Opinion – Reform alone is no solution for the eurozone – Martin Wolf – FT.com – John Gelmini

Fiscal policy

Fiscal policy (Photo credit: Wikipedia)

Dr Alf raises interesting points.

Probably what will happen is a slight loosening of German policy on austerity, more printing of money by everyone else, especially France and great proclamations about how well the EU is doing and more blaming of the present debacle on “Global economic conditions”.

The day of reckoning is coming but not just yet.

The “fiddlers” watching the reincarnation of the “Holy Roman Empire ” have a few more tunes left!

John Gelmini

Opinion – Germany’s Economic Mirage by Philippe Legrain – Project Syndicate – John Gelmini

Watercolour of Mr Bumble from Oliver Twist by ...

Watercolour of Mr Bumble from Oliver Twist by ‘Kyd’ (Joseph Clayton Clarke) (Photo credit: Wikipedia)

The Last Chance

The Last Chance (Photo credit: Wikipedia)

"Please, sir, I want some more." Fro...

“Please, sir, I want some more.” From Oliver Twist, illustration by George Cruikshank. (Photo credit: Wikipedia)

This post by Dr Alf from Philippe Legrain may have more than a grain of truth in it but if it does then one has to look at what the rest of Europe is doing.

France, under Hollande, is an uncompetitive basket case, doing an excellent job of dragging itself down. Worker productivity in that country is marginally better than the UK’s but as far back as World War II, France was hampered by restrictive practices and the influence of an all powerful elite of technocrats who run the country like a  medieval fiefdom in the manner of Louis the 14th. Theirs is not a world of “street-fighting”, earning and paying your way with exports but it is a mindset of people who think that the world owes France a living. Even now, the French President is more worried about his sleazy love life and tattered reputation than he is running the country.

Spain and Portugal have been uncompetitive and half asleep for years and Professor Michael Porter, of Harvard University, has been trying in vain to assist the Portuguese Government and business community out of their self-induced torpor for far longer than Angela Merkel has been in office. Thus these countries have been doing a pretty good job of dragging themselves down without any German help.

Italy, riddled with corruption from top to bottom, actually allegedly had a Mafiosi running the place for a time and EU money which goes there is plundered, particularly in the South of the Country. This too has been going on since well before my late mother was born some 96 years ago in 1918 and long before Angela Merkel was a gleam in her future parent’s eyes.

Greece has never really been viable as an economy since it makes practically nothing and sells even less. It did suffer badly during the Banking Crisis and when when five of its leading families took most of their wealth out of the country but the Greek Government had no solution other than to stand there like Oliver Twist in the workhouse saying “Please Sir can I have some more”.

The UK has had 1.4% average growth since 1946 and productivity per worker is 20th in the world and 16% below the average for the G7. Now it has an unsustainable housing boom a looming energy crisis (just 3% spare generating capacity) and is not self sufficient in food. Our 2020 export target of £1 trillion gbp is going to be missed; we are run by an intellectually bereft political elite and a man when asked why he wanted to be Prime Minister said “Because I thought I would be rather good at it”.
He isn’t and we are supposedly doing wonderfully so the Germans are not dragging us down.

Sweden, Holland, Finland, Luxembourg and Denmark all seem to manage well because they are sensible and pragmatic people and quite well educated. They create structures that work that serve the majority of the people and seem to be managing despite being “held back” by the Germans.

The new accession countries of Eastern Europe were poor relations to begin with and should not have been allowed to join the EU so quickly.

Ireland was actually bailed out by Germany and sustains itself by being the tax haven to the American High Tech giants, BT, Linked In, HSBC, Commerzbank, Facebook and State Street who manage Auto enrollment pensions for the British Government.

There are things Germany should be doing to assist the sclerotic Europe it is nominally in charge of but the other countries within the EU need to look at the examples of competitive economies from around the world not just navel gaze.

John Gelmini