Monday, November 7, 2011

Perhaps there’s hope for Germany after all

Finally, a German politician gets it. Granted, it’s the leader of the opposition, rather than Merkel’s team, but perhaps things are finally changing.

From A fistful of Euros:

THE AUSTERITY measures being imposed on Greece are “mad”, and indicate that Europe learned no lesson from the rise of the Nazi Party, Germany’s main opposition leader said yesterday. Sigmar Gabriel, the chairman of the Social Democratic Party and potential future chancellor, said the measures were “mad” and amounted to an “evil circle”….At a seminar organised by the Institute of International and European Affairs in Dublin yesterday, Mr Gabriel cited the example of Weimar Republic chancellor Heinrich Brüning, who cut successive budgets during the Great Depression. Germany ended up with six million people unemployed. Brüning’s cutbacks contributed to a rise in support for the Nazi Party, which grabbed power in 1933.

He went there. Wham.

Finally someone German is talking about the real history of the rise of the Nazi party in Germany, which really had nothing to do with massive inflation of the Weimar Republic (that was done with ten years earlier).

Germany really needs to understand that the Euro is it’s golden goose, and much of the economic growth of the last ten years has been due to the Euro currencies being misaligned from the beginning, giving Germany a huge competitive advantage. In fact, if you look at the ten years prior to the introduction of the Euro around 2000, it’s quite amazing how “spend thrift” countries such as Italy were running surpluses, and supposedly thrifty Germany was running big current account deficits:


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