Paul Krugman, Laureate of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2008 at a press conference at the Royal Swedish Academy of Sciences in Stockholm (Photo credit: Wikipedia)
Dr Alf is right about France and Paul Krugman’s incisive and thoughtful analysis.
Francois Hollande is and always has been a socialist and a leveler, so his credentials are always about spending and distributing money whether he has it or not.
Germany by controlling Europe, and insisting that people behave in a more financially disciplined way, is expecting the impossible which is why, in the case of France, they are contemplating a loosening of Mrs Merkel’s financial straight-jacket, but only to help their main backer in Europe, France.
Angela Merkel does not particularly rate the useless Hollande but needs to back him because he is there for the time being, at least, and in charge of France.
Northern Europe more or less works and functions quite well but Southern Europe does not.
Overall, the continent is still mired in stagnation and is about £4.5 trillion gbp short of what it needs to flourish and reverse the growing youth unemployment problem it has.
Writing off not one but two generations of young people is not wise if you want a harmonious society and in the meantime the currency speculators, like vultures and hyenas, are closing in for the kill looking for the weakest country in the Eurozone to attack first.
France, of the countries of Southern Europe, is its strongest link yet when compared to Europe as a whole it fails to make enough or sell enough of what people want and it taxes people and companies too heavily. This encourages a flight of people and capital which pushes France into a downward spiral.
Europe is in reality two blocs both of which are controlled by Germany but which operate to different economic cycles within themselves and at the level of the countries which form them.
Thus, we have the UK going through a pre-election credit fueled boom, and Germany exporting strongly but slowing fast; Spain, Italy, Greece and Portugal teetering on the abyss of bankruptcy and Holland, Sweden and Poland operating steadily and, in the case of Poland, improving strongly from a low base.
For Europe to ever function as if it were one country, these differences would have to be a lot less pronounced and there would have to be rotating shared control of the kind we have not yet seen.
In order to protect the Euro, I expect to see Germany reflating, introducing limited and controlled inflation; France and other Southern European countries are likely to be allowed some fiscal liberty in exchange for proven reforms.
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