Jörg Bibow, Eurointelligence 25/6 2010
At this weekend’s G-20 summit meeting Germany will try to defend its politcy of unconditional austerity to the rest of the world.
Germany never believed in fiscal stimulus anyway. Only when exports were falling off the cliff did Germany reluctantly agree to contribute to the EU and globally-coordinated crisis response.
The Bundesbank president recently declared that a mistake. Apparently, the stimulus package has caused the budgetary troubles of today.
Pronouncements like these will be widely believed. As the stupefying effects of decades of Bundesbank indoctrination have left a wasteland in public understanding of matters of economics.
As soon as the ECB took some trivial amounts of government bonds off the market to counter contagious market stresses that had been triggered by Germany’s inept handling of what was originally a local issue, did the Frankfurter Allgemeine Zeitung declare that hyperinflation was just around the corner.
Those bonds, of course, were mainly Greek of origin, and Greece has come to crystallize anti-European sentiment in Germany as no other. Things will hardly get any better now that Germans will taste austerity at home only shortly after “bailing out the lazy Greek”; or so they think.
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German unconditional surrender