Germany and the Euro euthanasia

Scritto il 20 Gennaio, 2015 - 9:00 da Redazione
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Germany and the Euro euthanasia. Do you know that Germany is violating the European norms in term of export? Read this article to know more about it!

euro euthanasia

euro euthanasia

In 2014 the export balance for Germany was higher than 7% of the GDP, the situation has always been the same starting from 2002, but the fact is that it is illegal. Yes, because the European rules stipulate that this balance must not exceed 6% in three years. It seems that Germany does not want to do anything in order to correct this conduct, even if the European Commission already asked her to do it last year.
The situation has been considered unsustainable because this level generates a decrease in term of welfare for all the other countries. Isn’t Germany always known as a “railway engine” for all the European countries? Well, its behaviour in this circumstance is the opposite as, by exporting more than the quantity allowed, Germany is robbing wealth to other countries instead of helping them, increasing the imbalance among the European countries. This could be one of the reasons why a lot of European countries, Italy for example, have found more difficult to face the global crisis. In effect, to adjust their accounts the Euro zone countries had to regain the competitiveness in terms of prices and revise their standards of life, generating deflation and reducing the demand.

The German behaviour is the opposite of the American one, the U.S.A. indeed generate a negative balance, acting as a global engine, entering net wealth and allowing other countries to export.

The IMF (International Monetary Fund) was created in 1945 to avoid commercial imbalances among countries and has strongly criticised the German behaviour. The British economist John Maynard Keynes talked about the idea of creating a global currency, Bancor, with whom creating protection mechanisms so that exporters had to help importers to have a balance among countries lasting during the years. This idea was never realized and Euro has never covered this function.

Germany should act to reconvert its economy as soon as possible, in order to help the Euro zone countries to get out of the crisis. On the contrary, we could face again deflation and slump, that is the Euro euthanasia.

 

 

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