Comment by mono442
3 hours ago
The crisis was largely artificially engineered because Germans believed that Southern Europeans were "lazy" and needed to be made an example of.
The ECB could have brought government bond yields down from the beginning and most of the problems could have been avoided.
Did anyone say lazy? I think the attitude was more like "irresponsible": Taking on debt with no hope of paying it off.
And are the Germans wrong?
>The ECB could have brought government bond yields down from the beginning and most of the problems could have been avoided.
Is that sustainable? Argentina's predicament is basically caused by a variant of this. The Peronists gave handouts to buy votes, funded by money printing (ie. "The ECB could have brought government bond yields down"), but that has consequences and turned Argentina into an economic basket case. Of course, you might argue the EU doesn't have this problem because it's stronger economically and other states can prop them up, but that begs the question, why should member countries like Germany fund Southern Europeans's fiscal profligacy?
sorry but whatever Ger/FRA doing right now is %100 not sustainable. Future growth potential is so bleak and so low chance, along with population crisis, aging natives too. They literally need miracle, like one that exist in stories
Germany and France will pull thd other European countries down worh them.
That populist narrative was popular on social media, but the truth is the exact opposite.
Germany had relatively reasonable debt and government spending relative to taxes.
Italy had entirely dysfunctional spending and Greece was essentially a house of cards built on fraud. Without the Eurozone, Greece would have faced bankruptcy and/or hyperinflation, but instead they got bailed out by the rest of the EU.
Check out Michael Lewis's book Boomerang that covers the distinct problems Iceland, Ireland and Greece faced. The TL;DR on Greece is a country with massive social spending and tiny tax receipts, that took out massive and entirely unsustainable debt thanks to the other Euro countries and then inevitably was unable to pay it back.
Germany was the hero who saved the EU from complete implosion, but instead of being thanked they get misplaced anger for being the only responsible ones in the room.
surely buying bonds will save you when you are running 8% yearly deficits to buy votes with welfare payments
There's no natural law saying that budgets have to be balanced. Most countries run constant deficits.
Governments being able to borrow money (to run that deficit) relies on people believing that they will be paid back. The more the debt grows, the less likely people are to believe they’ll get paid back.
The other option is endlessly printing money, which causes hyperinflation and you get an Argentina/Turkey/Weimar Republic situation.
Are you serious about this?
The author writes for Jacobin.
Of course it’s promoting Communism.
Stop the hyperbole. Jacobin is more like social democrat (what most nominally social democrat parties used to do, but aren't doing anymore). That's about two significant notches less communist than communism.
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