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Is Germany Already Signaling The Complete (Economic) Collapse Of The European Union?
In an attempt to try to divert a looming economic stagnation in the European Union, some leading German and French economists have launched some plans to try to revive (read: ‘resuscitate’) the economy of the Eurozone by tackling two issues which might have deteriorated the economic situation in the currency bloc.
Enderlein, an associate at a German school of Governance and Pisani, member of a French think thank have announced some ideas focusing on solving the issue of the rigid French labor market and the lack of government spending on infrastructure projects in Germany. This could be the perfect time to push some of these ideas through as the next elections in both countries are still 2.5 years away which means there’s plenty of time to implement new measures and restoring the popularity of the politicians before the next elections.
The interesting part is that both Ministers of Economy of both countries are agreeing that something needs to be done which is relatively easy to implement without disturbing the labor market or the public finances too much. However, the German minister of Economy has stated that Germany is unwilling to increase its budget for infrastructure works. He states that a total amount of 10B EUR has been included in the 2015-2017 budget which will be used to fund infrastructure and construction activities, but that it’ll be close to impossible to increase this amount to 24B EUR. That's interesting because if Germany would borrow an additional 14B EUR at a term of 10 years, its annual interest payment would be just 178M EUR per year as the 10 year government bond rate has been declining for six years now (see next image).
That’s a surprising statement as several economists would have thought the proposed 10B EUR to be insufficient for the necessary upgrade works anyway, and it looks like Germany is once again playing it hard. As the Minister of Economy said that the real problem in Germany is the lack of private investment, we wouldn’t be surprised if he was trying to put some pressure on those private parties in the German system.
Even though it’s unlikely that Germany will revert its stance and more than double its investment in infrastructure-related projects, it does look like the country would be willing to keep the door open for private parties to incur the expenditures. Those will obviously have to be incentivized by for instance a tax holiday or some other monetary advantages. But the budget for infrastructure isn’t Germany’s only problem. Because of its rapidly ageing population, there will be a strong need for new entrants on the labor market and those will very likely have to be sourced through immigration. One of the proposed plans is to automatically give foreigners who graduate from a German university a work permit. This should entice more people to effectively stay in Germany and to support the pyramid of the labor market.
Germany used to be the growth engine of the Eurozone but after some harsh decisions to keep its budget aligned with the European requirements, it’s very clear that its economy is in a worse shape than expected. If the European Union won’t find a solution which is easy to implement soon, we might be heading towards a complete economic collapse in either the European Union and the Eurozone. Until recently, Germany and some other strong countries were able to keep the economic growth rate at a decent level, but now the largest economy of the European Union is showing signs of fatigue, a comprehensive action plan will be needed.
And that brings us to the next problem in the European Union. The only thing politicians care about is their own job and job security. Nobody really has the balls to push through a certain reform as he/she knows it will cost votes. Precious votes which could result in not being re-elected for another term. There will be a lot of conversations and talks on a high level in the European Union, but we dare to bet that nothing will really change. As usual. So be prepared for the complete implosion of the EU.
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Oregon and Washington wanted to replace the I5 over the Columbia in 2007-8 time fame, but the feds started pulling back funding at the time and for a year they couldn't figure out a way to put a square peg in a round hole.
The one billion dollar bridge we could have had and the 4 Billion monument they wanted never got funded.
Last Election there was a bill to tax car registration for the purpose of road repair. And lo and behold it was to cover the fact they were stealing funds from road construction gas tax to cover their pay check and pensions.
One thing you can count on is, taxes, death and government corruption.
"the next elections in both countries are still 2.5 years away which means there’s plenty of time to implement new measures and restoring the popularity of the politicians before the next elections."
Are you kidding ?
Ain't gonna happen .... we want these crooks / cronies out.
The corruoption is SYSTEMIC .
It takes a long long time for TRUST to be earned ... and has now been squandered with abandon.
The people have a trust issue, do they? Well then let's double the propaganda, import millions of immigrants who will buy the BS and dust off "Gladio" just to keep the people nice and "flexible".
Obviously people have a trust issue because they were stupid enough to trust a self-legalized monopoly of force called government in the first place.
Fool me into war once shame on you, fool me into war fifty times I'm a European.
When Keynesian money creation and socialism fails to produce robust economic growth, obviously there was not enough of either! Moar, moar: Print, spend, regulate, tax!
Europe, get ready for war!
The "Battle of Greece" will be decisive ...
http://failedevolution.blogspot.gr/2014/12/europe-get-ready-for-war.html
These guys are living in a fantasy world, war is coming and nothing else.
Absolutely correct. Europe isn't moving fast enough for "somebody's" taste.
The article contained this howler:
"revive the economy of the Eurozone by tackling two issues [...] the rigid French labor market and the lack of government spending on infrastructure projects in Germany. "
Translation: Gutting a French working class that won't stand for it and getting Germany to gut the currency by printing which they'll never do.
So war it is.
Weve been at serial war for over a decade...when the wars stop through monetary exhaustion... the end will come.