The wacky economics of Germany’s parallel universe – Wolfgang Münchau – FT.com

This is an outstanding, must-read article by Wolfgang Münchau, published in the FT. Check it out!

via The wacky economics of Germany’s parallel universe – FT.com.

Having been close to this subject for over three years, I commend Wolfgang Münchau on his clarity of explanation.

Personally, I agree with the conclusions namely:

Germany is exporting ordoliberal ideology to the rest of the single currency bloc. It is hard to think of a doctrine that is more ill suited to a monetary union with such diverse legal traditions, political system and economic conditions than this one. And it is equally hard to see Germany ever giving up on this. As a result the economic costs of crisis resolution will be extremely large.

In recent months, I have been respectful of the German position that Southern Europe (including France) needs structural reform, like freeing up labor markets. I have been optimistic that with a little genuine structural reform from Southern Europe, Germany will countenance massive Keynesian stimulus in the form of investment. This is further supported by the European Commission’s changed position too.

Now I fear that I am close to admitting defeat. With Germany still at the economic helm in the Eurozone, it will be continued pain for all. Once again, the winners will be the privileged and the wealthy. If economic policies are unworkable, there will soon be social and political crises – this will include the increasing power of both the Far Left and the Far Right of the political spectrum.

Thoughts?

Greece and Poland switch roles as young Greeks head to vibrant Eastern European country for better prospects -ekathimerini.com |

English: The National Archaeological Museum of...

English: The National Archaeological Museum of Athens, Greece Italiano: Il Museo archeologico nazionale di Atene. (Photo credit: Wikipedia)

English: Syntagma with parliament building, At...

English: Syntagma with parliament building, Athens, Greece. Nederlands: Syntagma met parlementsgebouw, Athene, Griekenland. (Photo credit: Wikipedia)

This reflective article is currently the most read in Greek newspaper Kathimerini.  Kathimerini  is distributed exclusively with the International New York Times in Greece and Cyprus. The English Edition provides readers with a comprehensive summary of the main political, business, social and cultural news in Greece. Check it out!

via ekathimerini.com | Greece and Poland switch roles as young Greeks head to vibrant Eastern European country for better prospects.

Personally, I would recommend the article to any young person or parent in Southern Europe, including Greece, Cyprus, Italy, Spain, Portugal and France.

The article focuses on the reversed trends in international labor mobility. Once upon a time, Poles went to work in Greece, now Greeks go to work in Poland. The article focuses on Greece and Poland but the principles are generalizable across all Southern European countries.

Importantly, the article highlights how East European economies are growing much faster than Mediterranean countries. One critical ingredient is that East European countries are far much more effective in securing attractive funding from the European Commission.

Let me turn this to an open question:

Why are the Mediterranean countries growing more slowly than East Europe and what must be done to redress matters?

Thoughts?

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