Thanks for visiting this blog, created in July 2012 out of great concern for the fate of the €uro currency area, once again on the verge of collapse due to the economically ill-advised and heartless austerity policies imposed on Greece, Spain and other heavily-indebted €uro area countries by a christian democratic German chancellor impressed with the budgeting skills of Schwabian housewives. Meant to reduce the public debt and put the countries back on a path to economic growth, these macro-economically idiotic policies are doing anything but cause "pointless misery" as Paul Krugman so aptly describes it (Bloomberg, July 23-29, 2012).

Instead of reducing public debt, the austerity measures set in motion a vicious cycle of economic contraction, rising unemployment and poverty, lower tax revenues, private capital flight, and rising public debt shares as the economy declines faster than the public debt. What’s more, the austerity-driven ‘blood, sweat and tears’ policies recommended to the European periphery derive from the same economic doctrine that brought us to the brink of disaster in 2008. These policies are not only misanthropic and counterproductive to economic growth and debt reduction in Europe, but will prove explosive for the €uro currency area unless a drastic change of course takes place - and soon.

While I do not pretend to have ‘the’ solution for the €uro crisis, I would like to offer alternative economic perspectives and views on current events, and hope to chart a more humane path toward a balanced, socially fair, and sustainable economic future for the €uro area.

On the origins of the 2008 Great Financial Crisis:
“90+% of traders are men, and they bet all of our bank deposits on liar loans which froze credit leading to 40% average losses passed on to ordinary taxpayers; then begged for trillion-dollar bailouts upon which they paid themselves 50% higher boni.”


Sunday, May 19, 2013

Keep up the Pressure on Germany's Austerians

...because only international pressure and the international isolation of the Merkel government will make Über-Austerians Schäuble and Weidman yield to reason.

So it was last week, as the G-7 finance ministers met in London against the background of record unemployment and growing austerity fatigue in Europe. US Treasury officials made it very clear that they expected Germany, the country with the best economic performance in the eurozone, to support economic growth by raising private demand and thus help the economically weaker southern European nations get out of the deep recession caused by the draconian austerity measures instigated by the Merkel government. Fiscal austerity is to be scaled back, giving countries more time to reduce their budget deficits. And suddenly, Germany's Über-Austerian Schäuble showed "some signs of greater flexibility and said....that he supported the European Union's move to give France and Spain more time for deficit reduction." (see the New York Times of May 11 and the Washington Post of May 13: "Europe Shows Budget-Cut Realism as Slump Prompts U.S. Pressure").

With the backing of the United States, even eurozone leaders now have the courage to stand up against the powerful Merkel government: France's president Hollande refuses to support Merkel's new baby, the 'competitiveness pact' which is nothing else than Agenda 2010 re-loaded for Europe. Instead, he insists on implementing policies to promote economic growth and employment with a French-German "New Deal" against youth unemployment and a 10-year investment plan focused on four key sectors: the digital industry, renewable energy, health, and infrastructure. He even called for a eurozone economic government with its own budgetary capacity, a harmonized tax system, and a president. --->see Francois Hollande's communiqué de presse here and here:


And finally, a new pan-European initiative recently started an online-campaign against Merkel's competitiveness pact and a 'Troika for all'. This campaign gathered almost 10.000 signatures during its first week online, exemplifying the overwhelming discontent with economic policymaking in the eurozone. 

---> See the link to the campaign "Another Europe is possible" here and sign the petition.
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