I’ll tell you about Laschet and Weidmann’s Teutonic fixations
What the leader of the CDU, Armin Laschet, and the member of the executive committee of the ECB, Jens Weidmann say and make clear.
Armin Laschet and Jens Weidmann. Write down these two names. No, they are not part of the Mannschaft (as the Germans call their football team) that the Europeans are playing, but they promise to give adequate satisfaction to their country. And also ours.
Between yesterday and today, the former participated in a webinar on Bloomberg and the latter gave a long interview to the Handelsblatt newspaper.
Laschet is the leader of the CDU, a candidate in pectore to succeed Angela Merkel . Weidmann is a member of the executive committee of the ECB and both have not resorted to turning words to let us know what the German public opinion wants to hear: the States must return to budgetary policy tending towards balance, and the ECB must to begin to prudently dose the purchases of public securities in view of the end of the emergency phase and the consequent end of the PEPP program, an extraordinary instrument launched in March 2020 to face financial instability due to the crisis triggered by Covid.
The tasks were divided: the first dealt with fiscal policy, the second with monetary policy. The essential levers of a country's economic policy.
Laschet, imperturbably, affirmed that, as soon as the crisis is over, it will be necessary to return to applying the Maastricht criteria and, on the domestic front, to return to achieving the famous “schwarze null”, a balanced budget. The common debt issued to the NGEU will remain a temporary experience that will not follow. With all due respect to Enrico Letta, Romano Prodi and other various and assorted Eurosognatori.
No mention of the possibility of revising those rules, which almost everyone now defines as an error that, incidentally, caused almost three years of recession in our country between 2012 and 2014. No mention of the recent intervention by the Fiscal Board which strongly recommended reforming those rules urgently, before reintroducing anything.
In stark contrast also to what Mario Draghi declared in Barcelona , in favor of supporting demand with expansionary budget policies. Postponing the aims of containing the deficit to the medium term.
Weidmann also did not spare himself. While reiterating the need to avoid a premature withdrawal of stimuli, he clearly stated the temporary nature of the PEPP purchase tool. It's as temporary as the Covid crisis. Over that, over that. Indeed, as there are signs of recovery, even purchases will suffer an adequate dosage.
These are all paradoxically positive statements for our country. While taking into consideration the electoral climate, the two German exponents thus perfectly expose the structural contradictions of the EU and the eurozone. To stand up, both institutions require economic policy choices prohibited by the Treaties and unpopular with German public opinion.
So all that remains is to cheer for Armin and Jens and hope that they pursue the stated objectives to the end. It will be the way to make the EU and EMU implode under the weight of their incurable contradictions.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/vi-racconto-le-fissazioni-teutoniche-di-laschet-e-weidmann/ on Fri, 18 Jun 2021 17:58:55 +0000.