Comments on: The dark flip side of European technocracy Thu, 21 Jul 2016 07:57:19 +0000 hourly 1 By: danuta_huebner Tue, 10 Jul 2012 08:23:39 +0000 Let me briefly comment first on whether Germany needs the euro.
Bearing in mind the recent Spanish bailout, as well as the financing needs of troubled euro area economies such as Greece, Portugal and Ireland, one can be tempted to conclude that Germany has often had to bear disproportionately higher costs, relative to the derived benefits, when it comes to the euro area membership. The latter argument can however be contested, as some recent analyses suggest.
First of all, Germany benefits greatly from its membership in the euro area, as over 40 percent of its exports go to the euro zone. This aspect is particularly relevant for such a trade-oriented economy. The benefits ensured by trade can arise because of a lack of exchange rate risk, an expanded single market and greater price stability, all granted by membership in the monetary union. One could also go further and comment that Germany has benefited from the euro exchange rate through most of the life time of the euro.
According to estimates produced by the State Bank KfW, in 2009 and 2010, the German economy would have grown by 50-60 billion euros less in the absence of the euro. Similarly, its GDP growth in 2010 would have been 3.6 percent, not 5.6 percent as it was under the euro. In the counterfactual scenario, in which Germany still had the D-Mark, a flight to safe havens would have led to a hike in its currency and in its interest rates (according to estimates, as reported by KfW, the mark would have been 20 percent more expensive than the euro at the time of writing, in November 2011). This would in turn strongly impact a country with such a strong export basis. Lacking counterfactual evidence, one can compare the case of Germany to that of Switzerland. The year before the Swiss National Bank chose to link the currency to the euro, the Swiss franc (also regarded a haven in troubled economic times) rose more than 30 percent, affecting exports.
Arguments provided by McKinsey paint a similar picture: the euro has brought Germany a third of its economic growth since 1999, in contrast to the contribution the euro had for the euro area as a whole (20 percent). The removal of transaction and hedging costs also added another 11 billion euros to Germany’s GDP in 2010. McKinsey further estimated that improved trade gave the German economy an additional 30 billion, while improved competitiveness earned the country 113 billion. The effect was also considerable, relative to the one on the euro zone.
Another positive aspect induced by euro area membership, and also aided by the economic crisis, was the lower refinancing costs of German government debt, with German yields regarded as the safest in the euro area. According to a study by Unicredit, German yields averaged 3.5 percent over the last decade. Given this background, a 1 percent fall in yields could lead to a cut in the government’s interest payments on new debt issuance by 12.5 billion a year (by 60 billion by the end of 2015).

By: Watches1 Tue, 05 Jun 2012 07:41:09 +0000 European monetary aggregate data from the ECB came out this week and continues to follow the trends we have seen over the last year.

Killeen Home

By: PseudoTurtle Sun, 03 Jun 2012 13:17:23 +0000 @ seymourfrogs —

Thank you for the most rational comment — including the original article — of all.

By: seymourfrogs Sun, 03 Jun 2012 08:28:59 +0000 A lot of half-truths, IMO.
Germany was pressed into the Euro “to be a good European” as the French repeatedly said.

But it’s worth pointing out how the Greeks (and often in UK blogs) a brainless minority look to mix Germany’s current stand with WW2 history.

As for “the Holocaust” – there were a lot of holocausts, not to diminish Nazi atrocities. But Japan has erased its atrocities, Russia likewise. As for the Armenians, well, who are they? And “holocaust” lit: total burning. Do we remember approx 350 Protestants condemned and burned at the stake in England in 1555 for not swearing allegiance to the Pope? Imagine if they had been Jews – we’d still be paying for it. Or the “slighting” of Catholics from 1600 to 1820, paying for much of the UK govt’s spending. We don’t hear endlessly about that.

So when Germany has (a) admitted its Nazi past, (b) paid war reparations to Russia, USA, France, UK till ~ 1952, then (c) paid Israel, then (d) paid Russians for use of WW2 slave labor, then (e) paid East Germany to re-unite, then (f) faced a 1990s recession and taken short-time, worked at second (often menial) jobs, come through, I’m surprised how accommodating Angela actually is. And when Germany and Austria are heavily burdened by non-German speaking people, it’s not surprising there are a few Nationalistic voices.

Clearly no-one has a solution to the Euro crisis. It’s interesting that Cameron says (and I agree, generally) Austerity is needed, but increases Public Spending (the idiot), while Hollande says Stimulus is needed and then orders his semi-Nationalized industry bosses to take huge pay cuts to set an example! Mad world.

By: jujubean Sat, 02 Jun 2012 18:31:13 +0000 I am fascinated by the belief that countries with ancient histories of their own, intertwined at times with each other but essentially established as separate peoples with temperaments, religious beliefs, philosophical, ethical, moral perceptions – all the bits that make people who they are essentially, really thought there could be a cohesive Europe with economic equality and balance? Didn’t the persons in Brussels know that Greece has been corrupt for decades? That there is a defiance to authority? That Germans are temperamentally better at self discipline and saving than other nationalities? That the French while smart and linguistically capable are wily and somewhat superficia land like to control through style at times? Why is it so abhorrent to see the realities of national personalities? Do people really believe that Turkey will be able to be integrated into Europe? Really?
The French and the Germans have emerged as the leaders of the EU precisely because of their national temperaments! It is not racists to observe these things…these observations are a reality.

By: deLafayette Sat, 02 Jun 2012 09:52:36 +0000 {ML: In a much-quoted passage, he says supporters of eurobonds are driven “by that very German reflex according to which atonement for the holocaust and the world wars will never be complete until we have delivered our entire public interest, and even our money, into European hands.”}

Anyone who believes such drivel should be certified for the insane asylum. It’s pure nationalistic propaganda.

Germans want to remain in the Euro for two basic reasons:
* From WW2, they have learned how, when in Deep Doodoo, nationalist principles can come to the for and produce one of the most heinous regimes ever produced on earth since Attila the Hun. Meaning that they do not trust their political class and they are right not to do so. It is far better that Germany and Germans feel part of and contribute to a larger whole – which is the actual fact today.
* The EuroZone is an integrated common market that functions best based upon one convenient currency. People like Sarazzin have forgot the pre-Euro times when countries battled one another within the “snake”, which was established to mitigate the wild swings of national currencies that often caused nations to “beggar thy neighbor” by sudden currency devaluations. Such currency exchange wildness dampened inter-Europe trade patterns, thus diminishing aggregate demand of the Common Market (as it was known at that time).

It is true that the Eurozone, at its inception, overlooked the strictures of fiscal prudence – which should have been cast in concrete by means of a rigorous observance of the Golden Rule (of budgeting sobriety).

That can be fixed and should be fixed by integrating the Golden Rule into each EuroZone country’s national legislation and with regulatory oversight by the Brussels Commission.

Then countries can decide upon their array of national expenditures without affecting the solidity of the Euro from profligate spending maintained willy-nilly by National Debt. Which the Germans had insisted upon at the onset of the Euro-currency, but fell into the same trap (of too high spending) at a moment just afterwards in order to recover from an economic downturn.

People who live in glass-houses should not throw stones …

By: PseudoTurtle Fri, 01 Jun 2012 20:35:16 +0000 @ lisandro —

Your remarks are racist and disgusting, certainly not worthy of being allowed as a comment in Reuters.

By: PseudoTurtle Fri, 01 Jun 2012 20:29:07 +0000 I skimmed your article the first time through, but in reading it a bit more carefully I realize in reality you are not treating the Germans with much more respect than many lower-class European publications.

You can’t seem to differentiate between economic policy and anti-German sentiment either.

According to you, if the Germans don’t go along with writing a blank check for the rest of the eurozone, they must be Neo-Nazis bent on destroying civilization again.

Eurobonds are simply a bad idea.

From an economic standpoint they solve nothing of the problems inherent in the EU agreement, which was fatally flawed to begin with, but it massively increases the debt load to the wealthy bankers and investors who are sucking Europe dry.

Does that opinion make me a Neo-Nazi?

No, I think it makes me a person who understands what is really going on in Europe, whereas clearly you do not.

By: PseudoTurtle Fri, 01 Jun 2012 20:07:33 +0000 I think a substantial portion of German political and economic decisions are driven by guilt, not only of the Holocaust, but also of the war years of the 20th century in general.

In reading European news sources, it is very difficult not to pick up strong anti-German sentiment in many articles.

I would say the rest of Europe does not want Germany to forget the past, even though in many articles they urge Germany to do that and become more “European”. However, many nations are very jealous of Germany’s success and tend to blame Germany for everything that has happened.


Perhaps a collateral notion is, not only how long the world intends to punish Germany for the Holocaust, but how long before the world
loses its guilt about the Holocaust and begins to treat Israel like any other nation?

By: scythe Fri, 01 Jun 2012 18:54:15 +0000 complete nonsense

conflates sarazin and nazism with a deutschen pseudo-political elite, then grandly arches over to merkel and sarkozy as a mini-richelieu duet conspiring to depose berlusconi and papandreou, to finally wheeze out that tsipras and the pirate party represent some psuedo-european spring

shallow drivel from an anglophile to lazy to think and gullible enough to believe polls

long live their ignorance