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Bundesbank remits record profits to German government while Greek health system fails

I am back into my usual patterns, which means that I plan to write less on a Wednesday for my blog than other days. I have a number of projects underway at present – academic and advocacy – and I need to devote writing time to those. Given that yesterday I wrote about the Australian National Accounts data release and today I have to travel a lot, it is another case of Thursday becomes Wednesday and I offer some snippets. I will write a detailed account of my view on how to deal with the coronavirus from an Modern Monetary Theory (MMT) perspective next week. But today I want to highlight something that just ‘goes through to the keeper’ (cricket reference meaning no-one pays attention to it) but is significant in understanding what is wrong with the Eurozone. I refer to information that is contained in the latest – Annual Report 2019 – released last week by the Deutsche Bundesbank. If you juxtapose that with another report on the Greek health system you get a fairly clear view on what is wrong with the whole EU set up.

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The EU outdoes itself in the madness stakes

One of the themes I exercised when speaking in Europe recently, particularly when presenting at the French Senate Commission and the Ministry of Finance, was that by pushing European integration into an unworkable currency union and refusing to budge, the European political class was undermining the valid aspects of the ‘European Project’, which the likes of Jean Monnet and Robert Schuman saw as a way of bringing peace to the Continent after several attempts by Germany to usurp the rights of citizens in other European nations through military endeavours. Research released by the The PopuList Project, which is a UK Guardian motivated attempt to bring together academics and journalist to study shifts in European voting sentiment since 1989, is rather alarming for those who hang on to hope that the European Union is capable of progressive reform. And the latest shenanigans in the European Commission and the Council over the ‘Budget’ is indicative of why the PopuList Project is generating such results. If there was foresight among the leaders in Europe they would take a step back and restore national currencies and restore the quality of European democracy, which has been significantly compromised since the 1990s.

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Presentation at the Italian Senate building, Rome, February 7, 2018

Thursday is my last teaching day in Helsinki. The Tour moves onto Dublin tomorrow where I hope to learn a lot about the implications of the recent Irish election where Sinn Féin came out of nowhere, as they say, to gain the most votes by some margin and 37 seats, only one less than right-wing conservative party Fianna Fáil and two more than the other right-wing conservative party, the ruling Fine Gael. I have various meetings coming up in Helsinki on Thursday as I finish up this year’s Helsinki visit (although I will be back in June for other commitments). So today I am publishing the video of my presentation at the Italian Senate last Friday (February 7, 2020).

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Eurozone 2020. Don’t mention the War!

I guess I cannot avoid commenting on the European Commission’s recently released (February 5, 2020) – Economic governance review – which, allegedly, “seeks to assess how effective the economic surveillance framework has been in achieving three key objectives: ensuring sustainable government finances and economic growth, as well as avoiding macroeconomic imbalances; … promoting convergence in Member States’ economic performance.” The short answer is that the framework has failed on all fronts. The Member State fiscal situations are always mostly teetering on the edge of insolvency and only the ECB has been bailing them out; macroeconomic imbalances that really matter, such as the on-going illegal German external surpluses persist, and divergence is the Eurozone norm. Why? Another simple answer: because the architecture of the currency union is deeply flawed and biases the economies to crisis and makes them vulnerable, in an existential sense, to fluctuations in global activity. Why would they have done that? Answer: the triumph of neoliberal ideology over reason.

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Work not UBI – the hopeful not the surrender

I have long disagreed with Guy Standing about the solutions to unemployment. 20 years ago we crossed paths on panels and in the literature where he would argue that UBI was the way forward and I would argue that it was a neoliberal plot and that, instead, we needed to push for job creation. My view has always been that to surrender to the neoliberals on their claim that governments cannot generate sufficient jobs to satisfy the desires for work of the unemployed was a slippery slope. Standing continues to publish his fiction. In his latest Social Europe article (January 15, 2020) – Building a progressive alliance in Britain – he seeks to integrate UBI proposals with a recovery plan for British Labour. My view is that would not help Labour recover from the shots they fired into their own feet in the period before the December election by listening to the likes of Standing and those who advocated the Fiscal Credibility Rule and the reneging on the Brexit commitment. Standing’s aversion to job creation is in contradistinction with a recommendation from the Wetenschappelijke Raad Voor Het Regeringsbeleid (WRR or in English, The Netherlands Scientific Council for Government Policy) to the Dutch government to deal with the challenges of achieving “good work”, in part, by introducing a ‘basic job’ which in my parlance means by introducing a Job Guarantee. They are motivated by a deep vein of social science and medical research that extols the virtues of work beyond its obvious income generation qualities. Pushing a UBI in the light of that research is just a pitiful bailout.

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The German government celebrates its record surplus while infrastructure collapses

Wednesday blog post – so only a few snippets including some discussion about Germany’s latest extreme outcome – a record fiscal surplus, which the Ministry of Finance is claiming is responsible. Judged by the fact that the economy has ground to a halt and there is a massive infrastructure deficit in the country as a result of a systematic starving of capital expenditure by the government, one has to ask: are they joking! The surplus was, in part, the result of the German government not spending allocated public investment funds because there are insufficient skilled public servants on tap to manage the projects. So the government has hacked into skilled employment first, then it finds that there are not enough qualified officials left to oversee essential projects. So capital formation contracts and the allocated funds go unspent. So, the Government records a surplus and cheers while bridges, roads, hospitals, IT infrastructure, transport infrastructure decays further. Modern day Germany – ridiculous.

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Introduction – The Last Colonial Currency: A History of the CFA Franc – Part 3

I have been commissioned to write the Introduction (Preface) to the upcoming book – The Last Colonial Currency: A History of the CFA Franc – by Fanny Pigeaud and Ndongo Samba Sylla, which is an English version of the original 2018 book, L’arme invisible de la Françafrique. It will soon be published by Pluto Press (UK) – as soon as I finish this introduction. The book is incredibly important because it shows the role that currency arrangements play in perpetuating colonial oppression and supporting the extractive mechanisms that the wealthy have used for centuries to further their ambitions. It also resonates with more recent neoliberal trends where these extractive mechanisms, formerly between the colonialist (metropolis) and the occupied peripheral or satellite nation, have morphed into intra-national urban-regional divides. I am very appreciative for the chance to write this introduction for these great authors. This is Part 3 and the final part, which I will edit down to my preface for the book.

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Introduction – The Last Colonial Currency: A History of the CFA Franc – Part 2

I have been commissioned to write the Introduction (Preface) to the upcoming book – The Last Colonial Currency: A History of the CFA Franc – by Fanny Pigeaud and Ndongo Samba Sylla, which is an English version of the original 2018 book, L’arme invisible de la Françafrique. It will soon be published by Pluto Press (UK) – as soon as I finish this introduction. The book is incredibly important because it shows the role that currency arrangements play in perpetuating colonial oppression and supporting the extractive mechanisms that the wealthy have used for centuries to further their ambitions. It also resonates with more recent neoliberal trends where these extractive mechanisms, formerly between the colonialist (metropolis) and the occupied peripheral or satellite nation, have morphed into intra-national urban-regional divides. I am very appreciative for the chance to write this introduction for these great authors. This is Part 2 of a three part series, which I will edit down to my preface for the book.

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Introduction – The Last Colonial Currency: A History of the CFA Franc – Part 1

I have been commissioned to write the Introduction (Preface) to the upcoming book – The Last Colonial Currency: A History of the CFA Franc – by Fanny Pigeaud and Ndongo Samba Sylla, which is an English version of the original 2018 book, L’arme invisible de la Françafrique. It will soon be published by Pluto Press (UK) – as soon as I finish this introduction. The book is incredibly important because it shows the role that currency arrangements play in perpetuating colonial oppression and supporting the extractive mechanisms that the wealthy have used for centuries to further their ambitions. It also resonates with more recent neoliberal trends where these extractive mechanisms, formerly between the colonialist (metropolis) and the occupied peripheral or satellite nation, have morphed into intra-national urban-regional divides. I am very appreciative for the chance to write this introduction for these great authors. This is Part 1. Part 2 follows tomorrow. And then you can all rush out and purchase the book.

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European Union – business as usual as the madness continues

At the weekend, the German Social Democratic Party elected a new leadership from the Left of the Party, in the hope of resurrecting their disastrous political standings (Source), In rejecting the other main contender, current Finance Minister Olaf Scholz, the decision has apparently threatened the GroKo (Große Koalition), the coalition between Merkel’s CDU/CSU union and the SPD, which, arguably, has been the reason for the declining fortunes of the SPD. They have, in effect, abandoned their charter and become part of the neoliberal, austerity machine. The new leadership rejects the basis for the GroKo. At present, the SPD is only marginally ahead of the far-right AfD with the Union and Greens ahead of them. The same political dislocations are happening throughout Europe although the antagonism to the neoliberal austerity orthodoxy is more manifesting in chaos than a defined direction away from the major political parties (Britain is currently a good example of that). Meanwhile, the orthodoxy continues in the European Commission and in its – Autumn 2019 Economic Forecast: A challenging road ahead – they are requiring the majority of Member States to inflict more austerity on their nations even though a recession is looming. That is, business as usual as the madness continues.

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