Economist Gerald Mann
"Germany and Austria out of the Euro"
Martin Putschögl | 11 May 2011, 09:27
Gerald Mann explains why not the stricken Greece, but the strong countries should leave the single currency
Greece stumble still, the country needs a second financial aid package, which is now fixed. The Munich-based economist Gerald Mann, who teaches at the FOM Institute for Economics and Management, describes the events surrounding the rescue of the southern European country only laconic "wrongful". The hastily drawn up last year EUR 110 billion bailout package should avoid an admission of inability to pay, defer, at least. "Greece was able to remain a deficit economy, which imports more and more services other than it made available to them."
"Vorbürgerkriegsähnliche states"
Because financial markets were no longer prepared to finance this trade deficit, "the politicians were now the taxpayers and savers of the firmer euro countries in this liability," criticizes man derStandard.at over. "While Greece had to promise to save now strongly with 'saving' in this context is only to grow their own debt less rapidly than before." But even that Greece had achieved only partial, because the bankrupt country is suffering particularly from a lack of competitiveness - "its goods and services are too expensive this can be remedied by remaining in the euro area only through massive wage cuts and price reductions.." But that would not withstand the Greek society who are "partly in vorbürgerkriegsähnlichen states," said the economist. His conclusion: The Greek Euro-exit would take place as early as 2010 must be combined with an average debt of euro liabilities by at least 50 percent.
Since the whole way but had not gone, the debt continues to grow. "Has changed is that the damage was incurred at the beginning 2011, by the guarantees of the other euro countries, a further double-digit billion sum is added." The current state we can therefore only be maintained by further open or covert transfers. "The political resistance to this 'bottomless pit' but increases in the north of € country, think of the Finnish election results."
Start-up instead of leaving
The way out of this predicament sketched man as follows:. Since the exit of an economically weak country from the monetary union is highly problematic, should get the more solid states in the Euro zone, especially Germany, where would attack not the people the banks for fear of new currency, but they would be happy even on it. " Other countries might follow suit, as the Netherlands, Austria and Finland, so the new man "hard" currency - man she calls "European market" - would appreciate against the euro.
A new common central bank would be set up, as an admission criterion should apply in the exclusive club, "that ten-year bonds of these countries do not pay more than 0.5 percentage points higher than those of corresponding German bunds. Manipulation of the bond yields down through purchases of the European Central Bank (ECB), as currently in Greece, Ireland and Portugal, should participants in the "European market" are present in any case.
Strokes stability over depreciation
The benefits would be that "the more solid countries could return to a stability-oriented monetary policy with the ECB over the past year broken, not least through the purchases of government bonds. The weaker euro countries are given the devaluation and monetary flexibility they need to recover its competitiveness. "Holidays in Greece and Portugal is again cheap, and without nominal wage cuts. Exports from the 'Mark-countries' in the remaining euro countries would indeed fall, first, because we are after throwing bad money no more good to our own exports as before to . But after her recovery, finance, these countries would ask again strengthened goods, but just on a healthy economic base and non-credit-financed. " Whether solving the remaining € countries their debt through massive inflation of the debt or cuts, were left to themselves, affect the savers in the stronger countries, but less than in the actual situation.
Costs and benefits
The economic cost estimates of this model man, based on the experience of euro adoption in two to three percent of annual GDP, spread over several years. He notes, however, that this effort to survive for the stable countries, no small benefit would be: "In contrast to weak countries who leave the euro and therefore must make a debt-section can be economically strong countries of their debt so are in € . leave because the new currency should appreciate against the euro, then, the debt burden is reduced relative to GDP. "
49 percent of Germans do, according to a recent survey back the D-Mark, two-thirds are worried about the stability of the euro - man, therefore, the measures as politically feasible. "If the sums in the minds of citizens of the more solid countries have bailed with which their governments have for Greece, Ireland and Portugal, the rejection would be even greater."
Legally, there may be objections to this solution while massive, man concludes. "But not based the entry of Greece into the euro zone due to number manipulation on a highly dubious legal basis?" He says to the minister. And at some point but had to "impose economic policy reason against the European politically correct denial of reality." (Map, derStandard.at, 11/05/2011)
"Germany and Austria out of the Euro"
Martin Putschögl | 11 May 2011, 09:27
Gerald Mann explains why not the stricken Greece, but the strong countries should leave the single currency
Greece stumble still, the country needs a second financial aid package, which is now fixed. The Munich-based economist Gerald Mann, who teaches at the FOM Institute for Economics and Management, describes the events surrounding the rescue of the southern European country only laconic "wrongful". The hastily drawn up last year EUR 110 billion bailout package should avoid an admission of inability to pay, defer, at least. "Greece was able to remain a deficit economy, which imports more and more services other than it made available to them."
"Vorbürgerkriegsähnliche states"
Because financial markets were no longer prepared to finance this trade deficit, "the politicians were now the taxpayers and savers of the firmer euro countries in this liability," criticizes man derStandard.at over. "While Greece had to promise to save now strongly with 'saving' in this context is only to grow their own debt less rapidly than before." But even that Greece had achieved only partial, because the bankrupt country is suffering particularly from a lack of competitiveness - "its goods and services are too expensive this can be remedied by remaining in the euro area only through massive wage cuts and price reductions.." But that would not withstand the Greek society who are "partly in vorbürgerkriegsähnlichen states," said the economist. His conclusion: The Greek Euro-exit would take place as early as 2010 must be combined with an average debt of euro liabilities by at least 50 percent.
Since the whole way but had not gone, the debt continues to grow. "Has changed is that the damage was incurred at the beginning 2011, by the guarantees of the other euro countries, a further double-digit billion sum is added." The current state we can therefore only be maintained by further open or covert transfers. "The political resistance to this 'bottomless pit' but increases in the north of € country, think of the Finnish election results."
Start-up instead of leaving
The way out of this predicament sketched man as follows:. Since the exit of an economically weak country from the monetary union is highly problematic, should get the more solid states in the Euro zone, especially Germany, where would attack not the people the banks for fear of new currency, but they would be happy even on it. " Other countries might follow suit, as the Netherlands, Austria and Finland, so the new man "hard" currency - man she calls "European market" - would appreciate against the euro.
A new common central bank would be set up, as an admission criterion should apply in the exclusive club, "that ten-year bonds of these countries do not pay more than 0.5 percentage points higher than those of corresponding German bunds. Manipulation of the bond yields down through purchases of the European Central Bank (ECB), as currently in Greece, Ireland and Portugal, should participants in the "European market" are present in any case.
Strokes stability over depreciation
The benefits would be that "the more solid countries could return to a stability-oriented monetary policy with the ECB over the past year broken, not least through the purchases of government bonds. The weaker euro countries are given the devaluation and monetary flexibility they need to recover its competitiveness. "Holidays in Greece and Portugal is again cheap, and without nominal wage cuts. Exports from the 'Mark-countries' in the remaining euro countries would indeed fall, first, because we are after throwing bad money no more good to our own exports as before to . But after her recovery, finance, these countries would ask again strengthened goods, but just on a healthy economic base and non-credit-financed. " Whether solving the remaining € countries their debt through massive inflation of the debt or cuts, were left to themselves, affect the savers in the stronger countries, but less than in the actual situation.
Costs and benefits
The economic cost estimates of this model man, based on the experience of euro adoption in two to three percent of annual GDP, spread over several years. He notes, however, that this effort to survive for the stable countries, no small benefit would be: "In contrast to weak countries who leave the euro and therefore must make a debt-section can be economically strong countries of their debt so are in € . leave because the new currency should appreciate against the euro, then, the debt burden is reduced relative to GDP. "
49 percent of Germans do, according to a recent survey back the D-Mark, two-thirds are worried about the stability of the euro - man, therefore, the measures as politically feasible. "If the sums in the minds of citizens of the more solid countries have bailed with which their governments have for Greece, Ireland and Portugal, the rejection would be even greater."
Legally, there may be objections to this solution while massive, man concludes. "But not based the entry of Greece into the euro zone due to number manipulation on a highly dubious legal basis?" He says to the minister. And at some point but had to "impose economic policy reason against the European politically correct denial of reality." (Map, derStandard.at, 11/05/2011)