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

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 –

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.



Anniversary – Four Years of Blogging – Some highlights!

Here are my all-time, top-twenty, most popular, blogs, ranked by number of hits:

  1.  Bank of America Merrill Lynch intern Moritz Erhardt found dead after working long hours | Mail Online
  2. What are the three types of Interim Management assignment?
  3. What’s the difference between an Interim Manager and a Management Consultant?
  4. UK Local Authorities and Shared Services: Cost-Cutting – Myth or Reality?
  5. Immigration: The Polish paradox | The Economist
  6. The Portuguese and The Crisis: An analysis – Timothy Bancroft-Hinchey – English
  7. The Fall of France – Paul Krugman –
  8. BBC – Travel – Two days in Siena, Italy : Tuscany
  9. Interim Management: Ten Emerging Trends and Outlook for the Future
  10. Why I am obsessed by austerity – Simon Wren-Lewis – Mainly Macro
  11. Malaysia travel: What to do in the Cameron Highlands | CNN Travel
  12. A gaffe-prone Japan is a danger to peace in Asia – Gideon Rachman –
  13. The wacky economics of Germany’s parallel universe – Wolfgang Münchau –
  14. Martin Wolf’s ‘The Shifts and the Shocks’ – Joseph Stiglitz –
  15. Public Sector Catch 22: Cost-Cutting Vs. Cost Reduction
  16. The cult of home ownership is dangerous and damaging – Adam Posen –
  17. An in Depth Look at Deleveragings – Ray Dalio – Bridgewater
  18. Utilising Professional Interims to Help Reduce the Budget Deficit – Removing Catch 22?
  19. Public Sector Catch 22: The Role of “IT” in Business Transformation
  20. Public Sector Catch 22: Structural Reform, Strategy and Implementation – How to avoid a Omnishambles Recovery Programme?

Also you may be interested in my stats over four years:

  • Views 81,342
  • Comments 7,818
  • Posts 3,870
  • Followers
    • Twitter  4,609
    • Blog  983
    • Facebook  39

Thank you for your support!

Remember, I’m more than happy to publish quality guest blogs.