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Domedagen II
“If HRE is the only German bank that fails, that completely discredits the tests – not just for Germany but for the whole of Europe”.
Rolf Englund blog 2010-07-21
Theo Waigel, German finance minister in the 1990s:
"In '92 and '93 we had big crises," he says.
The "euro crisis" is no more than media hysteria and political ineptitude.
BBC 19 July 2010
/ineptitude; Synonym incompetence, unsuitability/
Waigel has aged well. His trademark eyebrows are just as black and bushy as they were in his heyday when he crafted the Stability and Growth Pact and Maastricht criteria that were supposed to ensure eurozone countries kept their budgets under control.
This, he concedes, was not strong enough. "I was very disappointed with my successors," he says. The Social Democrat-Green coalition government broke the pact and avoided sanctions - setting a precedent for others to follow.
"[My son] said to me: 'Is it true you are the father of the euro?'" says Mr Waigel. "I said: 'That's what they say'. 'Well,' he answered, 'I don't want to be its brother!'"
One Size Fits One
"a lot of the issue can be captured by one picture"
Paul Krugman July 12, 2010
Reading these commentaries by Edward Chancellor and Wolfgang Munchau, it occurred to me that a lot of the issue can be captured by one picture.
Here’s the total number of unemployed, in thousands, in Germany and Spain:
The gap between Spain and Germany
These two countries share a single currency and inhabit the same monetary union.
Spain would benefit from a looser monetary and fiscal policy.
Germany would not.
Gavin Hewitt, the BBC's Europe editor, 9 July 2010
It was 20 years ago that then-Chancellor Helmut Kohl made a lonely decision.
a monetary union for the two Germanys
Instead of one to one, the exchange rate should have been one to three or one to four, to reflect the economic reality
German Interior Minister Thomas de Maizière, Der Spiegel 1st July 2010
The Berlin Wall had come down, and thousands of East German citizens were moving to the West every week. Kohl offered Hans Modrow, the interim communist leader of East Germany at the time, a monetary union for the two Germanys.
Experts were annoyed by the proposal, and Karl Otto Pöhl, the then-head of West Germany's central bank, the Bundesbank, warned against it. But Kohl had his way. Money transporters began rolling eastward overnight. The West German deutsche mark was named East Germany's currency on July 1, 1990.
Politically speaking, the monetary union was a success. The people were delighted, because they no longer had to travel to the west to get deutsche marks. But the move had a devastating effect on the economy. Overnight, all pensions, wages and savings of up to 6,000 East German marks were exchanged on a one-to-one basis. This was beneficial for East German citizens but not for businesses, many of which went under when they suddenly found themselves having to compete with the highly modern West German economy.
"Although there was no reasonable political alternative to the fixed exchange rate, it was a bad move economically," says de Maizière. "Instead of one to one, the exchange rate should have been one to three or one to four, to reflect the economic reality, but this would have had the devastating political consequence of further migration."Kommentar av Rolf Englund:
Som man brukade säga från myndighetshåll i det gamla sog. DDR: "Eine Mark ist Eine Mark".
Germany reiterates its insistence on an EU sovereign insolvency law
There is still no final agreement on the EFSF, as this is still blocked by the Slovakians. But the fund will go ahead one way or the other.
Eurointelligence 13.07.2010
Wolfgang Schauble said the issue remains firmly on the agenda of Herman van Rompuy’s task force, but, as Frankfurter Allgemeine reports, there is no support for the setup of a “Berlin Club”, akin to the Paris Club, as all these changes would almost certainly require a change in the European Treaties, for which there is no appetite.
You can read more about this crazy Berlin Club proposal in Der Spiegel – hat tip Naked Capitalism, which correctly calls it a trial balloon for domestic consumption.
The new Slovak government remains opposed to a rescue package for Greece, Prime Minister Iveta Radicova said Monday, after a meeting with European Union Council President Herman van Rompuy.
Wall Street Journal 13 July, 2010
The snag with Germany’s idea (insolvency rules)is that it goes too far
It is hard to see how such a plan could be imposed, let alone enforced. It would place the debtor nation in a position of colonial submission.
If ever agreed to, this would be politically explosive.
FT editorial July 13 2010
New rules are needed to underpin the eurozone in the post-crisis world. The stability and growth pact has failed. To avoid moral hazard, these rules must admit the possibility of sovereign default.
Any orderly restructuring would involve creditors taking haircuts. So would a disorderly default. However, it would strengthen market discipline if creditors knew both that they would face haircuts and how those might be negotiated. The Germans are right to push these ideas. A colonial-style workout, by contrast, would lack credibility. When sovereigns default, what is needed is a conference table not a torture chamber.
Germany is now actively (and very secretly) pushing for a plan outlining a set of insolvency rules,
which would require that private investors bear a portion of the rescue burden, and much more importantly,
would see at least a partial give up in state sovereignty
Tyler Durden, Zerohedge, 12/7 2010
A new insolvency trustee (the "Berlin Club", which we fail to see at least for now, how it differs from the Paris Club) would take implicit control over and override a default nation's treasury, in essence pushing the bankrupt country into a form of Feudal vassal state-cum-reparations subservience.
Welcome to financial warfare in the post-globalization period.
The big news out of Europe this morning, and the reason for the drag on the euro is an article in Der Spiegel, "Merkel's rules for bankruptcy"
Logiken i det hela rör sig i federativ riktning... Sch! säger Kohl åt mig när jag tar upp det
Göran Persson
Will taxpayers will have to bail out their banks, when we have the results on 23 July of stress tests?
Only a few weeks ago there was an initial billion dollar bailout of European banks.
You may have missed it, because it wasn't called a bank rescue programme.
BBC's business editor Robert Peston, 16 July 2010
It was a financial support package for Greece worth 110bn euros - and 750bn euros of credit for other eurozone governments that may face difficulty keeping up the payments on their debts.
On the face of it therefore this was aid for eurozone states.
What is troubling, however, is that the creditors of Europe's big banks fear that the billion dollar rescue package wasn't enough
Only a closer union can save the eurozone
I am aware that, at a time of rising nationalism and regionalism throughout the EU, there is no consensus for such sweeping reforms
Wolfgang Münchau, FT, June 27 2010 19:52
At some point the markets will realise that large parts of the German and French banking systems are insolvent, and that they are going to stay insolvent.
You might think that Europe’s policy elites cannot be so stupid as to commit themselves to stress tests without a resolution strategy up their sleeves. But I am afraid they probably are. Europe’s political leaders and their economic advisers are, for the most part, financially illiterate.
In 1998, four renegade German professors tried to stop the introduction of the euro with a legal challenge in Germany's highest court.
Now, 12 years later, they are fighting against a German bailout for Greece - and this time around, people are listening to them.
Der Spiegel online 30 june 2010
Är Sverige med i motståndsrörelsen?
Ett tysk-franskt förslag mötte motstånd på EU-toppmötet. Det blockerades, av England, Tjeckien och Sverige
Rolf Englund blog 18/6 2010
Tyskland, G20, Grekland EU/SPV
Rolf Englund blog 2010-06-08
EU leaders will tomorrow meet in Brussels for a crucial summit.
A briefing outlining recent developments and moves towards what French President Nicolas Sarkozy has labelled an economic government for the EU
Open Europe 16 June 2010
...
Merkel, Sarkozy Paper Over Differences Before EU Summit
a vague call for an "economic government"
Spielgel Online 15/6 2010
"We're not afraid of transparency," said the Spanish Banking Association (AEB), saying the full truth would put an end to rumours battering Spain's instutitions. El Pais reported that the government backs the initiative, putting it on a collision course with Germany which insists on secrecy.
Ambrose Evans-Pritchard, 15 Jun 2010
Till och med i fredags hade ECB köpt obligationer från eurozonens krisländer för totalt 35 miljarder euro (340 miljarder kronor) på tre veckor.
ECB:s stödköp syftar till att få bort flaskhalsar på kreditmarknaden, som uppstått då obligationerna inte längre går att omsätta på andrahandsmarknaden.
DI/TT 31/5 2010
ECB Buying Up Greek Bonds
German Central Bankers Suspect French Conspiracy
gives French banks the perfect opportunity to get rid of their Greek assets
Der Spiegel 31 May 2010
Axel Weber, the Bundesbank president, remained stone-faced as he acknowledged the latest figures, which indicated that by the end of last week the European Central Bank (ECB) had already spent close to €40 billion ($50 billion) on buying up government bonds from Spain, Portugal, Ireland and, in particular, Greece.
The ECB already has about €25 billion of Greece's mountain of debt on its books, and it is adding another €2 billion a day, on average. The Bundesbank, which has a 27 percent stake in the ECB, is responsible for €7 billion of the ECB's Greek government bonds.
Many Bundesbank members are wondering why the ECB is buying Greek bonds in the first place, particularly on this scale, now that the euro-zone countries' €110 billion bailout package for Greece has been approved, and the first tranche of the funds has already been disbursed.
Top of pageThe €750bn financial rescue package
The German constitutional court has still to rule on the package. "natural disasters or exceptional occurrences beyond its control"
Wolfgang Münchau May 30 2010
The fixed-exchange mechanism had gone horribly wrong
The tragedy of the interwar years in Germany was that the Social Democrats - then the world’s foremost socialist party - became fatally tainted by acquiescing in /accepting/ Bruning’s deflation torture from 1930 to 1932.
They did so, of course, because they dared not confront the orthodoxies of the Gold Standard.
The result in Germany was the Reichstag election of July 1932 when the Communists and Nazis won over the half the seats.
Ambrose Evans-Pritchard 23 May 2010
Just 319 out of the 622 members of the Bundestag backed Germany’s €148bn contribution,
underlining Berlin’s unease about helping Greece and setting up an emergency fund for other nations.
Another 195 abstained and 73 voted against.
Financial Times May 21 2010
It was an uncomfortably close call for Mrs. Merkel.
The bill passed by a margin of just seven votes, with half a dozen members of her conservative coalition voting against it.
The left-wing opposition parties refused to support the deal, either abstaining or voting against it.
New York Times May 21 2010
Det tyska beslutet fattades med stor brådska och utan det breda parlamentariska stöd som regeringen hoppats på.
– Ni har ingen linje och inget mål. Ni vet inte vad ni vill med landet eller Europa.
Det omdömet fällde de tyska socialdemokraternas ledare Sigmar Gabriel om Angela Merkels regering i förbundsdagsdebatten i dag.
För Tysklands del omfattar dagens beslut ungefär lika mycket som en halv årsbudget för landet, eller omräknat i kronor 1 500 miljarder.
Ekot 21 maj 2010
By announcing a ban on the activities of short-sellers she /Angela Merkel/ is hoping her decoy will avert German attention from the small print of Berlin's support for Greece, which talks of developing processes for "an orderly state insolvency". This sounds ominously like a softening-up process for a form of default.
Jeff Randall, Daily Telegraph 20 May 2010
Gnisslet mellan Tyskland och övriga euroländer ger underlag för spekulationer om att tyskarna skulle vara på väg att tröttna på euron och i stället söka sig tillbaka mot gamla D-marken.
Förmodligen rör det sig om helt ogrundade gissningar, men de öppnar ändå för ett dystert scenario där valutaunionen spricker och Europa hotas av ekonomiskt kaos.
Johan Schück, DN 2010-05-21
The euro is in danger, German Chancellor Angela Merkel
said in a speech to parliament
CNBC 19 May 2010
Germans are amazed at global reaction to their fiscal proposals
FT Deutschland had an interesting culture shock article in which it quotes several economists as saying that
Germany’s debt rule, if applied to the whole of the eurozone, is much more likely to result in investor panic than solve the problem.
Eurointelligence 20 may 2010
Frankrikes president Nicolas Sarkozy hotade med att dra Frankrike ur eurosamarbetet
om inte Tyskland gick med på det räddningspaket som ska hjälpa Grekland ur krisen.
Det uppger den spanska tidningen El País enligt DN 14 maj 2010
There can be no more pretence that monetary union respects the premise
on which it was sold to European citizens, Germans in particular.
Financial Times editorial May 10 2010 20:41
The two German members of the ECB's council voted against the move
The European Central Bank risks irreparable damage to its reputation by agreeing to the mass purchases of southern European bonds in defiance of the German Bundesbank and apparently under orders from EU leaders.
Ambrose Evans-Pritchard 11 May 2010
How can a loan guarantee solve a problem of excessive indebtedness?
The funny thing is that the Germans, Ms Merkel probably included, really believed in the “no bail-out” clause.
They were shocked by events. They failed to see that Article 125 of the Lisbon treaty is the kind of law that is irrelevant until needed, at which point it becomes impossible to apply.
Wolfgang Münchau May 10 2010
Ms Merkel’s staff had impressed on her that any attempt to support Greece with loans at below market interest rates would draw the ire of the German constitutional court. That, too, turned out to be a misjudgment. We know that the court is sceptical about further European integration and made its views clear last year in its ruling on the Lisbon treaty. But Germany’s constitutional justices are not reckless. They duly and almost instantaneously dismissed a frivolous case against the Greek aid package, brought by four Europhobic professors.
German Chancellor Angela Merkel accused the financial industry of playing dirty. "First the banks failed, forcing states to carry out rescue operations. They plunged the global economy over the precipice and we had to launch recovery packages, which increased our debts, and now they are speculating against these debts. That is very treacherous," she said. "Governments must regain supremacy. It is a fight against the markets and I am determined to win this fight".
Ambrose Evans-Pritchard, 6 May 2010
Mrs Merkel made a moving plea to the Bundestag to support the €110bn (£93bn) rescue for Greece.
"Nothing less than the future of Europe is at stake. The happy tale of German history since World War Two and our emergence as a free, united, and strong country cannot be separated from the European Union.
We owe decades of peace and prosperity to the understanding of our neighbours," she said.
Daily Telegraph 6/5 2010
"Europe today is looking to Germany. As the strongest economy in Europe, Germany has a special responsibility and it takes this responsibility to heart.
"Immediate help is needed to ensure the financial stability of the eurozone. This must be done to avoid a chain-reaction to the European and international financial system, and contagion to other eurozone states. There is no alternative."
Rolf Englund: Det finns ingen anledning till oro, således
OBS Ironi. Eller om det är sarkasm?
To Angela Merkel and Germany’s political class, the state elections in North-Rhine Westphalia are infinitely more important than the future of the eurozone.
The opinion polls seem to support this attitude. Greek aid is unbelievably unpopular, with 86 per cent opposed according to a poll published last Sunday.
Come to think of it, there are not many issues in a democracy on which 86 per cent of the people agree on.
Wolfgang Münchau, Eurointelligence 29/4 2010
While it is one thing to criticise a political process as being too slow or otherwise inadequate, Mrs Merkel’s response to this crisis has been irresponsible. While the Greek crisis was caused by irresponsible Greek policy, it was turned into a wider political and economic crisis by her procrastination. The promises of two consecutive European Councils have proved hollow. The financial markets now consider EU leaders, and Mrs Merkel in particular, as liars.
After Wednesday’s scare, and the downgrade of Spain, Merkel went from complacency straight into panic.
But even now it is not clear whether the Bundestag is going to vote in favour of the aid – which is going to be much, much large than previously reported, about $120bn for three year, without restructuring.
Den 9 maj är det val i Tysklands största delstat Nordrhein-Westfalen med 18 miljoner invånare.
Händelsevis har eurozonens ledare nu bestämt datum för ett toppmöte om Grekland till dagen efter valet.
Gunnar Jonsson Signerat DN 2010-04-29
– Den stora risken i ett krisscenario är att bankerna i Tyskland och Frankrike får en rejäl smäll och att vi får en ny vända av finanskris,
säger Handelsbankens chefekonom Jan Häggström.
Ekot 28/4 2010
The writer is senior adviser to Soditic-CBIP LLP, chairman of SCCO International and author of The Euro – The Politics of the New Global Currency
When Josef Joffe, then foreign editor of the German daily Süddeutsche Zeitung, wrote a 4,000-word essay in December 1997 attacking the planned formation of the European single currency, he published it first in English, in the New York Review of Books.
“Never in the history of democracy have so few debated so little about so momentous a transformation in the lives of men and women,” noted Mr Joffe.
As if to confirm his point, the article appeared in an abridged German translation in the Süddeutsche Zeitung more than a month later, unobtrusively buried in a weekend supplement.
The episode illustrates past barriers to plain speaking about economic and monetary union (Emu). Many ordinary Germans always feared the euro would be less stable than the D-Mark. Yet, reflecting postwar belief that German interests ineluctably overlapped with Europe’s, there was little discussion of the risks. This went beyond Germany. One senior Dutch central banker, now retired, says most European governments – including his own – agreed the Maastricht treaty 20 years ago without understanding what they had signed into law.
Wilhelm Hankel, Wilhelm Nölling, Karl Albrecht Schachtschneider and Joachim Starbatty, four German professors who launched an unsuccessful anti-euro lawsuit at the constitutional court in 1998, are preparing fresh legal action. Their claims of infringements to the Emu rules, in particular over the “no bail-out clause” preventing joint payment of weaker states’ debts, have a much greater chance of success this time.
Under existing law Greece cannot be pushed out. In fact Greece cannot leave the eurozone voluntarily, without having to leave the EU as well.
In any case, it is smarter for Greece to default inside the eurozone than outside.
So what happens if the Bundestag blocks the aid? Greece will simply default, and this will put several German and French banks that hold large chunks of Greek sovereign and private debt at risk.
Wolfgang Münchau, FT April 25 2010
Perhaps the most significant legacy of this crisis is the emergence of a Germany that asserts its own national interest above being "good Europeans"; the role it has played in the past.
Gavin Hewitt, the BBC's Europe editor, 24 April 2010
In a revealing article in the New York Times, John Kornblum, a former US ambassador to Germany, says that "Europe in the institutional sense has become increasingly unpopular" in Germany.
"German courts have begun to define German European issues in the context of the German constitution rather than on the basis of EU law," he writes. He goes on to say that "the growing gap between Germany's aspirations and the perceived needs of other members of the EU is beginning to burden both sides. Most Europeans are simply not ready to live up to German standards".
77 milarder kronor
It has been estimated that Germany will have to contribute over eight billion Euros to the relief effort.
For Merkel, whose coalition government is facing an important regional election in the state of North Rhine-Westphalia on May 9, that steep bill is becoming reality sooner than she would have liked.
Spiegel Online 23/4 2010
German tax payers are reluctant to support their debt-strapped neighbors, and she and her coalition partners hoped to keep the awkward bailout issue as quiet as possible during the run-up to the election. But that plan has been crushed by the urgency of the Greek predicament.
The voices that matter are those of German Chancellor Angela Merkel, the Bundesbank, the finance committee of the Bundestag, and ultimately the Verfassungsgericht, or German constitutional court.
Ambrose Evans-Pritchard April 12th, 2010
Christopher Steegmans, spokesman for Chancellor Angela Merkel, decided that the best defense would be to go on the offensive.
In a press conference held in Berlin on Monday, he declared that the state of the European Union's decision on whether to help Greece was "unchanged"
Der Spiegel 12/4 2010
"Tyskland vek sig för trycket - vi ska inte lura oss själva att sådana lån är något annat än subventioner", sa Frank Schaeffler, biträdande finanstalesman för regeringskoalitionspartiet FDP.
DI/Direkt 2010-04-12
Germany's Bundesbank has fired a warning shot at Chancellor Angela Merkel, attacking the joint EU-IMF rescue plan for Greece as
a threat to economic stability and probably illegal.
Leaked extracts from an internal report appeared in the Frankfurter Rundschau
Ambrose Evans-Pritchard, 8 Apr 2010
Christopher Steegmans, spokesman for Chancellor Angela Merkel, decided that the best defense would be to go on the offensive.
In a press conference held in Berlin on Monday, he declared that the state of the European Union's decision on whether to help Greece was "unchanged"
Der Spiegel 12/4 2010
But something about his hasty and unprompted justification elicited the feeling that something just wasn't right. Hadn't something happened?
If worst comes to worst, Germany actually will have to contribute the lion's share of the EU's rescue package for Greece. KfW, the government-owned development bank, would have to transfer €8.4 billion into Athens' accounts, and those funds would be backed by the federal government.
"Tyskland vek sig för trycket - vi ska inte lura oss själva att sådana lån är något annat än subventioner", sa Frank Schaeffler, biträdande finanstalesman för regeringskoalitionspartiet FDP.
DI/Direkt 2010-04-12
"Lånen skulle skada euron, hjälpa Grekland endast temporärt. Vi skulle vara ute på mycket tunn is, legalt och ekonomiskt", fortsatte han.
"Eurogruppens beslut öppnar dörren för spridningseffekter. Det är en invitation till spekulanter att tjäna storkovan på andra euroländers obligationer och en bailout-spiral", sa Hans Michelbach, biträdande finanstalesman för CSU-partiet.
Germany's Bundesbank has fired a warning shot at Chancellor Angela Merkel, attacking the joint EU-IMF rescue plan for Greece as
a threat to economic stability and probably illegal.
Leaked extracts from an internal report appeared in the Frankfurter Rundschau
Ambrose Evans-Pritchard, 8 Apr 2010
The Bundesbank document offers a withering critique of the deal agreed by EU leaders two weeks ago, saying the plan had been cobbled together without consulting central banks and will lead to monetisation of debt. "It brings problems in respect to stability policy that should not be underestimated."
The joint rescue between the IMF and the EU would turn the Bundesbank into a "money-printing machine" for the purchase of Greek bonds, according to Rundschau. This would breach the EU's 'no-bail clause'.
Barclays Capital said any rescue would have to be at least €40bn-€45bn to restore confidence and provide Greece the funding it needs to buy time for reform.
SPIEGEL ONLINE: And in Athens in the meantime, they are burning the flags of Europe.
Weidenfeld: Clearly that is not a good thing.
But in this you can also see the meaningful role that Europe now plays.
Germany should boost domestic demand and wages to ease the lopsided euro-region trade flows
that restrict growth in economies from Greece to Portugal, Bank of England policy maker Adam Posen said.
Bloomberg March 25 2010
Leaders of the 16-nation euro region met in Brussels to debate the contingency plan for a mix of IMF and bilateral loans as the ECB’s president, Jean-Claude Trichet, said Europe has to resolve the crisis on its own.
“If the IMF or any other authority exercises any responsibility instead of the eurogroup, instead of the governments, this would clearly be very, very bad,” Trichet said on France’s Public Senat television.
Trichet’s criticism put the independent central bank on a collision course with European political leaders as the bloc struggled to prevent an escalation of Greece’s debt crisis that has sent the euro to its lowest against the dollar in 10 months.
The accord masks a bitter struggle between Germany and a French-led bloc over the future shape of Europe.
For all the rhetoric, Berlin has refused to cross the Rubicon towards an EU fiscal union, shattering long-held assumptions about the inevitable march of the EU project.
By bringing in the IMF, it ensures that each sovereign state remains responsible for its own debts.
Ambrose Evans-Pritchard 25 March 2010
The monetary union is neither a political nor a fiscal union.
The stability pact calls for each country to cope with its own budget problems.
Neglecting this principle would be dangerous for the acceptance of the European monetary union, especially in Germany.
Thomas Mayer, chief economist for Deutsche Bank, Spiegel Online 25/3 2010
Thomas Mayer has been chief economist for Deutsche Bank since the beginning of 2010. Before joining Germany's largest financial institution, Mayer worked for the International Monetary Fund in Washington and for investment bank Goldman Sachs.
SPIEGEL ONLINE: Do you worry about the currency?
Mayer: Of course. We should never steer towards a transfer union, whereby large countries give permanent financial support to less strong countries. The acceptance of the euro would rapidly dwindle among the general population. In the medium term, this could break down the monetary union. The German taxpayer is not prepared to permanently pay out for other countries living beyond their means.
Full textThomas Mayer, economist at Deutsche Bank, said the latest Greek austerity measures could cause the economy to shrink by 4 per cent this year, making the government’s task even more formidable.
“The adjustment remains a Herculean task, and the costs of the adjustment in terms of lost output could be larger than policymakers currently anticipate,” Mr Mayer said.
FT March 15 2010
– Som tysk kansler bär jag ett stort ansvar. Tyska folket litade på att de skulle få en stabil euro när de gav upp d-marken.
Det förtroendet får inte svikas, sa Angela Merkel inför de tyska parlamentarikerna.
Ekot 25 mars 2010
Hon upprepade den tyska linjen att Grekland bara i yttersta nödfall ska få bistånd utifrån. Och i så fall inte från EU direkt, eller från euroländerna gemensamt. Grekerna bör söka stöd hos Internationella valutafonden IMF, anser den tyska regeringen.
Därutöver kan enskilda länder i eurozonen ge bilateral hjälp till Grekland. Och om alla euroländer då ställer upp så kommer också Tyskland att göra det. Men, upprepade Angela Merkel i förbundsdagen, bara i yttersta nödfall. Och där är Grekland inte ännu.
Opinion polls suggest Angel Merkel’s coalition will lose control of the German Senate in regional elections on May 9.
No wonder she wants to fire a populist shot at voters. But in refusing to underwrite a few billion euros of Greek debt the Chancellor is playing with fire.
Simon Hobbs, CNBC 23 Mar 2010
For 60 years her predecessors spent vast amounts of money and energy driving European integration. At each stage their purpose was clear: solidarity.
11 years ago Germany finally persuaded 5 neighbours to join it in constructing the Euro; each abandoned their national currencies and pooled monetary policy in Frankfurt. Two years later Greece joined them. And yes – Athens lied to get in. We suspected so at the time. But no one blew the whistle.
GAME, SET AND MATCH FOR MERKEL – GREECE WILL HAVE TO GO TO THE IMF
Germany has laid down three conditions for an agreement: an immediately pending catastrophe, involvement of the IMF, and treaty changes to harden the stability pact (or rather a commitment to accept those changes).
Eurointelligence 24/3 2010
Hans-Werner Sinn's remarks are apparently listened to as closely as are the Federal Reserve Chairman's remarks in the US. He said:
The Greek drama will have a 'frightful' ('schreklich') ending no matter which course of action is taken.
The objective is to avoid having a Greek default trigger another banking crisis across the EU.
John Mauldin 22/3 2010
There are three bad alternatives. He recommends #3 (effectively, default):
A Franco-German bailout.
IMF loans. Dr. Sinn believes that this would accelerate the Greek economic contraction with a dramatic deflation
Exit the Euro zone, revive the Drachma, re-denominate the sovereign bonds in Drachma, let the Drachma collapse
The report - whose authors include Hans-Werner Sinn, president of Germany's Ifo institute, and John Flemming, former executive director of the Bank of England - will help to keep alive the debate over whether the monetary rules set for the eurozone are acting as a straitjacket on its economy.
Financial Times; Feb 18, 2002
Olivier Blanchard, the IMF’s chief economist called for several bold innovations.
Central banks should raise their inflation targets—perhaps to 4% from the standard 2% or so.
The Economist print Feb 18th 2010
The beginning of the end of Europe’s economic and monetary union as we know it.
This is the true historical significance of Ms Merkel’s decision.
Wolfgang Münchau, FT March 21 2010 19:35
The FT has commissioned an opinion poll from Harris, according to which a majority Germans oppose aid to Greece, want Greece to leave the euro area,
and believe that Germany would be better off with the D-Mark.
Eurointelligence 22/3 2010
Full text hos Eurointelligence
Kommentar av någon
När tyskarna blir tillfrågade om man tror att man skulle haft det bättre utanför euron svara 39% ja - och endast 30% svarar nej! Visserligen ett stort antal osäkra men om man endast betraktar de säkra så skulle ett valresultat få ungefär samma utfall som vår euro-omröstning.
Lustigt nog har jag inte sett en enda tidning skriva om detta. (sarkasm)
Germany with an expected current account surplus of $187bn this year, should spend more.
If Germany does not, it will force its less competitive eurozone partners to stagnate and deflate.
So the world faces a choice: either the serial exporters can choose to consume more and rebalance the world economy through growth.
Or – as Mr Schäuble would prefer – they can sit on their hands, allow demand to crumble and rebalance the world economy through stagnation.
There is only one sane answer.
--
Tyskland ska spara 771 miljarder
DI 2010-06-07
---
German Government Agrees on Historic Austerity Program
Right or wrong – whether this plunges the whole world into a deflationary abyss from which there is no escape or if, somehow, this has the desired effect of restoring financial stability over time –
it’s nice to see that there are at least a few elected officials in the world who question the idea of simply piling on more debt to cure the world’s economic ills.
Tim Iacono 7 Jun 2010
"economically absurd", "economically erroneous and politically dangerous", "a scandal", "insane"
Europe’s monetary union is in a deep crisis.
In the context of Greece’s debt concerns and emerging problems in other countries, huge current account imbalances have been identified as a major threat.
But since the adoption of a single currency, devaluation is no longer available to correct an unsustainable current account deficit.
Otmar Issing, FT March 18 2010
The Future of the Euro
Moment of Truth for Europe's Common Currency
Part 2: Is Europe Laying the Foundation for a Common EU Economic Government?
Der Spiegel Online 19/3 2010
China and Germany unite to impose global deflation
Germany is in a supposedly irrevocable currency union with some of its principal customers. It now wants them to deflate their way to prosperity in a world of chronically weak aggregate demand.
I am beginning to wonder whether the open global economy is going to survive this crisis.
The eurozone may also be in some danger.
Martin Wolf, FT March 16 2010
Greece, the euro, and the Battle of Jutland
A Gefechtskehrtwendunga 180-degree turn that saves you
Mr Juncker, the Commission’s Jose Barroso, and their allies, have been trying to exploit the crisis to advance the EU Project, pushing the boat stealthily across the Rubicon towards fiscal federalism and a de facto debt union.
Ambrose Evans-Pritchard 18/3 2010
This is a extraordinary story.
Here was the European Council making a political declaration that they would be ready to stand by Greece,
and now Germany wants Greece to turn to the IMF for aid.
Eurointelligence 18/3 2010
Bloomberg spoke to Michael Meister, the CDU’s influential finance spokesman, who has been a lead sceptic on a bailout all along, as saying:
“We have to think about who has the instruments to push for Greece to restore its capital-markets access... Nobody apart from the IMF has these instruments.”
He adding that attempting a Greek rescue without the IMF “would be a very daring experiment.”
This report from NRC Handelsblatt tells the extraordinary story of how it happened:
Sarkozy and Berlusconi worked out the deal with Trichet, and then told Merkel that they would go ahead by themselves.
Also, Merkel had insisted on a 6% interest rate. We quote the relevant of the story in full:
Eurointelligence 13/4 2010
Peter Boone and Simon Johnson say Portugal is next
11/4 2010
The voices that matter are those of German Chancellor Angela Merkel, the Bundesbank, the finance committee of the Bundestag, and ultimately the Verfassungsgericht, or German constitutional court.
Ambrose Evans-Pritchard April 12th, 2010
The Latin and Anglo-Saxon media have underplayed or ignored altogether the importance of a challenge at the Verfassungsgericht. So have market analysts. There seems to be a collective failure to understand that certain things cannot be “fixed” by the usual methods of EU alchemy.
I recommend reading the court’s thunderous ruling on the Lisbon Treaty in June 2009, a cannon shot warning to Brussels and the EU elites that it will no longer be pushed around. It states that the EU is “an association of sovereign national states (Staatenverbund)” and that states are “Masters of the Treaties” and not the other way round.
The EU’s fundamental order is “subject to the disposal of the Member States alone and in which the peoples of their Member States, i.e. the citizens of the states, remain the subjects of democratic legitimisation.”
It constructs a line of defence against infringements of German sovereignty, stating that certain fields “must forever remain under German control.”
Varför frågar ingen Birgitta Ohlsson om Grekland och EMU?
Rolf Englund blog 12/4 2010
Does nobody read German any more?
As of today, German finance minister Wolfgang Schauble has not yet agreed to anything beyond a last resort rescue “if insolvency were imminent” and if there were to be a threat to the “financial stability of the euro area as a whole”.
Ambrose Evans-Pritchard March 16th, 2010
Very Important Article
Does nobody read German any more? Nearly all the reports on Europe’s bail-out for Greece appear to be coming from Paris, or Madrid, or sources within the Brussels apparatus determined to seize on the EMU crisis to advance the “Project”, this time by leaps and bounds towards fiscal federalism.
This cannot possibly be done without German backing, so it is academic what these people think or want. As of today, German finance minister Wolfgang Schauble has not yet agreed to anything beyond a last resort rescue “if insolvency were imminent” and if there were to be a threat to the “financial stability of the euro area as a whole”. That raises the bar very high.
He cannot go further because any bail-out for Greece would breach the EU’s no-bail-out-clause, and would therefore violate the German Grundgesetz, or constitutional law.
I can only conclude that the persistent refusal to treat this as a genuine problem is because these pundits do not read German newspapers. They can read French and hack Spanish or Italian, and normally that is enough in EU affairs, but sometimes it is not, and this occasion is one of them.
I happen to think that the German/EU policy of enforcing a ferocious fiscal squeeze on half Europe is demented and destructive. This Hooveresque strategy will tip these countries into a debt spiral, along the lines described by Irving Fisher in Debt Deflation Causes of Great Depressions (Economica, 1933).
It will prove self-defeating, starting with Greece, which will see its public debt galloping up to 135pc of GDP this year. The policy will rebound against German exporters and Germany’s under-capitalized banks, ultimately dragging the entire eurozone into a deflationary swamp.
I can think of no better way to destroy everything good that the EU has done in half a century.
David Owen from Jefferies Fixed Income said there is no instance in modern history when a state has managed to pull off a fiscal squeeze equal to 4pc of GDP in the midst of a recession, as Greece is being told to do. (Though Latvia may qualify).
The immediate political issue is that whatever Berlin wants to do over Greece, its hands are tied by the Verfassungsgericht, or constitutional court. This is the same court that issued a thundering ruling on the Lisbon Treaty last year, reminding EU Putchists that sovereign states are “Masters of the Treaties” and not the other way round, and that national parliaments are the only legitimate fora of democracy.
In my view, the House of Lords should strike down any EU law that breaches our constitutional tradition
(Magna Carta, Bill of Rights, etc) and damn the torpedoes.
God bless the Germans.
Ambrose Evans-Pritchard March 16th, 2010
Very Important Article
Ambrose kommenterar en kommentar till sin artikel:
reply exbrat,
The German Verfassungsgericht is like the US Supreme Court. Its task is to ensure that all laws comply with the German constitution. If they do not, it strikes them down — and reserves the right to do this to EU laws. Ergo, it does not accept the primacy of EU law over German constitutional law (only over ordinary German law — though Germans may correct me on this if I am wrong).
You can amend the German constitution but that is very hard. Two thirds majority, etc.
The British system makes it harder to make a stand on this, but we can do so. In my view, the House of Lords should strike down any EU law that breaches our constitutional tradition (Magna Carta, Bill of Rights, etc) and damn the torpedoes.
It should certainly stamp all over the abominable Charter with its clause allowing the EU to override all rights in “the general interest of the Union”. That is an outright Fascist clause, and I am very surprised it got through the Verfassungsgericht (it may not, if there is a court case challenging this).
We don’t dare do what the German courts do. That is entirely political, and our own fault. Germany’s top court is now the only defender of British sovereignty against EU Putschists.
God bless the Germans.
In a landmark judgment in 1993, the constitutional court ruled that, once it came into force, monetary union had continuously to satisfy the full conditions of the “stabilisation treaty”
concluded when the single currency was agreed.
If it did not, the court ruled, Germany would be obliged to leave.
The four professors who took the German government to the German constitutional court in 1998 over Germany’s entry into the euro. Wilhelm Hankel, Wilhelm Nölling, Karl Albrecht Schachtschneider and Joachim Starbatty, FT, March 25 2010
Årets val gäller bl.a. ett vilande grundlagsförslag med ändringar av 10.2 och 10.5 i regeringsformen (RF).
Inga löften om att kassera det vilande grundlagsförslaget, inga röster från oss väljare!
Varför rösta, när det gör detsamma om våra lagar stiftas i Stockholm eller i Bryssel!
Margit Gennser i Barometern 2002-08-03
We need an agreement that as an ultima ratio it's possible to exclude a country from the euro zone if again and again it doesn't fulfill the requirements,"
Ms. Merkel said in an address to Germany's lower house of parliament.
WSJ March 17, 2010
If life in the eurozone becomes intolerable, exit will become the default resolution mechanism.
And when you include the legal possibility of an exit, the whole political and economic dynamic changes,
and the threat of an exit might turn into a self-fulfilling prophecy.
This does not apply only to Greece, but to a number of countries that have lost competitiveness to Germany.
Wolfgang Münchau, FT March 14 2010
“Should a eurozone member ultimately find itself unable to consolidate its budgets or restore its competitiveness, this country should, as a last resort, exit the monetary union while being able to remain a member of the EU.”
Wolfgang Schäuble, German finance minister, FT March 11 2010 19:15
Greece, Ireland, Portugal and Spain will cut the demand
So, unless as-yet-unspotted foreign cavalry ride to Europe’s rescue by buying up the continent’s products, aggregate demand will fall.
Less competitive Eurozone countries will be forced to deflate and shrink their economies to match Europe’s diminished and diminishing circumstances.
FT Editorial March 15 2010
Germans like to believe that they made a huge sacrifice in giving up their beloved D-mark ten years ago, but
they have in truth benefited more than anyone else from the euro.
Almost half of Germany’s exports go to other euro-area countries that can no longer resort to devaluation to counter German competitiveness.
The Economist print March 11th 2010
Too few women are in full-time work, partly because child-care support is lacking. The country’s demographic prospects are dire.
A special report on Germany
The Economist print March 11th 2010
Ever since the federal republic was founded, Germany has had two over-riding strategic objectives: sound money and European integration. These were the twin imperatives learned from the calamities of the early 20th century.
The euro embodies these aims. Now they conflict with each other.
Martin Wolf FT March 9 2010
Germany can be Germany – an economy with fiscal discipline, feeble domestic demand and a huge export surplus – only because others are not. Its current economic model violates the universalisability principle of Germany’s greatest philosopher, Immanuel Kant.
RE: Som varje mamma brukar säga: Hur skulle det se ut om alla gjorde så där?
Establishing the EMF would require a new treaty
We must note an even greater difficulty. The notion that the big threat is fiscal indiscipline is false.
Now Germany insists that every country should eliminate its excess fiscal deficit as quickly as possible.
But that can only happen if current account balances improve or private balances deteriorate.
The most likely outcome of such fiscal retrenchment would be a slump in countries with large external and fiscal deficits. Given the lack of competitiveness of such external deficit countries and the weakness of demand elsewhere in the eurozone, such slumps might become very long-lasting.
The question is whether populations would put up with this. If not, political crises will emerge, with inherently uncertain consequences.
Germany is in a trap of its own devising. It wants its neighbours to be as like itself as possible. They cannot be, because its deficient domestic demand cannot be universalised.
"Nu behövs ett statsmannalikt ledarskap... Europas ledare, först och främst Tyskland och Frankrike"
Ska vi rycka ut för de sydeuropeiska länderna
eller ge upp och låta euron dö?
Den frågan klargör vad hela krisen handlar om: det europeiska projektets framtid.
Joschka Fischer, kolumn DN 10/3 2010
SORRY, NO EMF – CAN’T BE DONE
Der Chefvolkswirt der Europäischen Zentralbank (EZB), Jürgen Stark
wrote in Handelsblatt that an EMF violated the existing treaties
Eurointelligence 9.03.2010
So here they make the biggest governance proposal in the history of the euro, and it looks like they messed it up. A treaty change is needed to implement Schauble’s proposal, as Merkel now admits and the French also think it is not realistic.
Der Chefvolkswirt der Europäischen Zentralbank (EZB), Jürgen Stark wrote in Handelsblatt that an EMF violated the existing treaties and would undermine the public’s trust in the euro. What was needed was a stricter application of the budget rules. The ECB said Mr Stark’s views did not represent those of the ECB, but were personal.
Merkel about EMF
A full-scale negotiation of the EU’s 27 member states would be needed to set up a European Monetary Fund, which would be able to bail out eurozone members subject to strict budgetary conditions.
“Without treaty change we cannot found such a fund,” Ms Merkel told foreign correspondents in Berlin on Monday.
FT March 8 2010
German constitutional law imposes such tight constraints that any dilution of the no bail-out clause in the Maastricht treaty or the price stability target of the ECB might trigger a forced German exit.
The most one can hope for during the next 10 years is improved voluntary co-ordination in the European Council.
Germany has unilaterally prescribed itself a deficit-to-GDP ceiling of 0.35 per cent from 2016.
Wolfgang Münchau March 7 2010
Grekland
One banker said the situation was surreal.
"How can they call the Germans incompetent Nazis and still expect a bail-out?"
Ambrose Evans-Pritchard, 24 Feb 2010
Grekland, EMU, Tyskland och Freden
Rolf Englund blog 23/2 2010
Participating states established a common central bank but refused to surrender the right to tax their citizens to a common authority. This principle was enshrined in the Maastricht treaty and has since been rigorously interpreted by the German constitutional court. The euro was a unique and unusual construction whose viability is now being tested.
George Soros FT February 21 2010
De som sade nej för att de är emot ökad överstatlighet blir än mer övertygade om att de har rätt.
Den svenska euro-debatten kommer att polariseras.
Klas Eklund February 14th, 2010
Det är sant att EMU som helhet inte är ett “optimalt valutaområde”. Skillnaderna mellan olika regioner är stora. Och arbetsmarknaden i unionen är inte tillräckligt internationaliserad och flexibel, ej heller är finanspolitiken tillräckligt samordnad för att kunna motbalansera då penningpolitiken kommer rejält ur synk för något land som utvecklas annorlunda än kärnländerna.
Men det här är ett problem som framför allt rör länder som Spanien och Irland. De har växt snabbt, med våldsamt byggande och ibland hög inflation. ECB:s ränta var under boom-åren för låg för deras behov.
Eftersom de hade hög inflation var realräntan faktiskt lägre där än i kärnländerna, vilket ytterligare blåste på uppgång och fastighetsbubbla.
Krisen ska lösas genom fastare samordning, först vad gäller stödet till Grekland, därefter finanspolitiken för unionen som helhet.
Den gemensamma penningpolitiken förutsätter ett mycket starkare samarbete också rörande finanspolitiken.
Logiken i det hela rör sig i federativ riktning... Sch! säger Kohl åt mig när jag tar upp det.
Göran Persson
Är Du federalist, Peter Wolodarski?
Rolf Englund blog 18/2 2010
Är Du federalist, Klas Eklund?
Less than a year before the euro became the currency of 11 European countries in January 1999, a declaration signed by 155 German-speaking economists called for an “orderly”— ie, long — delay.
The prospective euro members, they said, had not yet reduced their debt and deficits to suit a workable monetary union;
some were using “creative accounting” to get there, and a casual attitude towards deficits would undermine confidence in the euro’s stability.
The Economist print Feb 18th 2010
Now the prediction is coming true, says Wim Kösters, of the Ruhr University in Bochum and one of the original signatories. Greece, which joined the euro two years after its inception, has concealed the dodgy state of its finances. Now it is under attack from speculators. A default could spread panic to other deficit-plagued economies, including those of Spain and Portugal, with scary consequences for Europe’s already shaky banking system. But if Greece’s partners bail it out, defying the euro’s founding treaty, the currency will suffer. Either way, the euro is in trouble.
It is no secret that the German government and business establishment were also dubious about what they saw as a French-led project. What decided the matter for Helmut Kohl, the then German chancellor, was his belief in a federal Europe. He originally hoped that monetary union would be coupled with a political union. But, when he realised that was not to be, he still hoped that the monetary union would itself lead to a political one.
Samuel Brittan, FT February 18 2010
The worst that could happen now is a leap into the imaginary world of soft options.
That would be the end of the eurozone.
Wolfgang Münchau February 14 2010
Last year’s German constitutional court ruling on the Lisbon treaty added further impediments to effective eurozone economic governance. The court stated unambiguously that macroeconomic policy must remain the competence of the member states.
Chancellor Angela Merkel is constrained by the 1993 Maastricht treaty ruling of the German constitutional court stipulated that stability is an unalienable basis for Germany’s participation in a monetary union. Should this principle be violated, the legal basis for Germany’s participation would no longer be valid. Article 125 of the Lisbon treaty – the infamous “No Bail-out Clause” – is legally an important aspect of the overall stability of the system. And some people will no doubt argue that a Greek bail-out would violate article 125.
A fiscal union is not going to happen. Nor will the EU embark on yet another treaty change.
Germany should be encouraged – within the limits set by the constitution – to raise domestic demand. Last year’s constitutional balanced budget amendment was unhelpful in this respect.
The Frankfurter Allgemeine summed up German feelings when it asked why taxpayers should bail out a country that thinks it an outrage to raise the retirement age to 63.
"Should Germans have to work in the future until 69 instead of 67 so that Greeks can enjoy early retirement?"
Ambrose Evans-Pritchard GMT 14 Feb 2010
Frankfurter Allgemeine Zeitung oozed indignation.
“Germany is meant to take responsibility for Greek debts – that’s not how the idea of the euro was sold to the Germans,”
the conservative newspaper noted in reference to the single currency’s founding treaty, which banned bail-outs.
Financial Times February 11 2010
The newspaper noted that Greece’s eurozone partners had in the past neither the will nor the instruments to force Athens to reform its finances. “How do they hope to have any success once they have lent money to Greece?” Its editorial warned that if the eurozone changed from “a currency union to a debtors’ zone”, its citizens would “pay a heavy price in the form of a devaluation of their currency and their pensions”.
French banks hold €80bn of Greek debts, twice the exposure of German banks, though Greek debt is merely the tip of the iceberg.
Total exposure to Club O'Med is $853bn for France (30pc of its GDP), and $707bn for Germany (19pc of GDP)
Ambrose Evans-Pritchard, 10/2 2010
German exposure to the region amounts to €43bn in Greece, €47bn in Portugal, €193bn in Ireland, and €240bn in Spain,
according to the Bank for International Settlements.
German lenders are already vulnerable, with the world's lowest risk-adjusted capital ratios bar Japan.
Ambrose Evans-Pritchard, 10/2 2010
Should Germany bail out Club Med or leave the euro altogether?
Germany faces a terrible dilemma. Either Europe's paymaster agrees to underwrite a Greek bail-out and drops its vehement opposition to a de facto EU economic government, treasury, and debt union, or the euro will start to unravel,
and with it Germany's strategic investment in the post-war order.
Ambrose Evans-Pritchard, 31 Jan 2010
Germany is happily placed in the current EMU system. By compressing wages for a decade it has stolen a march on EMU. Critics unfairly call this a beggar-thy-neighbour policy. It is simply the way Lutheran society operates, in deep contrast to the way Latin society operates – a cultural clash that should have given pause for thought before Europe's elites launched headlong into their adventure.
The matter will in the end be decided by democracy. German citizens were given a pledge by their leaders in the 1990s that loss of the D-Mark would not lead to monetary disorder, or leave them liable for Club Med debt. That is the sacred contract of EMU.
"Politically," said Bundesbank chief Axel Weber, "it's not possible to tell voters that they are bailing out another country so that it can avoid painful austerity measures that they themselves have gone through. Such aid, whether conditional, or – even worse – unconditional, is counterproductive."
Athens has promised to slash the budget deficit by 10pc of GDP over three years, though the country is sliding deeper into slump, faces 20pc unemployment by the year's end, has a tottering banking system, and has already lost control of its streets before spending cuts have even begun.
The Papandreou government has craftily invited the European Commission to set up a vice-regal inspectorate in Athens, to become the focus of popular fury.
Spain's troubles are less immediate, but it lost as much competitiveness during the early EMU boom, that debt trap of negative real interest rates. External corporate debt is dangerously high. The budget deficit was 11.3pc of GDP last year. Madrid has drawn up €50bn of cuts to sweeten the markets, even though unemployment is already 19pc. The jobless typically receive 50pc to 60pc of former earnings for around 18 months, then the axe falls. The social distress hits with a lag. How much more tightening can Spain endure before Catalan, Basque, and Galician seperatism rocks the Spanish state?
Fiscal austerity in these circumstances without monetary and exchange stimulus to offer a lifeline is incoherent. These policies must fail because they are based on EU wishful thinking that high-debt nations can regain competitiveness within EMU against a zero-inflation Germany. Such a strategy will drive them into a debt-deflation spiral.
Jag tror ingen egentligen har tänkt igenom det här ordentligt. Ja, de som är federalister har gjort det, och de har gjort det lätt för sig, naturligtvis. De vill ha ett Europas förenta stater med direktvalt organ och alltihop, det är enkelt.
Men vi är inte federalister i Sverige, vi är för en europeisk union som vi vill skall bli större, men vi vill inte ha en federation.
Göran Persson
It was inevitable, I think, that Czech President Vaclav Klaus would take his last stand against the European Union’s Lisbon treaty on the Sudeten German issue.
Tony Barber, FT's Brussels bureau chief, 12/10 2009
Last week's ruling by the German Constitutional Court, coupled with demands by one conservative party for changes to the constitution,
may not only jeopardize Berlin's schedule for the ratification of the Lisbon Treaty.
The Karlsruhe ruling also threatens future steps toward European integration.
SPIEGEL Staff 6/7 2009
Anders Borgs plan för balans i EU-ekonomin
Mats Hallgren, Svde24 2009-07-07
Germany’s constitutional court ruled that the Lisbon treaty was consistent with German law.
This means Germany will be able ratify the treaty before the end of the year.
But... If you read the entire 147-page ruling, you realise that
the court has given a damning verdict on future European integration.
For example, it declared a hypothetical fiscal policy co-ordination or the establishment of a single European Union military command as unconstitutional.
Wolfgang Münchau, FT July 12 2009
Rolf Gustavsson:
Precis som när Maastrichtfördraget behandlades i författningsdomstolen (1992) sätter Tysklands högsta jurister gränser på en lång rad områden för hur långt den europeiska integrationen ska kunna gå utan att hota det demokratiska styrelseskicket.
Domstolen slår fast att EU inte är en ”statsanalog” organisation och att
EU-parlamentet inte representerar ett europeiskt statsfolk.
EU förblir ett förbund mellan självständiga demokratiska stater och EU-parlamentet företräder folken i dessa stater.
Men för att den fortsatta integrationen inte ska skena iväg utom kontroll för de demokratiska instanserna krävs att de ges förstärkta kontrollmöjligheter.
Utan förbättrad parlamentarisk kontroll riskerar demokratin att urholkas, anser domarna i Karlsruhe.
SvD 30 juni 2009, 23.30
It could be that future generations of German politicians find ingenious ways around the balanced budget law.
Or that they find a two-thirds majority to overturn it.
Or that Mr Sarkozy or his successors follow Germany into a future of austerity.
But as long as one of those three events fails to happen, Germany may discover that unilateral fiscal rigour in a monetary union could prove extremely costly.
For the sustainability of the euro, you surely do not want to get into a position where a large member state has a rational economic reason to quit.
So if Germany and France really do what they both promise,
you may as well start the egg timer.
Wolfgang Münchau, Financial Times June 28 2009
"The [free-market] liberalism without rules failed
"We refuse a bureaucratic Europe that mechanically applies the rules ...
We want a European Union that listens to the citizens, innovates, revitalises."
Such a Union would "favour the emergence of strong European enterprises" and
would "protect the European industry."
Angela Merkel and president Nicolas Sarkozy,
31 May 2009 Journal du Dimanche and Die Welt am Sonntag
After the US, the country with the biggest banking problem is probably Germany.
a bank can apply to set up its own bad bank
It buys the structured securities from the bank at 90 per cent of book value, guaranteed by the government
Wolfgang Münchau, Financial Times May 17 2009
Under the draft legislation put forward by the German government last week, a bank can apply to set up its own bad bank.
A bad bank is not really a bank at all. It is a special purpose vehicle, similar to those off-balance sheet vehicles that triggered this crisis in the first place.
It buys the structured securities from the bank at 90 per cent of book value – the price at which the securities are currently valued on the balance sheet.
In return, the SPV issues new debt securities to the bank, guaranteed by the government.
Germany’s government is finalising “bad bank” plans to deal with toxic financial assets
as part of efforts to restore confidence to the banking system that also include a
takeover offer launched this week for Hypo Real Estate, the stricken property lender.
Financial Times April 10 2009
The next government in Germany should start to cut spending by 2011 at the latest
to help achieve a balanced budget, European Union finance ministers said at a meeting in Brussels today.
Bloomberg March 10 2009
Ex-Bundesbank chief Karl Otto Pohl has just said that Ireland and Greece
are in danger of defaulting on their sovereign debts and/or may be forced out of the Euro
Ambrose Evans-Pritchard Daily Telegraph Feb 26, 2009
"I think there are countries considering the possibility. It would be very expensive," he said.
"The exchange rate would go down, 50 or 60% and then interest rates would go sky high
because the markets would lose all confidence."
Professor Pohl said Germany's political class is afraid their country will ultimately have to pay for the EMU mess.
His view is that the burden should be shifted to the IMF (ie. the US, Canada, Japan, Britain).
Thanks a lot Karl Otto. You broke it, you fix it.
For those who may not be aware of his Sky interview by my colleague Jeff Randall.
Will Germany deliver on the Faustian bargain that created monetary union?
The German finance ministry is drafting rescue plans to prevent
default on the edges of the eurozone
leading to a full-blown collapse of Europe's monetary system.
Ambrose Evans-Pritchard, Daily Telegraph 23 Feb 2009
From a European perspective, there is an acute danger of an extreme exchange-rate overshoot,
which on top of the fall in global demand for European export goods could have devastating effects on exporters, much worse than anything we have seen so far.
Unlike 10 years ago, there is not much scope for wage cuts this time, so this crisis will hit profits.
Wolfgang Münchau, Financial Times, December 21 2008
Germany's constitutional court has been handed a second complaint over the EU's Lisbon Treaty
with the potential to delay the country's final ratification of the document for several months.
The complaint is being brought by... former MEP Franz Ludwig Graf Stauffenberg
EU Observer 27/1 2009
German conservative MP Peter Gauweiler repeated his intention to bring the treaty before the country's constitutional court.
"What Brussels is supposed to get in powers is not compatible with our democratic principles,"
He said his reason for bringing the case is the constitutional court's loss of power to the European court. The constitutional court has until now kept an eye on the inalienable rights of German citizens given to them by Germany's constitution (Grundgesetz), he noted.
EU Observer 25/4 2008
Det är dock inte tillfredsställande att grundlagen ger ett så vagt och otydligt besked om förutsättningarna för Sveriges medlemskap i EU. Som lagrådet påpekade i sitt yttrande över det konstitutionella fördraget ”synes det ... väl kunna hävdas att principerna för statsskicket påverkas enligt det nya fördraget”.
SIEPS remissvar på Lissabon 2008
Läs mer här
EU treaty ratification may be delayed in Germany
The text then needs to be signed off by the country's president, Horst Kohler.
If Mr Gauweiler, a centre-right politician from CSU put a case before the he country's constitutional court...
EU Observer 20/2 2008
According to a report in German daily Die Welt, politicians from the Left Party as well as Peter Gauweiler, a centre-right politician from one of governing parties -the CSU - are examining the text of the EU treaty to see if they can bring a case before the country's constitutional court.
Their move could mean that the final formal step of ratification is delayed. German MPs are widely expected to approve the treaty when it comes before parliament in May.
However, the text then needs to be signed off by the country's president, Horst Kohler.
If Mr Gauweiler has put a case before the court, Mr Kohler will then have to decide whether to go ahead and sign off the treaty anyway or wait for the court to make its case.
There has already been a precedent for this. In June 2005, Mr Kohler refused to sign off the German law approving the original EU constitution. In addition to France and the Netherlands having rejected the document, Mr Gauweiler had also brought a case against the EU constitution before Germany's constitutional court.
At the time, the constitutional judge in charge of the issue, Siegfried Bross, advised Mr Kohler to wait until the court's decision before signing off the EU document, notes Die Welt.
Mr Gauweiler had complained that the EU constitution took too much power away from the country's national parliament, arguing that the document overstepped the boundaries that the German constitution provides for the integration of state institutions in the EU.
Mr Kohler, who hopes to be re-elected as president in May 2009, now finds himself in an awkward position.
Formally, it is possible to sign off the treaty even if the court is examining it, but such a move is politically difficult, especially if the constitutional court were to eventually decide against the legality of the EU document.
Questions are being raised in Germany about the new treaty,
following Germany’s failure to ratify the constitution.
An appeal lodged with the federal constitutional court obtaining an injunction from the court
preventing the federal president from signing the instrument of ratification
Frankfurter Allgemeine Zeitung/Freeeurope.info
In a long and carefully ambiguous interview with the Frankfurter Allgemeine Zeitung,
the President of the federal constitutional court, Hans-Jürgen Papier,
has said that “the EU is not a state” and that “it should not become one.”
Professor Paul de Grauwe
"Without further steps towards political union, the eurozone has little chance of survival"
Ambrose Evans-Pritchard, Daily Telegraph 16/7 2007
There is no doubt that containment of Germany
– usually politely put as the banishment of war from Europe –
has been fundamental to the development of the EU.
Gideon Rachman, Financial Times July 17 2007
The Common Agricultural Policy – still the EU’s most expensive policy – was, in effect, a form of disguised war reparations.
The euro – the biggest single act of economic and political integration yet – was largely a reaction to German reunification. France’s President François Mitterrand was initially panicked. So Chancellor Helmut Kohl of Germany persuaded him that a single currency would bind Germany irrevocably into a united Europe.
In 2000 it was they who played the role now assigned to the Poles – resisting the idea that Germany’s larger population should entitle it to greater voting power. The French insisted that the founding bargain of the EU – rooted in the war – was that France and Germany should always be equal.
It is certainly true that Germany has faced its own past with an honesty lacking in many other European countries. I remember the astonishment of German colleagues a couple of years ago, when they discovered that the building in Rome in which the ill-fated EU constitution was being negotiated still had heroic friezes of Mussolini carved into the walls.
More than 15 years after reunification, most Europeans seem comfortable with the new Germany. They fear a weak German economy more than a strong one, and they accept that the welcoming face that the Germans presented during last year’s football World Cup is the country’s real face, not just a mask. The EU really has moved on from the days when the containment of Germany was its central objective.
The only country where the external adjustment has taken place has been Germany:
but even in this case the adjustment was very slow and took more than a decade:
the shock of German unification and the ensuing loss of competitiveness of Germany took more of a decade to be unraveled
via a painful process of corporate restructuring and significant wage moderation.
Nouriel Roubini, New York University and RGE Monitor, 28/6 2007
Almost a new economic miracle
It became conventional to say that Germany was prevented by the European monetary union from having a needed devaluation.
But Germany has had a real devaluation.
It has been one of the very few countries apart from Japan to experience an actual fall in unit labour costs in manufacturing.
Samuel Brittan, FT April 13 2007
Unemployment, which peaked in 2005 at 10 per cent of the labour force is now down to 7.7 per cent on standardised international definitions.
What is so fascinating about the change is that it owes comparatively little to official policy. The government is using some of the extra VAT revenues to reduce social charges. But most of the turnround seems to reflect spontaneous behaviour by both business and labour. German businesses had to contend with both the rise in the euro and the “one size fits all” policies of the European Central Bank.
While the nominal trade-weighted exchange rate for the euro has risen by more than 20 per cent since the beginning of 2000, the real effective German rate has fallen by nearly 10 per cent.
None of this vindicates the “one size fits all” policy of the monetary union; nor does it suggest that the UK should throw away the inestimable advantage of a floating exchange rate to join the euro.
Milton Friedman once put the case for a floating exchange rate by comparing it with daylight saving time, which spared us the need to get up an hour earlier to take advantage of the extra sunlight.
Comment by Rolf Englund:
Economic miracle?
Or is it just NAIRU working?
High unemployment gives low inflation? But the cost is much higher to do it that way than by
letting the currency adjust.
Unemployment at 7.7 per cent, isn't it a bit to high for being in a miracle economy country?
In Sweden we call that Utanförskap....
NAIRU
An overwhelming majority of citizens in the big eurozone countries believe the euro has damaged their national economies, highlighting the popular scepticism that still surrounds Europe’s eight-year-old monetary union.
Almost two-thirds of Germans say they preferred their former currency, the D-Mark.
Financial Times 29/1 2007
Farewell to the Mark
Amity Shlaes, member of The Wall Street Journal's editorial
board.
Wall Street Journal, December 31, 1998
The Forgotten Man: A New History of the Great Depression, by Amity Shlaes.
This new book is the finest history of the Great Depression ever written.
Steven F. Hayward, National Review, July 30, 2007
Germany's parliamentary democracy is under threat from the European Union
which is slowly taking away all the national parliament's powers
Roman Herzog, the country's ex-president, has said in Welt am Sonntag.
EU Observer 15/1 2007
Det är fel att bortse från den positiva utvecklingen med stigande sysselsättning på den tyska arbetsmarknaden.
- Detta kan ha olika orsaker, inte minst de konjunkturella, och behöver inte bero på just att a-kassan sänktes.
säger Johnny Munkhammar, programansvarig på Timbro.
I Tyskland sänktes ersättningen i a-kassan drastiskt förra året.
Ett av målen med reformen var att få arbetslösa att acceptera jobb med låga löner.
Men effekterna på arbetsmarknaden har uteblivit, enligt forskare.
Kristian Åström, Ekot 25/10 2006
Det var för snart två år sedan som ersättningsnivån sänktes. Reformen, som heter Hartz fyra, drevs igenom av den tidigare kanslern Gerhard Schröder. Den fick också en stor betydelse i hans eget fall.
Den arbetsmarknadsreform som den förra regeringen Schröder genomförde (Hartz IV) och som var avsedd att spara och få fler att arbeta mer har visat sig lika verkningslös som kostsam.
Barbro Hedvall, DNs ledarsida, 22/6 2006
De tyska offentliga finanserna är i ett tillstånd som "trotsar all beskrivning" enligt förbundskanslern själv. Och detta också om man räknar med effekten av den treprocentiga höjningen av momsen som var ett vallöfte från CDU, förbundskanslerns parti.
Den arbetsmarknadsreform som den förra regeringen Schröder genomförde och som var avsedd att spara och få fler att arbeta mer har visat sig lika verkningslös som kostsam. Hartz IV, som denna reform kallas, har drivit upp utgifterna för social- och arbetslöshetsunderstöd till svindlande nivåer, bland annat därför att den tvärtemot avsikten inte uppmuntrar människor att ta alla slags arbeten. Arbetslösheten har förblivit hög och alltför många tyskar stannat kvar i bidragsberoende. Något måste göras åt Hartz IV, det medger förbundskanslern.
Se även:
Last week, Germany’s grand coalition claimed it had effectively solved the pension problem after deciding to increase the retirement age from 65 to 67.
The German government has therefore solved the pension problem by turning it into a deflation problem.
Wolfgang Munchau, Financial Times 13/3 2006
Angela Merkel kan tyckas grå i sin framtoning, men hon har skakat liv i Tyskland. Framtidstron har återvänt.
Tysklands ekonomiska stagnation med rekordhög arbetslöshet och budgetunderskott som bryter mot EU:s regelverk har två viktiga förklaringar.
SvD-ledare 28/3 2006
Tysklands ekonomiska stagnation med rekordhög arbetslöshet och budgetunderskott som bryter mot EU:s regelverk har två viktiga förklaringar.
Å ena sidan är arbetskraftskostnaderna för höga, och, å andra sidan, gäller detsamma för välfärdsstaten.
En gång kunde kostnaderna bäras, men världen (globaliseringen), EU (östutvidgningen, euron och inre marknaden) och Tyskland (återföreningen) har förändrats.
Merkel gick till val på reformer och detta är också grunden för hennes vision av Tyskland - och Europa. Hittills har det dock mest varit prat, men läget blir snart skarpt. Närmast gäller det sjukvården som blöder. Det handlar om att minska underskotten för staten och sänka arbetskraftskostnaderna för arbetsgivarna.
Det hävdas ibland att medier förstorar enskilda personers betydelse i politiken.
Men i fallet Angela Merkel är det svårt att överdriva den roll som hon redan spelat som tysk förbundskansler.
Arbetslösheten på 12 procent måste sjunka och välståndet växa.
DN-ledare 12/3 2006
Tyskland har med ekonomen Hans-Werner Sinns ord drabbats av fem chocker. Först den tilltagande globaliseringen som slagit ut tusentals traditionella industrijobb. Sedan EU-integrationen som bidragit till att minska landets skalfördelar gentemot små länder. Och så eurons ankomst som innebar att andra länder plötsligt fick lika låga räntor som Tyskland.
Förbundskansler Merkel har än så länge inte presenterat någon lösning på landets ekonomiska kris. Men hon har tagit några betydelsefulla steg. Pensionsåldern har höjts till 67 år. Det förs diskussioner om sjukvårdsreformer samt förändringar av skattesystemet och energipolitiken.
Nästan alla ekonomer underskattar effekterna av globaliseringen, hävdade professorerna Mats Persson och Marian Radetzki i måndagens DN. Deras budskap till kollegerna var tydligt: i stället för att intressera sig för sjukskrivningar, a-kassor och styrräntor borde de oroa sig för vad som händer i den globala ekonomin.
DN-ledare 14/1 2006
Germany wants to bind Russia to EU
EU Observer 1/9 2006
"The goal must be to make the political, economic and cultural ties between the EU and Russia – its anchor in a wider Europe – irreversible", says a foreign ministry paper seen by German daily Handelsblatt.
"A complete European peace regime and the resolution of important security and political problems from the Balkans to the Middle East can only be attained with Russia and not without it," the paper says.
Germany’s export strength also makes it export-dependent and vulnerable to a downturn in global demand.
Any distress in the US will transmit to the rest of the world economy via the financial markets.
Direct trade has long ceased to be the main transmission mechanism of transatlantic shocks, at least for the UK and the eurozone.
Wolfgang Munchau, FT March 4 2007
I have heard some economists argue that Germany would be in a better position than France to withstand any global shocks, given Germany’s recent improvements in competitiveness. I disagree. Germany’s economic strategy is far more dependent on a friendly global economic macroeconomic and financial environment – precisely the kind of environment that was called into question last week. France may be suffering from a deteriorating export performance, but at least France still manages to generate a decent rate of domestic demand.
The Morgan Stanley calculation is, in fact, not even a worst-case scenario. For that you would need to add a big rise in the trade-weighted exchange rate of the euro.
So how real are these alarmist scenarios? Last week, we saw a taste of how quickly the markets’ euphoria can turn. While Alan Greenspan, former chairman of the Federal Reserve, did not forecast a recession, the mere fact that he used the word is remarkable. As I predicted in my New Year outlook on the global economy, there is a non-trivial, though incalculable risk of a recession in the US and a fairly significant probability of a hard landing.
Full textThe world confronts the risk of a US recession next year,
brought on by a collapse in house prices.
Europe will not escape the impact of dollar depreciation
Wolfgang Munchau, FT 4/12 2006
The countries worst affected would be the Netherlands, Denmark, Sweden, Norway, the UK and Switzerland. Interestingly none of these countries, save for the Netherlands, is a eurozone member.
A recession would almost certainly lead to a fall in the US current account deficit, and possibly a further significant decline in the dollar’s real exchange rate.
Philip Lane from Trinity College in Dublin and Gian Maria Milesi-Ferretti from the International Monetary Fund looked at three scenarios: a soft landing scenario, a disruptive scenario and one in which the world’s policymakers would do all the right things at the right time – the “triumph-of-hope-over-experience” scenario.
Scenarios one and three are both benign and improbable. It is scenario two we should worry about.
Dollar - Houseprices - Top of page
Ms Merkel’s star has tumbled over the past week as the government’s reform agenda has come unstuck.
Only seven months ago she enjoyed the highest popularity ratings ever recorded by a postwar chancellor.
Today it looks as if the grand coalition of Social Democrats and Christian Democrats is failing to deliver change.
Wolfgang Munchau, Financial Times 9/7 2006
Der Spiegel, the influential German news magazine, last week asked whether she might end up as a less successful chancellor than Gerhard Schröder, her not very successful predecessor.
The compromise Ms Merkel tried to sell to the German public last week failed the main test – to break the link between health costs and wages. Nor did it include market-based mechanisms that would put a lid on overall spending on healthcare. Its main element was an increase in user charges. What Ms Merkel calls reforms in reality amount to little more than a hike in insurance rates. The main structural change is a new layer of bureaucracy to shuffle money between patients and the various health insurance companies.
Last week, the critics finally came out from their hiding places. Rarely have German political commentators used such vituperative prose as they did last week. The style of debate is getting rougher even within the grand coalition itself. Its leaders spent the last few days openly trading insults, accusing each other of a breach of trust. After seven months, this is the first genuine coalition bust-up.
Germany’s national economic strategy consists of two planks, budgetary consolidation and a beggar-thy-neighbour real devaluation inside the eurozone as Germany improves its competitiveness through wage moderation.
One could make a case for budgetary consolidation during a cyclical upswing, but a systemic policy of real devaluation is destructive from the perspective of the eurozone as a whole.
Wolfgang Münchau, Financial Times 15/5 2006
Last week, Germany’s grand coalition claimed it had effectively solved the pension problem after deciding to increase the retirement age from 65 to 67.
The German government has therefore solved the pension problem by turning it into a deflation problem.
Wolfgang Munchau, Financial Times 13/3 2006
In fact, welfare reforms may have caused the recent rise in protectionism. As reforms, they have been successful. They plugged financial gaps in the social security system and cut down welfare abuses. But they were unbalanced. They affected the social system but not the wider economy.
In a book published in Germany last week - Das Ende der Sozialen Marktwirtschaft, Hanser-Verlag, 2006 - I argued that the German government should have focused on reforms of the corporatist system, the so-called social market economy, rather than on social reforms.
The Hartz IV reforms, introduced by the previous government, dramatically reduced welfare entitlement. Unemployed single people, for example, now receive no more than a paltry €345 ($409) a month.
Welfare and pension reform, in particular, has had an undesirable macroeconomic effect.
A senior economic adviser to the German government told me he expected real wage deflation to continue for many years to come, even as the economy recovered.
The fall in pensions is even more dramatic than the fall in wages. Ten years ago, the German government projected that average pensions would reach €1,510 this year. Today’s average pension is only €1,184, about 22 per cent lower than forecast. What we are witnessing is a deflationary spiral in full swing, with both wages and pensions in real decline. The German government has therefore solved the pension problem by turning it into a deflation problem.
The causes of Germany’s fundamental economic weakness are still there.
There are several conventional explanations, none of which is fully convincing.
The consensus among central bankers is that failure to reform labour markets has depressed the trend growth rate, which may now be as little as 1 per cent a year.
Switzerland has been a model of a deregulated, low-tax economy. Yet its average growth rate since 1991 has been 1.1 per cent.
Wolfgang Munchau, Financial Times, January 16 2006
The consensus among central bankers is that failure to reform labour markets has depressed the trend growth rate, which may now be as little as 1 per cent a year. The flaw in this theory is that other countries, such as the Netherlands and Switzerland, have tried to reform their labour markets yet are performing even worse than Germany. Switzerland has been a model of a deregulated, low-tax economy. Yet its average growth rate since 1991 has been 1.1 per cent. If labour market reforms were the answer, the partial reforms of the previous German government should have improved growth by now. They have not.
An alternative reason is the macroeconomic policy regime.
Neither theory can explain, for example, Germany’s export puzzle. How can it be that the country is the world’s second largest exporter and yet is unable to generate domestic economic growth?
It is true that the wages of German production workers may not be internationally competitive. But the solution cannot be to cut their wages until they become competitive. What is needed is more economic flexibility, to give displaced industrial workers an opportunity to seek alternative high-wage specialisations. This would also be the best long-term response to a fall in the dollar.
Few have realised the most dangerous feature of EMU:
it has locked Germany into a seriously uncompetitive real exchange rate
Martin Wolf, Financial Times, March 31, 1999
Gerhard Schroeder's Sellout
It's one thing for a legislator to resign his job, leave his committee chairmanship and go to work for a company over whose industry he once had jurisdiction. It's quite another thing when the chancellor of Germany - one of the world's largest economies - leaves his job and goes to work for a company controlled by the Russian government
the chief executive of the pipeline consortium is none other than a former East German secret police officer who was friendly with Vladimir Putin, the Russian president, back when Mr. Putin was a KGB agent in East Germany.
Washington Post editorial, December 13, 2005
IT'S THE SORT of behavior we have - sadly - come to expect from some in Congress. But when Gerhard Schroeder, the former German chancellor, announced last week that he was going to work for Gazprom, the Russian energy behemoth, he catapulted himself into a different league. It's one thing for a legislator to resign his job, leave his committee chairmanship and go to work for a company over whose industry he once had jurisdiction. It's quite another thing when the chancellor of Germany -- one of the world's largest economies -- leaves his job and goes to work for a company controlled by the Russian government that is helping to build a Baltic Sea gas pipeline that he championed while in office. To make the decision even more unpalatable, it turns out that the chief executive of the pipeline consortium is none other than a former East German secret police officer who was friendly with Vladimir Putin, the Russian president, back when Mr. Putin was a KGB agent in East Germany.
The pipeline has cost Germany diplomatically by infuriating its Central European and Baltic neighbors. They point out that the Russian government chose to use the sea route rather than run a new pipeline alongside one that already exists on land, despite the far greater expense. The only possible reason for doing so was political: The Baltic Sea pipeline could allow Russia, a country that has made political use of its energy resources, to cut off gas to Central Europe and the Baltic states while still delivering gas to Germany.
Tysklands problem är låg ekonomisk tillväxt, hög arbetslöshet, svag konsumtion och ett för stort budgetunderskott.
Huvudmålet är att minska budgetunderskottet utan hänsyn till följderna för den ekonomiska aktiviteten - vad som brukar kallas dumsnålhet
DN, huvudledare 16/11 2005
Tysklands problem är låg ekonomisk tillväxt, hög arbetslöshet, svag konsumtion och ett för stort budgetunderskott. Samt en allmänt nedslagen stämning och ängslan inför framtiden. Det ska nu botas med högre skatter, både på inkomster och konsumtion. Borta är de skattesänkningar kristdemokraterna ville ha under valrörelsen, borta är också förslagen om att flytta löneförhandlingarna till företagen. Provanställningsperioden förlängs visserligen från sex till tjugofyra månader men möjligheterna begränsas att visstidsanställa.
Huvudmålet är att minska budgetunderskottet utan hänsyn till följderna för den ekonomiska aktiviteten. Den stora koalitionen kommer nära vad som brukar kallas dumsnålhet.
Risken är därför stor att Tyskland kommer att fortsätta i samma tillstånd som hittills, och det är inte så dåligt för den majoritet som har jobb. Men hos alla de miljoner som inte kommer in på arbetsmarknaden och hos alla dem som blir av med sina jobb till andra mer dynamiska länder kommer besvikelsen att växa. Och för Europa som helhet betyder ett problemtyngt Tyskland ännu en tid av svaghet.
Kommentar av Rolf Englund:
Man undrar när DN, och många andra, skall erkänna den svenska
dumsnålheten 1992 ff ?
A method to the dollar madness
So what's going on? Currencies are supposed to tumble in price when trade deficits climb this high.
The dollar's up because the euro is down
Jim Jubak, CNBC 15/11 2005
The parties seem to be deliberately over-ambitious
in their deficit goals and it is hard to understand why
Dirk Schumacher, economist at Goldman Sachs, Financial Times, 12/11 2005
Germany is set to breach the EU's budget rules for the fifth year in a row in 2006 as growth remains sluggish, the government's so-called "Five Wise Men" said in their latest forecast
Deutsche Welle 9/11 2005
As the incoming government under chancellor-to-be Angela Merkel tries to put together a program of reforms to get the German economy back on its feet, the Wise Men warned Berlin not to seek to plug the gaping holes in Germany's public purse by raising the sales tax, as is highly likely.
The European Central Bank is about to raise its interest rate for the first time in two and a half years. Does this move make any sense?
The ECB must not let an obsessive worry over what appear to be non-existent inflationary dangers kill off a fragile recovery.
That would be worse than a crime. It would be a blunder.
Martin Wolf, Financial Times, November 30 2005
Critic: Those whom the gods wish to destroy, they first make mad! At the very first signs of life in the eurozone, the ECB raises interest rates
Conservative: This is a typically hysterical reaction to the mildest of policy changes. All the ECB intends is to make an exceptionally accommodative monetary policy a little less so. Real short-term interest rates have been zero or negative for most of the last two years and the growth of money and credit has now reached 8.5 per cent.
The ECB believes that structural policies are chiefly to blame for the eurozone’s economic weakness.
The pre-announced interest rate rise that the European Central Bank is due to agree this Thursday must rank as one of the most bizarre monetary policy decisions of recent times
While the ECB does not pursue strict monetary targets, it has a monetarist tradition.
Wolfgang Munchau, Financial Times 28/11 2005
The real problem with the ECB is the mindset that has led to this decision. This mindset is also reflected in the Maastricht treaty, which establishes the central bank’s operating rules. It mandates that the ECB focus exclusively on price stability at the expense of other policy goals
The now defunct European constitution would have provided a golden opportunity for ECB reform. But EU leaders ducked the issue for fear of provoking a crisis of confidence in the euro. It is still not too late to propose ECB reform as part of the next treaty revision. For as long as EU leaders maintain the status quo, they have the central bank they deserve.
The ECB consensus holds that monetary policy has no “real” effects – those that affect growth and employment – and that monetary policy should therefore focus on price stability.
In the wide range of economic opinion, this is an extreme view.
So what institutional changes would it take to force the ECB to change its policy? Three specific, but moderate, amendments to the Maastricht treaty would do the trick.
Wolfgang Munchau is an associate editor of the Financial Times.
Mats Svegfors 1994:
Visst beror dagens problem i ekonomin i någon mån på missgrepp i slutet av 80-talet och början av 90-talet.
Men i grunden har Sverige inte hamnat i en stabiliseringspolitisk kris. Underskottet i statsbudgeten beror djupare sett på att vi försöker överbrygga en konjunkturnedgång när det i själva verket handlar om en grundläggande strukturell förändring.
Klicka här
Germany’s incoming “grand coalition” of Christian Democrats and Social Democrats is about to commit the biggest economic policy error since unification – the attempt to pursue budget consolidation at the expense of all other economic policy goals. In doing so, it risks turning a five-year-long stagnation into a full-scale depression.
It would be more accurate, perhaps, to compare her /Ms Merkel/ to Heinrich Brüning, a Christian conservative who was German chancellor from 1930 to 1932.
Wolfgang Munchau, Financial Times, 7/11 2005
Wolfgang Munchau is an associate editor of the Financial Times
The CDU and SPD have discovered a financing gap of between €35bn and €70bn which they plan to consolidate at once in 2006.
What does the new German government hope to accomplish with this policy? Part of the answer lies in the ideological zealotry of some Christian Democrats who believe that deficits are sinful. The other part is economic incompetence. The quality of economic policy advice at the level of the central government must rank among the worst in all developed nations. The few economists at the finance ministry are vastly outnumbered by lawyers. The legal case for deficit reduction – in terms of compliance with the European and domestic fiscal rules – is much stronger than the economic case.
One could conceivably justify a deficit-cutting strategy in combination with structural reforms that generate some short-term economic growth – such as deregulation of the services sector or financial markets, reduction in the transaction costs for house purchases, or an attempt to inject more competition into the market for housing finance. But the present state of coalition negotiations suggests this is not going to happen either. Ms Merkel may have campaigned on an agenda of reforms. But her “grand coalition” government will undertake far fewer reforms than the coalition of Gerhard Schröder, the outgoing chancellor.
Ms Merkel has often been compared to Baroness Thatcher, the former British prime minister. It would be more accurate, perhaps, to compare her to Heinrich Brüning, a Christian conservative who was German chancellor from 1930 to 1932. Mr Brüning was infamous for his insistence on balancing the budget every year, even though the country had already entered a depression. This coincided with the pursuit by the Reichsbank, the former German central bank, of a deflationary monetary policy.
Heinrich Brüning - Göran Persson - Carl Bildt
Part of what makes German politics so hard to read is the absence of an element present in virtually all western democracies: a body of publicly debated, right-of-centre doctrine.
It is easy to point to Mr Stoiber’s mix of Catholic social values and corporatism but harder to say whether his departure shifts Ms Merkel’s government “right” or “left”, or alters nothing. German politicians do not talk that way.
Udo di Fabio has written an American-style book. The Culture of Freedom (Die Kultur der Freiheit, C.H.Beck)
Christopher Caldwell, Financial Times, November 5 2005
Now he has written an American-style book. The Culture of Freedom (Die Kultur der Freiheit, C.H.Beck) chides Germans – and westerners in general – for embracing a specious idea of personal freedom that has actually made them less free. He seeks to rally them to a “new bourgeois age”. The book can be compared to Charles Murray’s Losing Ground (1984) or Allan Bloom’s The Closing of the American Mind (1987), which violated a set of social-democratic taboos and helped win over a politically disorientated middle class to conservatism and the Republican party.
EU political elites have no idea how to deal with globalisation and the EU’s institutions are not the place to tackle it.
The consensus in France is that globalisation is a threat against which one needs protection.
The Germans, supply-siders to the core, treat globalisation as a pure competitiveness problem. Their answer is wage cutting.
For the European Commission, globalisation is a good opportunity to launch wasteful programmes. The latest is the “shock-absorber” fund.
Wolfgang Münchau, Financial Times, 31/10 2005
The leaders of Germany's government-in-waiting agreed on Monday night to make spending cuts worth at least €35bn by 2007 in order to bring the budget deficit back in line with the European Union's fiscal rules
Financial Times 25/10 2005
Georg Milbradt, state premier of the eastern state of Saxony and a CDU finance expert, said on Monday that the necessary cuts would be painful. He told Financial Times Deutschland: “It's an illusion to believe that one could resolve Germany's budgetary problems without affecting the incomes of ordinary people. There are no easy solutions any more.”
Angela Merkel, the CDU's chancellor designate, has acknowledged that pensions would be frozen next year for the third successive year, and that cuts of at least €10bn to unemployment benefits for long-term unemployed were necessary.
Ms Merkel's comments came as she also sought to limit the damage of a debate within her own party over reasons why the CDU performed relatively poorly in last month's election.
Sir, Wolfgang Munchau could not be more right to argue that the current debate about European social models has got things the wrong way round (FT 9/11 2005)
It is time to set aside the tired debate pitting Europe against the nation state. Forced to choose between the two, voters in France, the Netherlands and elsewhere will not hesitate to opt for the national alternative.
The solution is not to push forward with “Europe”, but to explain to the voters that they do not need to choose. Put another way, if Europe is to recapture the popular imagination (and popular support), we need to make practical suggestions for how European integration can continue to rescue the nation state well into the 21st century.
At Chatham House we have been running a project on “Rethinking European Economic Governance” for almost a year now.
The Royal Institute of International Affairs (RIIA), also known as Chatham House
Erik Jones, Resident Associate Professor of European Studies—based at Bologna Center
These days, it is difficult to find a European think-tank that does not advocate adoption of the Scandinavian social model.
But the notion that the social model in small, consensual, wealthy and ethnically homogenous northern European countries such as Sweden and Denmark should serve as a model for large economies with huge wealth and income differences and mass immigration such as Germany or Italy is surely bordering on insanity.
Wolfgang Munchau, Financial Times 24/10 2005
Yet this is precisely the debate that European Union leaders will be having when they meet for their special summit at Hampton Court near London on Thursday. Instead of focusing on reforms of the social model, they should look at reforms of the EU’s economic system. The latter refers to the regulation of markets and macroeconomic governance. The former relates to risk insurance and social transfer systems. In the European debate, we
The right answer is therefore to liberalise markets, while retaining welfare and insurance systems. Instead, Europeans have been doing the opposite. We have scaled down our welfare systems without opening up our markets.
After 10 years of economic reforms, the Germans decided they had had enough.
The German electorate has launched a new era in European economic policy – a post-reform era.
The reforms by Schröder made life tougher but did not inject any new dynamism into the economy.
Wolfgang Munchau, Financial Times, October 10 2005
To outsiders, this sounds like a surprising statement. Germany does not feel like a reformed economy. Children leave school at 1pm. Mothers generally do not work. The shops close at 8pm. Most people work 35 hours a week. Trade unions and employers’ associations have a de facto monopoly over the wage level. Most companies cannot dismiss their workers. Trade unions hold 50 per cent of the votes in the supervisory boards. The list goes on and on.
His Hartz-IV welfare reforms extended means-testing and reduced overall entitlements. But they came at the wrong time – in the middle of an economic downturn – and most importantly, they were not accompanied by supporting reforms in other areas – for example, a liberalisation in services. They created plenty of uncertainty but no new jobs.
Among European policy elites, it has been virtually impossible even to contemplate the possibility that reforms might fail in the end. The worst possible scenario people had been imagining was for these reforms to be delayed.
The truth is that Europe has mismanaged the process of economic reform by making false promises and failing to explain what reforms should accomplish, by what time and through what channels.
Före 1970 hade Sverige låga skatter, 65 procents ersättning i a-kassa och sjukförsäkring samt flera karensdagar vid sjukdom - och reallönerna ökade i raketfart. Under 1970- och 1980-talet rusade skatter och ersättningar i väg - och reallönerna låg still.
Kom tillbaka, Carl Bildt, Bengt Westerberg och Bo Lundgren. Allt är förlåtet.
Niklas Ekdal, signerat DN 10/10
Kronkursförsvaret
Capitalism Vs. Democracy
The recent German and Japanese elections deserve more attention than they've received because they illustrate the uneasy relationship between capitalism and democracy.
Capitalism thrives on change - it inspires new technologies, products and profit opportunities.
Democracy resists change - it creates powerful constituencies with a stake in the status quo.
Robert J. Samuelson, Washington Post, September 28, 2005
In a study, political scientist Stephen Silvia of American University writes: "The [government's] share of the German economy has become too large, crowding out more productive economic activity. The cost of employing people -- in particular, non-wage costs -- has become too high. Government regulations . . . dampen competition." Schroeder made some changes. He cut lavish unemployment benefits (which made joblessness attractive). Merkel proposed easing restrictions against firing workers (which, perversely, deter companies from hiring new workers) and also wanted to relax nationwide collective bargaining (which makes wages rigid).
The weak Japanese and German economies partly explain the lopsided nature of world economic growth, which is overly dependent on constantly expanding U.S. trade deficits.
From 2000 to 2004, virtually all of Germany's meager economic expansion stemmed from increased exports; Japan's performance was also one-sided. Many economists regard this pattern as unstable, risking a global recession.
I am a bit more cautious than most about projecting a massive boom if Germany implements efficiency enhancing reforms.
The link between reform and growth is not obvious in the short-run. The dislocations associated with efficiency enhancing reforms (efficiency enhancing reform is economese for making it easier to fire people among other things ... ) can dampen consumer spending, as workers worry that they may lose their job and start to save more.
I do think Germany needs to do more to prepare for a world where the US no longer supports global demand growth, and to make sure the German government's future commitments are commensurate with its resources.
Brad Setser blog 15/9 2005
Long-term efficiency improvements do not always translate into higher consumer spending in the short-run. One potential explanation for why consumer demand has been so weak in Germany (see the OECD data) is the fact that Germany has started to reform. Unit labor costs in Germany are falling. That may be part of the reason why German household savings rose from 9.7% to 10.7% between 2000 and 2003.
German grand coalition plan in turmoil
Efforts to build Germany's grand coalition government descended into chaos on Tuesday as Edmund Stoiber, Bavarian premier, said he was no longer willing to join the cabinet of Angela Merkel, the chancellor-in-waiting.
Financial Times, 2/11 2005
Mr Stoiber's surprise decision not to become economics and technology minister means that Germany's unprecedented political crisis has now spread to the conservative parties following the unexpected resignation earlier this week of Franz Müntefering, leader of the Social Democrats, over an internal party power struggle.
Mr Stoiber was also annoyed that his proposals for a “super economics ministry”, encompassing aspects of the economics, technology and finance portfolios, had been watered down by Ms Merkel, analysts said. There are now fears in the CDU that Mr Stoiber, who failed in the 2002 election to become chancellor and has strained relations with Ms Merkel, will attack the coalition from his Bavarian power base.
SPD and CDU leaders said they still aimed to conclude a coalition agreement by their self-imposed deadline of November 12, but would continue negotiating if this target was not met. If they fail to reach an agreement, then both parties could try to form alliances with other, smaller parties. Fresh elections would be called if no coalition is formed.
No one wanted publicly to contemplate the prospect of more political uncertainty for Europe's largest economy, let alone the prospect of fresh elections if the current disarray leads to deadlock. But the prospects that Merkel, who hopes to be elected chancellor by Parliament on Nov. 22, could serve out a four-year term as Germany's first woman leader appeared diminished.
Nevertheless, she appeared on television Tuesday night and told the country: "I am fully committed to making a grand coalition possible. We will work to make a success of it."
In the first setback for Merkel, Franz Müntefering, the designated vice chancellor and labor minister, resigned suddenly on Monday as leader of the Social Democrats after a rebellion by a younger generation of politicians in the party.
With Müntefering no longer having the authority to push through a coalition agreement on the left and Stoiber no longer involved in the talks, Merkel is in an even weaker position to have a coalition accord accepted by either the conservatives or the Social Democrats.
International Herald Tribune 1/11 2005
Brandenburg Premier Matthias Platzeck has said he had won enough support to lead the Social Democratic (SPD) party
Platzeck will be the SPD's first leader from eastern Germany
Press Review: Bizarre Spectacle of German Politics
Deutsche Welle 2/11 2005
Brandenburg Premier Matthias Platzeck has said he had won enough support to lead the Social Democratic (SPD) party, ending a crisis after party chief Franz Müntefering said he would step down. Platzeck, 51, said he would take over as party president after meeting with a rival for the post, Kurt Beck, the premier of Rhineland-Palatinate. Beck said he was supporting Platzeck, who in turn said he had received the backing of all of the party's regional groups. Platzeck said he would combine the party leadership with his functions as state permier in the eastern German state of Brandenburg. As he governs with a grand coalition of SPD and CDU in his state, he is also well prepared to take part in grand coalition talks on the national level.
Den politiska krisen i Tyskland har förvärrats efter att socialdemokraternas ordförande Franz Müntefering oväntat hoppat av.
Sex veckor efter nyvalet har Tyskand fortfarande ingen ny regering och de pågående förhandlingarna om en storkoalition riskerar att spricka.
Ekot 1/11 2005
35 miljarder euro ska sparas och det är det största sparpaketet i tysk efterkrigstid. Båda partierna ska godkänna regeringsplanen om två veckor och därefter ska Angela Merkel tillträda som kansler. Så är det tänkt.
Gero Neugebauer, a professor of political sociology at Berlin's Free University, does not believe the current uproar over the SPD leadership and Stoiber's return to Munich necessarily means the end of the grand coalition, despite the shaken confidence of the parties involved. "Both parties have a long-term interest in making it work for now," he said. "Both need to build a stable government and look toward to the 2009 elections."
But he added: "The chances of that coalition being stable are now not as good."
Deutsche Welle
Germany
All the political parties, and their leaders, are now engaged in tortuous manoeuvring over possible coalitions that smacks more of Weimar than of the Federal Republic
The Economist editorial 22/9 2005
Comment by Rolf Englund:
Weimar was not so bad, until The Great Depression, the latest
research shows
Det tyska valet kan som de franska och holländska nejen till EU-författningen ses som utslag av den förtroendeklyfta mellan väljare och politiker som blivit allt mer uppenbar i Europa.
DN-ledare 22/9 2005
Den kanaliseras lätt till EU-projektet men gäller något mer: Medborgarna misstror framtiden och politikerna misströstar om sin förmåga att övertyga dem om att de har en lösning för denna framtid.
VOTERS OF GERMANY, I salute you! On Sunday you delivered a fair, constructive and intelligent verdict on your political class.
The fact that all respectable commentators in the German and European establishment agreed in declaring this election to have been an utter disaster — “the worst of all possible outcomes” is the cliché of the hour — merely confirms the democracy’s main premise:
the collective wisdom of the people is usually wiser than the conventional wisdom of a self-regarding elite.
Anatole Kaletsky, The Times, September 22, 2005
The German election was a triumph of democracy in the same way as the referendums in France and the Netherlands. Just like those referendums, it has created a political stalemate, neutered diplomacy and paralysed the economic reform process. But political paralysis was exactly what German voters wanted — and quite rightly so.
Germans were right to vote for political paralysis for the same reason that the French and the Dutch were right to immobilise Europe: because German politicians were all, without exception, determined to push their country in the wrong direction, and if you are moving in the wrong direction towards the edge of a precipice, immobility is a better option than dynamism
If these were the policies that could pull a country out of recession, then Herbert Hoover would be remembered as the greatest US President of the 20th century and Montagu Norman would be more celebrated as an economist than Maynard Keynes.
The new German government’s deflationary macroeconomic policies will sabotage potentially favourable results of supply-side reforms.
The need for mutual support between pro-competitive supply-side reforms and expansionary macroeconomic policies should be obvious to anyone with an understanding of Keynesian economics.
It has been amply demonstrated in practice — positively by the success of the US and UK economies since the mid-1980s and negatively by the consistent forecasting failures of the pre-Keynesian economic flat-earthers of the European Central Bank
Anatole Kaletsky, The Times, September 19, 2005
Angela Merkel
Why a science degree and a handbag are not enough for the new Iron Lady
Anatole Kaletsky, The Times, September 8, 2005
The reasons for scepticism about Germany are twofold. The first is that Germany’s electoral system is still very biased against a strong Thatcher-style government.
Frau Merkel’s reform programme, for all its fine rhetoric about competition and incentives, is economically misconceived. In fact, if Frau Merkel really implements her election promises, the German economy will probably slide into an even deeper morass.
This is because the austerity measures in her initial reform plans — higher consumer taxes, smaller government deficits, cutbacks in pensions and job security — would initially exacerbate unemployment and weaken economic growth... If Frau Merkel sticks to these masochistic priorities, not only will she push Germany into deeper recession: she could well set back pro-market reform across Europe for another decade.
To German devotees of Thatcherism this may seem an outrageous accusation; the Iron Lady, after all, pushed Britain into deep recession in 1979 and still emerged triumphant. What such masochistic neo-Thatcherites forget is that Britain in 1979 needed austerity because it had to stop economic overheating and inflation; Germany today has exactly the opposite problem.
In sum, Angela Merkel may seem to have a great deal in common with Margaret Thatcher, given her science degree, her bluntness and her hand-bag. But such superficial similarities may deceive. Thatcher did not, in general, demand pointless sacrifices and pick fights that she was bound to lose.
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The formation of a Grand Coalition will put an enormous strain on a party system that is already fragmented, by encouraging more radical small parties to formulate ever more outrageous alternatives to existing policies. |
Machtübernahme and all that |
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For Angela Merkel, the leader of Germany’s Christian Democrats, the grip on power is slowly slipping away. |
Angela Merkel’s failure to land a decisive victory in the German elections has sent shockwaves around the European Union and left supporters of economic reform in despair. |
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Det största nederlaget led ändå kristdemokraterna, som gjorde sitt sämsta val sedan 50-talet. |
När jobben står på spel är det ohållbart att centrala kollektivavtal ska kunna hindra lokala uppgörelser om längre arbetstider och lägre löner. En uppluckring av det starka anställningsskyddet skulle öka rörligheten och antalet nya jobb. |
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The disappointing result suggests that Ms Merkel may not have been the right candidate for the CDU, because she is so atypical of a party with deep catholic, social and western elements. |
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Tyskland har hittills sluppit högerpopulismen. Landets mycket civiliserade politiska kultur har varit stark. Men även den tyska valmanskåren är föränderlig och inget är givet. |
Massarbetslöshet, ekonomisk stagnation och offentliga underskott till trots misslyckades CDU och liberala FDP att samla en majoritet bakom sig. Tyskarna önskade sig förändringar men svek förändringsbenägna politiker. Ett dystert resultat för hela Europa. |
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Tyska arbetare måste bli billigare och tyska konsumenter få det litet dyrare. Så ser Angela Merkels program ut i stark förenkling. |
Många tyskar inser dock, glädjande nog, att förändringar behövs. Annars skulle kristdemokraterna, som vill gå ännu längre än SPD i fråga om reformer, knappast ha fått mer än var tredje röst. |
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Euron är inte problemet för Tyskland, tvärtemot vad många tror. Europeiska centralbankens styrränta på 2 procent är inte högre än den räntenivå som gamla Bundesbank skulle ha hållit |
For 34 years she worked in the same factory, but she lost her job in December 2002. |
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The lavish welfare state, financed from levies on wages, has raised average labour costs in the manufacturing sector to €27.60 ($33.70, £18.60) an hour, making German workers some of the most expensive to employ on the planet – Americans cost €18.76, Poles €3.29. |
Few have realised the most dangerous feature of EMU: it has locked Germany into a seriously uncompetitive real exchange rate |
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Angela Merkel, who was brought up in East Germany, is an uncharismatic campaigner who appears thoroughly uncomfortable at being called a German Margaret Thatcher. |
Det är ganska enkelt. Loket i den europeiska ekonomin behöver nytt bränsle för att åter kunna få upp farten och det ställer krav på förändringar av den tyska sociala modellen... |
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On Friday a senior CDU politician admitted for the first that the public might not support the tough economic reforms likely under a CDU-FDP alliance. |
If Chancellor Gerhard Schröder is ousted from office in just over a week, it will largely be because he failed to address Germany's joblessness - currently stuck at an alltime postwar high |
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Wolfgang Schauble, foreign affairs adviser in opposition leader Angela Merkel's pre-election team |
Ken Clarke’s dismissal of the euro as a “failure” is like a cardinal telling us that God doesn’t really exist. |
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The federal government will borrow €22 billion ($27 billion) next year, pushing the overall budget deficit well above 3% of GDP, the ceiling supposedly set by the euro-area's stability pact. Public debt will hit €1.5 trillion by the end of 2005, or 68% of GDP. If nothing is done, some projections have debt rising to an Italian-style 111% by 2050. Adding implicit debt, such as pension liabilities, pushes the ratio to three times as high. |
It is economic performance – not the European Union budget or any proposed constitution – that will determine the fate of the “European Project”. |
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It is extraordinary to consider, for example, that the German people never had the opportunity to express their views in a referendum as to whether they ought to abandon one of the most successful post-war monetary regimes in favour of an untried and untested currency. Even if one makes allowances for Germany’s traditional post-war phobia of being perceived as “bad Europeans”, it is almost certain that most would have voted to retain the D-mark, had they been given the opportunity to express themselves in a proper democratic forum. |
Bild, a leading German tabloid, showed overwhelming hostility in Germany to the constitution. |
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Gerhard Schröder; Det är under hans tid vid makten som den mödosamma omprövningen av en förkalkad välfärdsstat till sist ändå har inletts. |
Visst är det lustigt att moderaterna i Sverige går till val på det som
väljarna i Tyskland just med kraft har avvisat. |
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UPI press agency |
De omstridda så kallade Harzreformerna innebär bland annat en sänkning av ersättningsnivåerna för många arbetslösa och hårdare krav på att ta de jobb som erbjuds. |
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In North Rhine-Westphalia, as in the rest of the country, the No. 1 issue is unemployment. Of the country's five million jobless, more than one million live in North Rhine-Westphalia. In Gelsenkirchen, a city in the Ruhr Valley, Germany's industrial heartland, the jobless rate is a whopping 25%, double the national average. "My most important job is to give people hope, to make sure depression doesn't take over," said Mayor Frank Baranowski just before the elections. "It might take another 15 to 20 years before things are back to normal here, but at least people know that their children will have a better life." |
Given the results of yesterday's elections, it's clear that voters - furious about recent cuts to unemployment benefits - don't have that kind of patience. |
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The most ignominious defeat of Gerhard Schröder's political career may be at hand. |
German Chancellor Gerhard Schroeder plans to seek early elections following his party's devastating loss of a key powerbase |
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The ruling coalition of Gerhard Schröder faces a crucial test in North Rhine-Westphalia this Sunday. |
Tysklands största delstat Nordrhein-Westfalen |
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Enligt tidningen Süddeutsche Zeitung ska EU-författningen föras upp i den tyska Författningsdomstolen |
Det tyska folket har egentligen inte frånhänt sig några befogenheter, argumenterade domstolen. Dessa är bara utlånade. Unionen är ett provisorium. Därigenom kränks inte den tyska demokratin. |
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The proposal for a new European Union services directive, issued when Frits Bolkestein was single market commissioner, is under attack from all sides. |
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The new constitution, with its nonsense about a "social union", makes the wrong choices. |
As Germany becomes part of a bigger labour market with hugely divergent welfare standards, it will become a magnet for immigrants. |
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When Gerhard Schröder was first elected German Chancellor in 1998, 3.8 million Germans were out of work. |
Without the Stability Pact there would have been no support in Germany for the new currency. |
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Det finns ingen trovärdig vändpunkt i sikte. I dag står cirka 5,2 miljoner tyskar utan arbete. |
Gloom about Europe's economic outlook intensified markedly on Thursday after a plunge in economic confidence across the continent and further rises in French and German unemployment. |
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Germany would be able to cite the costs of its reunification as an excuse for breaking the European Union’s stability and growth pact. |
Germany does U-turn on competition in services
Germany has joined France in asking the European Commission to rethink ambitious plans to open the services sector to cross-border competition. |
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Five million Germans out of work |
Fem miljoner tyskar utan jobb |
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German unemployment rose for the 11th consecutive month in December - making the year's average jobless total the highest since reunification.
The seasonally adjusted jobless total rose a higher than expected 17,000 to 4.483 million, the Bundesbank said.
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Hans Eichel, finance minister, criticised the Bundesbank for refusing to help ease government financial problems by selling gold reserves. |
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– Det multikulturella samhället är dömt att misslyckas. |
Tack gode Allah för Europeiska Unionen |
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Germany's unemployment rate rose in November to the highest since December 1998 as business confidence fell to its lowest in more than a year |
Others countered that - at least as far as the European Union is concerned - English should not necessarily be given the status of the bloc's foremost language. |
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One Euro, One Way out of Unemployment? |
Continental Europe, and more specifically, Germany, would have to
find enough of an autonomous momentum to achieve a higher relative growth path. For this scenario to
materialise, a modicum of stability in oil prices and exchange rates is required, which would allow a
traditionally weakly resilient euro area to start catching up with the fast growing economies of the OECD.
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Euron spricker när dollarn faller |
How long will the euro survive? The author shows that the answer depends principally on Germany. |
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Business confidence in Germany, Europe's largest economy, has fallen to its lowest level in more than a year, over concerns at a strengthening euro. |
German economy grew just 0.1% in the three months to September, slower than expected.
The figure is the lowest since the outright contraction in the second quarter of 2003. |
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The number of unemployed in Germay rose to 4.457 million. |
German Foreign Minister Joschka Fischer has said Turkish entry to the European Union would be as important for Europe as the D-Day invasion 60 years ago. |
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German Chancellor Gerhard Schröder's hard-won labour market reforms could weaken his country's generous but underfunded social security system and fail to reduce unemployment, Germany's six leading economic institutes said |
External relations commissioner-designate Benita Ferrero-Waldner has put forward the case for a EU role on the UN’s Security Council. |
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The German Christian Democrat Party appears to be suffering an internal split over the Turkish issue. The leader of Germany's centre-right opposition party, Angela Merkel, earlier this month wrote to other centre-right leaders in the EU in a bid to block Turkey's full membership of the EU, offering instead a "privileged partnership". Chairman of the German Parliament’s foreign affairs committee Volker Rühe has however criticised the party’s leader Angela Merkel of being out of step with the majority in Europe. |
For the first time since 1989, Germans are questioning the old assumption that East would eventually meld into West. Instead it is becoming apparent that the two sides have begun to diverge economically, politically and culturally. | |
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I mötet mellan Stasi och den västtyska välfärdsstaten förenades det sämsta av två världar |
EMU bäddar för bråk |
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Hans Tson Söderström: Tur att vi har vår flytande krona |
Germany's mainstream political parties were sharply rebuffed on Sunday when voters in two regional elections in formerly communist East Germany handed extremists their best results in years |
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Schroeder said Monday he "would have wished for a better result |
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Commission's quarterly economic report |
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Can the world trust Germany, and can Germans trust themselves? |
It has never been clear whether the intention of the
stability pact was to secure fiscal sustainability, to run an optimal fiscal
policy for the eurozone as a whole or - as I always suspected - to dissuade
some countries from joining the euro Wolfgang Munchau Financial Times 24/5 2004 |
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"The [European] project has broken down: no-one today can
give a satisfactory answer to the question of why Europe [exists] and where it
is going" |
The finance ministers of Britain, France and Germany are
joining forces to call for reinterpretation of the eurozone's stability and
growth pact |
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Stora euro-länder som Tyskland och Frankrike, men
även nya medlemmar som Polen och Tjeckien, riskerar att få extremt
stora problem med sina offentliga finanser. |
Europe's traditions deserve a debate that identifies distinctive
European values and defines the nature of the great political experiment in
which the states of Europe are engaged. A document that raises the spirit.
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Den 13 juni är det val till Europaparlamentet. Den centrala
frågan inför detta val borde vara hur mycket makt vi är beredda
att överlåta till EU. |
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With present policies and public finance structures, Germany
is on course for insolvency |
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Stora euro-länder som
Tyskland och Frankrike, men även nya medlemmar som Polen och Tjeckien,
riskerar att få extremt stora problem med sina offentliga finanser.
Kreditvärderingsföretaget Standard & Poor’s har gjort framtidsberäkningar för 25 industriländer, däribland Sverige.Politikerna komemr med tiden att tvingas till en rad impopulära beslut, tror Marianne Flink, chef för Standard & Poor’s i Sverige: Trots den här varningen ser Standard & Poor’s ingen katastrof inom synhåll de närmaste 10-15 åren. Det är först därefter som de offentliga finanserna står inför ett hotande haveri. Men som vanligt är många faktorer inblandade, till exempel att förmånerna i välfärdssystemen är oförändrat stora, att skatterna inte höjs, att ålderspyramiden och tillväxten fortsätter utvecklas ungefär som i dag. Men i så fall kommer mycket att gå över styr. Inte minst i stora euro-länder som Tyskland och Frankrike. Men även nya medlemmar som Polen och Tjeckien, riskerar att få extremt stora problem med sina offentliga finanser. Växande problemen tornar upp sig, inte bara i Europa utan även i USA, Japan och i en asiatisk tigerekonomi som Sydkorea. Vid en jämförelse kommer några länder att klara bättre. Dit hör bland andra Sverige och Storbritannien, som ser ut att klara de nuvarande kraven i EU:s stabilitetspakt. |
German Chancellor Gerhard Schröder and his
conservative opponent Edmund Stoiber have blasted new EU member states for
policies of tax-dumping and unfair tax competition. |
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"Vi befinner oss i en dämpad uppgångsfas, utan
någon bredare bas. |
Why Germany's economy is failing to fly |
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Delstatsvalet i Hamburg på söndagen är
det första av 14 val i Tyskland i år och supervalåret inleddes
med en stor förlust för socialdemokraterna. |
Europe is doing much worse than the United States
economically, right? Not if you subtract Germany. Without Germany's
figures, The Economist magazine has computed, Europe's economic performance
would look as good as America's. |
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Turkiets förhållande till EU blir en
valfråga i den kommande valrörelsen inför valet till
Europaparlamentet |
Gerhard Schröder, German chancellor, is expected to
provide strong backing for Turkey's bid to join the European Union |
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Germany used to be one of Europe's richest nations. In
the late 1980s its GDP per head was 20% higher than the average of the European
Union. But estimates by The Economist suggest that Germany's GDP per head fell
1% below the EU average last year |
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The Commission says the economic forecasts produced by
Chancellor Gerhard Schröder's government are unrealistic, and that Germany
will breach the European Union's stability pact for a fourth successive year in
2005. |
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Det kan hända att de här tre gamla galtarna ska
böka på egen hand ett tag, sa den svenske statsministern Göran
Persson apropå det europeiska stormaktsmöte som i dag inleds i
Berlin. |
If there has been one element of consistency in the career of Gerhard Schröder, the German chancellor, it has been his determination and ability to occupy positions of power. So to find Mr Schröder giving up his other big job - the chairmanship of Germany's Social Democratic Party - speaks volumes for the mess in which he finds himself, and adds hugely to the uncertainties surrounding economic reform in Germany. Mr Schröder's ability to come from behind and secure
his objectives should never be underestimated. But he risks being in office and
not in power until the 2006 national election. The resulting reform hiatus
would be a terrible outcome for Germany, Europe and the world. |
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German Chancellor Gerhard Schroeder
has announced his resignation as chairman of his party Germany's Social Democrats suffered several setbacks in state elections last year. They have also hit an all-time low of about 25% in opinion polls, and lost tens of thousands of members. |
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The German economy has "turned the corner" and is set to grow by up to 2 per cent this year despite concerns over the strong euro, according to a government report. Wolfgang Clement, economy and labour minister, said that this year's economic recovery would outstrip the 1.5 per cent average growth figure recorded in the 1990s, in a sign of the early fruits from Chancellor Gerhard Schröder's structural reforms. Mr Clement predicted average unemployment would fall this
year by 100,000 to 4.28m, with the monthly total falling below the symbolically
important figure of 4m in "late summer". |
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I Frankrike lever stundom föreställningen kvar
att landets stormaktsstatus skall garanteras genom ett europeiskt samarbete.
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MEPs would get a basic salary of /SEK 83.000/ €9,053
($11,400) a month ( |
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Tysklands var den ivrigaste förespråkaren
för stabilitetspakten. |
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Euroländernas finansministrar nådde tidigt
på tisdagsmorgonen en kompromiss som kan avvärja den hotande krisen
kring Tysklands och Frankrikes budgetunderskott. |
German plan could be end of stability pact |
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Ulrike Guerot, |
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About 100,000 people have marched
through Berlin protesting against the German Government's far-reaching reforms
to the welfare system. |
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The Franco-German monster |
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Carl Tham talar: Tyskland - ett land i kris?
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The governing coalition in Germany has
proposed freezing the level of retirement pensions in 2004 as a part of its
economic reform package. Mr Schroeder admitted that the freeze effectively
amounted to a cut in real benefits received by pensioners. |
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Ser ni inte dramat på kontinenten? |
Germany signalled its determination on Monday to press
ahead with building a two-speed Europe, in the face of Sweden's resounding
decision not to join the euro. |
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Tyskland som svarat för nästan en tredjedel av BNP i eurozonen väntas även nästa år bryta mot stabilitets- och tillväxtpakten med ett rekordstort budgetunderskott på 4,3 procent av bruttonationalprodukten. Varningen kommer från konjunkturinstitutet DIW i Berlin som i går gjorde en dramatisk revidering av sin juliprognos på 3,6 procent och nu förutsäger ett underskott på 80 miljarder euro i år och 87 miljarder euro nästa år. - Sker inget mirakel har Tyskland inte en chans att klara 3-procentgränsen i stabilitetspakten, säger till SvD Näringsliv nationalekonomen Dieter Vesper som är ansvarig för DIW-prognosen. Vesper dömer ut statsminister Göran Perssons angrepp på Tyskland och Frankrike. Persson kritiserade i tisdagens Financial Times att de stora länderna i EU försummat att spara och genomföra reformer. - Vad gäller dagsläget är kritiken
irrelevant. Ingen i Europa är betjänt av att Tyskland sparar
ihjäl sig bara för att uppfylla budgetkriterierna, säger Vesper.
DIW anser att länder som Sverige i stället gynnas av att Tyskland
sänker skatterna och försöker få fart på
efterfrågan, precis som resten av Europa profiterade av den tyska
återföreningsboomen i början på 90-talet. Nästa
års skattesänkning är en av huvudorsakerna till att
statsfinanserna fortsätter att dräneras. Andra faktorer är den
höga arbetslösheten som har fått utgifterna för
socialbidrag och A-kassa att explodera. DIW är det första stora
forskningsinstitutet i Tyskland som nu officiellt gör tummen ner för
finansminister Eichels löfte att sänka budgetunderskottet till mindre
än 3 procent nästa år. Men även resten av instituten
förbereder nya prognoser med dystra siffror. |
Hans Eichel, German finance
minister: Germany might breach the stability pact by more than expected
|
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I stället för att kraftfullt förklara
varför han anser att det är avgörande för Sverige att vara
med i euro-projektet ägnar han sig åt att diskutera ett eventuellt
haveri av stabilitetspakten. Perssons resonemang om stabilitetspaktens problem är i sak inte fel. Tyska ekonomin står mitt i en av sina värsta kriser, liksom den franska. Om detta resonerar Persson insiktsfullt. Han borde ha fortsatt med att förklara varför pakten, om än reformerad, trots allt behövs. |
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Ett av nejsidans favoritnummer
är att Tysklands ekonomiska kris beror på euron |
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Han poängterar att de ekonomiska svårigheter
som Tyskland idag har inte har att göra med det europeiska ekonomiska
samarbetet. - Det är nationella problem som kan lösas inom
Tyskland med politiska beslut. |
Bankgesellschaft and several other German banks engulfed
in bad loans and creating a financial headache just as horrible as the 1980s
bubble in Japan |
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Utvecklingen i Tyskland är bara ett ovanligt tydligt
exempel på det reformbehovet. |
Germany is on course to breach the
European Union's budget deficit rules again next year unless it does more
to cut spending, the Bundesbank warned yesterday. |
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The European Commission has warned Germany radical
restrictions |
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Recession gripped Germany, Italy and the Netherlands
|
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German bank fears |
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Parallels between the American boom of the second half of
the 1990s and the present European recession. |
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"Jeg var måske lidt naiv" |
Italy has officially entered
recession |
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Det finns starka ekonomiska
skäl för att ha en buffert i statsfinanserna om man ska gå med
i EMU |
Germany's seasonally unadjusted unemployment rate rose to 10.4% in July, up from 10.2% in June. That means an extra 94,500 people were out of work in July,
bringing the total to 4.35 million. |
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Tyskland lånar till skattesänkningar |
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Lundgren-falangen lutar sig gärna mot den teori som
utvecklades av Robert Mundell - Nobelpristagare i ekonomi - om optimala
valutaområden. Kort innebär den att om länder inte har samma
struktur så är det svårt bedriva en gemensam ekonomisk
politik. Euromotståndarna brukar åberopa Tysklands
återförening som exempel på sådana strukturproblem.
Det vittnar om okunnighet om Tysklands historia att insinuera att en expansiv
valutapolitik skulle ha tillgripits för att åtgärda dessa
problem. Sällan har en teori blivit så missbrukad som Mundells!
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Germans are from Mars, Italians are from Venus |
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Tänk om Tyskland, för säg två
år sedan, hade kunnat sänka sin ränta kraftigt. Det hade
naturligtvis haft positiva effekter för investeringar, produktion och
sysselsättning. Att förneka det är att förneka alla
kända ekonomiska samband. |
Germany gets its way on immigration
policy |
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Tysklands inträde i EMU 1999 skapade naturligtvis
inte svårigheterna men förvärrade dem. |
German unemployment has fallen for the fourth month in a row, down to 4.26 million - or 10.2% of the workforce - from 4.34 million in May, but well below the peak of more than 4.7 million at the beginning of this year. The overall number of Germans in work also fell, an indication that prolonged economic gloom has persuaded many to quit the workforce Much of the decrease in unemployment, meanwhile, can be accounted for by adjustments to the way the figures are calculated. |
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Det är nonsens att Tysklands
ekonomiska problem beror på euron. De beror istället på
återföreningen. Det sade Tysklands utrikesminister Joschka Fischer på tisdagen vid ett socialdemokratiskt ekonomiskt seminarium under Almedalsveckan. Han ville också tona ned Tysklands federalistiska ambitioner för Europa och sade att federalism enligt tysk tradition snarare innebär decentralisering än centralisering. "From Confederacy to Federation - Thoughts on the finality of European integration" , Speech by Joschka Fischer at the Humboldt University in Berlin, 12 May 2000 |
"We know them, the German people. They
always want to be the best in the class and inhabit our beaches in the summer,
punch-drunk with arrogant self-confidence." With his country’s leader still embroiled in controversy, the Italian under-secretary of State for Industry, Stefano Stefani has attacked the German people in another extraordinary outburst from a member of the Italian government. In a letter addressed to his party members, the Lega Nord party member writes: "We know them, the German people. They always want to be the best in the class and inhabit our beaches in the summer, punch-drunk with arrogant self-confidence." |
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Chancellor Gerhard Schroeder insisted
that Germany could afford the stimulus of income-tax cuts without having to
raise other taxes, because the economy would grow fast enough to offset lost
revenue. |
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I regel kommer troligen den svenska konjunkturen att vara
väl synkroniserad med de andra EU-ländernas, men i vissa lägen
kan det uppkomma stora avvikelser som kan ge allvarliga stabiliseringspolitiska
problem (som i Sverige i början av 1990-talet eller i Tyskland i dag) |
“There's a clear sense that France and Germany are
moving side by side on economic co-ordination,” says a French official. If
so, no need to worry too much about penalties for breaching the stability
pact. |
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Haken är finansieringen. Det har
talats vagt om besparingar och privatiseringar, ja till och med om ökad
skuldsättning, men Tyskland har redan brutit mot reglerna i EU:s
stabilitetspakt två gånger så nu krävs att man drar ner
på de offentliga utgifterna. Allt annat är ohållbart.
|
"We will surely vote as expected, that is - not in favour", says Bavarian prime minister and CSU leader, Edmund Stoiber, in the German newspaper, Spiegel Online. "If the proposed tax cuts will not result in a serious
increase of the budget deficit, the step is in general a good thing,"
comments the President of the Bundesbank, Ernst Welteke in the Financial Times
Deutschland.
Background |
|
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Underskotten i den tyska budgeten
innebär ett hot för EU:s stabilitetspakts existens. Det sade Wolfgang
Wiegard, ordförande i förbundskansler Gerhard Schröders
råd av ekonomiska rådgivare, vise män, i en intervju med
Tagesspiegel på måndagen, enligt Bloomberg News. |
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Enligt Padoa-Schioppa, som är ledamot i
Europeiska centralbankens direktion, är det inte märkvärdigare
att ECB sätter samma ränta för hela euroområdet än
att tyska Bundesbank tidigare gjorde det för hela Tyskland, med deras
stora regionala skillnader. |
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Fromlet tillstår inga samband mellan Tysklands
negativa utveckling och euron och det gör inte heller Anders B Borg i sitt
genmäle. |
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En del menar att EMU-medlemskapet
förvärrar Tysklands situation i och med att det främsta vapnet
mot deflation är styrräntan. Dagens räntenivå på 2
procent är anpassat till EMU-snittet och inte specifikt för den tyska
situationen. Men det är ett pris som Tysklands nationella
centralbankschef, Ernst Welteke på Deutsche Bundesbank, är villig
att betala. |
A meeting is starting at an 18th
Century chateau near Berlin on Saturday that could further threaten the
credibility of the European Union stability pact. |
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The German life insurance sector has
suffered its first company collapse in 50 years. |
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The perils of political Europe |
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När jag har följt debatten har jag ibland
uppmärksammat argument som inte alltid har bekräftats av ekonomisk
forskning. |
While the CDU party seems prepared to
endorse the draft, Bavarian prime minister and CSU leader, Edmund Stoiber said
he would not be ready to ratify the paper in the German Bundestag as it stands,
according to German media reports. |
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Föga vettigt att hänvisa till den kraftigt
försvagade dollarn som ett argument mot
EMU. |
A contemptible deal |
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EMU är i gungning |
A half-serious proposition
|
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Robert Goebbels |
Germany has been called everything
from the sick man of Europe to the sleeping giant of the European Union. But in
a little-noticed consequence of Europe's constitutional convention, Berlin has
emerged as perhaps the biggest winner in the Union's internal power struggle.
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Tyskland hade inte haft bättre sits med egen valuta
|
Fears that Germany may be heading for
the damaging combination of deflation and recession that has plagued Japan for
more than a decade were fuelled earlier this week by the International
Monetary Fund said Germany faced a "considerable" risk of mild deflation over
the coming year and warned that the deep-seated economic woes of Europe's
biggest economy could quickly spill over into the rest of the eurozone.
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Inför folkomröstningen om euron
hävdar många att Tyskland utgör ett varnande exempel. Exakt
på vad är dock oklart. För egen del ser jag inte de tyska
problemen som skäl att säga nej till euron. Mer intressant är
vad som har skett i vårt östra grannland Finland. |
Unless monetary policy is loosened, such a level of
competitiveness /in Germany/ could take a decade to attain. |
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EMU-blocket hade nolltillväxt första kvartalet
i år, rapporterade Eurostat nyligen. Och utsikterna framöver ser
minst sagt bleka ut, inte minst för Europas största enskilda ekonomi,
Tyskland. Vad EMU-ländernas exportföretag - och för den delen
hela ekonomierna - minst av allt behöver är en "revalverad" euro.
|
Most economists do not currently see
deflation as an imminent threat to the eurozone. |
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"Sture Eskilsson tar upp Tyskland, och säger att
landet drabbats hårt på grund av påfrestningar skapade av
EMU. Det är ju totalt fel." |
Inflation in the developed world is at
its lowest in almost half a century. This should be a moment of triumph for
inflation-busting central banks. Yet instead, many economists are fretting that
they have succeeded too well. Prices have been falling in Japan since 1995; in
America and Germany the risk of deflation is greater than at any time since the
1930s. |
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Krig har alltid vinnare och
förlorare. Saddam Hussein - död eller på flykt - är
naturligtvis Irakkonfliktens stora förlorare. Men också Tyskland har
förlorat mycket, inklusive de många amerikanska trupper som enligt
uppgift ska flytta till baser i andra länder. |
It´s tough when prices rise.
But falling prices can be even worse. Deflation brought down Weimar Germany,
it´s crushing Japan, and it could be coming to you soon |
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Den tilltänkte moderatledaren Fredrik Reinfeldt
illbakavisade bestämt nejsidans argument att Tysklands pressade ekonomi
skulle vara en följd av EMU-inträdet |
If the dollar contiunes to decline-
something that should be expected given
the unustainable US current
account deficit of 5 per cent of gross domestic product - the probability
of exported disinflation from the US to Europe looms large. Deflation in
Germany is becoming more likely every month |
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Inför folkomröstningen om euron
hävdar många att Tyskland utgör ett varnande exempel. Exakt
på vad är dock oklart. För egen del ser jag inte de tyska
problemen som skäl att säga nej till euron - däremot som en
varning om vad som sker om arbetsmarknaden är för stel och
kostnaderna för höga. |
Even though Germany, the biggest economy in the euro zone, is suffering from a crisis of historic magnitude and is close to deflation, the European Central Bank has refused to cut interest rates. It must give equal weight to other members like Ireland, where inflation is close to five per cent. Furthermore, the Stability and Growth Pact, which
underpins the euro, restricts government borrowing and the German chancellor,
Gerhard Schröder, is actually having to raise taxes even though growth is
stalling. No wonder the latest poll shows support for his Social Democrat/Green
coalition has fallen to only 27 per cent. |
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Krisen i den tyska ekonomin är redan djup. Men om
ett år, när EU utvidgas österut, kan den förvärras
avsevärt. Den tyska utvecklingen är en bomb som väntar på
att brisera. |
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Förstamajtalet dränktes i burop. Partiet
är i uppror. Opinionssiffrorna katastrofala. Den tyske
förbundskanslern Gerhard Schröder kämpar för sin politiska
överlevnad. På den extra partidagen den 1 juni ska reformprogrammet
Agenda 2010 lotsas förbi fackliga protester och angrepp från den
socialdemokratiska vänstern. |
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Tyskland befinner sig i en svår kostnadskris. Vad
som krävs är radikala strukturgrepp |
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Tysklands ekonomiska problem är relevanta inför
den svenska folkomröstningen om EMU. Tysklands kris kan bli Sveriges. Hur
avser svenska politiker att hantera ekonomiska kriser om Sverige röstar
ja? |
Retail sales in Germany fell back
sharply in March, below even the most pessimistic forecasts. In real, or
inflation-adjusted terms, sales dropped by 3% in March compared with February,
and lost 4% on the year. |
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PM Nilsson: Antiamerikanismens antisemitiska
rötter |
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Den europeiska mardrömmen |
The gulf between Gerhard Schröder, the German chancellor, and his party critics deepened on Friday after leftwingers and trade unionists attacked sweeping plans to change the state pensions system. The recommendations that the pension age be raised and early retirement penalised, unveiled unexpectedly on Thursday by a government commission, have heightened the tension between the chancellor and leftwing opponents in his Social Democratic party in the crucial period before meetings on Mr Schröder's previously announced labour market and welfare reforms. |
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Att stå upp mot världens enda supermakt har
på kort tid blivit en tysk specialitet, i klass med produktionen av
bilar, bratwurst och surkål. |
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Det är uppenbart att Tysklands mer än tio
år gamla ekonomiska problem inte beror på den fyraåriga
euron |
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I valen 1932 fick Hitler 37 procent av rösterna och
blev landets största parti. Bruning avgick, och inom ett år satt den
tidigare obetydlige korpralen från Böhmen som ny tysk rikskansler.
Historikerna har inte varit nådiga i sin dom över den ekonomiska
politik som förde Europa till krigets rand. Men dagens EMU påminner
inte så lite om guldmyntfoten. |
Britain must avoid Germany's mistake |
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Mini-summit on April 29. The leaders of Belgium, France,
Germany and Luxembourg will discuss the creation of a European defence union.
|
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Alongside the shooting war in Iraq, another, less
sensational conflict has broken out. This is a struggle for influence between
Europe and the United States. |
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Germany is of particular concern: as IMF points out, 2003 will be the third consecutive year that Europe’s largest economy has grown at a rate of less than 1%. There is not much sign of any improvement, either. Although—unlike some economists—the IMF
forecasters do not believe there is much risk of global deflation, they do
think that of all the industrial countries, Germany remains most vulnerable to
falling prices after Japan. Japan, of course, is now almost a global economic
pariah. |
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What is the single factor uniting
Europe's worst performing economies? The answer is: they all use the euro,
while those countries still using their own currencies are doing rather well,
according to the European Commission's spring forecasts published on
Tuesday |
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Assar Lindbeck: |
European shares crash |
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"När tyskarna väl klarat att följa
stabilitetspakten, kommer ingen annan att tillåtas bryta den." |
Germanys leading pensions association warns that
statutory contributions will have to increase sharply to cover a looming gap
caused by feeble growth in Europe's biggest economy. |
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Strong euro hits VW profits wiped almost 1bn euros off
the firm's stock market value |
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Det är inte, som Rune Andersson tycks anse, den
rörliga kronkursen som skänkt oss svenskar de senaste årens
ekonomiska stabilitet. Att hänvisa till den tyska ekonomin som argument
mot euron är missvisande. |
German unemployment has risen to
11.3%, its highest level during the government of Chancellor Gerhard
Schroeder |
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Tysklands kris är vår |
A different view of euro-sclerosis |
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Euron ökar riskerna för egna
företagare |
Germany's stagnation is beyond its control |
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"Med en gemensam ränta för
hela EMU-området kan tydligen inte ens Tyskland få en
välanpassad ränta” (pdf) |
The European Central Bank on Monday sought to allay fears
of a banking crisis in Germany |
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Kommer Frankrike och Tyskland att överta rollen som
avskräckande exempel i världsekonomin från Japan? |
HVB Group, Germany's second largest bank, has posted its
first ever annual loss. The bank was hit hard by the dire state of the German
economy. The loss at Europe's largest lender was mainly due to due to
spiralling bad debts and a sharp drop in income. |
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"den fege och opportunistiske tysken
Schröder" |
Well over half the Bundestag's Social Democrats are
trade-union members or officials. |
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Tyskland är det uppenbara exemplet |
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- Jag blir medlem /i Medborgare mot EMU/ av
omtanke om EU. EMU kan skapa starka spänningar mellan länderna. Det
kan bli en bomb som briserar. |
German retail sales fell last year for
the first time since 1997, |
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Jag var kort sagt i Berlin |
German Chancellor Gerhard
Schroeder's Social Democrats have suffered crushing defeats in two state
elections |
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Europa nej-sidans bästa argument |
Tysk ekonomi blir bättre |
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Ingen räddning i sikte för Tyskland |
The German European Commissioner Günter Verheugen
and his French colleague Pascal Lamy have called for a Franco-German
federation. |
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I Tyskland fungerar oljan som totalförklaring till
allt som rör USA:s utrikespolitik |
Germany's economic growth slowed to 0.2%
last year, its lowest annual rate since the recession in 1993. |
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"Euron har förvärrat de tyska
problemen" |
Germany must take action on its
looming budget deficit by 21 May or face punishment, the European Commission
has warned |
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Margit Gennser tycks underskatta ECB:s
kompetens och oberoende när hon påstår att ECB kommer att
anpassa penningpolitiken till de tyska behoven. |
Germany’s economic outlook continues to deteriorate,
along with that for the rest of the euro area. The government now faces the
prospect of a strike by millions of public-sector worker |
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Fransmännen började oroa sig för att de
proamerikanska och frihandelsvänliga britterna skulle bestämma
dagordningen. Man kan nästan höra hur ropen ekade mellan Berlins
väggar: |
67.8% of Germans saying they are dissatisfied or outright
unhappy with the euro |
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Tyskland kan vara ett varnade exempel för
EMU-debatten Går det dåligt för Tyskland, kan viljan att
gå med i deras klubb ta stryk |
Gerhard Major |
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|
Peter Wolodarski om Tyskland |
Stricken giant holds back Europe's
economy |
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Det ekonomisk-psykologiska tvärstoppet i den tyska
ekonomin under de senaste månaderna pekar på ett större
problem som förr eller senare riskerar att hemsöka alla våra
ekonomier. |
Germany must go shopping |
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"Tyskland kommer att bli en av nej-sidans
trumfkort" |
Unemploment is high, bankruptcies are rife,
banks are teetering and taxes are going up. How did the German economy get this
bad? |
|
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Tyskland är på
väg in i en djup politisk kris. I detta läge pågår jakten
på syndabockar. Euron, och stabilitetspakten är självklara
kandidater. |
"If France does well by cutting taxes and pursuing a
laxer fiscal policy than the one demanded by the Commission and the ECB, other
countries will surely follow" |
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Tysklands dilemma blir smärtsamt
tydligt |
To be sure, Mr Chirac won a victory of sorts in Brussels.
He cajoled a weak German chancellor, lacking a clear vision of the future of
Europe, into accepting a deal that will hurt, not help Germany. Yet the
president was acting from a position of weakness rather than strength. To
equate the farm deal either with renewed French leadership in Europe or with a
rebirth of the Franco-German axis is to misunderstand how much Europe has
changed. |
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Strukturella reformer räddar Tyskland
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Michael Treschow: |
Germany's Economic Ills |
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Tysklands kris talar för euron |
A trap of Berlin's own invention |
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EMU bäddar för bråk |
Germany sits on the brink of deflation |
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|
Sverige bör vänta med EMU! Se
på situationen i Tyskland där man även efter mer än tio
år ännu inte lyckats integrera de forna östtyska delstarerna,
vare sig ekonomiskt eller politiskt. |
EU's recovery may have been washed away |
|
|
"Röde Danny" (Cohn-Bendit) vill att Europa blir
USA:s motpol |
The price of a falling dollar |
|
|
Germany´s
pensions bill is calculated to be 4.600 miljarder dollar |
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|
The battle for Germany |
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The Economist: Everyone knows that Europe has a high rate of unemployment on average. Few realise that more than half of the 15 EU member countries have unemployment rates lower than America's; these include Britain, the Netherlands and Sweden. |
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With present policies and public
finance structures, Germany is on course for insolvency
Financial
Times editorial 18/5 2004
There are fundamentally two reasons for the perilous state of public finances. Neither is fixable in the short term. The first is the public finance system itself. The proportion of discretionary spending in relation to total public sector spending has fallen persistently, thanks to off-budget programmes including those to finance unification. Mr Eichel has too little room to manoeuvre to deliver budgets that comply with the eurozone's stability and growth pact. The country is set to breach the deficit ceiling of 3 per cent of gross domestic product in 2005 for the fourth year running.
The second - and probably more important - reason is the persistent fall in economic growth rates.
Germany's council of economic advisers estimates the potential annual economic growth rate at about 1.5 per cent. Some estimates put it at 1 per cent. Behind the decline in potential growth are rising real interest rates as a result of economic and monetary union and falling productivity growth in some sectors.
An average of about 2 per cent is needed if the public sector and the country's welfare systems are to be sustainable in the long run. Low potential growth rates and the future obligations of German's unfunded pension systems have dramatic consequences for the public finances.
After last year's controversial welfare reforms Mr Schröder has made a more activist industrial policy to create national industrial champions his economic policy priority. He also wants to change the stability pact to legitimise Germany's deficits. Neither will change the fact that, with present policies and public finance structures, Germany is on course for insolvency.
Germany's bestselling book is “Das
Methusalem-Komplott” (The Methuselah conspiracy), an anti-ageism
tirade
The Economist 13/5 2004
After half a century of obscurity, population issues are resurfacing in headlines, bestseller lists and talk shows. When in April the Berlin Institute for World Population and Global Development, a think-tank, issued a study saying which regions will suffer from a shrinking population, it was amazed by the media interest. And Germany's bestselling book is “Das Methusalem-Komplott” (The Methuselah conspiracy), an anti-ageism tirade by Frank Schirrmacher, a co-publisher of the Frankfurter Allgemeine Zeitung newspaper.
Both publications paint a bleak picture. Some regions are in a death spiral of sorts, says Reiner Klingholz, one of the authors of the study—and others may share that fate in years to come: their population is imploding, not just because of a lack of babies but because young, qualified people are moving away, making many regions even less attractive for job-creating investments. Mr Schirrmacher fears a clash of the generations and wants a cultural revolution to rethink what it means to be old.
If Germany has suppressed its demographic problems for so long, it is mainly because of its Nazi past. Population policy sounded like racial policy. Even today, the country has only four university chairs in demography. There are many reasons Germans are waking up now, says Elisabeth Niejahr, author of a forthcoming book entitled “Altenrepublik” (Republic of the Old): the financial woes of public pension funds and the health-care system; unification (most imploding regions are in the east); and the fact that Germany's baby-boomers (like the 44-year-old Mr Schirrmacher) are beginning to be elderly.
The German government is pushing for the
German language to be accepted as an official European Union tongue
Deutsche
Welle 7/4 2004
With the European Union set to expand by a further 10 nations at the beginning of May, Germany's leaders see an opportunity to spread the word that German is a spoken language worthy of the second spot behind English as the EU's lingua franca. The federal government is preparing to make a very strong case for German to be one of the European "super-tongues" with an impressive array of statistics and the support of committed linguists to shore up the bid for recognition at EU level. I
n a resolution last Thursday, the Bundestag or the lower house of parliament called on the government to push for German as a third principal EU language. A similar resolution was passed in the Bundesrat or upper house last month.
Expansion brings more Germans speakers to the EU German is the world's 12th most widely spoken language and the most prevalent in Europe after Russian, with some 100 million native speakers. When the EU expands to 25 states in May, the new members will bring many more German-speaking citizens into the fold. In the ten accession countries joining the EU on May 1, German is spoken by twice as many people as French.
Why Germany's economy is failing to fly
Wolfgang
Munchau Financial Times 1/4 2004
While unfavourable demography, inflexible wage settlement systems and a generous welfare state may explain the gradual fall in potential output over the previous decades, they cannot explain the unexpected, sharp and persistent decline in economic growth since 2001.
As a British observer remarked last month at the annual Königswinter conference on Anglo-German relations: "There is a tendency in Germany not to question unification, economic and monetary union and the stability and growth pact as possible causes for economic problems. They are all treated as taboos." Few domestic commentators have dared suggest that the euro or unification might have exacerbated economic difficulties. In parliamentary debates about economic policy there are few references to interest rates or exchange rates, as opposed to laws on dismissal and shop opening hours.
But there is evidence that both unification and the euro had notable effects. Economic and monetary union's main impact has come through an increase in real interest rates, though not - as is often argued - through the entry exchange rate and the stability and growth pact.
The theory of an overvalued entry exchange rate does not appear consistent with Germany's current account surpluses against the rest of the EU and the world, or with the continuous fall over the past decade in real exchange rates - the nominal rates adjusted by expected inflation - against other EU countries.
There is likewise little evidence that the stability and growth pact, which set out strict enforcement procedures to restrain fiscal spending in the eurozone, had much of an impact. The government could not have run a significantly looser fiscal policy during this period, given the constraints imposed by the stability requirements in Germany's constitution, with its variant of the so-called "golden rule" that restricts government borrowing to financing investment.
EMU bäddar för bråk
Stefan de Vylder
Göteborgs-Posten 2002-10-22
RE: En lysande artikel
Few have realised the most dangerous feature of Emu: it has locked
Germany into a seriously uncompetitive real exchange rate
Martin Wolf, Financial
Times, March 31, 1999
Ageing populations 'will create crippling
debt'
continental European countries - including Germany, France,
Portugal, Greece, Poland and the Czech Republic - would see their public debt
grow to more than 200 per cent of gross domestic product by 2050
Financial
Times 1/4 2004
Richard Jackson, senior fellow in charge of the demography project at the Center for Strategic and International Studies, a US think tank, says future pension promises pose a risk to political stability. "If you assume countries do not cut benefits, you are looking at fiscal Armageddon."
He noted that the report might understate the size of future deficits because the calculations use statistics that understate consensus of forecasts for improvements in life expectancy and overstate future fertility rates.
"In a scenario which is about as optimistic as you can get, that still leaves fiscal meltdown in just about every country in 25 years," Mr Jackson said.
"Vi befinner oss i en dämpad
uppgångsfas, utan någon bredare bas.
Återhämtningen bärs av en dynamisk utländsk
efterfrågan...den inhemska efterfrågan har ännu inte
börjat öka och det gäller särskilt den privata
konsumtionen" som skadas av arbetslösheten.
Han sade också att
räntenivåerna är "låga" och "frikostiga".
"Penningpolitiken står inte i vägen för en snabbare
tillväxt"
tyske centralbankschefen och ECB-rådsledamoten Ernst
Welteke, DN/Direkt 24/3 2004
German industrial output fell in January
after a slight surge in December,
raising fresh doubts over the
strength of the recovery now under way in the eurozone's largest economy.
Financial Times 9/3 2004
The economics ministry said preliminary data released on Tuesday showed that output had fallen a seasonally adjusted 0.1 per cent. The drop surprised economists who had expected a 0.5 per cent increase.
Economists say the strong euro, which gained 20 per cent against the dollar last year, may have started to weigh on export demand. Domestic demand remains weak because of high unemployment and uncertainties brought by Berlin efforts to reform pension and benefit systems.
Hamburg is not Germany. But
the
rout of the Social Democratic Party in Sunday's elections in the city state
amounts to a grievous blow for Gerhard Schröder
With just over 30 per
cent of the vote, the chancellor's party recorded its worst ever result in a
state where it governed for about 50 years after the second world
war
Financial Times editorial, 2/3 2004
The Christian Democrat party, in opposition nationally since 1998 and ruling in Hamburg from 2001 until December in a bizarre coalition that included a maverick rightwing party, emerged with 47 per cent of the votes. It is true that local factors played a part in the SPD's Hamburg debacle. In Ole von Beust, the incumbent governing mayor, the CDU had an attractive candidate with a high personal following, not least among traditional SPD voters. Despite his administration's uninspiring record, Mr von Beust profited most from the collapse of his former coalition partner: the Schill party, formed by Ronald Schill, a former judge.
Blue collar voters and pensioners who deserted the SPD for the law-and-order populist in 2001 returned to the mainstream by voting for the CDU.
Delstatsvalet i Hamburg på
söndagen är det första av 14 val i Tyskland i år och
supervalåret inleddes med en stor förlust för
socialdemokraterna.
Ekot 1/3 2004
Samtidigt vann kristdemokraterna en historik seger och i Tyskland talas idag om en ny politisk stjärna. Kristdemokraterna fick egen majoritet Lyckliga kristdemokrater höjer ölglaset och njuter segerns sötma. Tyskland har fått en ny politisk superstar. Han heter Ole von Beust, 48 år och är kristdemokrat och borgmästare i Hamburg.
Ole von Beust är inget politisk fyrverkeri och när hans egen far förra året avslöjade i en tidningsintervju att hans son är homosexuell, befarade en del att det var slutet på Ole von Beusts politiska karriär. Men i valet i Hamburg har ett nytt storstadsanpassat CDU tonat fram i en kampanj helt fokuserad på Beust.
Europe is doing much worse than the United
States economically, right? Not if you subtract Germany.
Without
Germany's figures, The Economist magazine has computed, Europe's economic
performance would look as good as America's. That gives some sense of how bad
things are in Europe's biggest national economy
International Herald Tribune
6/3 2004
Germany is in the grip of a profound malaise. The economy contracted by 0.1 percent last year, and is headed for growth of only 1.5 percent this year. Unemployment stands at 10.3 percent. Consumers and investors lack confidence. The reasons are no mystery: a lavish welfare system that the state can no longer afford, and high labor costs that send business elsewhere.
The chancellor plans to make a major speech to the nation on March 25. It's a good opportunity for him to try to persuade his countrymen of the immediate and urgent need for a thorough overhaul of the entire economic apparatus, including the antiquated system of centralized wage-bargaining, the Byzantine tax system and the bloated budget. A bold wave of reform would give Germans the sense that they had not lost the capacity for hard work, innovation and sacrifice that created the postwar miracle.
Germany used to be one of Europe's
richest nations. In the late 1980s its GDP per head was 20% higher than the
average of the European Union. But estimates by The Economist suggest that
Germany's GDP per head fell 1% below the EU average last year
(measured
at purchasing-power parity, to take account of differences in prices).
The
Economist 19/2 2004
Very Important Article
Only four of the EU'S 15 members now have a lower income per head. The entry of new members into the EU on May 1st will help to spare Germany's blushes, because these countries' lower incomes will once again push Germany up above a new European average. Nevertheless Germany's relative economic decline has been alarming by any measure. And it looks as if it will continue.
Some of Germany's poor record can be attributed to the reunification of East and West Germany in 1990. At the stroke of a pen this produced a country with average incomes 13% lower than the former West Germany's. Yet this still left income per person for a united Germany 9% higher than the EU average.
Since then Germany has been the EU's slowest-growing economy, with an average annual growth rate of only 1.4%—roughly the same as that achieved by feeble Japan over the same period.
Over the past decade GDP per head in the rest of the EU grew by an average of 2.3%—even faster than America's 2.1% average growth.
And though it is true that European labour markets are in general less flexible than America's, Europe outside of Germany has been creating just as many jobs as America. Over the past decade, employment has risen by an average of only 0.2% a year in Germany, against a rate of 1.3% a year in the rest of the EU, exactly the same pace of increase as in America.
Apologists argue that Germany has not done so badly given the heavy cost of reunification. But this glosses over deeper problems that existed well before reunification. Germany not only has high wage costs, high taxes and an over-generous welfare state, in common with many other continental European economies, it must also cope with the hangover from years of over-investment due to a subsidised cost of capital, thanks to the big role played by state-owned banks.
Few have realised the most
dangerous feature of Emu:
it has locked Germany into a seriously
uncompetitive real exchange rate
Martin Wolf, Financial Times
EMU
bäddar för bråk
Stefan de Vylder Göteborgs-Posten
2002-10-22
RE: En lysande artikel
Det är lågkonjunktur i
EU. Den allra sämsta utvecklingen hittar vi i Tyskland, som befinner sig i
en djup ekonomisk svacka med låg eller obefintlig tillväxt av allt
utom arbetslöshet.
The Commission says the economic forecasts
produced by Chancellor Gerhard Schröder's government are unrealistic, and
that Germany will breach the European Union's stability pact for a fourth
successive year in 2005.
Financial
Times 18/2 2004
Last November Germany and France rebuffed Mr Solbes when they
forced the suspension of the rules of the stability pact to avoid being fined
for repeated breaches of the 3 per cent deficit ceiling. The Commission is now
challenging that decision in the European Court of Justice, and its verdict on
Germany's budgetary outlook is unlikely to calm tensions. It argued that
Berlin's forecasts are over-optimistic in a number of areas.
The Commission
forecasts German economic growth of 1.8 per cent in 2005, compared with
Berlin's claim of 2.5 per cent;
It says the German deficit will be 3.9 per
cent in 2004 and 3.4 per cent in 2005; the German forecasts are 3.25 and 2.5
per cent respectively;
And it argues that Germany has claimed for the last
six years that it is about to cut spending as percentage of GDP, but the
promises never materialise.
Det kan hända att de här tre gamla
galtarna ska böka på egen hand ett tag, sa den svenske
statsministern Göran Persson apropå det europeiska
stormaktsmöte som i dag inleds i Berlin.
I mindre grisiga
sammanhang lystrar mötesdeltagarna till namnen Gerhard Schröder,
kansler i Tyskland, Jacques Chirac, president i Frankrike och Tony Blair,
premiärminister i Storbritannien.
PM Nilsson, Expressen 18/2 2004
En återkommande tolkning är att stormakterna inför utvidgningen den första maj vill visa resten av Europa vem som egentligen bestämmer. Trilskande polacker och spanjorer ska inte tro att de är lika stora på jorden som de är i orden. Den gamla fransk-tyska motorn i väst-EU ska kompletteras med en extra brittisk cylinder för att orka dra vidare när unionen består av 25 medlemmar. Eller som Tysklands utrikesminister Fischer uttryckte det i en av sina många historiska jämförelser: "Precis som Bismarcks rike från 1871 är den fransk-tyska duon för liten för europeisk hegemoni och för stor för den europeiska maktbalansen". Om detta är bakgrunden är mötets innebörd inte så dramatiskt. Det fransk-tyska 50-åriga samarbetet präglades av att de nationella intressena underordnades det gemensammas bästa, och att få in outsidern Storbritannien i den inre kretsen kan bara vara bra.
Men en mer oroande tolkning görs av tyskarna själva. Denna unionens mest exemplariske mönsterelev, som hittills ansett att Tyskland måste europeiseras i stället för att försöka förtyska Europa och att kompromissen alltid är den bästa lösningen, har börjat tappa entusiasmen och pliktkänslan inför EU, skriver till exempel Die Zeits Bryssel-korrespondent. Efterkrigstidens hukande är slut, Helmut Kohls outgrundligt djupa plånbok som löste upp varje låsning är borta, liksom lojaliteten mot de gemensamma normerna i stabilitetspakten.
Och om Tyskland blir som alla andra länder, det vill säga sätter de nationella intressena före de gemensamma, ändrar unionen snabbt karaktär. Det unika försöket att samla européerna under ett tak byts mot det traditionella europeiska stormaktsspelet med växlande allianser, rivalitet och ökade spänningar när makterna ska balanseras och Tyskland hållas i schack. Till en början kommer det kanske att heta att mellanstatligheten vann över federationsivrarna, men egentligen är det inget annat än det europeiska mycket farliga normaltillståndet. För ett litet och skyddslöst land som Sverige vore en sådan utveckling katastrofal och det är en gåta att vår statsledning är så lättsinnig att den endast kan klämma ur sig ett dåligt lagårdsskämt.
Ulrike Guerot,
chief of the
European Union section of a government-subsidized policy research
institute,
the German Council on Foreign Relations:
Germany must not
fall further into a French trap
International Herald Tribune
4/11 2003
Considering that the source was the chief of the European Union section of a government-subsidized policy research institute, the admonition was fairly extraordinary: Germany must not fall further into a French trap that was turning the Schröder government away from the country's real interests and potential for leadership in Europe.
It wasn't just that the idea of EU pioneer groups under French control setting the pace for Europe have no chance of success, wrote Ulrike Guerot of the Research Institute of the German Council on Foreign Relations. The concept was dangerous for Germany, she said, because it harmed its traditional relationships with the United States and Britain and would alienate the new EU and NATO member countries of eastern and central Europe.
The remarks are the leading edge of what looks like a backlash against the Schröder government's over-embrace of France in the wake of the Iraq war and the EU's coming enlargement to 25 members. The backlash's central target, condemned in commentary in two major newspapers over the past week, was that Germany was lending itself to a remake of the French-generated policy that already during the Iraq war led to falling afoul of the United States - and perhaps more importantly creating opponents of the new democracies of Europe.
German Council on Foreign Relations
The Franco-German monster
The
Economist 2003-10-23
It has struggled back to life, but to what end? Rather like Frankenstein's monster, the Franco-German relationship has a habit of appearing dead for long periods, only to spring to life and start crashing around once more. Early last year, many commentators pronounced the monster dormant, if not definitively deceased. The German chancellor, Gerhard Schröder, and the French president, Jacques Chirac, were known to get on badly. The two countries fell out spectacularly at a summit in Nice in late 2000. Germany was said to be increasingly irritated by French intransigence over agricultural reform. And the French were fretful that a unified Germany was looking east, and no longer had eyes for Marianne.
Then, in October 2002, the Franco-German relationship miraculously revived. Mr Schröder and Mr Chirac settled their differences over agriculture and the budget. Just as significant as the fact of agreement was how it was reached—at a bilateral meeting just before an EU summit in Brussels, with the deal simply presented to other European leaders. And since that dramatic moment, the relationship has gone from strength to strength.
In January the two countries held high-profile celebrations of the 40th anniversary of the 1963 Elysée treaty that marked Franco-German reconciliation. At the convention on Europe's future they presented joint constitutional proposals. The two governments have held joint cabinet meetings and set up countless combined official groups. They stood shoulder-to-shoulder against the American-led drive to wage war on Saddam Hussein. In March, they put forward joint plans (with Belgium and Luxembourg) to set up a European defence headquarters separate from NATO.
The renewed closeness was epitomised at the most recent EU summit by Mr Schröder's invitation to Mr Chirac to stand in for him on the final day. Journalists amused themselves at the closing press conference by asking the French president questions in German, a language he does not speak.
Behind the hilarity, France and Germany are making two serious points. First, they will continue to have a closer relationship with each other than with any other EU countries. And second, the Franco-German motor will continue to drive the process of European integration.
Ett av nejsidans favoritnummer är
att Tysklands ekonomiska kris beror på euron
Sydsvenskan ledare
26/8 2003
Onekligen är Tyskland idag inne i en djup ekonomisk kris. Arbetslösheten ligger på över 10 procent, tillväxten är så låg att den knappast märks, industrins kostnadsläge är alldeles för högt.
I allt väsentligt är dock den tyska krisen självförvållad. Tysklands ekonomiska elände har sin grund i återföreningen för snart tretton år sedan. Då övertog Västtyskland det planekonomiska konkursbo DDR lämnat efter sig. Östtyskarna fick byta sina mark mot D-mark till kursen 1:1.
Möjligen var denna generösa växlingskurs politiskt nödvändig. Ekonomiskt var den ett misstag. När återföreningens tioårsjubileum firades hösten 2000 hade ofattbara 1 500 miljarder D-mark, 7 000-8 000 miljarder kronor, plöjts ned i återuppbyggnaden av det forna Östtyskland. Subventionerna motsvarade en tredjedel av bruttonationalprodukten i landets östra del. Trots att en femtedel av den tyska befolkningen bodde i öst svarade denna del bara för en tiondel av Tysklands produktion. Alla räknade då med att öststödet skulle vara nödvändigt i åtminstone ytterligare ett decennium. En annan viktig förklaring till att Tyskland förlorat sin ekonomiska särställning är att övriga länder inför övergången till euron sanerade sina ekonomier med Tyskland som riktmärke. Det var ett krav från tysk sida för att överge D-marken och ge sig in i en monetär union att de andra medlemsstaterna fick bukt med inflationen och ordning på sina offentliga finanser så att räntan kunde sjunka till låg, tysk nivå.
Men medan de andra blivande euroländerna stärkte sina ekonomier låg Tyskland stilla. Den smärtsamma ekonomiska omställning som många europeiska stater genomgick under 1990-talet återstår för tysk del.
Man kan som Svenska Dagbladets rutinerade Brysselkorrespondent Rolf Gustavsson gjorde i söndags ställa frågan "om Europas ledande politiker de senaste 30 åren varit naiva dumskallar eller ondskefulla fiender till demokratins ideal" när de skapat EU och den gemensamma valutan, eller om det är Per Gahrton, Sören Wibe och de andra på nejsidan som misstar sig.
An internal memo at the time showed that BaFin feared write-offs might top €800bn (£688bn), twice the reserves of Germany's financial institutions.
German lenders have the lowest risk-weighted capital ratios in the world after Japan. They were slow to rebuild safety cushions after the sub-prime crisis, and now face a second set of losses on Club Med holdings
Reporting rules have let Landesbanken delay write-downs, turning them into Europe's "zombie" banks.
Top of pageGerman bank fears
BaFin, the
chief financial regulator, is making regular appearances at the board meetings
of Germany's big banks - Deutsche, Commerzbank, HVB and Dresdner Bank
Financial Times 13/8 2003
German regulators have taken supervisory board roles at at least 10 of the country's top banks, reawakening fears about the health of a sector that last year was hit by record risk provisions and equity losses.
In a move virtually unparalleled in other western markets, BaFin, the chief financial regulator, is understood to be making regular appearances at the supervisory board meetings of all three of Germany's big listed banks - Deutsche, Commerzbank and HVB - as well as Dresdner Bank, part of insurance group Allianz.
It is also attending all the meetings of certain high-risk institutions, such as WestLB, the public-sector bank that since May has been the subject of a BaFin probe over lax risk management. Also under scrutiny are several other regional public-sector Landesbanks, including Bankgesellschaft Berlin (BGB), Bayerische Landesbank and NordLB, as well as the co-operative sector's umbrella organisation, DZ Bank, and several small private banks.
Helmut Bauer, director of banking regulation at BaFin, refused to comment on individual banks, but said: "Our presence on a supervisory board is part of good proactive regulation. It is in no way a signal that anything is going wrong."
Parallels between the American boom of
the second half of the 1990s and the present European recession.
In both
cases, policymakers decided that the economic conditions they observed were
driven by structural factors.
Paul de Grauwe, Financial Times, August
7 2003
The writer is professor of economics at the University of Leuven
There are intriguing parallels between the American boom of the second half of the 1990s and the present European recession. In both cases, policymakers decided that the economic conditions they observed were driven by structural factors.
In the US, the Federal Reserve attributed the great boom to a productivity miracle. In the eyes of the Fed, and of many others, the great economic expansion was driven by the new dynamics of the information technology revolution promising permanently higher growth rates. Acting on this diagnosis, the Fed felt unconstrained in providing ample liquidity.
It has now become obvious that this diagnosis was wrong. The US economy was experiencing a classic bubble led by the exaggerated expectations of believers in fairy tales. By providing all the extra liquidity, the Fed was fuelling the bubble, until it burst.
Surprisingly, something similar is happening in the eurozone, although the economic conditions are the opposite of those in the US in the 1990s. European policymakers, in particular the European Central Bank, have blamed the eurozone recession on structural factors. Labour market rigidities, above all, are seen as the root causes of the slowdown.
Acting on this diagnosis, policymakers have taken a wait-and-see attitude. The ECB has been slow in stimulating the economy and has blamed the eurozone politicians for doing nothing to liberalise labour markets and modernise welfare systems.
The eurozone governments have started to believe that nothing can be done to increase aggregate demand, and in any case their hands are tied by the stability pact, the European Union's public deficit limits.
The structural rigidities diagnosis of the downturn in the eurozone since 2000 is wrong. It is difficult to see how rigidities - a permanent feature of continental European economies for the past 30 years - can suddenly produce a drop in growth rates from more than 3 per cent in 1998-2000 to close to zero now. And why did the same rigidities not prevent a European economic boom in the second half of the 1990s?
It would be foolish to deny that there are market rigidities in Europe. Some welfare systems create disincentives to work and incentives to early retirement. Many countries place constraints on hiring and firing, while high taxation of labour and population ageing are widespread. But while they reduce the long-term growth potential of the eurozone, such rigidities barely affect business cycle conditions.
Economic growth in Europe has been known to move up and down, and will continue to do so irrespective of rigidities in labour, product and capital markets. By diagnosing the economic downturn as structural in origin, ECB officials and some governments have escaped their responsibility for stabilising the economy.
In the US in the late 1990s and in the eurozone today, policymakers made the wrong diagnosis and applied the wrong policies.
There is a second parallel between late 1990s America and the eurozone today. The US boom was driven by excessive optimism about economic prospects, which led American consumers and investors to embark on a spending spree.
The eurozone recession is driven by excessive pessimism about the future of Europe. Pessimism leads consumers and investors to postpone spending on goods and services, and it becomes a self-fulfilling prophecy.
As it turned out, the US was not the miracle economy that policymakers and analysts believed it to be. In contrast, there is as yet no such consensus that the pessimism that pervades the eurozone is excessive. There is still a widely held view that Europe is sick and that its economic future is bleak. But the gloom is vastly exaggerated.
Productivity growth, when correctly measured, has been much the same in Europe and in the US over the last 10 years. The main difference is that European workers like to work fewer hours than their US counterparts.
Several countries have embarked on reform programmes, even if progress is gradual. And unlike the US, the eurozone is not saddled with a consumer debt overhang, a long-term imbalance that will be painful to correct.
There is a third parallel between booming America and gloomy Europe. This has to do with the talk that was once heard in Washington and is now common in Frankfurt, home of the ECB. During the late 1990s, Alan Greenspan, the Fed chairman, openly defended the idea that America was living through a productivity miracle. As a result, he convinced many doubters that the boom was not just some temporary demand upsurge, but was caused by structural changes in the American economy. It is likely that this gave a strong impetus to the bubble and allowed it to last longer than it would have without the exuberant talk.
Something similar has happened in Europe since the start of the economic slowdown. The lectures we hear from Frankfurt routinely stress the need for structural reform as a condition for getting out of the recession.
Structural reforms, however, are very difficult to implement in democratic societies. They imply changes in the distribution of income and in economic security, and are resisted by those who are called upon to become more flexible.
The implementation of these reforms will take many years. If they are a pre-condition for escaping from recession, there is no end in sight.
Thus, paradoxically, the endless criticism of structural rigidities emanating from Frankfurt serves to prolong the pessimism and therefore the weakness of demand. Europe is stuck in a sluggish state.
Much as the Fed helped to fuel the great American boom of the late 1990s, the ECB is helping to sustain the recession by spreading the word that nothing can be done about it for the foreseeable future.
Pessimism is contagious. Fortunately, people become tired of it. That is why even modest signs of economic recovery can revive "animal spirits". That is also why Policymakers can make a difference by providing even a small monetary or fiscal stimulus. Despite their reluctance to assume their responsibilities, there is no doubt that the economic upturn will become a reality in Europe as it has done so often in the past. Pessimism then will fade away, making place for a more sober diagnosis of Europe's economic problems.
ECB is a law
unto itself FT 98-11-12
Paul de Grauwe says the
European Central Bank is accountable to no one, which compromises its chance to
be truly independent. Do the conditions exist for the successful independence
of the European Central Bank? The answer is no, for the following reasons.
Bankgesellschaft and several other German
banks engulfed in bad loans and creating a financial headache just as horrible
as the 1980s bubble in Japan
Gillian Tett, Financial Times 16/8 2003
Gillian Tett is a Lex columnist and former FT Tokyo bureau
chief.
Her book on Shinsei bank, "Saving the Sun", is published by
HarperBusiness next month.
For the past 13 years, Japan has suffered from economic stagnation, spiralling national debt, falling prices, declining industrial competitiveness and a series of banking collapses. In Germany, economic crisis became evident morel recently after it mishandled reunification by converting the former East German currency into D-Marks at a level that made East Germany utterly uncompetitive.
In the German capital, a financial tale has been unfolding which distils in a particularly potent form the problems lurking in Germany that so resemble those in Japan. And at the heart of it is Berlin's premier financial institution, Bankgesellschaft.
One powerful German fund manager described it during the bank's shareholder meeting two years ago as "the biggest banking scandal in German history". The bank emerged in its present form in 1994, when the Berlin government decided, in the mood of optimism and ambition that followed Germany's reunification, to merge some local, state-owned savings banks, mortgage lenders and commercial banks into a single entity.
the Berlin government was in the middle of an orgy of spending to celebrate reunification, as well as the impending resumption in 2000 of the city's role as the national capital. In particular, construction projects were exploding across Berlin and the rest of East Germany. Bankgesellschaft, along with the other German banks, provided the funding. The bank quickly became one of the 10 largest in Germany, dominating corporate lending in the Berlin region and accounting for a startling 60 per cent of the retail banking market in Berlin, with some €200 billion in assets.
by the time Berlin was restored as the capital, the property bubble had burst, leaving Bankgesellschaft and several other German banks engulfed in bad loans and creating a financial headache just as horrible as the 1980s bubble in Japan. "It is common knowledge that it is very hard for any outsider to tell what is happening at a German bank from its balance sheet, because the accounting is so opaque. In that sense Germany is rather like Japan," says Robert Stenram, former head of the Tokyo office of the Swedish group, Swedbank.
The situation at Bankgesellschaft was doubly murky because senior bank figures were also prominent Berlin politicians.
In 2001 German regulators belatedly inspected the bank, deemed it insolvent and forced it to declare a €1.65 billion loss, a record in the sector. Panic-stricken, Berlin's politicians decided they could not bear to see the bank collapse. They pumped in €2 billion more capital, taking state ownership from 57 per cent to 81 per cent, and promised to underwrite future losses on some €20 billion of particularly dubious loans in the bank portfolio.
Thus far, it all seemed like a leaf from the Tokyo book: whenever a crisis has emerged at a Japanese bank in recent years, the first instinct of Tokyo policymakers has been to paper over the cracks by propping up the system with money.
Bankgesellschaft was only the tip of an iceberg of problems for Berlin. The city is plagued with an extraordinarily expensive state infrastructure, a legacy of heavy cold war subsidies, and the transformation of two cities into one after unification. It has three state operas, two zoos, five orchestras, 170 museums, 150,000 government employees and a host of lavish benefits that Germans take for granted. Combined with the wild construction spending of the 1990s and a stagnant economy, this has created a debt that amounted to €38 billion when Sarrazin took office, or some €14,000 for every resident, a figure that looks positively Japanese.
The finance senator prefers another metaphor. "Our fiscal situation is worse than Argentina," he says glumly, as he sits in his hot, stuffy office in the Berlin senate. (There is no air conditioning, an aide explains, because of costcutting.) "In fact, on a per capita basis, our debt is twice as bad as Argentina, which is very alarming."
In the past 18 months, the city's debt has risen from €38 billion to almost €50 billion. Brussels is still insisting that Berlin must privatise Bankgesellschaft. The senate has promised to sell the bank by 2006 and expects to get considerably more than Flowers wanted to pay. It bases this on the belief that Berlin will enjoy an economic recovery and Bankgesellschaft will implement a wildly successful restructuring plan. If this does not happen, however, the government faces a full-scale banking crisis. It could then incur the wrath of Brussels by attempting another bailout, or end up selling the bank for a song after all.
The next, and potentially most crucial, chapter of the Bankgesellschaft saga, like that of German reform, is waiting to be written. And until that occurs, Europe's largest economy cannot state with any confidence that it has truly avoided he "Japanese disease".
Tyskland lånar till
skattesänkningar
- Förutsatt att våra kalkyler
håller kommer vi uppfylla kraven i stabilitets- och tillväxtpakten,
sade Schröder
SvD Näringsliv 17/7 2003
Förbundskansler Gerhard Schröder försäkrade i
går att Tyskland strävade efter att finansiera nästa års
skattesänkning utan att bryta mot stabilitets- och tillväxtpakten
för tredje året i rad.
- Förutsatt att våra kalkyler
håller kommer vi uppfylla kraven i stabilitets- och tillväxtpakten,
sade Schröder på en presskonferens i Berlin tillsammans med
finansminister Hans Eichel.
Uttalandet kom bara dagen efter en het strid bland eurozonens finansministrar om president Jacques Chiracs förslag att temporärt mjuka upp budgetkraven i EMU.
Det tyska skattepaketet som bland annat sänker marginalskatten med drygt 10 procentenheter till 42 procent kostar 7,5 miljarder euro nästa år, knappt 70 miljarder kronor.
Sänkningen skulle egentligen ha trätt i kraft 2005 men har tidigarelagts. Nästan två tredjedelar av beloppet, knappt fem miljarder euro, ska finansieras med hjälp av nya statliga krediter. Två miljarder euro ska dras in genom privatiseringar och ytterligare en miljard genom att avskaffa subventioner till både hushållen och näringslivet.
Till de statsägda företag som Tyskland avser att privatisera hör Deutsche Telekom och Deutsche Post, Europas störste telekombolag respektive största post- och fraktbolag. Aktierna kommer troligen att "parkeras" hos den statsägda banken KfW i väntan på bättre börstider.
Schröder sade i går att han räknade med att skattesänkningen skulle skapa högre tillväxt i Tyskland. Europas största ekonomi är nu inne på det tredje krisåret och väntas enligt Internationella valutafondens senaste prognos stagnera i år.
Schröder framhöll att Europa inte bara behöver
spara utan också få igång konjunkturen.
- Pakten kallas
ju faktiskt stabilitets- och tillväxtpakten, påpekade han.
Även Frankrike signalerade i går att regeringen
strävade efter att uppfylla kraven i stabilitets- och tillväxtpakten.
Men precis som Schröder, som knöt det tyska löftet till att
regeringens tillväxtprognos skulle uppfyllas, hade även den franska
regeringen ett kryphål.
- Målsättningen är att
respektera stabilitets- och tillväxtpaktens intention samtidigt som vi
måste ta hänsyn till den fortsatt svåra ekonomiska
situationen, sade regeringens talesman Jean-Francois Cope efter onsdagens
regeringssammanträde.
Chirac storms the stability pact
The Economist 16/7
2003
Frances President Jacques Chirac has angered other EU countries by proposing a relaxation of the euro areas rules on budget deficits. He also faces opposition from Jean-Claude Trichet, the Frenchman who, at Mr Chiracs insistence, will soon be running the European Central Bank
France bust the euro area’s limit on budget deficits last year, it is on course to bust it again this year and, unless the government makes big spending cuts, it will probably do so for a third time next year.
Under the European Union’s “stability and growth pact”, countries which have adopted the euro (currently 12 of the 15 EU members) must keep their budget deficits to less than 3% of GDP or face the possibility of heavy fines.
But on Monday July 14th, as France celebrated Bastille Day and the EU’s finance ministers gathered in Brussels for a two-day summit, President Jacques Chirac angered many of them by calling for the pact to be relaxed temporarily, to boost Europe’s sluggish economic performance.
The ministers agreed to reject Mr Chirac’s call for more “flexibility” in interpreting the pact: the Dutch finance minister, Gerrit Zalm, said France had already been given enough leeway; now it ought to start obeying the rules.
The storming of the Bastille had been a better idea than Mr Chirac’s storming of the stability pact, he quipped. Austria’s finance minister, Karl-Heinz Grasser, complained that reopening the debate on the budget limit was damaging the euro block’s credibility, and said that France should be fined if it breached the limit again next year.
Krig har alltid vinnare och
förlorare. Saddam Hussein - död eller på flykt - är
naturligtvis Irakkonfliktens stora förlorare. Men också Tyskland har
förlorat mycket, inklusive de många amerikanska trupper som enligt
uppgift ska flytta till baser i andra länder.
Trots planerna på
att skapa en europeisk armé tillsammans med Frankrike, Belgien och
Luxemburg är Tyskland mindre relevant i världspolitiken nu än
före Irakkriget.
Michael Mertes Översättning:
Peter Wolodarski
Michael Mertes var tidigare utrikespolitisk rådgivare till
Helmut Kohl
DN
12/5 2003
Att reparera den skadan blir inte lätt. Varje del av Tysklands internationella ställning har försvagats. Landet kan inte längre spela rollen som transatlantisk medlare mellan Frankrike och Amerika. Det kan glömma USA:s stöd i kampanjen för en permanent plats i FN:s säkerhetsråd. Och i stället för att forma en tredje väg för Europas vänster tillsammans med Storbritanniens Tony Blair behöver förbundskansler Gerhard Schröder stöd av Blair i diskussionerna med George W Bush - som känner sig personligen bedragen av Schröder i upptakten till kriget. I det postkommunistiska östra Europa uppfattas inte längre Tyskland som en pålitlig försvarare av regionens intressen. Multilaterala organisationer, som fungerat som hörnpelare i Tysklands utrikespolitik i nästan ett halvt sekel, är försvagade. Och europeiska unionens förhoppningar om en gemensam utrikes- och säkerhetspolitik har kommit på skam.
Förstamajtalet dränktes i burop.
Partiet är i uppror. Opinionssiffrorna katastrofala. Den tyske
förbundskanslern Gerhard Schröder kämpar för sin politiska
överlevnad. På den extra partidagen den 1 juni ska reformprogrammet
Agenda 2010 lotsas förbi fackliga protester och angrepp från den
socialdemokratiska vänstern.
Aftonbladet
ledare 4/5 2003
Gerhard Schröder och den franske presidenten Jacques Chirac slätar över de tidigare motsättningarna med USA. Nu gäller det att se framåt, säger de. Försvarssamarbetet handlar om att stärka ”den europeiska pelaren i Nato”, inte om en motvikt till Pentagon. Ändå är slutsatserna från tisdagens toppmöte långtgående. Tyskland, Frankrike, Belgien och Luxemburg enades om nya steg mot en europeisk försvarsunion. EU:s framtidskonvent har redan tagit fram förslag i samma riktning.
Gerhard Schröder sa ja till ett nytt militärt högkvarter, som kan leda EU-insatser när inte USA och Nato vill vara med. En radikal kursändring från Tysklands tidigare lojalitet med USA, och ett hårt slag mot britterna, som vill knyta EU:s militära förmåga nära till Nato. Det tysk-franska samarbetet väger fortfarande tyngst inom EU, trots Blairs övertalningsförsök.
Den svenska regeringen har goda skäl att kritisera planerna på en försvarsunion. Nya allianser för kollektivt försvar är inte lösningen på dagens säkerhetspolitiska hot.
A shot of inflation would be good for
Europe
By Hans-Werner Sinn
Financial Times May 20 2003 20:05
Highly recommended
The writer is professor of economics and public finance and president of the Ifo Institute for Economic Research
This month's long-awaited revision of the European Central Bank's inflation target was a disappointment. Although the ECB paid lip-service to greater tolerance of inflation, nothing has really changed. The ceiling for eurozone inflation will remain at 2 per cent. This is bad news for eurozone countries, because they need a dose of inflation to get moving again.
Controlling the average inflation rate alone makes no sense as long as the span in national eurozone inflation rates, which averaged 2.7 per cent over the first four years of the euro, remains as large as it is. This divergence has systemic causes that are likely to persist for the foreseeable future.
Although member countries already have very similar prices for traded goods, great differences prevail in prices for non-traded goods such as services, rents, building materials and catering. This is because of different wage levels, which in turn reflect differences in development. In the course of the economic convergence that will take place over the next two decades, wages as well as prices for non-traded goods and services will converge in all eurozone countries.
This adjustment in relative prices is a natural and desirable process that the ECB's monetary policy should tolerate, especially as it is advanced by the euro. The euro led to a convergence of interest rates in Europe and has lowered the real cost of capital in soft-currency countries that previously had to pay high risk premiums with their interest rates. For this reason the euro is stimulating investment in these countries, supporting real growth, boosting wages and increasing the rate at which prices are converging.
If the ECB tries to curb this transitional inflation with a restrictive monetary policy based on an ambitious inflation target, it will adversely affect the more developed countries, which will be forced towards too low a rate of inflation. Since nominal wages and prices in the core eurozone economies tend to be resistant to decline, some inflation is always advisable because it facilitates real wage and price cuts in weak sectors. If inflation is too low, real wages and prices in these sectors will remain too high, triggering bankruptcies and job losses.
The German and French economies are the main victims, because they have high wages and high prices for non-traded goods. Moreover, both countries have lost the interest rate advantage they enjoyed when they had their own currencies. Aggravating this is the possibility that the euro may have been introduced too early, before the D-Mark and the French franc were able fully to realign after the 1992 currency crisis.
The real wage restraint necessary for restoring competitiveness in Germany and France could be more easily accomplished if the ECB had a higher inflation ceiling. This would enable Germany and France to become more competitive by just waiting for inflation in other countries where price levels are currently too low. With separate currencies, they could induce the same effect with an open devaluation. Unless monetary policy is loosened, such a level of competitiveness could take a decade to attain.
It is sometimes argued that the ECB should not consider country-specific inflation rates because the US Federal Reserve looks only at the US average. That argument is not convincing. First, unlike the dollar, the euro is young. Currently, Europe is undergoing a real convergence process with huge differences in inflation rates; this problem has long since been overcome in the US. Second, unlike Europe, the US has no extended social welfare net that prevents nominal wages from falling.
European states offer unemployment benefits that depend on previous wages and welfare payments that are defined in nominal terms. These high replacement incomes keep a floor under nominal wages. Even if unions are willing to accept - or are unable to prevent - real wage cuts, real wages cannot fall unless there is inflation. Yes, political reforms that cut unemployment and welfare benefits are also a possibility but such reforms are very tricky.
For this reason the ECB should set an inflation ceiling of 2.5 per cent until eurozone convergence is concluded, at the same time ensuring that no country falls to very low inflation levels, say, below 1.5 per cent. It should pay particular attention to the inflation floor, because deflation or low inflation in single countries would pose great dangers to the stability of the European economy.
Stefan de Vylder var den första i världen som
upptäckte att EMU har ett inbyggt ofrånkomligt fel som gör att
länder med lågkonjunktur får högre realränta, medan
länder med överhettning får lägre realränta.
http://www.nejtillemu.com/devylder.htm#baddar
Peter Wolodarski är den ledarskribent som bäst av alla
har insett de faror som hotar Tyskland
http://www.nejtillemu.com/wolodarski.htm#bomb
I den artikeln refererar Peter också till just Hans-Werner Sinn
Inför
folkomröstningen om euron hävdar många att Tyskland utgör
ett varnande exempel. Exakt på vad är dock oklart. För egen del
ser jag inte de tyska problemen som skäl att säga nej till euron -
däremot som en varning om vad som sker om arbetsmarknaden är för
stel och kostnaderna för höga.
Klas Eklund, kolumn SvD 7/5
2003
Risken att Sverige skulle gå en tysk utveckling till mötes är liten.
Mer intressant är vad som har skett i vårt östra grannland Finland.
Det är märkligt att den svenska debatten i så hög grad fokuseras på Tyskland, när vi har ett grannland, Finland, vars struktur är mycket mer likartad den svenska och där de ekonomiska utmaningarna i så hög grad påminner om våra. Men det kanske beror på att de finska erfarenheterna av euron är så tydligt positiva - och det är väl inte tillräckligt pikant för att vara intressant …
Tysklands ekonomiska problem är
relevanta inför den svenska folkomröstningen om EMU. Tysklands kris
kan bli Sveriges. Hur avser svenska politiker att hantera ekonomiska kriser om
Sverige röstar ja?
Per Lundborg, professor Göteborgs
universitet
Fackföreningsrörelsens institut för ekonomisk
forskning (FIEF) SvD Brännpunkt 29/4 2003
Tysk ekonomi är i kris. Arbetslösheten är över tio procent och tillväxten sedan länge under EU:s genomsnitt. Det samlade produktionsvärdet (bruttonationalprodukten, BNP) per person, ett mått på levnadsstandarden, ligger nu nära EU:s genomsnitt och under senare år har Tyskland passerats av Storbritannien, Finland, Nederländerna, Irland och Österrike.
De offentliga finanserna är i oordning och förra året var underskottet 3,6 procent av BNP och statsskulden nästan 62 procent av BNP.
Tysklands kris är relevant för den svenska EMU-debatten. Krisen är inte orsakad av EMU, men krisen belyser de problem som kan uppkomma med gemensam valuta.
EMU-medlemskapet försvårar lösningen av de ekonomiska problemen och i avsaknad av nationell penningpolitik framtvingas ineffektiva arbetsmarknadsreformer och inrikespolitiska problem.
Den tyska återföreningen blev ett ekonomiskt misslyckande. Vid enandet tillät regeringen 1990 att den östtyska marken växlades in till kursen en D-mark. I ett slag steg lönekostnaden i öst från cirka sju procent av lönekostnaden i väst till cirka 30 procent. Vidare skulle lönerna i östra Tyskland fasas in med lönerna i västra Tyskland under bara fem år.
Men produktivitetsökningen i öst motsvarade inte på långt när lönekostnadsökningarna. Uppsvinget i öst uteblev. De uppkomna lönenivåerna gjorde att ekonomin i östra Tyskland inte var konkurrenskraftig.
Arbetslösheten är i dag 17 procent i öst trots många förtidspensioneringar och många i åtgärder. Västra Tyskland förmår inte heller suga upp arbetslösa från öst. Den offentliga resursöverföringen till öst har sedan återföreningen uppgått till svindlande siffror, cirka 8 000 miljarder kronor. Återföreningens regionala och strukturella problem orsakade gigantiska budgetunderskott.
Kommentar av Rolf Englund:
Östtyskland och Västtyskland bildade ett mini-EMU.
Bättre förutsättningar för ett optimalt
valutaområde kan man inte tänka sig.
Ett folk, ett språk.
Men Tysklands problem är inte bara strukturella. Efterfrågan på varor och tjänster är alltför låg. Arbetslösheten är hög även i västra Tyskland och inflationen är mycket låg, 1,3 procent. Den Europeiska centralbanken (ECB) anpassar räntan, inte till Tysklands, utan till hela euroområdets inflation som är cirka 2,3 procent.
ECB:s styrränta blir därmed för hög i Tyskland vilket håller tillbaka efterfrågan. En räntesänkning skulle höja den låga inflationen till en rimlig nivå, men samtidigt driva upp inflationen i andra EMU-länder där den redan är hög och euroområdets samlade inflation skulle bli oacceptabelt hög.
Det hävdas ofta att räntan anpassas till de stora EMU-länderna, men inte ens ett stort land som Tyskland får nödvändig draghjälp av ECB.
Hade Tyskland stått utanför EMU hade Bundesbank anpassat styrräntan till tyska förhållanden och ekonomin hade stimulerats.
Vid utanförskap hade värdet på D-marken fallit och Tysklands internationella konkurrenskraft hade förbättrats genom justering av de felaktiga priserna på varor och arbetskraft gentemot sina handelspartners.
En annan möjlighet är finanspolitiska åtgärder, d v s ekonomisk stimulans genom t ex skattesänkningar eller sänkta arbetsgivaravgifter, generellt eller regionalt. Men de stora underskotten omöjliggör sådana åtgärder. Ökade statliga underskott skulle göra att Tyskland drog på sig dryga böter.
Genom EMU-medlemskapet gav man upp räntevapnet och finanspolitiken är blockerad av underskotten. Då återstår enligt många bara en sak:
arbetsmarknaden måste avregleras så att lönerna kan chocksänkas till paritet med produktiviteten. Oppositionen har baxat in Schröder på denna väg: trygghetslagarna uppluckras, arbetslöshetsersättningen begränsas och kollektivavtalen inskränks för att pressa lönerna.
Det finns alltid skäl att granska effekterna av arbetsmarknadens institutioner och det är rimligt att man justerar t ex arbetslöshetsersättningens längd till normal europeisk nivå. Samtidigt är det orealistiskt att reformerna skulle påverka sysselsättningen på något avgörande sätt och inom rimlig tid.
Då önskade effekter uteblir framtvingas ytterligare neddragningar och hårdare sociala konfrontationer. Oppositionen och dess ekonomer har redan i dag ett batteri av mer långtgående förslag syftande till att möjliggöra lönesänkningarna.
De institutioner som präglar den tyska arbetsmarknaden är representativa för många europeiska länder och har existerat länge och i såväl goda som dåliga tider. Inget talar för att arbetsmarknadsreformer är effektiva medel för att komma ur kriser.
Reformerna av den tyska arbetsmarknaden är framtvingade bl a av EMU-medlemskapet, som utesluter växelkursanpassning och en för landet anpassad ränta.
Tysklands situation är ingalunda unik då Frankrike och Italien också kämpar mot hög arbetslöshet under stora budgetunderskott.
Ingen ska tro att inte svensk ekonomi kan hamna i samma situation. Detta stämmer till eftertanke inför Sveriges EMU-omröstning.
Principfrågan är hur den ekonomiska politiken vid kriser ska bedrivas under medlemskap. Många partier är emot ökat sparande (EMU-skatt) för att klara kriser under EMU.
För att interna devalveringar, d v s finansierade sänkningar av arbetsgivaravgifterna, ska fungera måste enligt utredningar finanspolitiken reformeras. Men även detta motsätter sig politikerna.
I avsaknad av nationell penningpolitik återstår, liksom i Tyskland, bara krav på avreglering av arbetsmarknaden vilket inte på ett effektivt sätt skulle minska arbetslösheten.
Det är rimligt att politikerna före omröstningen klargör hur ekonomiska kriser ska hanteras under EMU, utan "EMU-skatt" och finanspolitiska reformer.
Assar Lindbeck vill ha buffert finansierad med EMU-skatt
Germanys leading pensions association warns
that statutory contributions will have to increase sharply to cover a looming
gap caused by feeble growth in Europe's biggest economy.
Financial
Times 11/3 2003
The VDR association of statutory pension funds, an advisory body that influences government policy, will say increasing contributions to the state-run pay-as-you-go pension system from 19.5 to 19.9 per cent of gross wages may be unavoidable given the weak economy and high unemployment. The warning comes as a bruising blow to Gerhardt Schröder, the German chancellor, who will deliver a keynote parliamentary speech on Friday aimed at reducing the non-wage labour costs borne by employers.
European shares crash
BBC,
Wednesday, 12 March, 2003, 17:33 GMT
European shares have tumbled again, with London shares closing at their lowest level since May 1995. Paris stocks plummeted to levels a little over one third what they were at their September 2000 peak.
And Germany is now in the grips of a market downturn worse than it suffered in the Great Depression, calculations at investment bank Merrill Lynch have revealed.
"There's one word for it - carnage. It's horrible," said Richard Wright, at brokerage GNI in London. "Nobody has any confidence. Nobody wants to buy anything.
"And if they do buy anything they're wrong within about 10 minutes. It's fairly gloomy."
More about the stock
market
at Rolf Englund Internetional Communications website
"Nu har det vänt" - Ha
is i magen"
Strong euro hits VW profits
wiped almost 1bn euros off the firm's stock market value
BBC 11/3 2003
"Given present exchange rates ... and in the event that the market situation in Western Europe and the US does not improve, we will not be able to match the 2002 operating profit," chief executive Bernd Pischetsrieder said. The warning initially sent VW shares down 10% to their lowest level since December 1996, and wiped almost 1bn euros off the firm's stock market value.
Deutsche Telekom, Germany's dominant telephone company, has reported Europe's biggest ever annual corporate loss. For 2002 the company posted a net loss of 24.6bn euros (£16.9bn; $27.1bn) BBC 10/3 2003
The European Central Bank on Monday
sought to allay fears of a banking crisis in Germany
Financial Times 25/2
2003
The European Central Bank on Monday sought to allay fears of a banking crisis in Germany amid reports that the government and senior bankers had discussed emergency measures to bail out the financial system. In a hurriedly called press conference to launch an ECB report on banking stability in the European Union, Edgar Meister, who heads the ECB's banking supervision committee, dismissed talk of a Berlin-backed bank rescue plan. Mr Meister, who also sits on the board of the Bundesbank, said he was confident Germany's beleaguered banks could "resolve their specific weaknesses on their own" without needing taxpayers' money.
|
När det gäller EMU-debatten finns det ett argument
som jag har synnerligen svårt för. Inte för att det skulle vara
särskilt besvärligt att bemöta. Heller inte för att det
skulle vara intellektuellt tungt eller värst sannolikt. Nej, min antipati
beror på att det röjer en inställning till omvärlden som
jag tycker genuint illa om.
Argumentet går
ut på att Sverige inte ska gå med i EMU eftersom "EMU kommer att
spricka". |
Kommer Frankrike och Tyskland att
överta rollen som
avskräckande exempel i världsekonomin
från Japan?
SvD-ledare 18/2 2003
Medan Japan, USA och Sydostasien småningom reser sig, kommer det kontinentala Europa att ligga kvar i recession. Skulle EU dessutom börja rucka på stabilitetspakten kan det äventyra återhämtningen. Japan är ett avskräckande exempel på vad som kan hända om ett land sätter alltför stor tillit till finanspolitiska stimulanser.
Kommer Frankrike och Tyskland att överta rollen som avskräckande exempel i världsekonomin från Japan? Förutsättningarna finns och det är ett scenario som inger oro inför framtiden.
Tyskland är det uppenbara exemplet
Lars Calmfors, Affärsvärlden 12/2 2003
Tyskland har jämfört med andra länder ett mycket högt kostnadsläge och har också i högre utsträckning än andra EMU-länder tappat marknadsandelar på världsmarknaden. Utan devalvering måste Tyskland återvinna konkurrenskraften genom att ha lägre kostnadsökningar än omvärlden.
- Om kostnadsläget skulle behöva sänkas med tio procent och man har en halv procentenhets lägre kostnadsökningar per år skulle det alltså ta femton, tjugo år, säger Lars Calmfors.
Rolf Englund Medborgare mot
EMU
Affärsvärlden internet, kommentarer till
ovanstående.2003-02-13 07:05
Tyskland visar EMU:s risker Tyskland
är nu en daglig påminnelse om hur det kan gå - och regelbundet
kommer att gå - för länder som är med i EMU och
råkar i svårigheter. Ett land råkar alltid i
svårigheter, av och till och av olika skäl. Tysklands problem beror
inte enbart på Euron och EMU, men euron och EMU gör det svårt
för Tyskland att ta sig ur sina problem. Undrar hur Calmfors har
räknat när han kommer fram till ett Ja till EMU, av politiska
skäl, fastän hans utredning, världens största i sitt slag,
kommit fram till att EMU ekonomiskt vore en nackdel för Sverige.
Häromveckan besökte jag
huvudstaden i ett land som av USA:s regering numera nämns i samma andetag
som Libyen och Kuba. Det är också huvudstaden i ett land som USA:s
regering numera anser tillhöra det gamla Europa, till skillnad från
exempelvis Albanien eller Rumänien som numera anses tillhöra det nya
Europa. Det är också huvudstaden i ett land som till nyligen
betraktades som USA:s mest trogna allierade i Europa eftersom det mer än
något annat land i Europa har USA att tacka för sin nuvarande
existens. Jag var kort sagt i Berlin
Göran
Rosenberg 13/2 2003
Ingen räddning i sikte för
Tyskland
SvD-ledare 10/2 003
Tysklands situation är en del av en kontinentaleuropeisk kris som i grunden måste hänföras till brist på reformvilja. Den skattesänkningsvåg som tidigare sköljde över Europa har förbytts i skattehöjningar och budgetunderskott.
Det är symptomatiskt att diskussionen i EU mest handlar om hur man ska kunna etablera minimiskattenivåer, nu senast på energi. Och inte har skattehöjningar gjort Schröder mer populär. Hälften av de tillfrågade i en färsk opinionsundersökning tvivlar på hans förmåga att hantera ekonomin.
Ett ljus i mörkret är att Tyskland, Frankrike och Storbritannien har börjat samarbeta för att göra den europeiska arbetsmarknaden mer flexibel. Det rimliga vore att Frankrike och Tyskland satte sig på skolbänken och tog intryck av de reformer som har gjort Storbritannien till Europas ekonomiska centrum. Ja, inte bara Tyskland och Frankrike, utan även Sverige och resten av Europa.
In Frankfurt, the Dax index of leading shares had tumbled
nearly 4% to a fresh five-year low of 3,180.
BBC 2002-09-17
The Dax's latest slump means that it has now lost 42% of its value since March, making it the worst-performing stock index in Europe.
The combined market value of the blue chip firms listed on the Dax has fallen by a total of 318 billion euros ($309bn)- equivalent to the annual economic output of Poland - over the same period.
06/25
08:28 European Economies:
German Business Confidence Falls
(Update1) By Christian Baumgaertel Frankfurt, June 25 (Bloomberg) --
German business confidence unexpectedly fell in June, a survey of 7,000
companies showed, as Europe's largest economy struggles to recover from
recession. The Ifo economic research institute's index of western German
business confidence declined to 91.3 from 91.6 in May. Retailers and
construction companies led the decline.
Straining the pact
FT, May
15 2002 19:38
From Berlin, Brussels and other European capitals, the message going to the French government this week could scarcely have been louder or clearer.
Alarmed that President Jacques Chirac's budget proposals risk tearing apart the eurozone's rules for fiscal discipline, some of Europe's most influential policymakers are asking France to think again. "The French government cannot expect us to lift a finger to help soften the stability and growth pact," says Hans Eichel, Germany's finance minister, referring to the agreement that obliges eurozone governments to balance their budgets over the medium term.
Germany
goes for the big clean-up
FT, May 6 2002 20:36
It was not the sort
of thing you would expect a German govern ment minister to say. At the height
of a recent scandal in Germany over bribes paid by industry bosses to local
politicians, Werner Muller, economics minister, was reduced to assuring the
public that Germany had "not completely become a corrupt banana republic".
In a country with a love of rules and a law-abiding approach to life, the meaning behind the minister's words was not lost: corruption was a growing problem that could damage Germany's global standing. The latest scandal, involving huge bribes paid by waste disposal companies to Social Democratic politicians in Cologne, western Germany, was only the latest in a series to make headlines.
Major
strike hits Germany
BBC 6 May, 2002
Thousands of German workers have
downed their tools in the country's first large-scale strike in seven years.
The strike is going ahead despite warnings from business leaders and
politicians that it could hit the country's still-feeble economic recovery.
"What we're doing is not war. It's a strike for economic progress," said the
leader of the IG Metall engineering union in the south-western state of
Baden-Wuerttemberg, Berthold Huber
Särskilt yttrande
av ledamoten Nils Lundgren
Erfarenheterna från den västtyska
valutaunionen 1948-1991 pekar inte heller på att sådana
förändringar drivs fram på marknaden. Under denna period
präglades de södra delarna (Bayern och Baden-Württemberg ofta av
tendenser till överhettning medan Schleswig-Holstein och Niedersachsen
drogs med hög arbetslöshet.
Tillbaka till globaliseringen
(buffertfonder, guldmyntfoten , Lars Jonung)
DN-ledare 2002-03-07
Sverige måste välja: antingen bli en bra EMU-medlem som
Irland, eller följa den stela tyska ekonomin i
spåren.
Schröder calls for Europe
to set tax rates
The Times 2002-02-22
Europe's stability pact
The Economist
Feb 14th 2002
Kedjan var töjbar
(stabilitetspakten/Tyskland)
Barbro Hedvall
DN 2002-02-13
När Schröder
schnapsar är det rätt
Ledare i Finanstidningen 2002-02-13
Tyska regeringen EMU-förlamad
Leif Widén
2002-02-07
Helmuth Schmidt
Om
utvidgningen går för snabbt kan det komma en backlash
The European Commission has voted to issue
Germany and Portugal
with warnings over their swelling budget deficits.
What does this mean and what are the likely consequences?
BBC
News Online explains
A conservative tide is sweeping Europe
ANATOLE KALETSKY
The Times, JANUARY 17 2002
Germany risks EU warning over budget deficit
EU Observer 2002-01-23
Commissioners speak of
Franco-German confederation
EU Observer 2002-01-22
The CDU’s choice
Financial Times
editorial, 2002-01-08 20:04
"Peace in Our Time"
"the process of European
integration now irreversible"
Chancellor Helmut Kohl
BBC 2001-12-17
German conservatives call for EU
constitution
EU Observer 2001-11-27
CSU Chairman EDMUND
STOIBER:
"EU speak with one voice in foreign affairs"
France and Germany
back EU constitution
BBC, 23 November, 2001, 16:53 GMT
Little relief in sight for the German
economy
Wolfgang Munchau
Financial Times, November 4 2001
Pessimism worsens among German firms
BBC, 21 November, 2001, 12:57 GMT
Jobs woe for German economy
BBC, 16
October, 2001
Eichel puts case for changes to EU stability
pact
Financial Times, August 16 2001
Germans Prove Highly Resistant To the Unified
Currency's Charms
THE WALL STREET JOURNAL 2001-08-14
Tysklands kris är
vår
Exportutsikterna försämras ytterligare av de senaste
månadernas stärkta euro
Dagens Industri, ledare 28/2 2003
Tyskland är farligt nära en recession.
Kanslerns hårdnackade motstånd mot Irakkriget kan också straffa sig. Flera försvarsföretag har redan rapporterat att det har blivit svårare att sälja till USA. Om amerikanerna dessutom får för sig att bojkotta varor från Tyskland skulle det slå hårt mot tysk export. Sportbilstillverkaren Porsche har sin största marknad i USA, ja faktiskt i delstaten Kalifornien. Även Daimler Chrysler, BMW och Volkswagen är starkt beroende av USA.
Exportutsikterna försämras ytterligare av de senaste månadernas stärkta euro.
De tyska trygghetslagarna är också mer stelbenta än de svenska, vilket gör det svårt för företag i kris att skära ned. Få vågar anställa och arbetslösheten stiger. Många svenska företagsledare vittnar om att det är enklare i Sverige.
Krisen har redan börjat smitta av sig på bankerna. De senaste tre åren har staten tagit över nödlidande lån på över 260 miljarder kronor. Nu pågår också diskussioner om att starta en bankakut för de största bankerna. Redan vid starten skulle den tvingas ta över ytterligare krislån på minst 80 miljarder kronor.
Att budgetunderskottet ligger farligt nära EMU-gränsen, 3 procent av BNP, ökar inte direkt regeringens förhandlingsutrymme.
De tyska problemen angår Sverige i allra högsta grad. Tyskland är Sveriges största handelspartner. En tiondel av Sveriges export går dit. Dessutom sätter Tyskland takten för hela eurozonen och Europa. Om motorn fortsätter gå på tomgång hamnar hela Europa på efterkälken.
Att skylla EMU-medlemskapet för
Tysklands aktuella problem är missriktat
Lars Gunnar Aspman SEB
website 2003-02-26
Strukturproblem har starkt bidragit till att nuvarande konjunkturnedgång blivit djupare i Tyskland än i flertalet andra europeiska länder. Dessutom är stabiliseringspolitiken i hög grad låst av EMU-medlemskapet.
ECB sätter räntan på basis av inflationsutsikterna i Euroland som helhet, inte efter tyska förhållanden, och Stabilitetspaktens krav på max 3 procents budgetunderskott tvingar nu Tyskland att strama år finanspolitiken i en konjunktursvacka.
Men att skylla EMU-medlemskapet för Tysklands aktuella problem är missriktat, eftersom dessa främst är strukturella, och därmed borde angripas med reformer av arbetsmarknad, skattesystem och transfereringar.
Den politiska viljan att ta viktiga reformsteg förefaller dock skral, och till detta kommer allt mer högljudda protester från fackföreningarna. Mest sannolikt är därför att Tyskland förblir på efterkälken i Europa ytterligare några år
Se även SEBs chefsekonom Klas Eklund
Germany's stagnation is beyond its
control
By David Mackie and Silvia Pepino
The writers are,
respectively, chief economist for Western Europe
and eurozone economist at
JP Morgan
Financial Times 27/2 2003
Structural rigidities are widely blamed for Germany's economic stagnation. But although it suffers from a number of structural problems, notably in the labour market, these do not explain the contraction that started in the fourth quarter of last year.
Market rigidities explain why Germany has a very low potential growth rate: the latest Organisation for Economic co-operation and Development estimate is 1.5 per cent. But recessions come about owing to a lack of demand.
Although a common interest rate applies to the whole of the eurozone, this does not mean that the monetary stance in each country is the same. The best way to compare monetary stances is to look at Taylor rules. These were originally developed by John Taylor - now undersecretary for international affairs at the US Treasury - to indicate how a central bank should set policy rates given the extent to which actual inflation has diverged from the central bank's target, and the degree of spare capacity in the economy.
Applied to individual countries in the eurozone, Taylor rules show what level of policy rates would be appropriate if each country still had an independent central bank looking at growth, spare capacity and inflation.
There are three clear messages. First, before 1999, monetary policy in Germany (and for the region as a whole) was set on the basis of macroeconomic conditions in Germany. The gap between policy rates set by the Bundesbank and those implied by the German Taylor rule was very small. For France, Italy and Spain, interest rates were higher than their respective macroeconomic conditions required, in order to keep exchange rates stable.
Second, since the launch of the single currency, the monetary stance set by the European Central Bank has been too tight for Germany but too loose in Italy and Spain. The gap between ECB rates and the Taylor rule for France has been very small. And third, the divergence in monetary stances has increased. Since 1999, the ECB's policy rate has on average been almost 1 percentage point too high for Germany. But by the fourth quarter of last year, the ECB's policy rate was almost 2 percentage points too high.
The implications are dramatic. If the Bundesbank were setting rates purely on the basis of conditions in Germany - as it did before 1999 - they would be close to 1 per cent, rather than the ECB's current 2.75 per cent. Similarly, the Bank of Spain would have raised rates close to 7 per cent. Inappropriate monetary stances are pushing growth rates apart.
The only ray of hope is the possibility of a powerful upswing in global growth that is not offset by further appreciation of the euro. This seems unlikely. The outlook for Germany is grim indeed.
The Taylor
Rule
The Federal Reserve Bank of St. Louis
A different view of euro-sclerosis
The main arguments against the UK's joining the euro
relate to the positive advantages of a floating exchange rate; and it is on
this that UK euro-opponents should concentrate.
By Samuel
Brittan, Financial Times, February 28 2003
According to the conventional wisdom, Europe has been growing more slowly than the US for 20 years as a result of structural "rigidities". European Union leaders have themselves signed up to reform declarations, starting with one at Lisbon in 2000. Doubt is cast on this diagnosis in a recent paper, What's Wrong with Europe's Economy?, by Adair Turner
What's Wrong
with Europe's Economy?, by Adair Turner
http://cep.lse.ac.uk/queens/Adair_Turner_Transcript.pdf
The facts are not as they are often made to appear. In the period 1980-2001, real growth per annum was indeed nearly half as fast again in the US as in the eurozone countries. But if you look at growth per head of population, nearly all the difference disappears; and the US lead represents mostly population growth.
Turner puts under the microscope the difference between US and French gross domestic product per capita, which put the US some 40 per cent ahead in 1999. There was virtually no difference between output per hour in the two countries. The differences were due to two factors. American workers put in nearly 20 per cent more hours than French ones and the employment ratio was 15 per cent higher in the US.
The conclusion Turner draws is that ideally Germany ought to receive a reduction in labour costs via a lower exchange rate - the opposite of what has happened recently when the euro has risen against the dollar. But because it is in the eurozone, devaluation is not open to Germany.
One final point. Defective European labour markets are not a valid reason for Britain not to join the euro. The more rigid and sclerotic European products or labour markets turn out to be, the greater the opportunity for British companies to make a killing.
The main arguments against the UK's joining the euro relate to the positive advantages of a floating exchange rate; and it is on this that UK euro-opponents should concentrate.
Europa nej-sidans bästa
argument
Niklas Johansson
Veckans Affärer 2003-02-10
Europas länder kommer alltid att styras av politiker som är lojala mot EMU-projektet. Som följer stabilitetspakten slaviskt. Och som aldrig kommer att plocka populistiska poänger genom att kritisera den europeiska centralbankens, ECB:s, räntepolitik.
Tror ni på ovanstående påståenden? De är sällan uttalade i EMU-debatten, däremot underförstådda. Av dem som med säkerhet hävdar att EMU främjar politisk integration, stabilitet och fred på vår kontinent. Som om vägen från EMU ledde tillbaka till gyttjan, taggtråden och kulspruteelden vid Somme och Verdun.
Därför kommer den svenska nej-sidan att utnyttja minsta tecken på ekonomisk och politisk oro bland EMU-länderna. Problem som uppstår därför att ECB:s ränta och eurons valutakurs inte kan passa alla länder samtidigt.
Samtidigt kommer ja-sidan att tona ned dessa intressekonflikter.
Vi har Tyskland förstås, en intressant spelpjäs för nej-sidan. Landet plågas av låg, nära obefintlig, tillväxt och ett budgetunderskott över stabilitetspaktens gräns på 3 procent av BNP, vilket tvingar fram skattehöjningar och utgiftsminskningar som förvärrar lågkonjunkturen.
Samtidigt som varken ECB:s ränta eller eurokursen är tillräckligt expansiva för tyska förhållanden. Tvärtom får Tyskland den högsta realräntan (nominell ränta minus inflation) inom EMU, på grund av landets låga inflation. På liknande sätt får överhettade länder som Irland och Spanien den lägsta realräntan.
Även Frankrike lovar att bli en intressant tillgång för nej-sidan. Risken finns att budgetunderskottet kryper över 3 procent i år, men landets borgerliga regering trotsar ändå kraven från övriga länders finansministrar om att minska det strukturella budgetunderskottet med 0,5 procent av BNP i år.
Den minnesgode vet också att länder med statsskulder över 60 procent av BNP beviljades undantag från konvergenskriterierna vid inträdet till EMU, under förutsättning att utvecklingen gick åt rätt håll. Men Italien, med den allra tyngsta skuldbördan, dras fortfarande med ett stort budgetunderskott.
Vad ska då ja-sidan mobilisera?
Storbritannien är en dark horse. Före den 7 juni ska Tony Blairs regering ta ställning till om fem testkriterier för brittiskt EMU-medlemskap är uppfyllda (vilket främst handlar om hur den brittiska ekonomin skulle påverkas).
Ett positivt besked i juni skulle hjälpa den svenska ja-kampanjen. Det motsatta vore å andra sidan till stor skada.
Sammantaget tycks den europeiska utvecklingen spela nej-sidan i händerna. Det har uppstått sprickor i EMU-fasaden, den gemensamma räntan och valutakursen orsakar spänningar mellan länder som rör sig i olika takt.
Ändå har vi bara sett början. På sikt kan den tyska situationen, och andra liknande, i grunden skaka det etablissemang som fört in sina länder i EMU. När arbetslösheten stiger medan valutakurs, penning- och finanspolitik är låsta av EMU och stabilitetspakten får populister på både höger- och vänsterkanten ett präktigt frislag. Ett sådant scenario ville inte finansminister Bosse Ringholm ens diskutera när VA intervjuade honom om EMU. Det var alltför hypotetiskt. Och långsökt.
När EMU-motståndarna för ut den tyska spelpjäsen på brädet får han kasta sina skygglappar.
Tyskland - Europas sjuke man
DN-ledare
4/2 2003
Svenskarna må vara Europas mest sjukskrivna folk men tyskarnas ekonomi och välfärdssystem är det sjukaste. Deras politiska doktorer är inte heller de mest beslutsamma. Genom sin blotta storlek sprider dessutom Tyskland sin sjuka till övriga Europa.
Vi svenskar känner igen det mesta. Vi känner också igen botemedlen - rörligare arbetsmarknad, större konkurrens, försämrade förmåner, budgetsanering - allt för att nå tillväxt igen. Men inte nog med det - vi minns också varifrån de kritiska råden kom och vilka som hade en annan verklighetstolkning, vilka som ville reformera och vilka som inte ville. Samt vilka som faktiskt gjorde det.
Tysk ekonomi blir bättre
"if
everything goes well and we do not have a war in Iraq"
Financial Times 30/1
2003
Whichever way you look at it, the mood in Germany these days is pretty grim. The most optimistic estimates for growth of gross domestic product expect no more than 1 per cent in 2003. Unemployment is expected to hit an average of 4.2m, or one in 10 of the working population. In east Germany it is nearer one in five. Domestic demand is feeble. The retail trade has just reported the sharpest drop in turnover in postwar history, down 3.5 per cent in 2002 on the previous year, at €365bn ($395bn). The government is putting a brave face on it. Wolfgang Clement, economy minister, is still banking on an export-led recovery in the second half of the year - "if everything goes well and we do not have a war in Iraq".
Tyskland kan vara ett varnade exempel
för EMU-debatten.
Går det dåligt för Tyskland, kan
viljan att gå med i deras klubb ta stryk
Klas Eklund, ekot, 8/1
2003
-Tyskland är Europas största ekonomi och Sveriges största handelspartner, säger Klas Eklund, chefsekonom på SEB.
Tyskland kan också vara ett varnade exempel för den ekonomiska debatten i Sverige och för EMU-debatten. Går det dåligt för Tyskland, kan viljan att gå med i deras klubb ta stryk, tror Klas Eklund.
Det går minst sagt dåligt för Tyskland. Landet som tidigare var Europas ekonomiska lok har blivit Europas släpankare. Förra året var tillväxten i princip noll. Arbetslösheten är uppe på nästan tio procent, i det gamla Östtyskland ända uppemot 20 procent. Bättre tider dröjer Någon snabb förbättring är inte att vänta, enligt Klas Eklund.
– Om världsekonomin vänder uppåt under andra halvåret i år, som många hoppas, kommer tysk export att få mer draghjälp, enligt Klas Eklund. Problemet är att det inte finns några tecken på återhämtning i den tyska inhemska ekonomin och problemen består i flera år framåt.
Peter Wolodarski om Tyskland
"Arbetsmarknaden är för stel, välfärdssystemen
för generösa,
skatterna för höga och reglerna som styr
företagen för många"
DN 7/1 2003
Nästan alla är överens om vad som är fel; senast levererade OECD det kärva budskapet i sin årliga rapport. Arbetsmarknaden är för stel, välfärdssystemen för generösa, skatterna för höga och reglerna som styr företagen för många. Tanken var god: tyskarna ville minimera risker och skapa trygghet men fick i stället ett näringsliv som - i likhet med det svenska - saknar dynamik. Över fyra miljoner är arbetslösa och det går forfarande inte att köpa ett paket mjölk på söndagarna. Det är betecknande.
Betecknande är också hur de forna framgångarna -precis som i Sverige - födde tron på att samhällets maskin aldrig mer behövde oljas. Tyskarna hade sitt Wirtschaftswunder efter kriget, vi hade hundra år av fantastisk ekonomisk utveckling fram till 1970. Och varken här eller där har politikerna på allvar velat ta konsekvenserna av den stagnation som följt.
Det ekonomisk-psykologiska
tvärstoppet i den tyska ekonomin under de senaste månaderna pekar
på ett större problem som förr eller senare riskerar att
hemsöka alla våra ekonomier.
Carl Bildts veckobrev 7 januari
2003
Det successiva skapandet av en europeisk gemensam inre marknad i förening med den omfattande liberaliseringen av världshandeln och den pågående teknologiska revolutionen har skapat en utbudsrevolution som dramatiskt ökar kraven på konkurrenskraft och omvandling i de olika ekonomierna. Förr kunde strukturer skyddas och döljas bakom mer eller mindre betydande hinder vid de gamla gränserna, men när nu dessa successivt rivs förändras situationen dramatiskt, och kraven på omvandling och förnyelse av ekonomierna måste ställas väsentligt mycket högre än vad som tidigare var fallet. Det globala liberala systemskifte som tog sin början på 1980-talet, och accelererade kraftigt under 1990-talet, ställer nu allt större och större krav.
Och det är här Tyskland har snubblat. Stela strukturer från banker till fackföreningar har bromsat omvandlingen.
Under de närmaste åren tror jag att Tyskland kommer att vara Europas intressantaste land. När man nu så tydligt kört i väggen, finns inget alternativ till en mer eller mindre radikal reformpolitik. För ett decennium sedan var det åtskilliga som tittade på Sverige och det liberala systemskifte som vi inledde här och såg det som en möjlig modell för Europa. Hur Tyskland kommer att hantera sin situation under de kommande åren kommer att bli av allra största betydelse.
Peter Wolodarski om
Tyskland
"Arbetsmarknaden är för stel,
välfärdssystemen för generösa,
skatterna för
höga och reglerna som styr företagen för många"
DN 7/1 2003
Kommentar RE:
Man har hört det förut, att det
skulle vara strukturellt, se t ex kronnkursförsvararen Mats Svegfors
94-09-10 i SvD
- Visst beror dagens problem i ekonomin i någon
mån på missgrepp i slutet av 80-talet och början av 90-talet.
Men i grunden har Sverige inte hamnat i en stabiliseringspolitisk kris.
Underskottet i statsbudgeten
beror djupare sett på att vi försöker överbrygga en
konjunkturnedgång när det i själva verket handlar om en
grundläggande strukturell förändring.
Germany’s economic outlook continues
to deteriorate,
along with that for the rest of the euro area.
The
government now faces the prospect of a strike
by millions of public-sector
worker
The Economist 2/1 2003
Export prospects appear to have weakened, partly in response to the rise in the value of the euro, which has made German products less competitive on world markets.
The chancellor has warned of the need for reform—in his message, he talked about the need for fundamental change—but after more than four years in power, his newly re-elected government has shown little appetite for pushing through unpopular policies. Ironically, the government’s dithering has itself delivered unpopularity on an almost unprecedented scale. Within weeks of the start of his government’s new term, Mr Schröder had seen his popularity fall further and faster than any other chancellor in modern times.
The constraints of the euro area’s stability and growth pact mean that the government is having to tighten its belt instead of loosen it. Tax cuts planned for this month have been put on hold for at least a year, to enable the government to cope with the extra spending arising from last summer’s floods and to meet the its stability-pact targets. These have already been eased to give Germany, France and Italy more time to meet the pact’s exacting requirements.
The creation of the euro has seen Germany squeezed from both ends. Room for manoeuvre in fiscal policy is limited because of the stability pact. Monetary policy is now entirely a matter for the European Central Bank (ECB), which largely resisted interest-rate cuts during 2002. When a rate cut did come, in December, German banks were quick to make clear that they would not be passing on the benefits of cheaper money to the rest of the economy: they are, they say, too tightly squeezed themselves to afford it. This blockage in the monetary-policy transmission mechanism will slow the impact of the ECB’s loosening.
Mr Schröder also has his work cut out to convince Germans that the bloated welfare system has to be tackled. Germany’s pension and unemployment benefits are among the most generous in the world and there has been fierce popular resistance to change. Union leaders and even some senior Social Democrats remain opposed to cuts in benefit provisions and to the introduction of more private-sector competition into health-care provision.
Recession gripped Germany, Italy and the
Netherlands
The weakest numbers of all came from the
Netherlands
"It's worse than Germany now,"
International Herald Tribune
15/8 2003
The weakest numbers of all came from the Netherlands, where output plunged by 0.5 percent between April and June as consumers pulled back on spending. It was the third straight quarter of economic contraction. Analysts warned that the Dutch economy, one of the few Continental success stories of the 1990's, has now inherited Germany's role as the sick man of Europe.
"It's worse than Germany now," said Annemarieke Christian, an analyst at Morgan Stanley, "and it will continue to lag for some time."
"It's pretty awful," said Audrey Childe-Freeman, an economist at CIBC World Markets in London. "We're still in an environment where the euro zone economy has basically come to a halt."
The German economy, long the European laggard, entered a shallow recession for the second time in as many years, the government reported Thursday.
The weakness spread to Italy - heavily dependent on Germany as an export market - which also slipped into recession in the second quarter, the first in a decade.
The weakest numbers of all came from the Netherlands, where output plunged by 0.5 percent between April and June as consumers pulled back on spending. It was the third straight quarter of economic contraction. Analysts warned that the Dutch economy, one of the few Continental success stories of the 1990's, has now inherited Germany's role as the sick man of Europe.
"It's worse than Germany now," said Annemarieke Christian, an analyst at Morgan Stanley, "and it will continue to lag for some time."
Most countries in the euro zone are suffering from weak overseas demand for their goods, which have been priced out of some markets by a rise in the value of the euro. The region's gross domestic product was unchanged in the three months to June compared with the first quarter, when it expanded 0.1 percent.
The EU's European statistics office on Thursday reported that the euro region grew by 0.1 percent in the second quarter, unchanged from the first-quarter growth pace.
France, the second-largest economy in the euro zone, does not report on its second-quarter performance until next week. But the government has steadily reduced its growth forecasts this year, citing the effects of an unfavorable exchange rate.
Unlike Germany, which is opening the fiscal spending taps in an effort to get out of recession, the Netherlands is actually curbing spending as the government aims to keep its budget deficit within the 3 percent limit allowed under European monetary union.
Germany, along with France, is expected to breach that cap.
The Netherlands, meanwhile, is cutting government outlays, as the government tries to stay within the euro guidelines on public spending.
The Netherlands was one of the first countries in Continental Europe to overhaul its labor markets. That helped it to cut unemployment sharply in the 1990's and to steadily record economic growth rates of more than 3 percent late in the decade. But that success also drove up labor costs, and now the economy is suffering some of the consequences. Belatedly, companies are cutting payrolls and consumer spending is sliding.
"Tyskland kommer att bli en av nej-sidans
trumfkort"
Viktor Munkhammar, DI finanskrönika
23/12 2002
Nej-anhängarna i EMU-debatten har vind i seglen just nu. Opinionen går deras väg och ett antal tunga borgerliga debattörer har klivit på nej-tåget. Dessutom är en intern strid inom socialdemokratin om de så kallade buffertfonderna under uppsegling. LO kräver att de införs men det tycks hart när omöjligt att konstruera ett upplägg som inte skrämmer bort potentiella ja-röster.
Men frågan är om inte Tyskland kommer att bli nej-sidans allra bästa vän i EMU-debatten. EMU-områdets största ekonomi, EU:s skattkista och Europas symbol för effektiv ekonomi parat med socialt ansvarstagande är en miserabel syn för tillfället.
Tyskland är ett perfekt skräckexempel för att visa hur illa det kan gå i EMU.
I debatten sägs ibland att Tyskland kopplade D-marken till euron till en alldeles för stark kurs. Den tyska konkurrenskraften skulle därmed ha skadats för lång tid framöver.
Att döma av exportstatistiken håller inte argumentet. Enligt Svenskt Näringsliv har den tyska exporten ökat snabbare än såväl övriga EMU-länders som Sveriges sedan euron infördes 1999.
Ett tyngre argument för att EMU-medlemskapet skadar Tysklands ekonomi är Tillväxt- och stabilitetspaktens krav på högst 3 procents underskott i de offentliga finanserna. Pakten tvingar landet att föra en galen finanspolitik.
Även för den som inte är lagd åt det keynesianska hållet och vill att staten ska bedriva en aktiv stabiliseringspolitik för att motverka konjunktursvängningar, ligger det något i resonemaget: Tillväxt- och stabilitetspakten tycks vara mer en stabilitets- än en tillväxtpakt.
Ett annat tungt argument är att den tyska ekonomin stryps av en för hög realränta, det vill säga den nominella räntan minus inflationen. Inflationen i Tyskland är den lägsta i hela EU, 1,0 procent. Men eftersom prisökningstakten i EMU-zonen som helhet ligger och har legat en bit över Europeiska centralbankens tuffa inflationsmål på högst 2 procent, har det varit snålt med räntesänkningar.
EMU bäddar för bråk Stefan de Vylder
SEB:s chefsekonom Klas Eklund skriver i en kolumn på SvD:s ledarsida att en halv procentenhets lägre ränta hit eller dit inte har så stor betydelse.
Tyskland är på
väg in i en djup politisk kris
Klas Eklund, kolumn på SvD
ledarsida 17/12 2002
Men om det i stället handlade om 1-2 procentenheter skulle saken komma i ett annat ljus, vilket Mats Lind på fondkommissionärsfirman Öhman påpekar i ett marknadsbrev.
Sammantaget finns ändå visst fog för att hävda att EMU-medlemskapet har varit negativt för den tyska ekonomin. Åtminstone har det lagt sten på börda. Hur tung stenen är i relation till den av EMU oberoende bördan kan diskuteras länge. Men i en upphetsad och känslomässig valkampanj finns litet eller inget utrymme för sådana nyanser. Tyskland kommer därför att bli en av nej-sidans trumfkort.
Few have realised the
most dangerous feature of Emu:
it has locked Germany into a seriously
uncompetitive real exchange rate
Martin Wolf, Financial Times
67.8% of Germans saying they are
dissatisfied
or outright unhappy with the euro
EU Observer 20/12
2002
As the single currency approaches its first anniversary, around two thirds of Germans surveyed say they are unhappy with it, making the EU's largest economy the most sceptical in the eurozone. A European Commission poll found that many Germans blame the replacement of the Deutschmark for a rise in prices and the current economic slowdown.
Economic analysts and the European Commission deny the claim that the euro changeover led to major price hikes, arguing that actual overall price inflation was no more than 0.2%. But the 67.8% of Germans saying they are dissatisfied or outright unhappy with the euro, shows a marked contrast with nearly 80 per cent of Belgians and Finns who declare themselves pleased with the single currency, reports the Financial Times.
Gerhard Major
Financial Times
editorial
November 20 2002
Highly recommended article
For decades, Germany has exported economic and political ideas; its postwar social market economy was widely admired and copied. That remains largely unchanged. But the current economic crisis is so entrenched and so intractable that Germany is now importing the postwar "British disease" and the language to match.
Derived from Shakespeare's Richard III, the "winter of discontent" described a low point in Britain's industrial relations, when the strikes of late 1978 and early 1979 left rubbish piling up in the streets. Germany's stagnant economy, rising taxes and antagonism to change have prompted some to reach for the bard in translation. Winter der Unzufriedenheit captures the public's dramatic loss of support for Gerhard Schröder's new government. Britain was forcibly ejected from Europe's exchange rate mechanism on "Black Wednesday" in September 1992. With its budget deficit rising alarmingly, the European Commission decided to launch its excessive deficit procedure against Germany on schwarzer Mittwoch, last Wednesday.
The parallels do not end there. Governments rarely suffer mid-term unpopularity in their first year. The popularity of John Major's 1992-97 Conservative party slumped, never to recover, after the ERM disaster within five months of the election. Mr Schröder's ratings have similarly collapsed - but within weeks. The electorate does not believe that he had no knowledge of the problems to come in September's election campaign. Nor should it.
Recovery from here would test any politician's skills. For Mr Schröder, it will be even harder. He has to fight against his reputation for zigzagging on policy, his tiny parliamentary majority, opposition control of the legislature's upper house and rampant vested interests in society.
Mr Schröder could follow the path of Mr Major and muddle on for the next four years. Past form would suggest he will. It may work: the US economy may start firing again; perhaps German consumers will fill the shops with Christmas cheer; perhaps opposition to the Hartz proposals on the labour market and the new Rürup commission on welfare will melt away. Perhaps pigs will fly. This was the tactic of John Major and it failed - miserably.
Alternatively, Mr Schröder could start by telling Germany that the country may be wealthy but its prospects are bleak. SPD ministers would stop blaming differential inflation rates in the eurozone, as Hans Eichel, the finance minister, did yesterday. Instead, they would tell the public that low wage increases, lower employment costs and less generous unemployment benefits are needed to regain competitiveness and economic growth.
So far, there is no sign that Mr Schröder's government will take the bold steps necessary. His government deserves the same fate as that of the Conservatives after Mr Major. For its own survival, the SPD must avoid such an outcome; and the Greens should question their role in a government destined for disaster.
Stricken giant holds back
Europe's economy
By Brian Groom, Financial Times, November 15 2002
This ought to be Germany's hour. Twelve years after the fall of the Berlin Wall, the country that has been the chief proponent and potential beneficiary of enlargement will shortly be at the centre of a 25-member European Union - its biggest country with 82m people, generating a fifth of its gross domestic product. It could be immensely powerful.
It is seen as a stricken giant, the sick man of Europe, that has lost its way as a wealth-generator and has yet to work out how to articulate its international role. The "German problem", which recurred for the best part of two centuries, is back - but this time, unusually, the German problem has economic weakness at its heart.
In these circumstances, a degree of schadenfreude might be expected in other capitals. For years Germany had been thrust down their throats as the model of economic virtue. The mighty Deutschmark ruled and Bundesbank presidents regularly lectured others on fiscal and monetary probity.
The situation is too serious, however, for others to take much pleasure. With Japan's recovery faltering, and German weakness holding back the European economy, the US looks like being left again as the world's main source of growth - and there are doubts about the sustainability of its performance.
For the past 50 years, German leaders have sublimated national instincts to the broader EU good - not least in exchanging the D-Mark for the euro, which was far from popular with many Germans.
Germany is in a bind. It cannot escape by devaluing its currency now it is in the euro, which many believe it entered at too high a rate. And externally the euro is more likely to rise against the dollar and yen than to fall.
Interest rates set by the European Central Bank are too high for Germany. The stability pact and Germany's own structural deficit (irrespective of the economic cycle) cramp its room for fiscal expansion. It is in a vicious circle in which low employment leads to higher welfare claims and eventually heftier payroll taxes, creating still more unemployment.
Structural reform is the only long-term answer, but in the short term it would cause pain that neither government nor the public appears willing to contemplate. Germany remains a wealthy, comfortable society. The danger is that, like Japan, it would prefer to muddle through than take tough policy decisions.
Germany must go shopping
the eurozone monetary policy works very differently from in the Anglo
bloc
By John Plender, Financial Times, November 14 2002
The world is overdependent on the English-speaking countries, especially the US, as a source of demand in the global economy. No one expects Japan to do much for global demand for quite some time. Continental Europe ought to be in a position to save the world from recession or deflation if the Anglophone bloc prematurely unwinds imbalances that have caused private sector debt to soar and current account deficits to widen. But we all know that is unlikely to happen.
The obvious cyclical remedy for the ills of Europe's slower-growing economies is a cut in the European Central Bank's short-term interest rate. The structural medicine favoured by most liberal economists in investment banks is the deregulation of rigid labour markets.
Yet in Germany, where the threat of deflation is greatest, the long maturity of debt, especially in the housing market, means monetary policy imparts less stimulus than in the US or UK. Comparable strictures apply in France and Italy. And loosening labour markets might be counterproductive in a downturn. Employers facing a credit crunch and a profits squeeze would be more inclined to fire than to hire, worsening the demand problem.
The reality is that in the eurozone monetary policy works very differently from in the Anglo bloc, a point that is reflected in contrasting structures of savings and debt. In 2001, according to the Organisation for Economic Co-operation and Development's Economic Outlook, household savings as a percentage of disposable income in Germany were 10.2 per cent; in France 15.8 per cent; and in Italy 10.9 per cent. The figures for the US and the UK were 1.6 per cent and 5.6 per cent.
The same contrast is apparent in these countries' household liabilities. The Bundesbank calculates that, after adjusting for transatlantic differences in the statistical treatment of sole proprietorships and partnerships, household liabilities as a percentage of national output amounted to 108 per cent in the US, 80 per cent in the UK, 74 per cent in Germany, 46 per cent in France and 30 per cent in Italy.
The high saving, low borrowing ethos makes for stability. Yet this stability is not much help when an economy is threatened with deflation. And in Germany and Italy, demographic pressure will worsen the threat by shrinking the working age population
Unemploment is high,
bankruptcies are rife, banks are teetering and taxes are going up.
How did
the German economy get this bad?
Time 2002-10-03
Long regarded as the locomotive of European industry, Germany has recently been behaving more like the caboose. If the Germans can't turn their economy around soon, it risks going the way of Japan, which has suffered a decade-long slide into high unemployment and deflation. Since Germany's industry is closely tied to exports within the euro zone, the faltering economy threatens recovery in other E.U. states like France and Italy. "Deflation is coming into the system and that's what happened in Japan," says Gustav Horn, an economist with the German Institute of Economic Research. "I'm afraid this could start in Germany too next year."
The main dax index of stocks has declined from a high of 8065 in March, 2000 to around 3170 today — a fall of 60%, higher than losses in the U.S. or British markets.
A study by the European Union issued in May says that the growth rate in Germany averaged just 1.6% between 1995 and 2001, a full percentage point behind its euro-zone partners.
"If France does well by cutting taxes
and pursuing a laxer fiscal policy than the one demanded by the Commission and
the ECB, other countries will surely follow"
Anatole Kaletsky, The
Times, October 10, 2002
Almost all economists and many politicians now accept an apparently outlandish view expressed on this page many times since the mid-1990s: that, as a result of its own mishandling of unification and the euro project, Germany has become the sick man of Europe. What is still controversial is whether the whole Continent is condemned to follow Germany’s long-term decline, or whether a new source of economic dynamism and political leadership
If France does well by cutting taxes and pursuing a laxer fiscal policy than the one demanded by the Commission and the ECB, other countries will surely follow. As this happens, the commission and the ECB will be forced to adjust to the new economic reality by changing their own rules and operating procedures.
Let me return, then, to the key issue — whether France would improve its economic performance by defying the Stability Pact and following a more expansionary economic policy. The answer is unequivocally yes. In an environment where interest rates are set by the ECB at far too high a level for the health of the European economy, fiscal policy is the only answer for a nation that wants to cut unemployment and restore economic growth.
Germany's Economic Ills
Martin
Feldstein
Essays in Honor of Horst Siebert, forthcoming
I will start this essay by looking at the short-run problems of recession and of the loss of monetary policy independence as a result of the European Economic and Monetary Union.
In writing this I certainly do not mean to be critical of the ECB. Its responsibility is to the EMU countries as a whole and on that basis the interest rate decline may have been appropriate. My point is rather that Germany would have benefitted from a more rapid reduction of rates.
Within the United States, however, individuals respond to state or regional declines in demand by moving to other regions and by reducing wages relative to those of other regions, thereby increasing the attractiveness of producing in the region and reducing the prices of the products of the region relative to prices elsewhere in the country. While such migration and wage responses are in principle available in Germany, the reality is that migration to other countries is severely limited by differences in language and wages are much less responsive than they are in the United States.
Even with such a more active fiscal policy, the effect of the EMU is likely to mean greater cyclical fluctuations in unemployment and higher average levels of unemployment than would have been possible with national monetary policy and a national currency.
EMU and International Conflict
FOREIGN AFFAIRS NOVEMBER/DECEMBER 1997
More american economists about EMU
Germany sits on the brink of
deflation
Financial Times, September 17 2002 20:05
The US may suffer a decade of lost growth, just as Japan did during the 1990s, they argue. But when looking for a country most likely to be sucked into a deflationary trap, people should focus on Germany, not the US.
Both Japan and Germany have lost control over real short-term interest rates. For Japan, this is because nominal short rates have reached the lower limit of zero and inflation is stuck in negative territory. For Germany, the European Central Bank has to set interest rates to achieve price stability across all eurozone countries. Though the cause is different, the effect is the same: interest rates are too high for both Germany and Japan. One method for determining the right level for interest rates - the so-called Taylor rule - would imply that interest rates in Germany should be as much as 3 percentage points lower than in the rest of the eurozone and below the ECB's current refinancing rate. For Japan, the same method would suggest that official interest rates should be significantly below zero.
Both Germany and Japan also suffer from high real effective exchange rates. Japan's persistently high current account surplus prevents a meaningful decline in the yen's exchange rate. Meanwhile, Germany's exchange rate has been irrevocably fixed against its main trading partners within the eurozone, giving it limited scope to achieve a depreciation. So, with too-high official interest rates and still strong exchange rates, the two countries suffer from inappropriately tight monetary conditions.
Both countries are also unable aggressively to stimulate the economy via a loosening of the fiscal stance. Japan cannot afford to do so because the size of the deficit is already high. In the face of zero nominal growth and an already high debt to GDP ratio, Japan is under pressure to reduce its deficit.
Germany's flexibility is cramped by the eurozone's growth and stability pact, which requires Germany to prevent its high fiscal deficit from rising further.
Few have realised the
most dangerous feature of Emu:
it has locked Germany into a seriously
uncompetitive real exchange rate
Martin Wolf, Financial Times
The German malaise: a 'barricaded
society'
International Herald Tribune
2002-09-10
While the economy is a central issue in national elections Sept. 22, the performance rankings suggest that Germany's most specific problems - one of the European Union's lowest rates of economic growth, high debt and deficit, and a bottom rung in the EU for unemployment - are ultimately difficult to solve because they have their roots in a society that is uncomfortable with and resistant to change.
The key performance figures are these: In the 2002 World Competitiveness ratings, compiled by the Lausanne-based Institute for International Management Development, Germany ranked 47th out of 49 major countries when it came to flexibility and adaptability. It placed 15th in overall competitiveness, but in terms of the business community's trust in any German government's capacity to adapt to economic developments, it was 46th.
EU's recovery may have been washed away
Anatole Kaletsky
The Times, August 29, 2002
Highly recommended
Back in the spring, when Westminster, the media, and the markets were all consumed by one of their outbursts of euro fever, and speculation was rife about a referendum as early as this autumn, I made a small bet with Philip Gould, the Prime Minister's pollster. The euro, I maintained, would prove even less attractive to British voters after they returned from their summer holidays than it was before. As a result, Tony Blair would face certain defeat in a referendum and would have to abandon the entire euro project at least until the next Parliament.
The disdain for the euro among British travellers this summer has now been so well-documented that I can hardly add anything beyond "I told you so". Indeed, the whole issue of euro membership is so utterly dead that it is scarcely worth discussing any longer.
The first e-mail I opened when I returned from my holidays was a disinvitation to a major conference on the hoary old question of whether Britain should join the euro. The event had been cancelled for lack of interest. "We have not been able to recruit enough participants," admitted the distinguished quango which was to run the retreat. "This is a most surprising outcome and has never happened to us before in the history of our organisation."
To me, the lack of interest was not at all surprising. Even the Foreign Office has given up on the euro, to judge by Jack Straw's shift of focus to constitutional issues in his recent speaking tour. And Tony Blair has a new outlet for his vanity: Iraq. (I suspect that Iraq will prove as frustrating as the euro for Mr Blair; after a Republican defeat in November's congressional elections "regime change" in Iraq will join the euro referendum among the great non-events of the decade. But that is another story for another day.)
In any case, the reason for believing that Britain will stay out of the euro is the same as it has been since 1997. As long as British voters are asked in a referendum whether they want to give up their economic self-government, they will say no.
But while Britain has been saved from the euro, at least for the time being, by the operation of democracy and the good sense of voters, the rest of Europe is looking less and less fortunate on both counts. Europe is bouncing along the bottom of a deep economic slump and can no longer hope to export its way out of trouble by selling luxury goods to a super-charged American economy.
Meanwhile, Germany, which is now perennially Europe's weakest, as well as its largest, economy, is being sucked into a deflationary whirlpool similar to the one that drowned the postwar economic miracle in Japan.
Yet there seems to be little hope that either democracy or good sense will come to the rescue. To understand this grim diagnosis, we must focus on Germany, whose dysfunctions and blunders have been primarily responsible for Europe's economic woes since the late 1980s.
That the German economy is going from bad to worse was shown yesterday by the third fall in three months in the closely watched IFO economic situation index. Germany's economic growth is projected at around 0.5 per cent in each of the next two years by the most "optimistic" forecasters and nobody expects any reduction in unemployment in the foreseeable future.
This is not surprising to anyone with an understanding of economics or history.
When Germany entered the euro it made the same mistakes as Britain did when it rejoined the gold standard in 1925 and re-pegged the pound to the dollar after 1945.
Like Britain in the 1920s or the 1950s/1960s, Germany has locked itself into a fixed exchange rate with labour costs that are unsustainably high.
Few have realised the
most dangerous feature of Emu:
it has locked Germany into a seriously
uncompetitive real exchange rate
Martin Wolf, Financial Times
Krugman: WHY GERMANY KANT KOMPETE
In another disturbing analogy with Britain in the 1960s, the German political system has ceded enormous power over wage-setting and economic policy generally to trade unions whose main concern is to preserve the privileges of the very workers who are most overpaid.
Germany has topped this farrago of blunders by imposing on the whole euro system an ultra-monetarist macroeconomic framework designed to prevent any possible escape from the predicament in which it has trapped itself.
It was Germany that encouraged the European Central Bank (ECB) to impose an absurdly low inflation ceiling on the entire eurozone. This has prevented German competitiveness from being restored - as it often was in the 1970s and 1980s - via wage inflation in France, Italy and other eurozone countries.
The ECB's German-inspired anti-inflationary fanaticism has also resulted in a euro-wide interest rate which is substantially higher than the rate of growth of German national income. This means in effect that savers are guaranteed a better return from lending money to the ECB than businessmen can expect to generate from risky investments in German industry and commerce.
This sort of monetary perversity, which favours rentiers over entrepreneurs and encourages excess saving instead of consumption and investment, is justifiable only during periods of high inflation. It is, however, sadly familiar to anyone who has studied the interwar depressions or remembers the monetary madness of the early 1990s that pushed Japan into its current spiral.
To make matters even worse, Germany blocked off the one remaining escape hatch that might have been open to it, even with the euro, by insisting upon the ludicrously misnamed "stability and growth pact".
This pact has prevented euro members from offsetting overly tight monetary policies with Keynesian remedies such as higher public spending or tax reductions.
Given that Germany cannot cut interest rates or devalue its currency, the only means it has left to stimulate economic growth and reduce unemployment is to reduce taxes, raise public spending and allow its budget deficit to increase.
Such a Keynesian expansion would be even easier to justify after the devastation of the summer floods. But taking another leaf out of Japan's pre-Keynesian textbook of the 1990s, the German Finance Ministry is now contemplating exactly the opposite course.
It is, instead, calculating how much it should raise taxes to "compensate for" the budgetary shortfalls caused by the economy's disappointing rate of economic growth.
Yet despite all these perversities, there was cause for moderate optimism about Europe's economic prospects - at least until this month.
First, the political swing to the Right across Europe seemed to presage a victory for the Conservatives in Germany too. This raised the possibility of major changes to the ruinous economic policies of Gerhard Schröder, especially in the fields of taxation and employment.
In the past week, however, the gap between Edmund Stoiber's conservatives and Herr Schröder's Social Democrats has narrowed almost to vanishing point. This does not mean that the Left will win, since the liberals will almost certainly favour a Centre-Right coalition, but it does mean that Herr Stoiber will be even more mealy-mouthed in his economic promises - especially with regard to tax cuts and European issues - than he was before.
Secondly, the strong public reaction in recent elections against mass unemployment created the hope that Europe's governments would rebuild the macroeconomic framework of the euro project. The present ultra-monetarist rules of the eurozone effectively ban expansionary Keynesian policies to reduce unemployment. Yet precisely such policies were demanded by Europe's voters. The implication seemed to be that the Maastricht treaty would be reopened, the "stability pact" would be rewritten, and the ECB would surely be reformed.
The reaction in Germany to the flood disasters makes these hopes seem increasingly forlorn. Instead of attacking the pre-Keynesian economic illiteracy of Herr Schröder's plan for a tax increase to pay for the flood damage, the conservatives and liberals are simply avoiding the issue.
Instead of demanding lower interest rates and direct political control of the ECB's targets, they ramble nostalgically about the Bundesbank. Instead of proposing an alliance with France and Italy to dismantle the stability pact, they waffle about the need for the euro to be as strong as the old mark.
Europe will need some much more decisive economic leadership if it is to avert long-term stagnation and quite possibly a Japanese-style crisis. Nobody in Germany seems fit to provide it.
Euron spricker
när dollarn faller
Rolf Englund i EU-krönika i Nya
Wermlands-Tidningen 2001-01-08
The battle for Germany
Financial
Times editorial, 2002-04-08
To understand Edmund Stoiber's appeal to Germany's voters, travel to the rolling hills of southern Bavaria. In countless small towns and villages, businesses from chemicals to computers have risen alongside traditional agriculture to create one of the most successful economies in Europe.
From its roots as a poor agricultural state after the war, Bavaria has been transformed into virtually the richest region in Germany. Unemployment, at 5.5 per cent, is the second lowest in Germany and only a sliver above the 5.4 per cent of neighbouring Baden-Wurttemberg.
It is on his reputation for economic competence that Mr Stoiber is largely basing his campaign to unseat Gerhard Schröder in September's federal elections. In speech after speech, the Bavarian premier has contrasted his state's prosperity with the rising unemployment and faltering growth of many other parts of Germany - an underperformance he blames on the social democratic chancellor. For both men, economic issues will be crucial in a close election fight.
Germany risks EU warning over budget
deficit
EU Observer 2002-01-23
The European Commission is considering the possibility of reprimanding Chancellor Gerhard Schroeder’s government over the country's budget deficit, official sources said on Tuesday to the Frankfurter Allgemeine Zeitung.
German finance minister Hans Eichel said that he saw no reason for any reprimand because the deficit remained below 3 per cent of GDP.
Under the Stability and Growth Pact criteria that apply in the eurozone, a country's deficit should not exceed 3 per cent of GDP.
Tysk höst
Monica Hedlund,
Veckans Affärer nr 50/2001
Nu saktar också Europas ekonomiska lokomotiv Tyskland in. Med ungefär en fjärdedel av EU:s BNP vilar ansvaret tungt på Tyskland att dra upp EU-länderna ur konjunktursvackan. Statistiken är allt annat än uppmuntrande. I oktober var arbetslösheten hela 9 procent, industriproduktionen föll med 2 procent i september och orderingången till tillverkningsindustrin sjönk dubbelt så mycket. Under tredje kvartalet i år var BNP-tillväxten negativ.
"Peace in Our Time"
"the process of
European integration now irreversible"
Chancellor Helmut Kohl
BBC
2001-12-17
An opinion poll on Sunday found that only one in three Germans thought the euro would benefit them, confirming that many are still deeply ambiguous about the currency.
Brushing aside such doubts, the former Chancellor Helmut Kohl - one of the architects of the euro - said the process of European integration was now irreversible. In a newspaper interview, he hailed the euro as a precondition for peace and freedom in the 21st Century... the process of European integration was now irreversible.
The CDU’s choice
Financial Times
editorial, 2002-01-08 20:04
The Christian Democratic Union used to be the natural party of government in Germany. From Konrad Adenauer to Helmut Kohl, the CDU’s ascendancy was virtually unchallenged. But today the party is struggling to find a suitable candidate to challenge Gerhard Schroder, the Social Democrat chancellor, in this year’s federal elections.
The choice is between Angela Merkel, CDU party leader, and Edmond Stoiber, prime minister of Bavaria and head of the conservative Christian Social Union. Both have declared their willingness to run as the CDU/CSU chancellor-candidate but Ms Merkel is under some pressure to stand aside. In the interests of her party, she should do so.
Ms Merkel enjoyed a promising start as leader. Her folksy east German manner went down well after the traumatic departure of Mr Kohl owing to afinancing scandal. But she has failed to offer a credible alternative to Mr Schroder. She has rarely had a grip on her fractious party. Her big idea - the “new social market” - is small beer.
Mr Stoiber is made of sterner stuff. He is unchallenged in Bavaria. His home state, with its low unemployment and high-technology prowess, is a showcase for the rest of Germany. His call for a clearer definition of powers between Brussels, the nation states and the regions has made him one of the most influential voices on Europe in Germany.
A Stoiber candidacy would nevertheless be an uncomfortable prospect for some Germans - and other Europeans. Bavarian politicians are social conservatives who do not travel easily north of Nuremberg. Franz Josef Strauss discovered this in 1980 when he suffered a humiliating defeat from Helmut Schmidt, another SPD chancellor. Mr Stoiber, who hails from a Catholic state, may find his appeal limited in predominantly Protestant east Germany.
On Europe, Mr Stoiber’s reputation is hard-line. He opposes the steady accumulation of power in Brussels. On occasions, he is unashamedly populist. He is a fierce critic of the European Commission’s competition and state aid policies. A Chancellor Stoiber, alongside a rightwing Silvio Berlusconi government in Rome, would give the EU a different complexion.
Yet Mr Stoiber is not a free-market Eurosceptic. His views on Europe are closer to Tony Blair’s than to those of the British Conservative party. On the economy, his instinct has generally been more provincial protectionist than pro-competition. Thus, while he is less in thrall to the trades unions than Mr Schroder, his radicalism has its limits.
The chancellor remains the favourite in this year’s election but the economic slowdown has shortened the odds. A Stoiber candidacy guarantees a serious contest. That can only be in Germany’s interest.
German conservatives call for EU
constitution
EU Observer 2001-11-27
CSU Chairman EDMUND STOIBER:
"EU
speak with one voice in foreign affairs"
Germany's Christian Democrat opposition parties on Monday called for a European constitution and far reaching reforms of the EU's system, showing consensus between German political parties on EU reforms, three weeks ahead of the Laeken EU summit, which will focus on the future of Europe.
The proposals, presented by the CDU and its Bavarian sister party CSU, also include a plan for a distribution of competences between EU and the member states.
The paper, called "proposal for a European constitutional Treaty", calls for more powers for the European Union in the security and defence policy and in the area of asylum, and urges powers for the regions in the current EU regional policy managing the aid for less developed regions.
Vorschläge von CDU und CSU
für einen Europäischen Verfassungsvertrag (pdf)
A conservative tide is
sweeping Europe
ANATOLE KALETSKY
The Times, JANUARY 17 2002
Last weekend, Germany’s conservative parties united around an impressive new leader, Edmund Stoiber, to challenge the red-green coalition Government in September’s general election. This morning, the first poll to be published since the announcement gives Stoiber’s conservatives their first significant lead over Gerhard Schröder’s Social Democrats since 1999.
A few days earlier, Silvio Berlusconi, imprinted his Italian Government with the stamp of his nationalist conservatism by sacking Renato Ruggiero, the centrist Brussels civil servant whom the Italian political establishment had imposed as Foreign Minister.
Within the next few weeks, Jacques Chirac, the leader of the French Right, will launch what is likely to be a successful bid for re-election as President on a platform of tax cuts and national sovereignty.
If they win decisively in May, Chirac’s right-wing supporters will probably acquire enough political momentum to beat the Socialists in the legislative elections and reunite the legislative and executive arms of the Government under conservative control.
Surveying this scene and thinking ahead to the most tempestuous year for European politics since the fall of the Berlin Wall, I cannot resist rephrasing Marx and Engels at the start of the Communist Manifesto:
“A spectre is haunting Europe, the spectre of conservatism. All the powers of Europe have entered into a holy alliance to exorcise this spectre: the Commission and the unions; Schröder and Jospin; German environmentalists and French énarque spies. Let the chattering classes tremble at a conservative revolution. The conservatives have nothing to lose but their seats, they have a world to win.”
Pessimism worsens among German firms
BBC, 21 November, 2001, 12:57 GMT
Hopes of a rapid recovery for the German economy have been dashed with news that industrial confidence has fallen to an eight-year low. The well-regarded monthly Ifo survey of business confidence eased to an index level of 84.7 last month, from 85.0 in September. The drop, while small, had been little expected by economists following a particularly notable decline in optimism in September.
Eastern Germany's economy and voters
The
Economist 2002-03-14
Its economy soared at an average 8% a year in the first half of the 1990s; since 1997 it has grown at less than half the western rate, and last year it moved into recession, shrinking by 0.5%. Wages are still a quarter below those in the west, yet unemployment has climbed to almost 18%, higher than when Mr Schröder came to power and over twice the western rate. Productivity, having doubled in the early years, has been stuck at two-thirds of the western level since 1997.
The east has already had some euro750 billion ($675 billion) in net transfers of public funds over the past decade. Much has been achieved—not enough, but far more than most easterners care to recognise. And, despite grumbles from states like Bavaria, the federal government recently pushed through a new euro156 billion “solidarity pact” to improve infrastructure in the east in the 15 years after 2005, when the current pact ends. Yet money alone cannot solve all the east's ills.
Another, perhaps more intractable, problem for the east has been the exodus of many of its brightest and best. Even before formal reunification, some 800,000 easterners flooded west over the newly opened borders in search of a better life. Since 1991, a further 1m have left, tempted by better job opportunities and higher wages in the west. Most are young, dynamic and well trained. Some have since returned, but they tend to be the old or the less successful. This is one reason for the continuing wide discrepancy in productivity between east and west.
Little relief in sight for the German
economy
Wolfgang Munchau
Financial Times, November 4 2001
Why is the German economy so weak? The US, Japan and the eurozone have all been experiencing a significant fall in economic growth in the past few weeks. Yet Germany, which makes up a third of the eurozones economy, seems to suffer more than the average eurozone country. Are there specific factors that need to be tackled by Germany alone and, if so, will the government deal with them?
Gerhard Schröder, German chancellor, has so far refused to acknowledge publicly that the country is on the brink of recession and has declined to enact US-style programmes of tax cuts or spending increases. Yet the economic downturn carries great risks for him, with a general election set for next September.
There are two cyclical scenarios to explain what is likely to happen to the economy. Under the first, Germany is going through a normal cyclical downturn, maybe a recession, which will be followed by a noticeable recovery in the second quarter of next year. This scenario would probably cause only limited political damage to the government.
Scenario two assumes a more prolonged recession in the US, delaying recoveries elsewhere. This is an alarming scenario for the German economy and for Mr Schröder. German fiscal policy is relatively, but not excessively, loose. European interest rates are relatively, but not excessively, low. The euros exchange rate is stable. If US growth is sluggish or negative in the first half of next year, the German economy will be in a recession - or close to one - for most of next year.
During the last election campaign, Mr Schröder said he wanted his tenure in office to be judged primarily on reducing unemployment. He pledged to cut the number of jobless from the then prevailing level of 4m. He even said he did not deserve to be re-elected if he failed to meet his goal. The statement sounded courageous but he now looks in danger of breaking his promise.
According to a survey by the German Chambers of Industry and Commerce, a third of all companies in Germany are planning job losses this winter.
There is no doubt that Mr Schröder will act to stimulate the economy. The question is when he will act and what he will do. The government believes it may be wiser to move when the public mood hits rock bottom. With more bad news on the economy expected in the next few months, the best time for action might be December or January, when headcount unemployment is expected to peak.
There would also be political risks. Germany and other European countries are eager to stick to the stability and growth pact, which aims to restrain government deficits. This is not a time to undermine confidence in economic and monetary union, when the introduction of euro banknotes and coins is only a few weeks away. Furthermore, Mr Schröder knows that his core Social Democratic voters are not among those most likely to benefit from income tax cuts.
With monetary policy in the hands of the European Central Bank, and fiscal policy constrained by the stability and growth pact, the German chancellor has a few policy options left. He could bring forward public sector investment programmes and boost spending on Germanys chronically underfunded police and army. The government has already pledged DM3bn ($1.37bn) on internal and external security following the September 11 attacks in the US. But there is scope for even greater public spending in these areas - and that is supported by large sections of the German public.
Mr Schröder can expect little relief from the US and the world economy, from the cautious monetary policy of the ECB, and from the German consumer. Waiting for the recession to end is simply too risky. Mr Schroder may be a player but he is certainly not a gambler.
Jobs woe for German economy
BBC, 16
October, 2001
Munich's Oktoberfest - held traditionally, albeit confusingly in September - was a more dismal affair than usual this year.
Beer consumption, that key indicator of economic sentiment, was down by an unprecedented 20%.
Germany's economy was already stuttering dangerously ahead of the 11 September attacks on the US.
Now, with the country's top companies announcing a swathe of job losses, the mood is grimmer than it has been for years.
Eichel puts case for changes to EU
stability pact
Financial Times, August 16 2001
19:05GMT
Hans Eichel, German finance minister, has held out the prospect of changes in the European Union’s stability pact, which enforces fiscal discipline in the eurozone.
Mr Eichel, answering press questions in Riga, Latvia, on Thursday said it could be useful to focus more on spending targets rather than following rigid annual deficit reduction. His comments reflect a broader debate in the eurozone as EU governments grapple with an economic slowdown that is reducing tax revenues.
Germany was the original achitect of the stability pact - conceived partly as a means of persuading the German public that countries such as Italy with poor records of fiscal discipline would be kept in check if they became members of the single currency.
Slower-than-expected growth is making it more difficult for some governments to stick to this year’s deficit-reduction targets. It is also calling into question the 1993 Maastricht treaty’s plan for a steady movement toward balanced budgets in the medium term.
Mr Eichel made clear he remained committed to budget discipline. But he said the treaty was agreed when most governments were running heavy budget deficits.
It might be more useful to follow spending targets. “You can plan spending in a budget, but you cannot plan your income. The decisive thing for me is that we pursue [budget] consolidation steadfastly, independently of whether or not there is more or less income one year due to economic developments.”
Mr Eichel later clarified his remarks. “To dispel any doubt, I want to say clearly that I support fully the stability and growth pact, its instruments and all the responsibilities that arise out of it and which we signed up to. This Germany suppports fully.”
Belgium, which holds the presidency of the EU, said there was already a consensus within the EU over a more flexible approach to the pact. An adviser to Didier Reynders, finance minister, said: “If tax receipts are lower than expected in nominal terms a higher deficit could be accepted.”
The position was agreed by finance ministers in June. At their Gothenburg summit later that month, EU leaders implied that an economic downturn - and a consequent revenue shortfall - should be taken into account when assessing the pact.
Mr Eichel said a quick reform of the pact was unlikely. “I am for keeping the deficit targets in the first instance for pedagogical reasons, knowing we do not decide this on our own.”
Germans Prove Highly Resistant To the
Unified Currency's Charms
THE WALL STREET JOURNAL 2001-08-14
SCHWERIN, Germany -- In the cobblestone marketplace of this eastern German city, a small tent decorated with information on the euro squats in the sweltering midday heat, deserted by all but one young man. Perspiring in a yellow-cardboard euro costume, he waits for someone to whom he can hand a flyer.
Finally, a visitor wanders in: Horst Endler, a retired chemical
worker.
"If they had asked us, I would have said no to the euro," he says,
blithely ignoring the man in the euro suit. "They are cheating us with the
euro."
So go Germany's efforts to popularize the currency that in five months will kick the mark -- the beloved mark -- out of people's pockets. The home of Europe's biggest economy turns out also to be home to its toughest audience: The Berlin government says it spends more per capita on marketing the common currency than France, Italy and Spain, but with less success. Eight months into the campaign, most Germans still reject the euro. And Theo Waigel, the former finance minister who helped create it, continues to get regular death threats.
Perhaps that accounts for the marketing campaign's somber -- even defeatist -- tone. While France sells the euro with a happy little girl, and Spain trots out bubbly Ernie, the Sesame Street character, Germany's most prominent images are black-and-white photos of elder statesmen and no-nonsense news anchors stating the dreary inevitable, such as "The euro, our future."
The mark, one of history's most successful currencies, symbolized Germany's postwar rebirth. It was created in 1948 -- before West Germany itself, before the country won its fist Olympic gold and before its triumph at the 1954 World Cup. For a people that in 35 years had lost two World Wars and twice had their savings hyperinflated out of existence, the mark's strength became an obsession, and an object of national pride.
"The hard mark has become part of our national identity," says Ulrich Wickert, a German news anchor who is part of the euro campaign. "It is a symbol of regained respect in the world, and people feel that this is what they're losing now."
Given this mourning for the mark, the campaign's creators have faint hope of making the euro a hit. Publicis Groupe, the ad agency behind the promotion campaign, says it's seeking only to calm, not to convert.
"We are not trying to make the Germans love the euro, but to accept it," says chief executive Maurice Levy.
http://interactive.wsj.com/articles/SB997736081777083905.htm
Germans 'unhappy over euro'
BBC, 16
July 2001
54% of Germans were unhappy to be giving up deutschmarks for euros.
If you look at a survey carried out in 1999, it was then estimated that 60% of people in Germany supported the euro. That has changed. Part of the reasoning is probably Germany's move towards recession - a move which has coincided with the adoption of the euro.
Do Economic
Captains Hear the Storm Warnings?
David Ignatius International Herald
Tribune Monday, July 16, 2001
A
troubled city (Berlin)
Financial Time, May 30 2001
From lawyers to
Lufthansa pilots, the list of wealthy west Germans who have lost money
investing in Berlin property since 1990 is about as long as the wall that once
divided the city.
It is not surprising that the same misjudgments - founded
on post-reunification euphoria that led to wildly inflated expectations of
income streams and property prices - should have extended to Bankgesellschaft
Berlin.
The bank is the city's biggest financial institution and Germany's
10th biggest bank, majority-owned by the city state.
Tyskland skissar på kraftigt
förändrat EU
Rolf Gustavsson i SvD 2001-05-02
Schroeder Plan Seeks More
Unified Europe
Radical Changes in EU Constitution Would Create
a Strong Parliament
International Herald Tribune, April 30, 2001
German proposal for EU
Government
BBC website, 29 April, 2001
Gloom hits German businesses
BBC, Monday, 23 April, 2001
Schröder in call for EU
constitution
Financial Times 2001-01-20
The newsmagazine Stern published
five photographs Thursday of Foreign Minister Joschka Fischer assaulting a
police officer during his days as a militant in the 1970s in Frankfurt.
Internetional Herald Tribune 2001-01-05
German Economic Indicators (pdf)
The last days of King Kohl
Mitten im
Leben, Wolfgang Schäuble, Bertelsmann, E21.47
The implosion of
Germany's centre-right Christian Democrat Union is one of the most dramatic
political events of the past decade. Seemingly invincible under Helmut Kohl,
the CDU-led coalition held power for 16 years in Europe's largest country.
Then, in a matter of months, the party fell apart in the wake of an illicit
financing scandal which is still buried in mystery.
Wolfgang Schauble, the
long-time crown prince to King Kohl, is well-placed to write the definitive
account of what went wrong. The former leader of the CDU has produced a book
which is part political testament and part authentic thriller. By the end, the
reader is left gasping at the speed of the party's descent into chaos.
Otmar Issing: Two
speeches, one by Joschka Fischer, the German foreign minister, the second by
Jacques Chirac, the French president, have revived an old debate:
what
should be the future shape of Europe? "Old wine in new bottles," some sceptics
say. But I believe we really do need a new debate.
Buch: Europa neu denken - Warum und wie weiter Einigung? Hans Arnold
Neue Vorwürfe in der
CDU-Affäre:
Einem Zeitungsbericht zufolge hat die hessische CDU
doch Schwarzgeld von ihren Schweizer Konten an die Bundespartei
überwiesen.
War der Landesverband einer von Kohls anonymen Spendern?
Ein Sprechers Kohls dementierte gegenüber SPIEGEL ONLINE die Meldung.
German president demands a European constitution
Bundespräsident Johannes Rau hat sich für die Schaffung einer europäischen Verfassung ausgesprochen
Germany to press for referendums From
FT, September 6 2000
Germany's governing coalition parties are to
campaign for a change in the constitution to allow greater use of referendums
on important political decisions.
Speech by Joschka Fischer at the Humboldt University in Berlin, 12 May 2000
Tyska MBL-planer pressar eurokursen
Tyskar och fransmän kohandlar om IMF och ECB mot USA
Speech by Joschka Fischer at the Humboldt University in Berlin, 12 May 2000
Few have realised the
most dangerous feature of Emu: it has locked Germany into a seriously
uncompetitive real exchange rate
Martin Wolf, Financial
Times
The next federal election is due in September 2002
and the contest will probably be fought between Mr Schröder and the other
heavyweight of German politics, Edmund Stoiber, the conservative Bavarian prime
minister
. Under normal circumstances, Schröder versus Stoiber would be
no contest. No Bavarian has ever succeeded in becoming chancellor. Franz-Josef
Strauss tried against Helmut Schmidt in 1980, and failed resoundingly. Bavaria
is too conservative, and too staunchly Roman Catholic, to inspire voters from
other more Protestant and secular parts of the country.
This time, however,
might just be different. The economy is weakening and unemployment is rising.
The Green party, Mr Schröder's coalition partner, has lost some of its
support.
Of all the conservative leaders in Germany, Mr Stoiber is the
least compromising and most outspoken. He is also a Eurosceptic, at least by
German standards. But that is not the real threat to Mr Schröder.
The
key to Mr Stoiber's political attraction is that his home state of Bavaria is
consistently outperforming the rest of the German economy. It has almost no
unemployment, an excellent education system, the lowest crime rates in the
country and the highest concentration of high-technology industries. Indeed, if
Bavaria were an independent state, it would be one of the most successful
economies in the world.
By contrast, Mr Schröder's economic record is
mixed. Lower Saxony, where he was premier until 1998, is one of the less
well-off west German states. At the national level, growth has long lagged
behind those of most EU countries since the mid-1990s.
Euroland’s prospect - Daily Telegraph 2000-04-28
Germans shaken by euro slump - From The Times 2000-05-01
German advisers losing faith in the euro - Daily Telegraph 2000-04-25
German industry calls for moderate pace in EU eastwards expansion, 25 April 2000
Helge Berger
Center for Economic Studies University of Munich
German
economics professors call for delay of EMU
-
Prof. Dr. Manfred J. M.
Neumann, Direktor Institut für Internationale Wirtschaftspolitik der
Universität Bonn
Stoiber: Fischers Grundsatzrede zur Europapolitik hinterlässt mehr Fragen als Antworten
CDU: Zehn gute Gründe für die Euro-Währung
The American Institute
for Contemporary German Studies (AICGS)
is a center for nonpartisan ,
advanced research, study, and discussion of the Federal Republic of Germany --
its politics, economy, culture and society.
The Institute is affiliated
with The Johns Hopkins University
German academics criticise 'weak' euro Electronic Telegraph, 25 March 1999
Euroland’s prospect
Daily Telegraph 2000-04-28
Imagine what it must be to be residents of euroland. How would we feel about the decline of the euro?
Yesterday the European Central Bank increased interest rates by a quarter of one per cent, but, instead of rallying, the euro fell even further. The currency has now dropped by more than a fifth against the dollar. The German mark (which now exists only in name) is at a 14-year low against the pound. If we were residents of, say, France or Belgium, would this cause us to worry?
We would certainly be hearing reassuring words from our politicians. There is a lot of talk on the Continent about the difference between the ”internal” and the ”external” economies. It is suggested that the internal economy is not affected by changes in the external value of the euro. To British ears, such reasoning takes us back to Harold Wilson’s notorious ministerial broadcast in November 1967, after the pound had been devalued by a comparatively modest 14 per cent. ”It does not mean, of course,” he said, ”that the pound here in Britain, in your pocket or purse or in your bank, has been devalued.” Is that message any more reliable now than it was 33 years ago?
For the present, there are no signs of resurgent prices. But on the other hand, monetary control appears loose. The fall in the currency itself indicates this. In addition, money supply in euroland has been rising at more than six per cent – above the reference level of 4.5 per cent. Credit growth is rising even faster, at about 10 per cent. These figures suggest a genuine risk of higher inflation down the line.
Eurolanders might also reasonably be concerned about the causes of the present weakness. Foreigners - and locals, too are reluctant to invest in euroland. Most of the member countries are seen as having low underlying growth, taxes that are too high and administrative burdens that are too heavy. Gradually, faith in the currency itself is ebbing away.
Nobody has ever known the euro to do anything but fall and the European Central Bank is untested. It has never raised interest rates aggressively. Is it capable of doing so? Has it got the guts and the independence? Eurolanders cannot know for sure.
There is a slight risk that the currency might go into freefall. What would happen? Would the ECB at last raise interest rates with conviction? Or not? If it did, how would countries still suffering from high unemployment react? Might a populist politician arise somewhere, arguing that the unemployed were suffering because of the membership of the euro?
Could there be talk of deserting it? For the time being, eurolanders are not suffering. But they might reasonably be a little concerned. It is like the phoney war - a time of uneasiness.
Germans shaken by euro slump
From
The Times 2000-05-01
GERMANY'S growing nervousness about the relentless slide of the euro bubbled to the surface yesterday with demands for an urgent European summit to discuss the ailing common currency.
"The German Government should make the euro the dominant theme at the European summit in Porto in June," Roland Koch, the Christian Democratic prime minister of Hesse, said.
Jürgen Rüttgers, another leading Christian Democrat, who aims to be prime minister of North Rhine Westphalia in elections this month, said: "I do not think this can wait until June." An emergency summit should be held before the scheduled session in Portugal, he said.
The Government is trying to avoid any sign of panic and emphasises that the weak euro is doing wonders for German car exports to the United States. But the fear of imported inflation and a more general anxiety about a permanent loss of confidence in the euro is now evident at every level in the German political class.
Hans Reckers, a banker, appealed yesterday to delay the entry of Greece into the euro club. "With the present period of weakness of the euro, and bearing in mind the long-term stability of the euro, it will be a bad signal to take in new candidates who do not unambiguously conform to the Maastricht criteria for European monetary union," he said.
German politicians have taken up the call to keep Greece out of EMU for the time being.
An opinion poll showed that four out of five Germans have minimal, or no confidence in the euro.
The euro fell last week to $0.91 (57 pence).
For Germans the price of a glass of Coca-Cola in Britain has gone up since last October from DM4.70 to DM5.25 and a glass of beer from DM3.90 to DM4.40. That makes Britain one of the most expensive destinations for German tourists.
