Anybody else think Germany's taking the pi**?!

alan85

As I see it:

• Germany needs to remain competitive.
• It maintains competitiveness by being tied with 'rag' nations.
• Not only does it deflect inflation that way but it also deflects it by having effective control over the ECB although the ECB is meant to be an authority in itself.

So, all in all, we lose, Germany gains. It's economy is tinkering along o.k. Any savers in Germany gain because of combined low inflation and deflation in prices. We can't do anything to stimulate the economy and counter the deflationary aspects here because we can't print money off.


Here we lose all round.

• Jobs - enforced austerity.
• Savings - the government are going to take a third of any interest we get as D.I.R.T. is going up now.
• Services - hospitals are being shut because of Croke Park which is so that civil unrest doesn't develop.
• Fear - Of losing what we haven't got regards the Euro currency. And also, fear instilled immorally by our governement every December. This is going to go on for another few years at least.

As I see it Germany has it both ways. It has control over the ECB and the peripheral countries to keep it competitive. That is unfair.


If any treaty comes our way I will be voting against it unless there is something to do with Germany/France's control over the ECB in there. I'm starting to wish the currency would just fail so we can get on with things and release any fear we have.


Yes, the deficit needs to be sorted. You could argue the speed at which that needs to be done and also how cuts and taxes are distributed. It's gas how they are worried about taxing wealth even just a little in case people leave Ireland. So, what do they do? They tax those with less so that they WILL leave Ireland... It's only a matter of time 'til we see mass demos here!

View

alan85 wrote: »

As I see it Germany has it both ways. It has control over the ECB and the peripheral countries to keep it competitive. That is unfair.

How exactly does Germany control the ECB given that it has a grand total of:
a) 1 seat out of 7 on the ECB's Executive Council, and,
b) 1 seat out of 29 on the ECB's General Council?

Is this like how Joe Higgins TD controls the Dail all on his own?

meglome

View wrote: »

How exactly does Germany control the ECB given that it has a grand total of:
a) 1 seat out of 7 on the ECB's Executive Council, and,
b) 1 seat out of 29 on the ECB's General Council?

Is this like how Joe Higgins TD controls the Dail all on his own?

Don't be letting yer facts get into this... who do you think you are.

Cuddlesworth

meglome wrote: »

Don't be letting yer facts get into this... who do you think you are.

Some kind of superstar, I imagine.

alan85

View wrote: »

How exactly does Germany control the ECB given that it has a grand total of:
a) 1 seat out of 7 on the ECB's Executive Council, and,
b) 1 seat out of 29 on the ECB's General Council?

Is this like how Joe Higgins TD controls the Dail all on his own?

Care to rationalise the ECB's fear of inflation then? 1/7 is still sizeable and that doesn't take into account status and influence over the other 6. Let's get real...

I'm not a lefty irrational but I do think Ireland is on a slippery slope. Even if the economy picks up there'll be little difference to us really. Any extra incomes go to debt payments. Who are we kidding?

View

alan85 wrote: »

Care to rationalise the ECB's fear of inflation then?

To quote Protocol 4 of the EU Treaties:

Article 2

Objectives

In accordance with Article 127(1) and Article 282(2) of the Treaty on the Functioning of the European Union, the primary objective of the ESCB shall be to maintain price stability.....

In other words, to keep inflation low. The member states specified that that is what the ESCB (which is the ECB + the Central banks of the member states) should do.

alan85 wrote: »

1/7 is still sizeable and that doesn't take into account status and influence over the other 6. Let's get real...

1/7 is 1/7 - a minority which certainly is not "control" like you claimed earlier.

The reason the "other 6" support keeping inflation low is because that is what they are legally tasked with doing. Were you sitting on the ESCB, you too would have the same legal obligation on how you acted.

Dr Galen

Cuddlesworth wrote: »

Some kind of superstar, I imagine.

I should ban you for answering that post with a Spice Girls lyric........

I should also ban myself for knowing that you did this....

:pac:

alan85

View wrote: »

To quote Protocol 4 of the EU Treaties:



In other words, to keep inflation low. The member states specified that that is what the ESCB (which is the ECB + the Central banks of the member states) should do.



1/7 is 1/7 - a minority which certainly is not "control" like you claimed earlier.

The reason the "other 6" support keeping inflation low is because that is what they are legally tasked with doing. Were you sitting on the ESCB, you too would have the same legal obligation on how you acted.

Just because 'price stabilisation' is their responsibility does not mean that by using quantative easing, which in some cases yes but not all, you will produce inflation. It's argued that certain forms of it will not produce inflation. It's the irrational fear of inflation that is the crux of the matter and that goes back to the Germans and I think is hurting us here. Or maybe it's not so irrational? Maybe the Germans think: If we devalue we want to be sure the money goes where absolutely needed i.e. centralise power... So, effectively, cede power to get in return what we need... Stinks if you ask me.

Historians will see this as a depression, I have no doubt. Politicans will say recession...

Does anybody know of any sources comparing the situation now with that of WW1? I heard somebody on the radio claiming the aims of Germany then are somewhat similar to what they are achieving now.

carveone

alan85 wrote: »

It's argued that certain forms of it will not produce inflation.

Particularly the form of inflation the US uses, which excluded silly things like fuel and food

Does anybody know of any sources comparing the situation now with that of WW1? I heard somebody on the radio claiming the aims of Germany then are somewhat similar to what they are achieving now.

Er. What? I hear a lot of things about Germany from people who've never been there. Also about Ireland from people who've never been here.

WWI? Don't we need an Austro Hungarian empire for that? Or that it'll all be over before Christmas?

I'm not sure about WWI history and if Germany had any specific aims. Other than expansionism but sure they were all at that. Anyway, when it comes to taking over the world, you can't beat Britain - it was number one at that for 200 years.

(Great, now I have to learn history as well as economics. Help!)

Edit: Maybe people are talking about the Septemberprogramm which, according to wikipedia, detailed various goals. Wikipedia also says that it was more of a discussion document and not a formally-adopted government policy. I think people who go back that far are risking a light been shone on their own countries!

View

alan85 wrote: »

Just because 'price stabilisation' is their responsibility does not mean that by using quantative easing, which in some cases yes but not all, you will produce inflation. It's argued that certain forms of it will not produce inflation. It's the irrational fear of inflation that is the crux of the matter and that goes back to the Germans and I think is hurting us here.

As I said it isn't to do with an "irrational fear" rather it has to do with all the member states agreeing they wanted price stability/low inflation.

alan85 wrote: »

Or maybe it's not so irrational? Maybe the Germans think: If we devalue we want to be sure the money goes where absolutely needed i.e. centralise power... So, effectively, cede power to get in return what we need... Stinks if you ask me.

Again, Germany has 1 vote out of 7 and 1 vote out of 29. As such it is clear that the majority on the ECB agree with a "low inflation" policy however much you may disagree with it.

alan85

View wrote: »

As I said it isn't to do with an "irrational fear" rather it has to do with all the member states agreeing they wanted price stability/low inflation.



Again, Germany has 1 vote out of 7 and 1 vote out of 29. As such it is clear that the majority on the ECB agree with a "low inflation" policy however much you may disagree with it.

Britain have a low inflation stance too and I'm sure the U.S. don't want high inflation either. Both of whom have used quantative easing. Maybe you could argue the ECB is doing it in a roundabout way but I think they should be more forthright myself...

View

alan85 wrote: »

Britain have a low inflation stance too

UK CPI is 5%, RPI is 5.4% - their low inflation target is being ignored essentially.

alan85 wrote: »

and I'm sure the U.S. don't want high inflation either.

Most of the time, the US tends to run a higher inflation rate than Europe as the tend to aim for growth first and low inflation second. A perfectly valid political choice, of course, but not one that the EU member states opted for.

alan85 wrote: »

Both of whom have used quantative easing.

Agreed but neither of them is particularly healthy looking.

According to Mr Osborne, even if the Eurozone fixes its issues in the short term, the UK is facing a decade of austerity. As the UK has the third biggest current account deficit in the EU, he may well be right.

alan85 wrote: »

Maybe you could argue the ECB is doing it in a roundabout way but I think they should be more forthright myself...

The ECB would probably disagree they are doing it as inflation still remains low.

goose2005

Dr Galen wrote: »

I should ban you for answering that post with a Spice Girls lyric........

I should also ban myself for knowing that you did this....

:pac:

Don't go wasting my precious time - get your act together.