Germany must decide if it really wants to save the euro … Berlin and the ECB hold the key to the future of the single currency. Will the latest crisis finally force their hand? Germany has to start offering some carrots as well as all the sticks it seems so ready to brandish. -UK Telegraph
Jim O’Neill, who invented the acronym BRICs believes that Germany needs to solve the euro-crisis. But what is Germany? When O’Neill who works for Goldman Sachs says Germany, he is really speaking of a handful of banking functionaries in the government and outside of it.
O’Neill believes that Spain’s difficulties pose both a terrible challenge and an opportunity for the EU. In this article, he proposes solutions as he sees them.
He starts by summarizing the situation, writing of Spain’s severe recession and how at the same time, Spain is unable to borrow at low rates. Spain could leave the Eurozone, but he points out that “Eurozone policymakers claim that this is not an option.”
O’Neill then proposes other options such as issuing Eurobonds. He also admits that the “Germans” have thus far nixed the Eurobond option, which would require the European Central Bank to issue bonds on behalf of the entire union.
The ECB needs to introduce new ideas, he writes, and then mentions ECB president, Mario Draghi’s recent statement that there are no “taboos” for the ECB. What Draghi meant with this statement is that he is ready to purchase the debt of the EU “PIIGS” countries directly.
This was something Draghi tried to do months ago, but German leaders among others put a stop to it. Interestingly, while the program was announced then with fanfare, its cessation received much less attention.
O’Neill and others want the program restarted. His idea is that the world’s larger economy is slowing down and that this slowdown will affect Germany. Now is the time for the ECB to strike.
|Have You Overlooked Comprehending This Piece of the US Economic Puzzle? By David Galland
In some ways, gaining an understanding of the US economy – and its current trajectory – is as simple as recognizing a few fundamental facts.
As much as I read, and despite interacting with very smart people on a daily basis, until just recently I have missed something about our economy that, on reflection, should have been as obvious as the computer screen I spend far too many hours staring at.
Allow me to emphasize the point in somewhat stronger terms.
That I could have overlooked this particular aspect of the US economy and the overarching consequences that follow from it for all these years should, if I were a lawyer, cause me to be disbarred. If I were a doctor, the medical practice board would be entirely within their rights to revoke my license. If I were a politician, my benefactors would be entirely justified in cutting off my bribes donations. If I were a… well, you get the idea.
Interestingly, as smack-up-the-side-of-the-head obvious as this feature of the economy is, and has been for years, virtually everyone else has failed to spot it as well.
So, what is this mystery?
Throughout is article, O’Neil uses the word “Germans” in a way that makes it appear the Germans are a homogenous lot. But this is simply not the case.
Identifying cultures by regionality is an ancient rhetorical trick. While what may be termed the German “banking class” might back various monetary steps to reinflate the EU, it is not nearly so clear that the average German is similarly inclined.
A recent poll, for instance, for the Bild am Sonntag showed 51 percent of Germans believed Europe’s top economy would be better outside the 17-country Eurozone. Less than 30 percent believed the country would be worse off.
This presumably is an inconvenient number for globalists like O’Neil who make a good living as advance men for the handful of dynastic families that want to run the world. It is the views of these people that the mainstream media tends to quote. And this provides a skewed version of reality.
The “Germans” like any other culturally cohesive group of people, have shared traits, but that doesn’t mean they will back empire building that will jeopardize their own solvency.
Most of the remedies that globalists like O’Neill are proposing are now being challenged in Germany either through constitutional courts or the German parliament
The constant din for a “resolution” of the German crisis grows ever louder. But the reality of what “Germans” actually want makes the comments of people like O’Neill sound increasingly shrill rather than more convincing.