Half a million people have benefits suspended in welfare crackdown – Telegraph

This is a powerful article from the Telegraph. Of course, it very much depends upon your viewpoint and whether you are on benefit. It’s an important read. Check it out!

via Half a million people have benefits suspended in welfare crackdown – Telegraph.

Just like the example of Russia, it is questionable whether sanctions ever achieve their objective.

These sanctions on benefits recipients are designed to encourage people to find jobs. The system doesn’t respect education, skills or qualifications – it’s driven by statistics – it would be happy to see all the unemployed stacking shelves at their local supermarket.

The Labour MP, Frank Field correctly asks ‘what happens to the people who are denied benefits?’

If the Tories win the next election, will George Osborne reintroduce the ‘poor house?

The historical and cultural differences that divide Europe’s union – FT.com

Euro ECB

Euro ECB (Photo credit: Wikipedia)

This is currently the most-read article in the FT. I recommend it as a must-read. The author is Jürgen Stark, a former ECB director. Check it out!

via The historical and cultural differences that divide Europe’s union – FT.com.

Stark argues powerfully and passionately for the integrity of Germany‘s economics, based upon ordoliberalism. There is nothing fundamentally wrong with his case but there are some exclusions. When the Euro was introduced, Germany benefited from the exchange-rate – this helped Germany’s businesses and banks. Yet once, the Eurozone turned sour, both Germany & France went to enormous ends to protect their respective banks from major bad-debt write-downs. Germany called upon the IMF to supervise the ECB and European Commission. The result was politically-driven austerity, and the hated troika was born.

Also the ECB has been unable to function like a real central bank and this has caused enormous pain for Southern Europe. But as Stark argued correctly, there are proper political and legal checks and balances in Germany.

As an advocate of Keynesian economics, I would favor a massive fiscal stimulus but recognize that this is ruled out under the Eurozone’s 3% constraint.

Critically, I agree that Germany is right about structural reform and politicians in Southern Europe, including France, have been too weak to push the reform agenda.

However, it is now a time to find a ‘win-win’ agenda. I propose that structural reforms are a pre-condition of refinancing national balances sheets and encourage greater fiscal stimulation, a one-off reprieve from the 3% fiscal constraint for a limited time.

Thoughts?

 

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