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As this pops up everywhere, could you please cite a source from e.g. a ECB protocol or otherwise how Germany "controls the rates" or "enforces shockingly low bo

As this pops up everywhere, could you please cite a source from e.g. a ECB protocol or otherwise how Germany "controls the rates" or "enforces shockingly low borrowing rates" in violation of the ECB charta? The ECB back then set rates in accordance with inflation, e.g. to keep it low. That's the charta of the ECB. When a high inflation country joins a construct that has a goal of keeping inflation low, then yes you have a problem if you do not change. But I'm not sure Greece e.g. was forced to join a low inflation construct. From the ECB homepage: "The ECB is the central bank for Europe's single currency, the euro. The ECB’s main task is to maintain the euro's purchasing power and thus price stability in the euro area." (Beside the obvious fact that "shockingly low borrowing rates" would lead to high inflation, which could then not lead to "countries used to high inflation rates that collectively shot themselves in the foot.") (PS: I'm biased as I'm German)

muyuu 14y ago
The rates always follow the needs of Germany and sometimes France. The rates are discretionary and set by the president of the ECB. Borrowing in most countries with a "hot" Real Estate market was unstoppable. Only higher rates like they historically had could have controlled it. The dimension of the damage done by this policy is incalculable. There was no compromise. If a middle-ground, 5-6% rate had been set, the cost would have been shared. Now we're like Japan, the UK and to some extent the US: way over-leveraged, and the problem is our asymmetry and the fact that we really don't believe in the Union. When push comes to shove we shift blame. In the US nobody talked about expelling California from the Union when it went kaput and their hole is of a much bigger dimension than that of Greece. Germans will never consider Greeks as equals, it's a fact, so we either enforce it or call it quits.
- lispm 14y ago
  The EU consists of independent countries which have their own governments, their own economic policies, their own banks, ... a real-estate bubble in Greece is fully the responsibility of Greece. A hot 'real-estate' market not stoppable? Where was it tried? How about Mexico? Would the US pay for Mexico to prevent a bancruptcy there?
  - muyuu 14y ago
    If someone in the US decided the interbank interest rate, then they would have shared responsibility. You are very misguided. The EU is one thing and the eurozone is a different thing. The UK does have some economic independence and very importantly, monetary independence. Those countries in the eurozone have surrendered their monetary policy to the ECB, and the ECB responds mostly to the interests of Germany, followed by France, followed by Italy, Spain and then smaller countries. The economic cycle of Germany is substantially out of phase with that of most countries from Southern Europe, who in turn thought the Germans would pay for the party. In any case it wasn't their call. Turns up things have snowballed out of control.
    - Uchikoma 14y ago
      Yes it is out of sync b/c Germany cut costs in the 2000, cut social security, changed job laws, increased the minimum pension age etc while the southern countries increased spending and increased massively labor costs.
      - batista 14y ago
        Even with those "cuts" the German wages are still 2 times over the "southern countries". Except if you mean to say that those in the South are less humans and do not deserve even half the wages and social welfare that Germans do --which Germany has historically said in a few occasions...
        Uchikoma 14y ago
        Again, this is not what happened. e.g. see here http://www.voxeu.org/index.php?q=node/7536 http://www.voxeu.org/index.php?q=node/7536 Unit labor costs in Germany increased 5% (essentially was flat) from 2000 to 2011, Greece costs increased 40%, Spain 30%, Italy 30%. The graph very clearly explains why Germany has substantial economic growth. (Google "unit labor costs europe" for other sources)
        14y ago
- Uchikoma 14y ago
  From the ECB homepage: "The ECB is the central bank for Europe's single currency, the euro. The ECB’s main task is to maintain the euro's purchasing power and thus price stability in the euro area."
  - muyuu 14y ago
    Which has been done at the expense of causing massive persistent damage in some "secondary" countries in the EU. As a said before, there was a middle ground, but it wasn't considered. Higher rates during the last decade would have caused stagnation in Germany but would have avoided the complete demolition of some countries. Note that this demolition process was not only beneficial for Germany, but also for bank tycoons in these countries - their direction is now a bunch of billionaires despite whatever happens to their banks now. In these countries 2 full generations basically have had their lives destroyed from being out of the housing and job market chronically, and those with a job will have most of their disposable income confiscated. These are the really important figures usually not told in the BBC, Euronews or Deutsche Welle. And the worst part of it is the "rescue" - the rescue consists in ensuring the banks in the most affected countries don't need to sell their massive housing stocks in a firesale. It basically consists in pegging housing prices in these impoverished countries so their average house costs twice the price of a house in an average German city, keeping 30+ year olds (the generation coming out of school during the euro-originated frenzy from last decade) homeless or living with their parents. The rescue basically consists in perpetuating this tragedy: a lost generation, birthrates to the ground (impossible to emancipate), people deprived of a sane life plan and forced to be enslaved for decades. Because that's what happens when you "so kindly" inject money to these over-stocked banks. They. Won't. Let. Their. Stocks (housing mostly). Lose. Value. This will only happen when you cannot continue "helping", the sooner the better. But this will ultimately happen, thankfully. That's the rescue plan. Social collapse in several countries from the eurozone so all banks (both rescued banks and very especially lenders - in supposedly "responsible" countries) can be happy and, very importantly, German banks (and French banks, Spanish banks, British banks in the case of Ireland, ...) don't have to take responsibility for over-lending. The rescue is mainly a rescue to the banks of ALL parties disguised as a rescue to these "filthy irresponsible P.I.I.G.S." Fucking let them bankrupt and take the hit, you have done enough damage already. Say buh-bye to all the money lent instead of pretending to be "saving Europe".
batista 14y ago
>"The ECB is the central bank for Europe's single currency, the euro. The ECB’s main task is to maintain the euro's purchasing power and thus price stability in the euro area." Hmm, they forgot to add that they are a front for the interests of Germany foremost and France second.

muyuu 14y ago

The rates always follow the needs of Germany and sometimes France. The rates are discretionary and set by the president of the ECB. Borrowing in most countries with a "hot" Real Estate market was unstoppable. Only higher rates like they historically had could have controlled it. The dimension of the damage done by this policy is incalculable. There was no compromise. If a middle-ground, 5-6% rate had been set, the cost would have been shared. Now we're like Japan, the UK and to some extent the US: way over-leveraged, and the problem is our asymmetry and the fact that we really don't believe in the Union. When push comes to shove we shift blame. In the US nobody talked about expelling California from the Union when it went kaput and their hole is of a much bigger dimension than that of Greece. Germans will never consider Greeks as equals, it's a fact, so we either enforce it or call it quits.

lispm 14y ago
The EU consists of independent countries which have their own governments, their own economic policies, their own banks, ... a real-estate bubble in Greece is fully the responsibility of Greece. A hot 'real-estate' market not stoppable? Where was it tried? How about Mexico? Would the US pay for Mexico to prevent a bancruptcy there?
- muyuu 14y ago
  If someone in the US decided the interbank interest rate, then they would have shared responsibility. You are very misguided. The EU is one thing and the eurozone is a different thing. The UK does have some economic independence and very importantly, monetary independence. Those countries in the eurozone have surrendered their monetary policy to the ECB, and the ECB responds mostly to the interests of Germany, followed by France, followed by Italy, Spain and then smaller countries. The economic cycle of Germany is substantially out of phase with that of most countries from Southern Europe, who in turn thought the Germans would pay for the party. In any case it wasn't their call. Turns up things have snowballed out of control.
  - Uchikoma 14y ago
    Yes it is out of sync b/c Germany cut costs in the 2000, cut social security, changed job laws, increased the minimum pension age etc while the southern countries increased spending and increased massively labor costs.
    - batista 14y ago
      Even with those "cuts" the German wages are still 2 times over the "southern countries". Except if you mean to say that those in the South are less humans and do not deserve even half the wages and social welfare that Germans do --which Germany has historically said in a few occasions...
      - Uchikoma 14y ago
        Again, this is not what happened. e.g. see here http://www.voxeu.org/index.php?q=node/7536 http://www.voxeu.org/index.php?q=node/7536 Unit labor costs in Germany increased 5% (essentially was flat) from 2000 to 2011, Greece costs increased 40%, Spain 30%, Italy 30%. The graph very clearly explains why Germany has substantial economic growth. (Google "unit labor costs europe" for other sources)
        14y ago
Uchikoma 14y ago
From the ECB homepage: "The ECB is the central bank for Europe's single currency, the euro. The ECB’s main task is to maintain the euro's purchasing power and thus price stability in the euro area."
- muyuu 14y ago
  Which has been done at the expense of causing massive persistent damage in some "secondary" countries in the EU. As a said before, there was a middle ground, but it wasn't considered. Higher rates during the last decade would have caused stagnation in Germany but would have avoided the complete demolition of some countries. Note that this demolition process was not only beneficial for Germany, but also for bank tycoons in these countries - their direction is now a bunch of billionaires despite whatever happens to their banks now. In these countries 2 full generations basically have had their lives destroyed from being out of the housing and job market chronically, and those with a job will have most of their disposable income confiscated. These are the really important figures usually not told in the BBC, Euronews or Deutsche Welle. And the worst part of it is the "rescue" - the rescue consists in ensuring the banks in the most affected countries don't need to sell their massive housing stocks in a firesale. It basically consists in pegging housing prices in these impoverished countries so their average house costs twice the price of a house in an average German city, keeping 30+ year olds (the generation coming out of school during the euro-originated frenzy from last decade) homeless or living with their parents. The rescue basically consists in perpetuating this tragedy: a lost generation, birthrates to the ground (impossible to emancipate), people deprived of a sane life plan and forced to be enslaved for decades. Because that's what happens when you "so kindly" inject money to these over-stocked banks. They. Won't. Let. Their. Stocks (housing mostly). Lose. Value. This will only happen when you cannot continue "helping", the sooner the better. But this will ultimately happen, thankfully. That's the rescue plan. Social collapse in several countries from the eurozone so all banks (both rescued banks and very especially lenders - in supposedly "responsible" countries) can be happy and, very importantly, German banks (and French banks, Spanish banks, British banks in the case of Ireland, ...) don't have to take responsibility for over-lending. The rescue is mainly a rescue to the banks of ALL parties disguised as a rescue to these "filthy irresponsible P.I.I.G.S." Fucking let them bankrupt and take the hit, you have done enough damage already. Say buh-bye to all the money lent instead of pretending to be "saving Europe".

batista 14y ago

>"The ECB is the central bank for Europe's single currency, the euro. The ECB’s main task is to maintain the euro's purchasing power and thus price stability in the euro area." Hmm, they forgot to add that they are a front for the interests of Germany foremost and France second.