The Economist has it on their cool "Daily Chart" blog. The full article is sub-titled "Is Germany bailing out euro-area countries to save its own banks?" The answer, of course, is "yes". This is why Germany is insisting on austerity throughout the union. This is why the ECB is intervening in bond markets. This is why the EFSF is providing loans until 2013, but not after. This is why Ireland, Greece, and Portugal are so unhappy. The entire EU response to the debt crisis is to construct policies that protect German -- and to a lesser extent French -- banks.
We've written about this before. When folks like Krugman are bewildered that the ECB's monetary policies are "one size fits one", they're absolutely right. But that's because this policy is about distribution, and about appeasing powerful domestic interests. Those are the banks.
- ► 2013 (95)
- ► 2012 (129)
- Politics, Not Economics, Will Decide Europe's Path...
- Karl Smith on Fire
- Good News
- There Will Be Austerity
- The Politics of Hard Keynesianism in the E.U., Par...
- UNC Everywhere
- Nye on Power
- The Politics of Hard Keynesianism in the E.U.
- What Libya Tells Us About American Hegemony
- A Presidential Reading List
- The Indirect Effects of the Dollar As Reserve Curr...
- Elasticity of Morals, con.
- Policy Research and Stats
- Fighting Grade Inflation at UNC
- The Lesson of Iceland
- Some Politics of U.S. "Hooliganism"
- Explaining the Financial Crisis, Assuming No Prior...
- Germany's EU Policy Is Not Charity
- Summers, Salmon, DeLong, and the Underpants Gnomes...
- The EU Crisis In One Picture
- The Coming Chinese Collapse
- Congratulations, Henry Farrell
- Gaming Immigration
- Chait FTW
- Interests and Cognitive Dissonance
- The World Is Still Not Flat
- More on Hegemony, Stability, and Changes to the Sy...
- Hegemony and the Middle East
- Politics as Reality TV
- Mysteries of the Universe
- New Research
- Budget Politics
- Private Information
- Bernanke: The World's Central Banker
- Theories of International Politics and Cylons
- ▼ April (36)
- ► 2010 (478)
- ► 2009 (521)
- ► 2008 (134)
- ► 2007 (142)
Friday, April 15, 2011
Posted by Kindred Winecoff at 4:11 PM . Friday, April 15, 2011