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the EU establishes redistribution programmes that counteract the German mercantilism (which would effectively turn the German mercantilist policy into subsidy by the German taxpayer to the German export industries)

You mean the German taxpayer hasn't been already subsidizing the German export industries?

Let's look at German economic policy under both Schröder and Merkel:

  • stagnant real wages in Germany - check!
  • unconstitutional reduction of the German social safety net - check!
  • running deficits during the growth part of the business cycle - check!
  • increasing public debt even when above the 60% GDP threshold - check!
all this while running a substantial trade surplus - which is only possible with supply-side tax cuts to "stimulate" growth, which was stagnant precisely because of the suppression of internal demand. Let's also recall how in 2005 Germany lobbied to relax the enforcement of the Growth and Stability Pact which it was violating. Let's also remember how Germany kept its borders closed to new EU member states labour on the grounds that their economic growth was sluggish, while at the same time going on a capital shopping spree in the new entrants, siphoning business profits off from the periphery into Germany.

So the German oligarch have already been bleeding the German people dry for at least a decade. Meanwhile, the German banks lent money to the peripheral economies so they could buy German products. In 2009 the German government has been busy bailing out the German banks.

It is impossible - unless you're a Serious Person - to take any pronouncements coming out of Germany seriously.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan

by Migeru (migeru at eurotrib dot com) on Sun May 16th, 2010 at 06:48:42 AM EST
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