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2014-10-24

Otmar Issing, ECB’s former chief economist, one of my Gurus, apparantly does not understand that Germany no longer is an idependent state, regarding monetary policy.

Otmar Issing, ECB’s former chief economist, one of my Gurus, apparantly does not understand that Germany no longer is an idependent state, regarding monetary policy.

If Germany would still have the D-Mark his arguments would be right. But now Germany is a part of Euroland.

Could my Guru be wrong?

- Where is the economic textbook that argues that such a country /Germany/ should run a deficit to stimulate the economy /in Euroland/? 

- Yet in never-ending debates in Europe and discussions at recent meetings of the International Monetary Fund and the World Bank, politicians and academics ignore such basic economic reasoning and demand that Berlin “do more”. 

The weakest argument is that Germany, unlike a number of highly indebted countries, has “room for manoeuvre”.

This is from his article in The Financial Times, 23 October 2014

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Otmar Issing

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