German hotheads are close to destroying the euro

[ramirez]

hei dico a voi ! a voi che ogni parola dei tabloid esteri
è vangelo, soprattutto se parla male di noi.
OGGI sul Financial times è scritto a caratteri cubitali
che i tedeschi (i tedeschi non gli italiani)
SONO DELLE EMERITE TESTE DI CAPZO.
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shortsighted German politicians opine that Germany could actually benefit if Greece is forced into default, or even out of the euro. Nothing could be further from the truth. Germany now risks the destruction of its own and Europe’s prosperity if it continues to ignore the interdependence of all of Europe’s economies.
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l'articolo è sul ft il titolo..è quello del 3d

[manx]

hotheads , che tradotto colloquialmente significa teste di ca....

[ramirez]

ed oggi ancora..
e se leggete bene, in un certo senso, si difendono le manovre italiane (e spagnole) in quanto il massimo POLITICAMENTE POSSIBILE IN DEMOCRAZIA.
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The recent policy towards Italy has been a case in point. In early August, yields on 10-year Italian bonds climbed above 6 per cent. A further rise threatened to turn Italy’s manageable debt burden into an unbearable deadweight. The ECB responded by buying Italy’s bonds and driving the yields below 5 per cent. But instead of defending that victory, the central bank squandered it: Italian government yields are now back up at 5.6 per cent. The first rule for central bankers facing down markets is not to show weakness. We need shock and awe, not a house call from an empathetic shrink.
Why won’t the ECB do for Europe’s governments what it happily does for Europe’s banks? The crude answer is Germany – and particularly the top German central bankers who have consistently opposed buying government bonds. But logic of these hawks is elusive. They cannot really believe that government bond purchases will stoke inflation. The ECB has a better record on price stability than did the Bundesbank, and with growth in the eurozone weakening, inflation is a distant threat. Nor can they seriously think that the bond purchases conflict with the central bank’s mandate. The ECB is not supposed to buy government bonds in the primary market, but it has done so before in the secondary market. Under its mandate to ensure financial stability, it has the right to do so on a larger scale.

The best explanation of the German position is that, by seeming crazy enough to allow Italy and Spain to go under, the central bank can terrify politicians into slashing their deficits. But this bluff is hugely risky. In Italy, unemployment for under 25s stands at 29 per cent. In Spain, the share is 44 per cent. Further austerity in these countries is neither economically sensible nor politically defensible. In these circumstances, outside efforts to impose austerity via tough conditionality are unlikely to work – a point that NYU’s William Easterly demonstrated more than a decade ago in his critique of conditionality in World Bank programmes. Anyone who thinks Europe can be the magical exception to Easterly’s evidence should ask themselves how well conditions are succeeding in the case of Greece.