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

Dr Alf is right and eventually German economic policy will have to change and the PIIGS will have to reform.

If this does not happen the EU and the Eurozone will both fail which on balance I see as inevitable because national traditions are different between member states, economic cycles are out of synch and both Germany and the UK want to run things and are re-enacting centuries old rivalries.

The UK has to rethink its position with fractious Scots, Welsh, Irish and Cornish people threatening trouble now that the cupboards are bare.

UK Local Authority Chief Executives are also at it by pretending that if they got their hands on Westminster cash they would create jobs for people other than their own bloated staffs.

The Scots are the worst because they now threaten a new referendum, unless Labour agrees to not apply austerity to the Scots and agrees to let Scotland and the SNP have Devo Max.

It is time to draw a line in the sand, grant Scotland, Wales, Cornwall and Northern Ireland some independence and save £33 billion gbp on the Barnett Formula.

It is time to leave the EU to Germany and let that continent work out its own future.

We should become a tax haven plus City State with a bicycling Monarchy.

All the rest of the hangers on, flunkies and fawning supplicants need to experience the smell of “napalm in the morning”.

The EU is a busted flush and to remain in it we have to accept German control and German rules or do our own thing.

John Gelmini

Japan’s latest recession spells trouble for Abe | Gavyn Davies – FT

This blog from leading macro-economist, Gavyn Davies, published in the FT is a recommended read. Check it out!

via Japan’s latest recession spells trouble for Abe | Gavyn Davies.

It seems that Abenomics is in serious trouble, with Paul Krugman and the IMF with divergent views as to future policy priorities.

For sure, Abe is caught between the rock and the hard-place. His policy included massive monetary stimulation via QE but fiscal tightening to redress debt.

There are important parallels for the UK and Europe. No doubt conservative economists in Germany will be saying “I told you so” and “They should have concentrated on structural reform and opening up their economy to competition”

This is a really important story because it reopens the whole approach national debt management.  Personally, I’m with Krugman that there’s no point in fiscal tightening when an economy is in contraction – but what about Southern Europe?