Tag Archives: Draghi

Germany Demands Greater Austerity Because Three Recessions in Six Years are not Enough

Posted on October 5, 2014 by | 3 comments

By William K. Black

Things are going badly in the eurozone – as they have for six years due to Germany’s demand that “there is no alternative” (TINA) to austerity as the response to the Great Recession.  Austerity caused a gratuitous second Great Recession throughout the eurozone and threw nations with one-third of the eurozone’s total population into Great Depression levels of unemployment.  Austerity has now forced Italy into a third recession in six years and produced overall stagnation in the eurozone.  Germany, whose budget surplus has produced economic stagnation, has found a solution to the latest crisis caused by self-destructive austerity – greater austerity.  Better yet, as a Reuters column relates, Germany’s leaders are enraged that anyone would dare to question why it makes sense to reduce further already inadequate demand through austerity.

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Heard (but not understood) On the Street: The WSJ and Deflation

Posted on April 6, 2014 by | 1 comment

By William K. Black

A brief update is in order after my three part series on how the troika (the ECB, EU, and the IMF) was acting contrary to its stated policies on deflation, Mario Draghi’s (the head of the ECB) confession that he favored deflation in the eurozone periphery because he wanted these nations to have lower prices and wages so that they could increase exports, and the disgraceful reporting of the subject in the New York Times and the Wall Street Journal.  The WSJ’s “Heard on the Street” feature is out with an April 3, 20014 story on deflation that epitomizes each of these defects.  The title of the article foreshadows the analytical black hole that follows: “Inflation, Euro Test Draghi’s Resolve at ECB.”

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The New York Time’s Disgraceful Reporting about Deflation

Posted on April 2, 2014 by | 6 comments

By William K. Black

This is the third and final installment of a series of columns discussing the latest harmful policies and articles about eurozone deflation.  This column discusses the March 31, 2014 article in the New York Times entitled “Another Worrisome Drop in Euro Zone Inflation.”  I have already discussed the extraordinary sentence in the article in which the head of the European Central Bank (ECB), Mario Draghi, is cited as claiming that deflation is desirable for eurozone nations suffering Great Depression levels of unemployment.  Draghi claims that deflation will cause reductions in working class wages and prices that will lead to increased exports and economic recoveries.  I explained in prior columns that this is contrary to the ECB’s written policies and economic theories and the views of virtually all economists.  The NYT article does not report these facts.

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Has ‘Super Mario’ Really Saved the Euro?

Posted on September 13, 2012 by | 2 comments

By Marshall Auerback

Germany’s Constitutional Court gave a green light on Wednesday for the country to ratify Europe’s new bailout fund, boosting hopes that the single currency bloc is finally putting in place the tools to resolve its three-year old debt crisis.

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Marshall Auerback Appears on BNN: ECB Bond Purchase Program

Posted on September 7, 2012 by | 2 comments

Marshall Auerback appeared on the September 6th episode of BNN’s Business Day discussing the ECB’s bond purchase plan. You can view it here.

 

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“Misery”: A Postscript To “The Euro Is Not Unassailable”

Posted on September 6, 2012 by | 7 comments

By Marshall Auerback

This memorable scene in Misery is a perfect metaphor for the ECB’s much vaunted bond buying program.

In essence you have two distinct, but related problems: the solvency issue and the problem of deficient aggregate demand.

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The Euro Is Not Unassailable, Even With The ECB’s Bond Buying

Posted on September 5, 2012 by | 10 comments

By Marshall Auerback

There appears to be an emerging consensus that the euro will survive, especially now that Mario Draghi has apparently grasped the nettle and persuaded his colleagues that the ECB is prepared to initiate unlimited purchases of national government bonds in order to underwrite their solvency.  Of course, as usual
with the ECB, there’s a sting in the tail, the sting being additional “conditionality” (for which one can read more fiscal austerity) as a quid pro quo.  It’s like dealing with Hannibal Lecter.

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Not only in Germany: The ECB now wants export-driven growth for whole Europe!

Posted on December 14, 2011 by | Comments Off on Not only in Germany: The ECB now wants export-driven growth for whole Europe!

By Andrea Terzi
(Cross-posted from Mecpoc)

One claimed objective of the single currency area in Europe is (or should I say was?) to create a large single market for producers. But now the ECB is pressing national governments to gear their policies to enhance competitiveness so that they can “count on external demand” and increase their net exports! Mario Draghi, President of the ECB, and a key figure in the team now managing the European crisis, made this statement while responding to an Italian journalist, in the Q&A session of the ECB press conference of 8 December 2011.

Earlier, Draghi had described the ECB’s view of the 3-pillar recipe to end the euro crisis as follows:

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