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Not it isn't. It is a regional branch of the ECB.

It sure as Hell doesn't act like it.

And what effing exchange rate poliy? There is no exchange rate in a currency union.

A currency union is an exchange rate policy.

And regarding the exchange rate of the euro, do you want to argue it is undervalued?

No, the €-Mark is about where it should be, since its external accounts are roughly in balance.

The problem is that Germany (and the Netherlands, Austria and to an extent Finland) want to run an internal current accounts surplus but do not want to finance the internal deficits this creates.

The opinion of the german government [...] was rightly or wrongly shared by a lot of other countries.

Yes, that's what I wrote: The German government and the BuBa pitched a hissy fit, and the rest of the EPP-PES shut up and fell back in line. You seem to be claiming that they would have done so even if Merkel and the BuBa had not pitched a hissy fit. In that case, one cannot help but wonder why the BuBa broke the confidentiality of ECB proceedings - confidentiality that was instituted at the BuBa's insistence (because the BuBa does not like democratic oversight of central bank operations). That seems like a rather drastic sort of step to take simply to voice a consensus position.

the position of the opposition is different,

Die Linke are talking sense most of the time, but they are at least two election cycles away from being in a position to appoint ECBuBa governors. As for the SPD and Die Grüne, their wage suppression policies from the last time they were in government are a substantial part of the problem (Hartz, anyone?). A stint in opposition may have reduced the amount of neoclassical brain rot in those parties, but I'll reserve judgment on that count until I see what they do the next time they have a chance to actually do something.

Regarding the Bundesbank, what are you talking about? How exactly can they pick up their marbles and go home?

Uh, by not clearing €-Mark transactions with other countries and reissuing D-Mark notes.

They are just a administrative sub-division of the ECB.

You know that and I know that, but from their public pontifications it does not appear that the BuBa officials have quite internalised that fact yet.

Bofinger isn't Sinn

Didn't say that. I said that neither understands national accounting. Which is true.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Aug 14th, 2011 at 07:13:22 AM EST
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"Uh, by not clearing €-Mark transactions with other countries and reissuing D-Mark notes."

€Mark? Petty.

And that is an illusion. You are basically arguing that because the Bundesbanks sometimes talks as if the still matter, they still matter. But they don't. Sticks and stones will break my bones, but words can never hurt me.

"s, that's what I wrote: The German government and the BuBa pitched a hissy fit, and the rest of the EPP-PES shut up and fell back in line. You seem to be claiming that they would have done so even if Merkel and the BuBa had not pitched a hissy fit"

So the right-wing government of say the Netherlands are closeted Keynesians or even MMT people? And the act like they act only under german duress?

"Didn't say that. I said that neither understands national accounting. Which is true."

"National accounting" has nothing to do with taxation levels. The higher levels of taxation in the scandinavian countries or (somewhat) Germany is the result of prefered policies. As Bofinger pointed put, you can't run a good state on the tax levels of the US or Ireland. That has nothing not with current account balances; Ireland is running a surplus and a big budget deficit.

by IM on Sun Aug 14th, 2011 at 07:40:44 AM EST
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And that is an illusion. You are basically arguing that because the Bundesbanks sometimes talks as if the still matter, they still matter.

If they did not matter, they would be punished for breaking the rules of confidentiality that they themselves insisted on.

They're not, so they do.

Sticks and stones will break my bones, but words can never hurt me.

They can increase bond spreads. And since the BuBa has been the most poisonously opposed to doing anything meaningful about those (that is, unrestricted primary market operations)...

So the right-wing government of say the Netherlands are closeted Keynesians

No, the Dutch are almost as insane as the BuBa. But the Spanish , Italian and French governments are just barely smart enough to see that the only solution to this crisis is to print money. German hissy fits at every mention of this solution is not a helpful part of the European political scene.

"National accounting" has nothing to do with taxation levels.

But everything to do with the ability of taxation levels to affect the sovereign budget outcome in the context of a deleveraging private sector.

As Bofinger pointed put, you can't run a good state on the tax levels of the US or Ireland. That has nothing not with current account balances;

The quite clear implication of the table Mig quoted was that if just the countries running sovereign deficits in excess of the Grief and Stupidity Pact limit would institute German levels of taxation, those sovereign deficits would go away.

That implication violates a couple of accounting identities.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Aug 14th, 2011 at 08:08:48 AM EST
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