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Then what was the debt brake amendment and the deficit panic of late 2009 all about?

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 Sat Feb 18th, 2012 at 12:49:50 PM EST
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God if I knew I would already told.

 The debt brake is a imitation of the debt brake in Switzerland introduced in 2001, the concrete german rule a result of commission working from early 2007 to early 2009. So I think we are talking less about a reaction to the crisis and ore about a manifestation of a long term obsession of the german body politic with public debt.

by IM on Sat Feb 18th, 2012 at 01:05:51 PM EST
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So I think we are talking less about a reaction to the crisis and ore about a manifestation of a long term obsession of the german body politic with public debt.

And what we're arguing is that it's toxic for the rest of the Eurozone to have by far the largest and currently most solvent country in the Eurozone acting on that obsession.

One thing we have pointed out is that after the summer of 2011 even France had lost any of the political leverage it may have had (and, again, reportedly Sarkozy got to make credible threats in the Spring of 2010 - now Merkel thinks she needs to help him with his reelection). So now it's just a Germany with a decades-old unhealthy obsession with public debt alone in the driving seat. Or do the Netherlands, Finland and Luxembourg set EU Council policy independently of Germany?

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 Sat Feb 18th, 2012 at 01:42:50 PM EST
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See, I tried you answer your question and you just use is as a cudgel.

"Or do the Netherlands, Finland and Luxembourg set EU Council policy independently of Germany?"

A straw man. The three and others Austria e. g, share the "decades-old unhealthy obsession with public debt".

Why do deny this simple fact? The government of say the netherlands is not a bunch of fanatic keynesians forced on a difference course.

by IM on Sat Feb 18th, 2012 at 01:52:39 PM EST
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For all the apparent disagreement I think it's been pretty well established that the Eurozone cannot work as structured and with its current membership.

At  which point one wonders if the inevitable conclusion is not that the Eurozone will shed its members one by one until all that's left is, well, Germany, the Netherlands, Finland and Luxembourg.

The problem is that it's one thing to say that the countries South of the Alps should never have joined a currency union with Germany, and a very different thing to say the proper thing to do now is to throw them out. But that's what appears likely. And the rump Neurozone would probably not enjoy having their currency appreciate by maybe 50% with respect to the old broad Euro average.

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 Sat Feb 18th, 2012 at 02:03:00 PM EST
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Well, it'll be good for Sweden, as the majority of our exports go to the Neurozone... ;p

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Sat Feb 18th, 2012 at 02:26:39 PM EST
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