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Germany's Most Noted Euroskeptic Is Now In Control
This weekend's events in Europe have clarified who is really running the show across the 'union'. Hans-Werner Sinn, Chairman of the Ifo Institute for Economic Research, vehemnt euroskeptic, and head of the so-called 'five wise men' advising the German government and specifically Angela Merkel, confirmed his call from 2012 for a "temporary grexit from the euro." The right wing economist previously explained "Greece and Portugal have to become 30-40% less expensive to be competitive again. This is being attempted through excessive austerity measures within the euro zone, but it won't work. It will drive these countries to the brink of civil war before it succeeds. Temporary exits would very quickly stabilize these countries, create new jobs and free the population from the yoke of the euro."
It seems key given this to comprehend what Sinn's thought process is. Here is Sinn explaining why a temporary exit from the euro is in everyone's best interest and expressing his euoskepticism in 2012...
If Greece exited the monetary union, the Greeks would purchase their own goods again, and wealthy Greeks would return to invest. And if Portugal leaves, it will have similar positive experiences. The Ifo Institute has studied some 70 currency devaluations and found that recovery begins after one to two years. We are, of course, also suggesting just a temporary exit. Greece and Portugal have to become 30 to 40 percent less expensive to be competitive again. This is being attempted through excessive austerity measures within the euro zone, but it won't work. It will drive these countries to the brink of civil war before it succeeds. Temporary exits would very quickly stabilize these countries, create new jobs and free the population from the yoke of the euro.
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We should stop proclaiming the end of the world in the event of an exit. Instead, we should shape the exit as an orderly process with relevant aid for the banks of the country in question and for the purchase of sensitive imports. What we are currently witnessing in Greece is a disaster -- and it's not a disaster caused by an exit, but rather by remaining in the euro zone.
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Spain only has to devalue by 20 percent. That's achievable within the euro zone. Greece and Portugal are in a separate category. These are the only two countries that consume more than they produce.
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On the basis of sound analysis, I am pointing to a danger that that many do not perceive, and I am weighing things up. Euro-zone member states have made available €1,400 billion ($1,780 billion) in bailout loans, €700 billion of which has been contributed by the Bundesbank through its TARGET loans. On top of this, there is the ESM with €700 billion, which is to be leveraged to €2,000 billion with the help of private investors. This stabilizes the capital markets, but it also destabilizes the remaining stable European states and wipes out the savings of retirees and taxpayers. We are gradually sliding into a trap from which we will no longer be able to escape. This risk is, in my opinion, the greatest risk of all.
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You can't convince me that it makes sense to stand by idly and watch as we take on increasingly greater risks. We are destabilizing our political system with this excessive rescue policy...
I was too quick to endorse the euro because I thought it would liberate the continent from endlessly fluctuating exchange rates. My mistake was that I believed that the nations of Europe would adhere to the Maastricht Treaty and not socialize the debts of Southern European countries. Older colleagues had already pointed to this danger at the time.
And explaining that Q€ was never expected to help the southern nations of Europe and may lead to a messy end for the euro...
I do expect QE to bring about some inflation. Given that an exchange rate is the relative price of a currency, as more euros come into circulation, their value has to fall substantially to establish a new equilibrium in the currency market. Experience with similar programs in the United States, the United Kingdom, and Japan has shown that QE unleashes powerful forces of depreciation. QE in the eurozone will thus bring about the inflation that Draghi wants via higher import and export prices. Whether this effect will be sufficient to revitalize southern Europe remains to be seen.
There is a risk that Japan, China, and the US will not sit on their hands while the euro loses value, with the world possibly even sliding into a currency war. Moreover, the southern EU countries, instead of leaving prices unchanged, could abandon austerity and issue an ever greater volume of new bonds to stimulate the economy. Competitiveness gains and rebalancing would fail to materialize, and, after an initial flash in the pan, the eurozone would return to permanent crisis. The euro, finally and fully discredited, would then meet a very messy end.
One can only hope that this scenario does not come to pass, and that the southern countries stay the course of austerity. This is their last chance.
And finally yesterday, reiterating the strategy that is now in place...
The temporary exit of Greece from the euro, with lure a potential “haircut” of the debt, suggests the Chairman of the Ifo Institute for Economic Research in Munich, Hans-Werner Sinn.
“A temporary exit from the euro would be the easiest way for Greece to get out of this mess”, says in an interview with the weekly magazine “Hot” the German professor, who has been insisting for years on the exit from the Eurozone of economically weaker countries-members.
As he says in his interview, “unfortunately, the euro has jeopardize the European integration project and if we do not find methods to restore the competitiveness of Southern Europe in a way that allows a temporary exit, there is the possibility to “kill” this plan”.
Professor Sinn, who has served for many years as head of the “five wise men” – advisors of the German government and Chancellor Angela Merkel, also appears contrary to the pursuit of countries like France and Italy, and the European Central Bank (ECB ) to relax the harsh financial policy imposed by Berlin in the Eurozone and defends the policy of strict austerity.
In regard to Greece, in fact, the president of Ifo believes that “it is absurd to accuse Germany, the greater austerity relief force in Greece, that it imposes austerity, because it does not intend to give unlimited guarantees and accept the unlimited accumulation of additional debt”.
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Anyone positioning for more centrist union-supporting rhetoric, hope is no longer a strategy as the hardest conservatives are now in charge.
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Ha ha ha - that is really going to piss off Lorcan Roche Kelly (@LorcanRK). Sinn has the last laugh.
Leave the euro buy chinese let germany implode with its africans and muzzies.
GrecShit!
The dream is over!
Every man for themselves and all protecting your ass!
I believe that Europe will experience a medieval trade with barter (exchange one product for another).
The Banksters are fucked.
Maserati, Ferrari, dear screens on the wall do not produce anything to eat.
Perhaps the trade returns to normal, or a IIIWW until October (when the Russians closed the gas tap).
Much weeping and gnashing of teeth in the next six months this beautiful planet ...
hehe.
"Temporary exit" is an admission that the E.U. is doomed.
What they are doing now is seeing how much money can be made in the dissolution process.
No different here in the U.S. - with the Feds in collusion with the Corporate/Banking/Insurance cabal bleeding out the States and what's left of the middle class.
Generational theft on a historic scale. Hang the bankers.
How is it possible that a right-wing economist is in charge at a time when all major economic faculties in the world are run by Keynesians? Are the times already changing?
It's not. Every time left-wing, progressives fuck up the world (which is to say, "all the time"), it HAS to be the fault of a vast, mysterious right-wing conspiracy.
Just ask that stupid cunt Hillary.
The right wing economist previously explained
Sinn is not right wing at all
Re: "Temporary exits would very quickly stabilize these countries, create new jobs and free the population from the yoke of the euro." <-- Break your shackles, and then ask to have them replaced?!
WHAT IS THEIR OBSESSION WITH THIS PSYCHOPATHIC PARASITISM?!
BY ANALOGY, SHOULD AN ABUSED WIFE KEEP GOING HOME?
This becomes tiring, but lets break this shit down for non-Europeans/non-literate
EuroZone - Nations of the European Union that use the Euro. Not all nations of the EU use the EURO. Czech Republic, United Kingdom, Hungary, Poland, Croatia, etc. do not use the Euro.
European Union - A collective of European Nations that facilitate the free movement of capital (when capital controls are not in place), free movement of people (Europeans), etc.
The EU can happily function without the EuroZone as did occur before the Euro. The issue they were trying to resolve was the different currency tediousness when travelling/trading/working/moving between countries.
The Euro, if it consisted of solely the non-profligate spenders (read: thrifty, productive nations) would include: Germany, Netherlands, Slovakia, Slovenia, Austria, Belgium, etc. Blowing out the dead beat scumbags (Greece, Italy, etc.) would produce a German Mark with more strength. Having a currency composed of just the EU members that live within their means would be a currency to behold.
The USA could only dream of having monetary hardliners from Germany at the FED.
The USA could only dream of having monetary hardliners from Germany at the FED.
If they were hardliners, they never would have gone along with the idea that Greek Bonds were worth face value, when parked at the German banks.
This whole mess is because German banks could hold high paying Greek bonds as if they were zero-risk. So, the Greek bonds being high paying, they were in demand and the German banks drove the price up and interest rate down until the interest no longer covered the risk. The initial interest rate probably never covered the risk.
We do have the same kind of hardliners at the Fed as at the German central bank - both protect the banks at all costs and only the banks, even when the Central Bank is the one that caused the problem, in this case by allowing banks to assume Greek bonds were good.
Your countries are belong to us!
"hope is no longer a strategy as the hardest conservatives are now in charge"
What else is new?
"The right wing economist previously explained..."
Ooooooh, I guess he must be a NAZI, right? The friggin' bogey-man Nazis are back in control of Germany now!
Run for the hills!!! All power to the Greek people and the filthy damn whores who service them!!!
You are actually quite right.
In fact, that fact that hollow-cost* denial is a crime in Germany, has been since WWII is really all the "tell" one needs in terms of who is in charge of what.
The Bolshevik hand via NY NY back in the 1900's onwards snakes on a long arm...
* see the story of Earnst Zundel:
https://www.youtube.com/watch?v=A5sbegfCz7o
Greece needs to immediately exit the euro. The tsunami that will visit Europe and the global economy is just collateral damage (ask Iraqis). The next move, once the grecian team GS is toppled, is a reorientation towards the BRICs.
The guy has a freaking point....
He does, but why limit it to just Greece and Ireland ?
He does have a point.
Then again, I don't see what's right-wing or conservative about what he said. The left-wing economists raise the same points, mainly about the necessity of being able to devaluate when you need to.
Barring those intellectual midgets for whom the euro is like a religion (Spain's Rajoy, France's Hollande, etc), everybody agrees: the euro is NOT adapted to most European economies.
It doesn't work like the dollar, where you have the wealthy states paying for the poor on a daliy basis, and where there is fiscal unity. The Germans don't want to loosen the strings of their purse, so it can't work at all.
That's why the majority of us Europeans want out of the euro. It only benefits the Germans.
On the one hand, we get to see Nigel Farage here on ZH encouraging Greece to stand tall, take the pain, and tell the EU to frack off.... and now Herr Sinn is getting hammered by the left blooded, german speaking Tyler, who can´t stand dudes like Sinn who are being proven right. And it´s a joke and a half saying that "he´s in charge". He has no political power, and if he even had a simidgen of real power like the article would have you believe, Greece would have been gone long ago.
This isn´t the first time headlines of stories related to Germany have been slanted with falsehoods. Was soll das?
Without having read the above article completely, I feel that ZH is generally biased against Germany.
I believe it is in part a natural reflex to protect the weaker party.
But mostly it is driven by a underlying international power competition
For all the condescending remarks about the EU, it is my impression that a strong and united Germany in a strong and united Europe is simply threatening.
We should find ways to overcome this.
For example by forming a confederation between the EU and US.
earlier today reaction by german economists: (don't have enough german so google translate, sorry)
"Sham" characterizes the motion of internationally renowned professor of economics Peter Bofinger, a member of the German government's Committee of Wise Men. "That would be nothing more than a Grexit», says Professor Bofinger and warns that "according to the actual conditions in Greece are most likely to lead to chaos and hyperinflation"
"The Schäuble proposal is not good," says director of the German Economic Institute in Cologne, Michael Chouter. "The Return to the euro after that date is unrealistic. We must disclose that what is at stake in the proposal Schauble is the output of Greece ".
Opposition to a "temporary Grexit» expresses economist at Deutsche Bank Nicholas Chainen warning that this would cause chaos the Greek economy will weaken further the position of Greece in attracting investments, but would trigger a major political controversy the date of re-entry into the euro area.
Mr. Chainen even warns that this could lead to increased tension between Greece and the rest of Europe. "The Schäuble proposal exudes a paternalistic perception of European policy," said economist at Deutsche Bank.
Wish they listened to him in 2012. We would have been spared the Syriza/Varoufuckis shitshow...
The only problem with his theory is that the exit from the euro will be temporary. Assuming that Greece recovers after leaving the euro, why would they ever return?
Yeah, it's just "temporary", all right. Just like our "temporary" closing of the 'gold window'.
The only problem with his theory is that the exit from the euro will be temporary. Assuming that Greece recovers after leaving the euro, why would they ever return?
I am sure all Greeks will help their European brothers if any of them are in trouble, support German politics in general and the German army in particular if required, and invest every hard-earned Drachma in a green, sustainable, gender-sensitive manner in order to enlighten the grand European project.
Who cares. A lot of countries are in EU but not in EZ. The important thing is to get them out of this mess and to let the upper echelon EZ countries share the Euro.
For the Euro to be everybody's money, the EU has to go FEDERAL. No other way. If not, then stay out of Euro, those who don't want to compete with the Core.
Not in the EZ fuck joining those German retards thanks who only work on world domination.
Keep the pound, then if we fuck up we can CTRL-P to stabilise the economy.
Oh we did that a couple of years ago to the fucking tune of 375 billion thats like half a trillion euros.
That's why no nation should go into monetary union because no nation is independently economically sustainable.
HOW TO FORM A MONETARY UNION!
The two nations / block before monetary union go into total trade isolation, nothing can cross the national boundaries of these two from anywhere. Last one whole year like this then you can join because THERE IS NO EBB OR FLOW IN ANY PARTICULAR DIRECTION like all those euros flowing to Germany.
They won't, their currency will be Yuan.
Because the Greeks get sick of devaluations every 12 months because of the continued profligate spending.
But, that would be a country of productive people... i.e. not Greece.
So they will stay with the Drachma and discover the beauty of the 3rd world within the EU.
Yeah, they need to get out from under the yoke of Der Führer, no I mean the Euro
Looks like the jig is up.
Back to work Greece.
“it is absurd to accuse Germany, the greater austerity relief force in Greece, that it imposes austerity, because it does not intend to give unlimited guarantees and accept the unlimited accumulation of additional debt”.
breath of fresh air.
...kinda Greeced out....
tomorrow is going to be all about the Iran deal and how the ZOG will sabotage it since Likud demands regime change, in essence so it can finish the ethnic cleansing of Palestine and re-invade Lebanon [and maybe Sinai and more of Syria] without resistance.
https://consortiumnews.com/2015/07/11/obamas-posturing-risks-iran-nuke-d...
---
https://consortiumnews.com/2015/07/08/the-51-day-genocide/
For being called one of the 5 "wise men" he seems very stupid. To think that Greece will ever return to the slave plantation again is childish thinking. Once any country leaves and gets the taste of freedom there will be no returning. That's like saying, "let the state of Texas leave the United States and teach them a lesson. Trust me, Texas would never return and 90% of the remaining US population would move to Texas so as to leave the US slave plantation. I really think that these rich EU leaders are so detached from regular people that they believe that what they offer is the greatest thing since sliced bread.
JL 445, save me a family spot in the Republic of Texas. I disagree, though, half of the 90% are Takers and will remain in FSA with a liplock on the big pink Nanny tit. It will collapse and here comes another War of Northern Agression for the same economic reasons as the first.
Calling Sun Tzu. West Point Generals need not apply.
Changing of the guards. Only thing better than a euroskeptic is a euro-hater.
If he kicks Greece out of the PIGS then we'll be left with the 'P-I-S's. Then it'll be the 'S-P-I-F's when France gives up the ghost. Sinn should just have fun with it right now and add/ subtract countries arbitrarily to come up with the coolest acronym.
It might help lighten the mood over there.....
"Temporary exits would very quickly stabilize these countries, create new jobs and free the population from the yoke of the euro."
I read: "...the joke of the euro". My bad.
This guy makes sense provided there is a debt reduction before "temporary exit"...and subsequent devaluations in Club Med.
The Euro has already met an ignoble demise, and the European Union is finished, as are all the inhabitants of Europe, you shit-for-brains 'five-wise-men' fucktard retrograde simpletons.
Five-wise-men = NEOCONS that always have a plan to ride a handcart into Hell, as long as you are going to pay for it, America.
Eddie, time to come downstairs, Sweetie. Your mac'n cheese is ready.
Eddie Munster always came out of the stairs that went to the 2nd floor. Spot the Dragon lived under the stairs too, don't you remember? And uncle Herman was always in the basement crafting spells like a good warlock. My brother downloaded the series for me. lol
I also have The Twilight Zone, The Outer Limits, Get Smart, Batman, Superman, Beverley Hillbillies, Lost In Space, Dragnet, Emergency, 1-ADAM 12, My Three Sons, et cetera.
This could all be solved if germany paid Greece war reparations. The problem is that Germany already paid jillions to the 50 million holocaust survivors and they don't have any more to give. maybe the jews will voluntarily give some of that money to Greece? What do you say guys? You jews have recovered quite well. Can't you help the poor Greeks out a little? And I don't mean like Goldman sachs did a few years ago when they cooked the books to get Greece into the EU.
Wow, this is pure Hegelism at it's finest.
Interesting to see the 'crisis management' plan emerge that has but one goal, which is the fiscal union that the EU can't survive much longer without.
DON'T GIVE THEM THE CHANCE TO PLAY OUT THEIR STUPID GAMES.
DEFAULT, DEFAULT DEFAULT, TONIGHT.
FUCK UP THEIR ENTIRE PLAN.
LET'S SEE THEM EXPLAIN TO THE GERMAN PEOPLE HOW THEY'RE ON THE HOCK FOR 80 BILLION AND COUNTING.
ANOTHER FUCKING HITLER BUT WITHOUT THE TANKS, JUST THE PSYCHOPATHIC TRAITS.
When the world is so oversupplied in everything, or can you tell me something you DON'T have!
Applying austerity, really it is cost cutting you lose the work in the transition phase to other low cost countries. Now unless a Greek or any other western citizen can live on a chinamans daily income you have lost those jobs forever. China wanting the work will keep devaluing its currency to ensure this happens and ensures the higher valued country is trapped in this position.
The other issue, sure reduce a Greek persons income from 10 euros to 1 euro an hour that's so competative. If they do not earn it they can never support the debt through taxation because you now need 10x the population to just standstill and migrants will not be moving to Greece.
Then you get the concept for many people, needing an income anything you are trading has to fall for it to be purchased when everybody is on a low income. Else it does not sell, sits on the shelf unaffordable, no economy.
THERE IS NO WAY OUT, THEY CANNOT AFFORD THE INTEREST ON THE EXISTING DEBT LET ALONE BORROW MORE AND THE TROIKA KNOW THIS! THE TROIKA ALSO KNOW GREECE CANNOT LEAVE THE EZ BECAUSE IT HAS NO MONEY FOR ANYTHING AND SO THEY TURN THE THUMBSCREWS.
Germany, pay your fucking WW1, WW2 debts please because you never paid any of them. For the ECB, the FED stopped QE and now you CTRL-P to make up for what you are not getting now or fall into deflation.
Endlessly throughout history elites trashed civilisations for their own greed thats why history repeats itself we got the same people running the show.
It's the cost of all this oversupply, they used to plug (and it doesn't take any more energy then as to now) a tire for $3, now it's $20, that's an over supply we can do without.
Say what?
http://www.dailymail.co.uk/news/article-1315869/Germany-end-World-War-On...
I looked up Sinn in Wiki and he has been in hot water with the Chosenites for having the audacity to hint that a potential holocaust is being revisited by the bankers. He wasn't accusing the Jews as being the bad guys directly.
No matter, the Jews howled indirectly back that NOTHING compares to the holocaust. The way I took it was that he was intimating they are having an instant replay of the bankers and their tactics in times past. I took it that the Jews were screaming for him to shut up exposing the Jewish bankers, just because they killed tens of millions doesn't mean Jack Shit because the Holocaust trumps everything now and in future milennia to come. It is even so important that it deserves to be capitalized, so I corrected my error. Sorry.
Anyway, he has a Keynesian bent to his philosophy, and Merkel doesn't go pee without his advice, apparently.
I'm gonna ask my wife if i can have a 5 year amicable exit...
Her litigator will be overjoyed to write up the amicable invoice, Dragon HAwk.
The article is misleading. Sinn, by the way, has resigned from his position at the IFO institute and has been replaced by Mr. Fuest.
Only Politicians & BankCorp are allowed to Fuck Up Big-time and be bailed-out time and time again, much of the compensation from the Public Purse.
The same Cabal then hire Rating Agencies and Media Moguls to LIE, LIE and LIE Bigger to cover up their illegal activity.
The same sorry lot finally turn around and point the finger of blame towards the General Public when it all goes Tits Up.
RICH, REALLY RICH.
In my opinion, the problem is not what currency is used, but rather the attempt to set social benefits far in excess of the productivity level of the country concerned. Given low productivity levels, and the resulting low yield of tax revenues, the Greek governments, imitating standards in other countries, attempted to provide social benefits that its economy could not sustain. The answer is not to borrow from higher producers (and then refuse to repay) but rather to contain social programs to a level that can be maintained at current levels of productivity.
Sinn is a typical fucking statist wanker.
I hear much of "Left Wing and Right Wing" but remember that it's a completely different ideology from US to "across the pond". Europe is either Commie or Facisist (Left / Right respectively) whereas US is ....Commie ( Lol ) or Constitutionist (right). Oh sure, we're still fucked but ...it's worth noting ...I suppose. Bartender!
Part of the equation for economic health of a state is it's debt to GDP ratio. How does austerity help to improve this measure? You reduce debt at the cost of GDP. Therefore, the ratio stays the same, or in Greece's case, increases because GDP falls in response to increased taxes and decreased social spending. It's an absolute fallacy to think that taking money from social services and handing it over to bankers is healthy for a nation. Tsipras needs to get the fuck out of the EU , bring in a nice weak devalued currency to boost his tourism and exports and tell the German fascists to go fuck themselves.
If they just set themselves up with the Drachma in advance...
They are not going to be let to exit the euro because why would they join back if they will do so much better with own currency(which they will)
Of course, a return to the drachma would be a massive devaluation and put Greece on a footing to be THE vacation destination for the world. BMWs would be a lot more expensive in Greece, but retsina and a nice Greek dinner would be a lot less expensive. Since imported items would be more expensive Greece would find itself producing more homegrown and manufactured items to offset the expensive imported goods. More Greeks could make a living farming, or working in light manufacturing. The tourist industry would boom with Dollars, Euros, Renminbi, and Yen flowing into the country. It would be harder to sing the Internationale. Ditto all the PIIGS.
Thew dude gets it,
So it and move on....
Define "Temporary". Gracias
Not eternal. De nada.
Hans-Werner Sinn doesn't understand that a currency doesn't influence the econmy. That is to say.. a good currency which is a stable one.
It is of no importance if the UK would have a currency with the same value of DM or Lira. nor if Germany would have Drachma as money.
Or in other words the value (price) of a money is of no importance to an economy, if it would kept a constant valuation.
You might want to read F.A. Hayeks "denationalzation of money" ( www.mises.org)
The problem the Greek have is a corrupt government which is too big. And illegal laws.
So if Greece would implement a free market ( also for the banking sector; so Central banking must come to an end: free banking, free minting) and much less government and alot lesser laws, it could find its way up within two years. ( Rothbard/ von Mises) The people will fix the job.
But sadly.... mainstream economists do not share this opinion.
So there will be more bad things to come....
Here's a correction: Hans-Werner Sinn is NOT right-wing, nor is he especially Conservative (in the US sense).
His position is something that Americans are unfamiliar with as they haven't experienced it. Indeed few are even familiar with the term: ordoliberal.
Does the following sound like right-wing rhetoric to you?
Were an American politician to start speaking like an ordoliberal, the media would foam at the mouth branding them as extreme left-wing socialists. That's how far out to the right the American media has drifted. (Ordoliberalism is actually central, demanding a mix of left and right).
If you care to learn more (whether you agree with it or not): https://en.wikipedia.org/wiki/Ordoliberalism
Some history regarding the split between neoliberals and ordoliberals: https://en.wikipedia.org/wiki/Neoliberalism#Germany
This is also worth a read if you wish to explore Sinn's perspective: http://ukcatalogue.oup.com/product/9780198702139.do