Germany Is Screwing All Of Europe Because It's Too Big

[Melech 9,900]

 

 

"Poor old Germany. Too big for Europe, too small for the world."

That famous statement by former US Secretary of State Henry Kissinger still holds some truth.

Today, Germany's politicians and the Bundesbank (the country's portion of the European Central Bank) are the two biggest obstacles toward more financial stimulus in Europe that could, if approved, revitalise the continent's flagging economies.

Germany has consistently opposed more monetary stimulus by objecting to interest rate cuts and quantitative easing, a method that is meant to push investors away from safe government bonds and into corporate bonds and stocks. German officials are also reliably opposed to looser deficit targets that could also boost the economy.

This conservative strategy may work for Germany  which does not necessarily need quantitative easing (Germany's growth is slow, but unemployment is at a record low)  but it does not bode well for more troubled economies in places like Spain, Italy, and Greece.

The problem is, because all the eurozone countries are bound by a single currency, the euro, they all have to subscribe to the same policies.

Unfortunately for Spain, Italy, Greece, and others, the European Central Bank is built on German foundations and operates in a similarly cautious manner. Christian Odendahl of the Centre for European Reform explains:

The ECB was modelled on the German Bundesbank. As a result, it is one of the world’s most politically independent central banks; its mandate is focused narrowly on price stability; it does not take broader economic goals like unemployment into account in the way other central banks, such as the Fed, do; and it is de facto more restricted than other central banks, since controversial measures can lead to complex political and legal struggles, involving 18 (soon to be 19) countries. Its setup and philosophy are therefore 'German,' that is, conservative and cautious.

In short: The tension between Germany and the eurozone parties that want more stimulus, like Italian Prime Minister Matteo Renzi, is partly to blame for the near-zero growth and inflation in the region.

It's hard not to feel bad for Germany, which didn't even want the euro in the first place. Through most of the 1990s, before the euro was introduced, German opinion polls did not support the new currency. The euro was officially adopted in 1999, without the approval from European citizens through a referendum. Only Denmark and Sweden held votes. Both countries rejected it.

There's also some astonishing historical evidence suggesting then-West German Chancellor Helmut Kohl was pushed by former French President Francois Mitterrand into accepting the euro.

Today, German politicians are stuck in a vicious cycle. Because most German voters don't favour stimulus measures, the more support these politicians offer to Europe-wide stimulus, the more voters they are likely to lose to the country's anti-euro party, Alternative fur Deutschland. In turn, the more support the AfD gains, the more the party is able to influence the debate over Europe in German politics, and the more other German politicians have to try to claw votes back.

Ultimately, Germany is trapped in a pretty grim position: It's the only country capable of pulling Europe out of its funk, but most Germans never asked for  and don't seem to want  that responsibility.

 

Read more: http://www.businessinsider.com/germany-stimulus-bundesbank-eurozone-economic-2014-12#ixzz3L2BMG5Yk

 

 

Poor Germany, Poor europe 

[LetsGetHigh 52,683]

I read Grammy for some reason...

[craig 680]

There's also some astonishing historical evidence suggesting then-West German Chancellor Helmut Kohl was pushed by former French President Francois Mitterrand into accepting the euro.

 

I guess we can all blame the French.

 

Today, German politicians are stuck in a vicious cycle. Because most German voters don't favour stimulus measures, the more support these politicians offer to Europe-wide stimulus, the more voters they are likely to lose to the country's anti-euro party, Alternative fur Deutschland. In turn, the more support the AfD gains, the more the party is able to influence the debate over Europe in German politics, and the more other German politicians have to try to claw votes back.

 

Very similar to the dilemma British Conservatives are in regarding immigration policy.

[Benji 20,113]

I just want the UK to leave Europe. It's stupid to be supporting other countries when we're nearing another financial crises 

 

Also I still refuse to be funding more resources that are to be built or handed over to Germany. They're fine on their own and the Brits deserve more than that.

[SychosSoChic 9,995]

I read Grammy for some reason...

 

Excitement is getting to you :brokemyhip:

[Didymus 34,380]

Very, very interesting. Had no idea of that historical background.. interested to see how things will unfold from now on.

[Supersonic 49,376]

So Germany is the Adele of Europe?

[Melech 9,900]

So Germany is the Adele of Europe?

yes,slaying it 

[HANZ 4,380]

it's like Madonna leaving at the same house as Jessie J

 

 and sharing Costs And Expenses

[Robotboy 1,700]

and i would be fine if sweden and scandinavia was on their own. like sit down, you are doing nothing.

and countries help eachother- not kill eachother so its good that germany and UK learned their lesson.

[CannaeDrive 3,412]

I was saying something along these lines for quite sometimes, that Germany is the scourge of Europe, being strong enough to dominate Europe but not enough to be competitive with America and Asia. Kind of a giant dwarf.

[RAMROD 117,036]

Slé!

[Dolev 867]

Seems like The EU won't last long. Germany is better alone.

[Economy 52,845]

Ive been sayin this forever. Same currency means same exchange rate for everybody and same monetary policy (interest rates, money supply etc)

Economic conditions vary from Country to Country and having the same currency and same rxchange rate for everyone is just plain dumb

U dont have to be a genious at economics to get a simple concept like that :roll:

[Economy 52,845]

it's like Madonna leaving at the same house as Jessie J

and sharing Costs And Expenses

ok no, not by long shot

Each country pays for their own healthcare, education, infrastructure etc. any costs that are a EU thing are a drop in the bucket in comparison to what Countries spend for themselves

As for the bailouts, that was lent money, not as if Germany gave it away for free. And even on that note, France and the IMF participated in bailouts it wasnt just Germany.

So the a--logy u just made is not even close to comparing reality

The issue here is the currency and policy agreements everyone must follow even if it doesnt suit everyone