Mit Merkel sparend in den Zerfall der EU

Merkel: Europa muss weiter sparen

BERLIN. Kanzlerin Angela Merkel (CDU) will am Sparkurs in Europa nicht rütteln und pocht auf die Einhaltung von Haushaltsvorgaben. „Damit wir unsere Ziele erreichen, wird strikte Ausgabendisziplin erforderlich sein“, sagte sie gestern in der Generaldebatte des Bundestages. „Und das, was für Deutschland gilt, das gilt unverändert auch für Europa.“ Die Situation sei nach wie vor fragil – trotz Reformerfolgen. (dpa) 

Dazu eine knapp und prägnant gehaltene Einschätzung aus dem Artikel

The New York Times Admits that “Many Economists” Criticize EU Austerity

Worse, the preceding sentence of the NYT article, which is necessary to understand the full context of the “many economists” sentence, is a clunker.

“Germany has encouraged austerity in other countries, including Ireland, Greece, Spain and Portugal, as a way to keep the euro debt crisis at bay.”

No.  First, Germany has extorted austerity and a war on workers’ wages throughout the E.U.  Angela Merkel is not some cheerleader who “encourages” the football guys through a rousing cheer.  Merkel exploited the bond vigilantes’ attacks on the periphery and Germany’s de facto control of the ECB to obtain enough leverage to issue her diktats that forced the periphery to accede to austerity and the war on workers’ wages.

Second, Germany has not extorted austerity “to keep the euro debt crisis at bay.”  Austerity was a major aggravating factor of the debt problem.  The debt problem was easily dealt with by the ECB as my colleagues and I explained it could be.  (The Irish debt crisis was caused not by any Irish fiscal excess but the spectacular “own goal” of the Irish government deciding to gratuitously bail out (largely German) creditors of Ireland’s failed banks.)  Merkel’s political goal was to destroy the ruling parties of the left in Greece, Spain, and Portugal by forcing these parties to betray their principles and their voters and force their economies into recession by inflicting austerity.

Third, Germany claims that austerity is expansionary and that budget surpluses are morally and fiscally desirable.  Germany faces no “debt crisis,” yet it continues to run a serious fiscal surplus and a war on workers’ wages that leads to serious underinvestment in its infrastructure and inadequate consumer demand from working class Germans.  The current result of its twin economic policies of austerity and wage suppression has been stagnation in Germany and stagnation or renewed recession in the eurozone.  German “success” has come overwhelmingly from a neo-mercantilist policy of promoting net exports through German wage suppression.

This is not a strategy, of course, due to the “fallacy of composition” that can work for the eurozone as a whole.  Indeed, the larger Germany’s net exports are the less successful other nations would be were they to try to mimic Germany’s strategy.