Opinion – ECB’s Mario Draghi Signals Boost to Stimulus Program – WSJ – John Gelmini

What Draghi is proposing is as with everything else within the EU too little, too late.

Southern Europe needs to recover and as Dr Alf says it will need this stimulus to do so.

On its own the stimulus is a temporary measure which will have to be accompanied by welfare reform, pensions reform, a stronger attempt to root out corruption and radical transformation of business, local authority finance and productivity.

Draghi has not talked about these other measures and neither has Renzi, the Portuguese Prime Minister and, of course, the Greeks.

Europe’s conservatives have had enough of taxation, EU subidy and immigration. Meanwhile, liberals, socialists and the hard-left want social policies to promote jobs and give them and their families greater quality of life. As usual, politicians are not being fully open. But there is a reckoning coming with elections in Germany, France and the Brexit referendum.

John Gelmini

Germany will think twice before saving France next time – Telegraph Blogs

Angela Merkel, the Chancellor of Germany

Angela Merkel, the Chancellor of Germany (Photo credit: Wikipedia)

This is an outstanding blog from Ambrose Evens-Pritchard writing in the Telegraph. It is recommended reading. Check it out!

via Germany will think twice before saving France next time – Telegraph Blogs.

The article concludes that:

The penny has dropped that France is trapped in policy regime that will cripple the socialist party, just as it crippled Zapatero’s PSOE in Spain, or PASOK in Greece, and they will not take it meekly.

Germany’s rulers are in turn cleaving rigidly to their certitudes, unwilling to even start to analyse the core problems of EMU through any prism other than their own.

Recently, French Socialists attacked the German Chancellor Angela Merkel and the article picks-up on German retaliatory briefings against France’s economic strength.

Personally, I think that Germany is right to be seriously worried about the French economy. French industry is increasingly un-competitive, with over-protected labor markets, a bloated public sector and some of the highest taxes in Europe. For years, French Governments have come to power with a reforming mandate but French leaders have not stood up to the powerful unions.

I envision France joining the rest of the Mediterranean economies like Greece, Italy, Spain, Portugal and Cyprus, with a major economic crisis. France is a serious economic risk to the Eurozone. Indeed a French economic crisis could easily bring the Euro down or force German to reflate. The period to the German election in September will be especially risky, in my view. I fear that the hedge funds will be speculating against France.

Enhanced by Zemanta