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Tag Archives: Germany

Germany Signals a Historic Shift From Austerity That Could Upend the Economy of Europe — Marshall Auerback

Germany has been the epicenter of the austerity crazy. But the only final solution is to get free of the euro straight jacket. The dollar works in a currency union of sovereign states in the US because the union is string socially, politically and economically.  Those condition don't apply in Europe, and the US had to go through a bloody civil war on this way to it. The notion that a common market with a common currency and open borders has failed and failed so badly that nationalism in...

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Bill Mitchell — Bundesbank remits record profits to German government while Greek health system fails

I will write a detailed account of my view on how to deal with the coronavirus from an Modern Monetary Theory (MMT) perspective next week. But today I want to highlight something that just ‘goes through to the keeper’ (cricket reference meaning no-one pays attention to it) but is significant in understanding what is wrong with the Eurozone. I refer to information that is contained in the latest – Annual Report 2019 – released last week by the Deutsche Bundesbank. If you juxtapose that with...

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Bill Mitchell — European Union–business as usual as the madness continues

At the weekend, the German Social Democratic Party elected a new leadership from the Left of the Party, in the hope of resurrecting their disastrous political standings (Source), In rejecting the other main contender, current Finance Minister Olaf Scholz, the decision has apparently threatened the GroKo (Große Koalition), the coalition between Merkel’s CDU/CSU union and the SPD, which, arguably, has been the reason for the declining fortunes of the SPD. They have, in effect, abandoned their...

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The German Problem — Heiner Flassbeck

German mercantilism, deficit hysteria and debt phobia compounded by economic ignorance and the preference for theory over data. From some reason through, Heiner Flassbeck does not mention the ruinous effect of adopting the euro as  the European common currency, which underlies this entire issue.Flassbeck EconomicsThe German Problem Heiner Flassbeck

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Bill Mitchell — Germany to play smokes and mirrors again

Germany is proposing some more smokes and mirrors so that it can maintain its position as the exemplar of fiscal responsibility by obeying its ‘Debt brake’ yet inject significant deficit spending into its recessed economy, which is starved of public infrastructure spending. They are proposing to set up new institutions which will be funded by government-guaranteed debt and spend billions into the economy while ensuring these transactions do not show up on the official fiscal books of the...

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Bill Mitchell — Germany is now suffering from the illogical nature of its own behaviour

Last week (August 9, 2019), the British Office of National Statistics (ONS) – GDP first quarterly estimate, UK: April to June 2019 – told us that the UK economy contracted by 0.2 per cent in the June-quarter 2019 after having grown by 0.5 per cent in the March-quarter. The UK Guardian pundits and the Remain cheer squad all screamed Brexit and were heard to be walking around in circles saying “see, we told you so”. Meanwhile (August 7, 2019), not far away (according to the Remain crowd’s...

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Dissecting the Eurozone’s (lack of) inflation

Eurozone inflation is in the doldrums again. After perking up to 1.7% in April, it slumped back to 1.2% in May. According to Bloomberg, this was "lower than expected". But I wonder who, apart from the ECB, really expected anything else. Core inflation has been well below target for the last five years: (chart from Bloomberg)And although the headine HICP measure increased in 2016-18, this was mostly due to the oil price bouncing back from its 2014-15 slump: (chart from Macrotrends)The...

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Warren Mosler — “Entweder wir glauben an die Demokratie oder nicht”

Die Zeit is somewhat similar to the NYT in the US in that it is centrist to left of center and intellectual. But it differs from the Time in not being considered the paper of record. It is published weekly rather than daily.Die Zeit is a major venue and their publishing this article by Warren Mosler is a big step forward for MMT in Germany.Die Zeit"Entweder wir glauben an die Demokratie oder nicht" Warren Mosler

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Bill Mitchell — The German undervaluation obsession is resistant to ‘reform’

Martin Höpner, who works at the Max-Planck Institute for the Study of Societies in Cologne, recently sent me a copy of his latest paper – The German Undervaluation Regime under Bretton Woods: How Germany Became the Nightmare of the World Economy (published January 2019). He presented this research at a Makroskop workshop in Wurzburg on October 13, 2018 – I was on the same panel as him at that workshop and enjoyed some very productive conversation about these issues. It is a very interesting...

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