Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
The interview is here: Jürgen Stark: ,,Das kann nicht Aufgabe einer Zentralbank sein"
Typisch für diese Krise ist, dass immer wieder neue Nachrichten die Märkte aufschrecken. Mal sind es die Ratingagenturen, mal streiten sich die Regierungen untereinander oder mit der EU, dann schlagen der IWF oder die EZB Alarm. Ist dieses Informationschaos hilfreich?

Das, was Sie Informationschaos nennen, ist die Folge von politischen Entscheidungen, die nicht an dem Gesamtproblem ausgerichtet sind, sondern immer nur Teilprobleme in den Blick nehmen. Daraus würde ich aber der Politik keinen Vorwurf machen. Die Lösung dieser Krise lässt sich in keinem Lehrbuch nachschlagen, und all die klugen Äußerungen aus dem akademischen Bereich widersprechen sich sowohl in der Analyse als auch in den Rezepten. Das bringt die Regierungen immer wieder in fast ausweglose Situationen - dennoch müssen sie Entscheidungen treffen.

Fallen die Entscheidungen unter dem Druck der Märkte zu vorschnell?

Die Politik hat es nicht leicht. Es gibt kontroverse Lösungsansätze aufgrund unterschiedlicher Beratungslage. Daraus resultieren dann auch Konflikte innerhalb der Europäischen Union. Und es kommt hinzu: Die Entscheidungen der Regierungen bedürfen der demokratischen Legitimation. Die Regierungen müssen sich gegenüber ihren Parlamenten rechtfertigen, und die Parlamente müssen dies den Wählern gegenüber tun.


Hätte die EZB nicht früher korrigierend eingreifen müssen, um die Schieflage innerhalb der Euro-Zone zu verhindern?

Die EZB hat ihren Auftrag, die Preisstabilität zu gewährleisten, voll erfüllt. Auf die unterschiedliche Entwicklung der Lohnstückkosten in der Euro-Zone haben wir schon 2005 sehr deutlich hingewiesen. Die Politik hat das damals nicht als akutes Problem angesehen.

Witschaftswoche: Stark: "This can not be the task of a central bank"
It is typical of this crisis that the markets are always scared of breaking news, one time it's the rating agencies, another the governments argue among themselves or with the EU, yet another the IMF or the ECB sound the alarm alarm. Is this information chaos helpful?

What you call information chaos is the consequence of political decisions that are not aimed at the overall problem, but only take a piecemeal view of it. From this I would, however, not blame the politicians. The solution to this crisis is not to be found in any textbook, and all the wise comments from the academic sector are contradictory, both in the analysis as well as in the recipes. This keeps putting the governments in almost hopeless situations - but they have to make decisions.

Decisions are made under pressure from the markets prematurely?

It is not easy in politics. There are controversial proposals for solutions because of the diverse advice. This will also result in conflicts within the European Union. And on top of that, the decisions of governments require democratic legitimacy. The governments have to justify them to their parliaments, and parliaments must do this to the electorate.


Shouldn't the ECB have taken earlier corrective action to prevent imbalances in the euro zone?

The ECB has fully met its mandate to maintain price stability. On the divergent evolution of unit labor costs in the euro zone, we pointed it out very clearly in 2005. Politicians have not regarded them as as an acute problem then.

So, the only imbalance worth mentioning in the Eurozone was "unit labour costs" (i.e., "competitiveness) not the structural trade imbalances (which are not exactly solved by slashing wages).

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Mon Dec 19th, 2011 at 05:25:11 AM EST
[ Parent ]
Daniel Gros: Can Italy survive the financial storm? (VoxEU)
In an ideal world it is clearly not the task of a central bank to finance regional current-account imbalances.  But it would still be preferable for the ECB to provide the Italian banking system with continuing access to its normal monetary policy operations to the tune of €50 billion annually, rather than buying hundreds of billions worth of government debt.  (See my CEPS commentary on why the ECB has no choice but to effectively become the `central counterparty' given that the Eurozone is not a fiscal union.)
Get that, Herr Stark? We don't live in an ideal world.

Anyway, Gros' solution is this:

The distribution of tasks should be simple:
  • Italian households should finance their own government by buying its debt, and
  • The ECB should prevent a collapse of the Italian banking system.
A first, key element of survival is thus that the new high-cost debt should be sold mostly to Italians.  In this way the higher cost of debt service will not be a burden on the country, but just a redistribution of income between savers and taxpayers.
If you can't tax savings through inflation, try to lure them into buying your debt.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Mon Dec 19th, 2011 at 05:59:32 AM EST
[ Parent ]
just a redistribution of income between savers and taxpayers.

And that cannot possibly lead to a collapse in aggregate demand, now can it? Because that would mean people saving without specific plans to spend later. And that is basically like saying that people can't predict the future.
Must be a miserable world where you don't even know next weeks weather. Probably round too.

by generic on Mon Dec 19th, 2011 at 07:33:11 AM EST
[ Parent ]
Not exactly. What Daniel Gros is suggesting is that the existin Italian savings should be channelled through Italian sovereign debt.

No word of the fact that Germany has an excess of savings over investment, and a government which intends to reduce the amount of debt it issues, so that German savings must be recycled into foreign assets. Gros is suggesting Italian debt should be held by domestic investors in a proportion of about 3/4, rather than the current 1/2. But then you'd have to prevent German and Italian savers from investing freely in each other's debt markets (Italians cannot buy "safe" German bonds, Germans cannot buy "high-yield" Italian bonds). That is, curtail the free movement of capital in the single currency area.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Mon Dec 19th, 2011 at 07:47:42 AM EST
[ Parent ]


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