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See It? Say It? Do Something About It?

by afew Mon Sep 22nd, 2014 at 10:00:34 AM EST

Robin Fransman has a post on Pieria that neatly sums up a lot of what has been said here over the last few years (and that continues to prove depressingly accurate). Citing approvingly Mario Draghi's recent speech at Jackson Hole for its mention of a lack of an EU budget and of a lender of last resort as problems for the euro, he goes on to what Draghi didn't talk about:

Mr Draghi, is it really that difficult to see?

Using the EIP, the Commission can force countries into austerity when deficits and sovereign debts are too high, but can't force them into stimulus or tax cuts when surpluses are high. It can force countries into wage moderation and real wage declines when Unit Labour Costs rise too rapidly, but is powerless when wages rise too slowly. EIP will kick in when a country has a negative international investment position greater than -35%, but a high positive position goes unnoticed. It kicks in when inflation is too high, it does nothing when inflation is too low. Every indicator in the EIP is biased this way. The only indicator that has some balance is the current account indicator: deficit of more than -4% will sound the alarm bells, as will a surplus greater than +6%. But even this is simply another glaring asymmetry.

This is not a system that works towards a benign equilibrium. This is not an Excessive Imbalance Procedure. It's a deflation machine. It works towards an economy with perpetual current account surpluses and suppressed domestic demand, leaving exports as the only possible growth engine, under conditions that put constant upward pressure on the exchange rate of the Euro.

As has been pointed out many times here, all the partners in a single currency can't simultaneously run current account surpluses with each other; and, if Europe's sole vocation is to export, that calls for a big world (or Mars) with a growing appetite for Europe's goods and services. Fransman points out that projecting Eurozone export growth to the rest of the world in line with international trade and economic growth only adds 0.5% to GDP growth. Before one counts the effect of the shortfall in investment due to export gearing via demand depression.


Under an exclusively export oriented policy regime, sectors that service domestic demand have little incentive to invest. Without growth prospects, without rising real wages, companies start maximizing free cash flows and restrict their investments to replacements only. Without rising labour costs, productivity enhancing, labour saving investments become self-defeating. That's 85% of the economy not investing, because their market, domestic demand, does not grow.


We may wonder where, on a global scale, the mercantilist logic leads. If domestic demand in a unit as large as the Eurozone is to be depressed, and investment reduced, the European economy acts less as a locomotive, and the capacity of the rest of the world to soak up European exports will diminish. This has certainly happened within the Eurozone with respect to Germany. Mercantilism is a mug's game.


Franson goes on to speak of morality plays and a new gold standard, language that is familiar to us here:


Mr Draghi, is it really that difficult to see?

The EIP is not sound economic policy but a morality play. Debt and deficits are bad, financial assets and surpluses are good. High wages bad, low wages good. Rising currency good, falling currency bad. It does not recognise that debt and assets, surpluses and deficits are twins, two sides of the same coin. It does not recognise that a surplus or a deficit is not only the result of differing competitiveness, but also the result of differing savings and investment patterns. From an economic perspective all this is utter nonsense. Since economies must find their equilibrium, there is no intrinsically "good" or "bad" price level: nstead, there is an optimal level that can be high or low, rising or falling.  Without the Euro, floating currencies would take the largest share in restoring equilibrium, and this would ALWAYS mean both a rise and a fall in relative prices between countries. Within the Eurozone, restoring equilibrium must follow the same path, or it will break up eventually. With high and rising debt levels, being stuck in a deflation machine will kill it, sooner or later. We will then finally have our transfer mechanism in the Eurozone, through defaults and the resulting return to multiple currencies, but it will be very, very painful.

The EIP is the new Gold Standard. It forces member states into rounds of competitive wage declines. It is mercantilism through wage devaluation instead of competitive currency devaluations.

OK, asking Draghi if he can't see all this is somewhat of a framing device for the article. Because whether Draghi sees it or not, he can't or won't say it, and, at the ECB, there's not a lot he can do about it. As for Merkel and Schäuble seeing it, the evidence is that, whatever happens, they will not.

On glides the Titanic.

Display:
Actually Draghi (or at least the ECB) could do something.

Mr Draghi, is it really that difficult to see?

Using the EIP, the Commission can force countries into austerity when deficits and sovereign debts are too high, but can't force them into stimulus or tax cuts when surpluses are high. It can force countries into wage moderation and real wage declines when Unit Labour Costs rise too rapidly, but is powerless when wages rise too slowly. EIP will kick in when a country has a negative international investment position greater than -35%, but a high positive position goes unnoticed. It kicks in when inflation is too high, it does nothing when inflation is too low. Every indicator in the EIP is biased this way. The only indicator that has some balance is the current account indicator: deficit of more than -4% will sound the alarm bells, as will a surplus greater than +6%. But even this is simply another glaring asymmetry.

They could abolish the first part of each of those sentences by expanding their backing of eurozone state debts to include all state debts at all times. The ECB is what gives the Commission any power over euro-countries with trade deficits and it is within their real powers to give that up.

Of course giving up power is rarely done, so Draghi will keep complaining about a lack of demand in the northern economies while brandishing the power that keeps the southern economies from expanding their demand. And in the same way the leaders of the northern economies are not going to give away the power position their trade surplus yields.

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by A swedish kind of death on Mon Sep 22nd, 2014 at 02:06:47 PM EST
Draghi has done an ok job so far, he has stretched the ECB to its legal limits. How can I get my fellow Germans to see the light?

There is a somewhat productive debate of in Germany about Lack of investment. But with the rise of the AFD the CDU is cornered and can not show any flexibility.

by rz on Mon Sep 22nd, 2014 at 03:17:29 PM EST
Eurointelligence: Germany rejects idea of ESM as an investment fund (September 22, 2014)
Suddeutsche Zeitung reported on Saturday that Jean-Claude Juncker was actively considering turning the unused capacity of the ESM into a credit facility to help boost EU investments. The idea was to channel the money into an investment fund under the aegis of the EIB, which would then lend-money backed by the fund to certain investment projects. Werner Hoyer, president of the EIB, has set up a task force to study the details, the article said. It also said that work was under way to set up a list of investment projects.

The German reaction to this story was [bordering] on the hysterical. Frankfurter Allgemeine expresses predictable outrage. Wolfgang Schauble immediately dismissed it on the grounds that the use of these funds was not backed by the ESM treaty. He said the fund had been created to help countries in an acute financial crisis and to deter speculators in return for strict conditionality. The fund was not there to be used. It has nothing to do with investment, Schauble said.

The paper quotes a source close to Juncker as saying that the main discussion now was about the legal basis. The paper quoted diplomats as saying that this scheme would require a change in the ESM treaty, which would have to be unanimous. Germany would oppose this.

At the G20 in Cairns, Schauble said the main problem in the eurozone is not lack of finance but demand, on which he is in agreement with Hoyer, who pointed out that only 16% of EU companies complained about shortage in the availability of finance.

FAZ also writes that Juncker had difficulties getting his €300bn together. The biggest part of this sum would come from a reshuffle of existing spending,

In a comment in the paper Werner Mussler writes that it would be potentially dangerous to turn the ESM into an investment vehicle because it would damage its reputation in financial markets, and reduce its capacity to act.

The ECB's preferred way for governments to support investment is guaranteeing asset-backed securities. Reuters has an interview with Peter Praet. He said the ECB was not suggesting that governments insure the entire mezzanine level but to target SME lending. "The amounts are not that important, considering also that existing facilities, which in some cases are not even used, can be tapped."



A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon Sep 22nd, 2014 at 03:25:36 PM EST
[ Parent ]
It is impressive the extent to which the consequences of ECB policy and the EIB mirror the consequences of US elite agendas: miniscule domestic investment, collapse of demand and widening wealth disparities. Elite agendas converge, despite differing methodologies, to similar consequences, the most important of which is the increased wealth of the elites.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Sep 23rd, 2014 at 10:40:59 AM EST
[ Parent ]
The elites earned so much money and financial assets. The politicians and bureaucrats are now working hard for all that money to have tangible significance.
by das monde on Thu Oct 9th, 2014 at 12:59:34 AM EST
[ Parent ]
To build the shaky face value of bubble-inflated assets into solid wealth, consolidation is called for. Ie, the income and assets of the vast majority are depreciated to compensate for the rapidly-increasing wealth of the few.

This is basically the process that has been under way since 2008. The current labile state of international (public and private) finance makes it reasonable to fear a second round any time soon.

NB state-shrinking "reformers" seem to agree that one area in which public spending may usefully increase is in the training and equipment of riot police.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Oct 9th, 2014 at 01:59:53 AM EST
[ Parent ]
Hard-money as a policy would be tolerable (even with the results being seen), but Germany is not for hard-money. Germany is for whatever is better to Germany: During the re-unification (with its costs) it was OK to run deficits. Germany and Portugal were the two countries that broke the 3% deficit limit first more than 10 years ago and at that time it was fine because it was convenient to Germany.

This means that the correct narrative is not about hard-money, but about German interest. It is not very difficult to step from here and suggest that a certain pattern with regards to European domination seems to assert itself in Germany from time to time. In the previous century it was more atrocious, but the underlying pattern seems to be there still.

The EU has become a mechanism for that power grab  (nowadays probably unconscious). At the very least the Euro is that: For the sake of all of us, it must go.

by cagatacos on Tue Sep 23rd, 2014 at 12:02:58 PM EST
[ Parent ]
I think this is the wrong way of looking at it. Berlin really cares about hard money, and so does the average German. Neither Berlin nor the average German feel they have (yet again) embarked on a project to subjugate the rest of Europe. Rather, they see themselves as victims, the losers who have been tricked into bailing out the feckless southerners, who really should just behave as Germans and that would make everything alright.

No amount of arguments about mercantilism, current account surpluses or aggregate demand is going to change this - most ordinary people don't know what those things are, and even fewer politicians do.

Sure, Germany did break the Stability pact a decade ago, but who remembers that? Also, that was before the crisis, so hard money sentiment was not rampant. It might have existed under the surface, but no one really cared. Everything seemed to be working so well, after all.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Thu Sep 25th, 2014 at 02:36:52 PM EST
[ Parent ]
Hard money is not ok. If there would be a consistent hard money policy in europe we would all be screwed.

While there is a distinct and annoying  feeling of superiority in Germany, there is no power grab in the sense that Germany willfully destroys the southern economies to gain power.

by rz on Mon Oct 6th, 2014 at 03:11:34 PM EST
[ Parent ]
Instead German backed policies continue to grind to dust the economies of the periphery while German politicians assert not only that this is not the intent, but that their policies are not the cause - a sort of self serving blindness.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Oct 6th, 2014 at 08:29:20 PM EST
[ Parent ]

The great heights of European growth came in a quasi-mercantalist time, when post WW2 the USA was the main consumer and other producers (Japan and now China) were not ready to compete with Europe.

This time is buried deep in the German cultural beliefs about economics.

I think Europe is economically doomed to another 10 years at least of stagnation, because for now Germany is in a semi-positive equilibrium.

  • It will be at least 5 years before competition from China starts to ask hard questions of the Mittelstand companies.

  • Under the Euro, German prosperity is underwritten by exporting the negative consequences of mercantilism out to the rest of the Eurozone. It will take at least 5 and I'm guessing 10 years for that destruction to reach a level where the "buffer" is exhausted and the negative effects of mercantilism catch up with the German electorate.

The consequences of this are that economies like Greece and Italy and Spain (and in time, France) will be slowly shrunk. They will grow again in spurts, but each time the brakes are applied the shrinkage will outweigh the growth. Skilled young people who can migrate out, will.
by Metatone (metatone [a|t] gmail (dot) com) on Tue Sep 23rd, 2014 at 04:33:48 AM EST
Metatone:
This time is buried deep in the German cultural beliefs about economics.

It's precisely the time when the key doctrines (and their apparent validation by the "economic miracle") were laid down. Based on Bismarckian practices, (neo)liberal principles, and deeper-rooted myths.

I'm afraid your forecast will turn out to be correct. Unless the extreme right takes over in the meantime.

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Sep 23rd, 2014 at 04:57:29 AM EST
[ Parent ]
EUobserver / ECB ready to use more 'unconventional tools' to spur economy

BRUSSELS - European Central Bank (ECB) chief Mario Draghi has said he is prepared to use more unconventional measures to spur growth in the eurozone.

"We stand ready to use additional unconventional instruments within our mandate, and alter the size and/or the composition of our unconventional interventions should it become necessary to further address risks of a too-prolonged period of low inflation," he told MEPs on Monday (18 September).

He said loose monetary policy will only be stopped "when we have complied with our mandate" which is to keep inflation at close to 2 percent. Currently inflation is at 0.4 percent.

The ECB has taken a series of steps since the summer to try and boost the economy and head off deflation, including interest-rate cuts and cheap loans to banks. In early September the Frankfurt-based bank cut rates further and announced it planned to buy asset backed securities (ABS).

However its lending programme was deemed to have faltered when 255 eurozone banks last week only borrowed €82 billion of the €400 billion available.

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Sep 23rd, 2014 at 03:28:38 PM EST
This is the top-ranked comment on the article Draghi's attempt to jump start stuttering eurozone falls flat.

First you stiffle demand.

Then you make sure there is no one interested to expand capacity in view of this stiffled demand.

Then you wait patiently for 6 years to make sure that due to meagre investment companies are flush with cash.

And then you ...scratch your head on how convince companies, with no clear prospects of increased or increasing demand, and their coffers flush with cash, to take up loans so that more money is pumped into the economy to defuse a possible deflationary horror for Europe.

If this is not the proverbial situation  of painting yourself in the corner, then what is!!!
At least the Americans had the wisdom to open the taps before the field turned into a wasteland.



Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Sep 25th, 2014 at 03:21:52 PM EST
Well, last thursday the ECB once again disappointed. Obviously it is also once again not the case if it is Draghis fault, or if the Bundesbank is the problem. With head line inflation at 0.3% and core inflation at 0.7%  things are looking bleak. 5y5y has now fallen bellow 2%, indicating what any sane man knew all along, that inflation expectation have be unanchored.

Meanwhile the earlier indicators point to very low growth in Germany in the third quarter, with a substantial risk that Germany is in recession. Early reports also indicate that Brussels wants to force Italy and France to cut spending sharply. Which will contract the Eurozone economy even further.  

We are approaching a perfect storm.

by rz on Mon Oct 6th, 2014 at 09:40:08 AM EST
I am sorry for my horrible spelling. Here the corrected version of my comment:

Well, last Thursday the ECB once again disappointed. Obviously it is also once again not clear if it is Draghis fault, or if the Bundesbank is the problem. With head line inflation at 0.3% and core inflation at 0.7%  things are looking bleak. 5y5y has now fallen bellow 2%, indicating what any sane man knew all along, that inflation expectations have been unanchored.

Meanwhile early indicators point to very low growth in Germany in the third quarter, with a substantial risk that Germany is in recession. Early reports also indicate that Brussels wants to force Italy and France to cut spending sharply. Which will contract the Eurozone economy even further.  

We are approaching a perfect storm.

by rz on Mon Oct 6th, 2014 at 10:05:27 AM EST
[ Parent ]
rz:
Early reports also indicate that Brussels wants to force Italy and France to cut spending sharply. Which will contract the Eurozone economy even further.

To judge by the propaganda blitz in France, that's where we're heading.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Oct 6th, 2014 at 10:36:50 AM EST
[ Parent ]
Are you saying that the France Press thinks this is a good idea?

If France cuts it budget, where is the demand gonna come from? Germany? Ha!

Maybe we can beg the Fed the keep the printing press rolling.

by rz on Mon Oct 6th, 2014 at 10:42:42 AM EST
[ Parent ]
The French chattering classes are completely captured by the idea that the deficit must be reduced, therefore unfortunately the state must be shrunk (and they forget to mention the corollary, crashing the economy)

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Mon Oct 6th, 2014 at 10:48:12 AM EST
[ Parent ]
When Gerd Schroeder did the same in Germany the economic consequences were severe. But it was done at a time when the global economy was going more or less well. This time it is going to be a disaster.
by rz on Mon Oct 6th, 2014 at 10:51:47 AM EST
[ Parent ]
There is little or no place in the French public discussion (journalists, commentariat, pols of "left" or right) for a different point of view than: France is hopelessly retrograde and must shrink the state, reduce benefits and taxes, deregulate the labour market.
by afew (afew(a in a circle)eurotrib_dot_com) on Mon Oct 6th, 2014 at 11:33:01 AM EST
[ Parent ]
Is there any criticism of the ECB for failing to meet its 2% inflation target?
by rz on Mon Oct 6th, 2014 at 11:36:08 AM EST
[ Parent ]
There's sometimes some concern about low inflation, but as long as "deflation" can be avoided as a topic of discussion, it doesn't reach alarm proportions.

Anyway, since growth and jobs come from austerity...

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Oct 6th, 2014 at 11:43:48 AM EST
[ Parent ]
A key argument why Labor market liberalization is supposed to generate growth, is that it allows to deploy capital in the most effective way. But even if this is true, it can only work if capital is deployed at all. And to do this you have to have a central bank which is committed to keep inflation up (see Federal Reserve). Since this is not the case in Europe, labor market reform will be a major disaster.
by rz on Mon Oct 6th, 2014 at 03:37:03 PM EST
[ Parent ]
Draghi last Thursday (emphasis mine):

ECB: Introductory statement to the press conference (with Q&A)

Looking ahead to 2015, the outlook for a moderate recovery in the euro area remains in place, but the main factors and assumptions shaping this assessment need to be monitored closely. Domestic demand should be supported by our monetary policy measures, the ongoing improvements in financial conditions, the progress made in fiscal consolidation and structural reforms, and lower energy prices supporting real disposable income. Furthermore, demand for exports should benefit from the global recovery. At the same time, the recovery is likely to continue to be dampened by high unemployment, sizeable unutilised capacity, continued negative bank loan growth to the private sector, and the necessary balance sheet adjustments in the public and private sectors.

(...) Monetary policy is focused on maintaining price stability over the medium term and its accommodative stance contributes to supporting economic activity. However, in order to strengthen investment activity, job creation and potential growth, other policy areas need to contribute decisively. In particular, the legislation and implementation of structural reforms clearly need to gain momentum in several countries. This applies to product and labour markets as well as to actions to improve the business environment for firms. As regards fiscal policies, euro area countries should not unravel the progress already made and should proceed in line with the rules of the Stability and Growth Pact. This should be reflected in the draft budgetary plans for 2015 that governments will now deliver, in which they will address the relevant country-specific recommendations. The Pact should remain the anchor for confidence in sustainable public finances, and the existing flexibility within the rules should allow governments to address the budgetary costs of major structural reforms, to support demand and to achieve a more growth-friendly composition of fiscal policies. A full and consistent implementation of the euro area's existing fiscal and macroeconomic surveillance framework is key to bringing down high public debt ratios, to raising potential growth and to increasing the euro area's resilience to shocks.

What a sick mess that speech is. Whatever Draghi sees, he's not going to contradict the nonsensical mantra coming from the monetarists / neoliberals: growth and jobs will come from smashing demand to smithereens (in spite of several years evidence to the contrary).

Just as long as regulation and redistribution are smashed in the same process. Draghi sees this perfectly well, too. He's a Vampire Squid alumnus, after all.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Oct 6th, 2014 at 11:25:23 AM EST
[ Parent ]
the progress made in fiscal consolidation and structural reforms

How is that going to support demand?

If we look for a country country in Europe which has done everything the IMF, ECB and Brussels wanted, it is Spain. How are things going there? Growth is anemic, unemployment is sky high.

If France does implement structural reform, we now that this means liberalizing the labor market. Without sufficient demand the first thing to happen is that people will get fired. Collapsing demand even further. When is this going to turn around? We are now 6 to 7 years into the crisis. Nobody can call the situation Spain a turnaround. One wonders when the magic 'long run' will be in which the supply side reforms will work.

by rz on Mon Oct 6th, 2014 at 11:35:24 AM EST
[ Parent ]
and lower energy prices supporting real disposable income

See what he did there? When real disposable incomes turn out to go down, it will not be the fault of the ECB, but of higher energy prices, because Who Could Have Predicted?

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Mon Oct 6th, 2014 at 11:42:26 AM EST
[ Parent ]
Well, lower energy prices do come with depression.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Oct 6th, 2014 at 11:48:36 AM EST
[ Parent ]
As in '08-'09.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Oct 6th, 2014 at 11:50:14 AM EST
[ Parent ]
Oops, should have said 'contraction'....never use the D word.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Oct 6th, 2014 at 11:51:16 AM EST
[ Parent ]
Well, he had to put a bit of icing on the cake.

I mean, if there are "ongoing improvements in financial conditions", what is he doing announcing measures against there being no lending, no investment (ie everyone hanging on to their last penny)?

That just leaves him with "fiscal consolidation and structural reforms", which everyone can see are not in fact producing anything positive. As that is in fact the cake he wants us to swallow, it's a bit stale and nasty.

So, energy prices are the icing. Got to find some somewhere.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Oct 6th, 2014 at 11:51:41 AM EST
[ Parent ]
This is how a truly effective monetary policy would look like:

Helicopter money: The best policy to address high public debt and deflation

Biagio Bossone, Thomas Fazi, Richard Wood 01 October 2014

High debt and deflation have afflicted Japan, the Eurozone, and the US. However, the monetary and fiscal policies implemented so far have been disappointing. This column discusses the importance of helicopter money in the form of overt monetary financing in addressing these problems. Overt money financing is the policy with the highest impact in raising demand and output without increasing public debt and interest rates. 

 

Vox EU

by rz on Mon Oct 6th, 2014 at 03:58:20 PM EST
It is as though the ECB and the EC are working not to revive the EU economy by to embalm it, though convinced that this is the way to revive it. More formaldehyde!

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Oct 6th, 2014 at 08:37:12 PM EST
found in Handelsblatt:

Für Frankreichs Zentralbankchef Christian Noyer steht das Land am Scheideweg zwischen einem neuen Aufschwung und ,,Niedergang". Er drängt auf Reformen und fordert das Einhalten des Sparkurses.

Translation: The Head of the French Central Bank demands that France implements Reforms and strictly adheres to Austerity.

Maybe one should ask him if the ECB will strictly adhere to the 2% Inflation mandate.

by rz on Tue Oct 7th, 2014 at 05:14:57 AM EST
If Hollande had any guts he would immediate replace this clown, with somebody who intends to do his job and keep the inflation mandate of the ECB.
by rz on Tue Oct 7th, 2014 at 05:16:41 AM EST
[ Parent ]
But Hollande agrees with him.
by afew (afew(a in a circle)eurotrib_dot_com) on Tue Oct 7th, 2014 at 05:58:45 AM EST
[ Parent ]
He can't. All central bank presidents run on fixed terms, that is the rule.
by IM on Tue Oct 7th, 2014 at 09:59:59 AM EST
[ Parent ]
Thanks for the info. I was looking on Wikpedia, who appoints the Head of the French Central Bank but could not find much information about this process.

It is interesting that Axel Weber, the probably worst head of the Bundesbank ever, suddenly stepped down in 2011, one year before the official end of his term.

by rz on Tue Oct 7th, 2014 at 10:16:38 AM EST
[ Parent ]
Noyer keeps up a constant barrage of lies about this. "If we don't do reforms, French growth will remain under 1% and unemployment over 10%".
by afew (afew(a in a circle)eurotrib_dot_com) on Tue Oct 7th, 2014 at 05:58:20 AM EST
[ Parent ]
well, depending on the monetary situation and global demand he might actually be right.

But with austerity and reform France can become a total basket case, with unemployment at 20% and contraction instead of any growth at all.

by rz on Tue Oct 7th, 2014 at 06:08:45 AM EST
[ Parent ]


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