The Great Debate UK
A revisionist theory on the causes of the global financial crisis blames surplus countries like China, Japan and Germany as much as highly-leveraged, deregulated finance in the United States and Britain.
Making Germany a scapegoat may be tempting, especially in Britain, where memories of sterling’s humiliating exit from the European Exchange Rate Mechanism in 1992 still rankle, but it is unfair and dishonest.
The revisionists contend that the meltdown was due not just to the Americans and British who borrowed, traded and lived beyond their means but also to the Chinese, Japanese and Germans who sold them the goods and lent them the money.
Germany is becalmed by a political and economic phoney war five months before this year’s most important European general election. But a lack of real economic debate now risks prolonging the political stalemate and delaying much needed reforms.
LONDON/PARIS, April 23 (Reuters) – Germany is to set up a system of bad banks before the summer recess to hold some 250 billion euros of toxic assets. Finance Minister Peer Steinbruek has assured taxpayers that his solution — called “eine Bad Bank” (there is no German word for the concept) — will not weigh on the budget.
from The Great Debate:
The United States is fighting a fire in the world economy, but Germany and some other European countries fear a flood of inflation as a result.
That clash of cultures is at the heart of transatlantic debate over whether Europe should spend more and ease monetary policy to revive growth, with a deep economic contraction certain this year and an end to the recession not yet in sight.