26 November 2013 | 99 comments (99 topical, editorial, 0 hidden)

The alternative is for Germany to engineer fiscal transfers to the periphery, directed to capital formation.

Foreign direct investment wouldn't cut it because it would still contribute to Germany's current account surplus (if I'm nt mistaken) but it would be better than nothing.

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 Tue Nov 26th, 2013 at 07:14:27 AM EST
[ Parent ]

Re: World (none / 0)

Mig, I suspect that German FDI in peripheral countries could help now but exact a cost later. After what we have seen why should any peripheral expect that a German FDI was anything other than an asset grab in disguise - whether it was or not?

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Nov 26th, 2013 at 10:51:44 AM EST
[ Parent ]

Re: World (none / 0)

The capital intensity of the periphery needs to rise. That's the only way for incomes to increase, too.

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 Tue Nov 26th, 2013 at 10:55:59 AM EST
[ Parent ]

Re: World (none / 1)

Agreed. But finance has recently found it more profitable to sell the improvement but deliver a failed project and a debt - see Ireland.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Nov 26th, 2013 at 11:19:04 AM EST
[ Parent ]

26 November 2013 | 99 comments (99 topical, 0 editorial, 0 hidden)

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