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EuroIntelligence.com: EU started work on Brady plan for Greece
Angela Merkel's new strategy seems to be to accept the need for an economic government of the eurozone, but to ensure that it deals mostly with macroeconomically irrelevant issues. Der Spiegel has some concrete details of what Merkel actually means by a common economic government. It turns out the big idea is the harmonisation of the pension age (something not really necessary given that pensions systems remain nationally funded, and very different in structure.) Merkel also wants the rest of the eurozone to adopt Germany's version of a debt-brake, a self imposed balance budget rule. In other words, economic government means forcing the rest of the eurozone to adopt Germany's economic and social policies. (Since this is not going to happen, one wonders what the purpose  of this proposal might be. None of this would have prevented the crisis had this been in place ten years ago. None of this will get us out of the crisis. One still gets the impression that Berlin is pussyfooting on crisis resolution.)

Keynesianism is intellectually hard, as evidenced by the inability of many trained economists to get it - Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon Jan 31st, 2011 at 09:15:48 AM EST

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