The chickens are coming home to roost for Europe’s so-called powerhouse

When I was in Portugal a few years ago (Porto mainly), I noticed taxi drivers at the rank queue who would get out of their cars when the front of the queue changed and push them to the next spot in the queue. It was like something one would see in a very poor nation without fuel. But then austerity had created poverty in Portugal and the taxi drivers were just trying to eke out a living as best they could and make as many savings as they could along the way to spread the meagre receipts they earned as far as possible. But then that was just Portugal, right! They have been living beyond their means for years and needed the reality check that austerity brought, right! They should follow Germany’s lead and tighten their belts and enjoy low unemployment and the strongest economy in the Eurozone, right! But, of course, the reality is different. Germany has become so obsessed with recording fiscal surpluses that its trucks can no longer transit important bridges and so the export model is being undermined. It is so obsessed with screwing its own people and overseeing an increasing bias to precarious work with low pay that the future retirements of their workforce is in jeopardy. The chickens are coming home to roost in a big way for Europe’s so-called powerhouse. No other nation should follow its lead.

Remember the Juncker plan aka the ‘EU Infrastructure Investment Plan”, which the current European Commission President devised between drinks as his grand scheme to revitalise Europe after years of failed policies interventions.

The plan outlaid a measly €315 billion over the period 2015-2017. Yes, it ends this year.

The estimates of the sort of capital injection that was actually needed at the time to address the failing infrastructure in Europe and to kickstart growth was multiples of the sum that the European Commission provided for.

Massive capital injections are needed in the Eurozone after two decades of starved public investment.

The Deutsche Welle report (March 7, 2015) told us that “all truckers heading eastward towards Duisburg” should “bring a pillow” because the main bridge on the A40 autobahn that “crosses the Rhine River between Oberhausen and Duisburg” was deemed unfit for heavy vehicles given its deteriorating state of repair and increasing traffic usage.

It is “one of western Germany’s most heavily used bridges in what is one of the most important inland waterway transportation hubs in all of Europe”.

At the time the report was published, engineers working for the state of North Rhine-Westphalia estimated that of the 880 bridges in operation, “229 bridges have been assessed: 150 will have to be rebuilt, and 64 will have to be repaired.”

Just before this bridge was closed, another bridge between Wiesbaden and Mainz – the A643 Schiersteiner Bridge – was closed because the roadway had sunk several centimeteres overnight (in fact, 30 cms) after one of its main structural pillars collapsed (Source).

It reopened after extensive repairs.

As an exporting nation, the bridge infrastructure is crucial for its on-going prosperity.

When government embark on austerity they typically find it hard to attack what is referred to as recurrent spending because the impacts are immediate and tied to people – pensions, educational overheads, health expenses etc.

It is much easier to hack into capital expenditure because the negative effects are more remote from our daily experience and take time to reveal themselves anyway – usually beyond the current political cycle.

But when they do start to impact, chaos enters the scene.

As in Germany, where the public infrastructure has been so starved of funds that it is now starting

Last year (September 14, 2016), I read a report on CNBC that the A1 bridge between Cologne and Leverkusen in Germany was no longer capable of supporting the traffic, particularly heavy vehicles.

Trucks have been banned from using the bridge since 2012, which is one of the most important arterial road links in Europe. Truck drivers now have to take a 30 kms detour to access other (similarly endangered) bridges across the Rhine river.

One “study estimated that closing of the Leverkusen Bridge would cost €108 million per quarter in additional fuel and time.” (Source)

The report said that:

Crumbling bridges and traffic jams are staining Germany’s global reputation for efficiency. The infrastructure in Europe’s largest economy — as in the United States — has been slowly deteriorating from a lack of investment over the past few decades …

In 2006, Germany ranked third in the World Economic Forum’s Global Competitiveness Report for the overall quality of its transport infrastructure. This year, it has slipped to 11th place, while the United States ranked 13th.

Further:

The German Institute of Urban Affairs estimated that 15 percent of Germany’s municipal road bridges need to be completely rebuilt. German railway company Deutsche Bahn said new measures to increase train punctuality will take several years. Last year, 1 in 4 long-distance trains on the network did not run on time, in part because of construction efforts.

A recent report in the Handelsbltatt Global (May 25, 2017) – A Rusty Bridge Too Far – reported that:

Leverkusen Bridge in Cologne, for example, is host to an almost perpetual traffic jam, its steel so rusty that trucks are no longer allowed to use it. The chaos on this bridge across the River Rhine is so bad that it was a factor in the defeat of the North Rhine-Westphalia government of Social Democrats and Greens in recent state elections …

Leverkusen Bridge is beyond repair and experts refuse to predict how long before it collapses. The cost of replacing it is pegged at around €600 million – only a fraction of the tens of billions needed across the country.

The austerity-obsessed German government is claiming the solution lies in private-public partnerships with the private sector stumping up the funding.

We have been down this road before in many Anglo nations and have learned the hard way – PPPs are generally disastrous.

Please read my blogs – Public infrastructure 101 – Part 1 and Privatisation failure – the micro analogue of fiscal surplus obsessions – for more discussion on this point.

The Financial Times article (August 4, 2017) – Cracks appear in Germany’s cash-starved infrastructure – carried the sub-heading “Bridges and roads crumble as local authorities use funds to reduce deficits”.

Which really says it all.

It also reports on the disastrous Leverkusen Bridge closure and says:

To outsiders, Germany can seem like a well-oiled machine. But its reputation as a paragon of efficiency obscures the fact that many roads, bridges and public buildings are in shocking disrepair. Starved of investment for years, a lot of infrastructure is slowly crumbling.

On Thursday, authorities were forced to close another bridge over the Rhine after a crack was found in a cable fixture. Normally some 100,000 vehicles a day cross the bridge at Neuenkamp, which is about 80km north of Leverkusen and one of the most important transport links between the Ruhr industrial belt and the Netherlands.

There is nothing new in the world of austerity or so the saying goes.

While some would say that the lessons never get learned by the ideologues that push austerity, that characterisation somewhat misses the mark because it is reasonable to expect they know what is going to be the consequences and that these results work in their narrow favour.

Although it is probably also true that these characters sail by the seat of their pants more often and not and then revise history when they get caught out – as Thatcher did when she devastated public infrastructure in Britain during the 1980s.

I wrote about this sort of degradation in the following blogs (among others):

1. Austerity is the enemy of our grandchildren as public infrastructure degrades.

2. British floods demonstrate the myopia of fiscal austerity.

3. The myopia of fiscal austerity.

On February 23, 2017, Germany’s Federal Statistical Office reported that German governments in total had recorded the highest fiscal surplus since reunification. The surplus of around €24 billion continues its run of surpluses (over the last three years).

The surplus was equal to 0.8 per cent of GDP. The federal surplus was €7.7 billion, which the Chancellor called “rather small” (Source).

Angela Merkel told the media at the time that:

At the same time, we don’t want to take on new debt. So the room for manoeuvre is rather limited.

The following graph shows the evolution of the German government fiscal balance since 1995, about when the convergence process began.

You can see the early period of the Eurozone when Germany consistently violated the Stability and Growth Pact rules and forced the European Commission to change the rules to avoid punishing Germany’s recalcitrance in this regard.

The impacts of the GFC are clear and the response since 2011 is also clear – ever bigger surpluses.

Yet investment in transport infrastructure in Germany (roads and bridges) has been falling in real terms since Germany entered the Eurozone.

This DIW (German Institute for Economic Research) Report (October 2013) – Transport Infrastructure: Higher Investments Needed to Preserve Assets – noted that:

From 1991, annual gross fixed capital investment in the road network in real terms remained virtually constant at 11 to 12 billion euros (at 2005 prices). In recent years, however, this figure fell to less than ten billion euros

The next graph shows the evolution of the investment ratio (capital formation as a percent of GDP) for Germany – total and government – from 1970 to 2016.

It doesn’t take too much to connect the movements in the previous graph with the decline in government capital formation in Germany. In 1970, the German government was investing 4.7 per cent of total German GDP on public infrastructure. By 2016, this had dropped to 2.1 per cent of a much larger GDP.

A leading German economist told the FT that:

For too long, Germany was focused on balancing its budget and reducing the deficit rather than on investment, and over time that really adds up.

Further, the funds provided to local authorities (States) by the Federal Government have been diverted “to reduce budgetary deficits and build up surpluses”.

In 2009, the ‘debt brake’ amendment to the German constitution banned “Germany’s state and local governments … from running structural deficits.”

Are you starting to form the words ‘moronic’, ‘mindless’, ‘ideology gone mad’ in your lips yet!

Well, we are not finished yet.

In 2012, the Spiegel Online Report (March 23, 2012) – Berlin’s Poor Collect Bottles to Make Ends Meet – told us that “Many pensioners and unemployed people in Berlin are turning to an unusual means of supplementing their meager incomes: collecting discarded deposit bottles.”

In this land of plenty, the so-called powerhouse of Europe, where trucks can no longer traverse key bridges and the costs of transport are rising significantly, its poorer people were resorting to rubbish bins to supplement their incomes.

This was no green environmental exercise. Rather, it was barebones survival for those who are trawling through the rubbish.

One of the images that never leave you if you work in poorer countries is the sight of people (of all ages) trawling through rubbish piles to make ends meet.

But in modern-day Germany, Spiegel told us that:

Significant numbers of financially destitute people are now resorting to collecting discarded glass and plastic bottles … But whereas the majority of those collecting used to be the homeless, alcoholics and drug addicts, more recently it is Berlin’s pensioners and long-term unemployed who are increasingly turning to the practice in order to make ends meet.

The powerhouse of Europe!

But the desperation of poverty is not just confined to pensioners and the unemployed in Germany these days.

A recent Euronews report (July 26, 2017) – Germany’s “working poor”: employed but still in poverty – gave a graphic account of the problem.

Despite low official unemployment, many who “have a job … are known as the working poor”.

They are so badly paid, despite having qualifications, and are forced to work in temporary or part-time jobs because of a lack of overall quality employment growth that their incomes render them among the impoverished.

The Report says that “Berlin … [is] the ‘capital of the working poor” as a result of the concentration of precarious employment in that city.

We learn that:

… one in five workers are paid less than ten euros an hour, they are the “working poor” … they are people who work 40 to 50 hours a week but who cannot make a living.

One of the consequences of this dive into low-paid, precarious jobs is that the old pension systems are starting to break down. Workers can no longer “put money aside for retirement”.

The pension formulae that used to work when people had full-time, secure jobs with real wages growing in proportion with productivity are now producing ridiculous outcomes for workers forced by austerity and neoliberal deregulation to eke out a living on precarious income streams in an increasingly low-paid work environment.

One worker (Adriana) told EuroNews about a letter she just received about her future pension:

Adriana has been a teaching music for more than two decades. She’s set to retire in 2033. When she received the letter informing her about her future pension, she was shocked.

“Well, no-one will believe me when I say it so I will show you the letter,” she says, taking the document out of her bag and placing it on the table for everyone to see. “Here it is, in black and white. I will receive a monthly pension of 351.82 euros. I have to pay 400 euros for my flat, my pension won’t even cover the rent.”

The powerhouse of Europe!

Conclusion

Once again we come to understand that Germany cannot be a viable model upon which to base a prosperous Europe.

Neoliberalism combined with Germany’s obsession with fiscal surpluses is undermining even its own prosperity and future.

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    21 Responses to The chickens are coming home to roost for Europe’s so-called powerhouse

    1. James Schipper says:

      Dear Bill

      When pensions are based on wages, it isn’t surprising that many people will receive low pensions. The best public pension scheme is a universal old-age pension, financed from general revenues and which everybody receives after reaching a certain age. Just as we try to provide health care to everybody regardless of their employment history, so we should provide a basic old-age pension to everybody person regardless of how much they worked and how much they earned. Old-age pensions shouldn’t be regarded as a reward for working but as compensation for the infirmity of old age. It really isn’t that expensive, especially if we make it taxable, so that the high-income receivers will pay back some of it through taxes.

      Regards. James

    2. Andreas Bimba says:

      Europe’s biggest parasite really deserves to be detached from the eurozone and learn to live from its own resources. Learn to live with your Deutschmark and stop dictating EU policy or the people of Europe at some point will reject living in ‘Germania’ which Britain’s working class recently has done with Brexit!

      Germany’s neoliberal ruling elite is squandering Germany’s ultimate potential and is doing severe damage to the EU with mass unemployment, stagnant wages, further industry closures and decaying infrastructure likely to become worse.

      Germany was once one of the least stratified societies with a well educated and well paid ‘working’ class and a ruling class that did not receive the exorbitant salary packages received in the English speaking world and the middle class then made up the vast bulk of the population, Japan was and still is much the same. Now Germany’s working poor have become numerous and the wealthy elite gorge themselves with an ever increasing share of national wealth just like the equally demented major English speaking countries.

      The tide has turned against the destructive neoliberal era but we still await the torrent to wash the stinking mess away.

    3. Nigel Hargreaves says:

      I’m not sure the eronews quote actually tells the whole story.

      I don’t know about Germany, but in the UK a single pensioner receives around £670 a month depending on length of employment (even though it is supposed to be a fixed rate). For the maximum they would have to have worked and paid NI contributions for 35 years. But if that was all they were getting – ie no contributory pensions and no savings in excess of £22,000 – they would also be entitled to housing benefit of enough to cover most reasonable rents, council tax benefit of 90% and probably Pension Credit, all of which could more than double that amount. The actual amounts are subject to extremely complicated calculations. If they had an even lower State Pension they would be eligible for higher Pension Credit because it is meant to top the pensioner’s income up to an amount the State considers to be a (more than) subsistence income. I would suspect that something similar is true in Germany and the euronews story is headline-grabbing. Any readers in Germany know?

    4. Jorge Amar Benet says:

      The link to the video of euronews that Bill quoted http://www.euronews.com/2017/07/26/germany-s-working-poor

    5. larry says:

      Andreas, The UK isn’t living in Germania. It isn’t in the Eurozone. And it has a lot of opt outs. Brexit is becoming a complete shambles, as the people appointed to carry it out are incompetent. And May seems to be incapable. It is a complete shower.

    6. Andreas Bimba says:

      The EU is effectively Germania with France servile to Germany’s neoliberal elite and these two then dominate the rest.. The ECB and the European Commission are effectively German run institutions. The EU is only nominally democratic with most important macroeconomic decisions decided by unelected bankers and business interests and is likely to get worse. Do you trust Jean Claude Juncker and this kind of leadership? Do you think Germany has a right to dictate Greek unemployment levels and social expenditure? The treatment of Greece is an example of EU ‘democracy’ in action. It is better to leave this mess and work towards returning the EU to being a European free trade zone of independent democratic nations that at some point can include Europe’s biggest nation Russia with NATO still providing a military balance with Russia. Then the foundations will have a chance of being solid and ongoing human progress will be more likely. The current EU will try to make Britain pay a high price for Brexit, all the more reason to leave this German mafia organisation.

    7. Neil Wilson says:

      “Brexit is becoming a complete shambles”

      Not sure where you get that from larry. Looks like it is right on schedule. The EU throwing all the bully boy tactics out there they can sure of their own superiority and the UK contingent seeing if they can talk any sense

      I doubt they will get any sense, unless the national politicians in the EU yank chains hard. We’d have more success trying to negotiate with ISIS.

      This will go on for a while, and at the same time the word will go out behind the scenes to prepare for exit without any ‘deal’. I believe Lord King has started that process.

      The only question is whether the Tories are going to be prepared to abandon their ‘sound finance’ delusion and do what is necessary to get Britain ready for action.

    8. larry says:

      Neil,

      I get it from listening to Davis and Fox report inaccurately (and in my view stupidly) and contradicting one another. I’m ignoring Johnson. I don’t see how you can think it is on schedule. I don’t see it the way you see it at all. They both seem to me to be trapped in different illusions, each with their own sense of superiority, except that some of the European bureaucrats think that the Brits know what they are doing. That might have once been true.

      I don’t think May is capable of negotiating/discussing anything. A recent comment by two people on recent public inquiries, which they related to the Grenfell inquiry, have told how the HO (May) interfered with the inquiry they were on, even going as far as to try to control what they said and looked at. She is a control freak and has authoritarian tendencies. Quite why she appointed the morons she did, I don’t know, unless she wanted to punish them. Davis certainly looks frazzled and appears to have aged some.

    9. larry says:

      Andreas, I am not denying what you are saying about the German elite. I am only saying that the UK was not under its control, as I thought you appeared to suggest. That’s all.

    10. Richard1 says:

      To me, Brexit is a shambles because we are likely to loose so many reasonable and good-paying jobs. For example: Most of the information I have is second-hand, but it seems whole research teams in many Universities are looking to relocate. Others are simply loosing EU funding and closing in this country, no doubt to be re-formed elsewhere on mainland Europe. Leaving Euratom seems to me to be Mrs May et al shooting us in the foot and head. I could add more …..

      Perhaps there is much happening behind the scenes, about which the press etc know nothing. The continuing war within the tory party, however, inspires little confidence.

      I suspect that even if the leave decision were reversed, its too late; the decisions already taken will be implemented.

    11. Andreas Bimba says:

      Point taken Larry, I agree that the UK was relatively more independent within the EU than smaller states like Greece and retaining an independent currency is a vital element. Memory of WW2 may also factor a little in the Eurocrats minds in regard to treating the UK more carefully? The trend was always to greater centralisation within the EU and I firmly believe this federation was already beyond democratic control and heading towards a neoliberal autocracy with Germany’s financial and corporate elite in effective control. Most nations are also well down this autocratic path but there still remains a chance of an enlightened electorate regaining some control over government policy at some point. My comments are intended to present my view of the issues and I’m not trying to lecture anyone or discourage different viewpoints.

    12. Andreas Bimba says:

      Richard it the UK introduced proper macroeconomic policy as per the MMT proponents recommendations then there would be no need for EU grants. Democracy must be made to work in all countries and hoping for good things from higher undemocratic institutions like the EU is going to end in tears in my view. The EU certainly has many good aspects and is quite liberal in many respects such as environmental protection policy especially when compared to Conservative governments. Hopefully the EU will forget it’s current United States of Europe (Germania) direction and become simply a free trade zone with a few Europe wide organisations to foster some level of beneficial cooperation in some key areas like science or education for example. It will however require a few more Brexits to force change.

    13. Andy Blatchford says:

      “Looks like it is right on schedule”

      It is only right on schedule if the plan is to remain, mind you assuming there is any plan at all that is.
      I had it from a senior customs officer when he was asked, just shrugged and said their plan is remain.
      I said a while ago I couldn’t see anything changing, I now more than ever hold that view.

      “The only question is whether the Tories are going to be prepared to abandon their ‘sound finance’ delusion and do what is necessary to get Britain ready for action”
      They are incapable of that, the factions that hold the top of the party will not allow it.

    14. Dave Kelley says:

      So the strong man of Europe with its magnificent road network is really starting to crumble! Seems like the EC with austerity-hit southern countries doesn’t even have a strong Germany. Wonder why this ‘picture’ has never been shown on British media? Thanks to both Bill Mitchell and to Jorge Amar Benet, for the article and the link to the ‘euronews’ website.

    15. Andy Smith says:

      @larry. Although the UK is not in the Eurozone it is subject to and rigorously seems to implement the constraints on Government financial activity contained in the Maastrict and related treaties. As such it is subject to a constitution informed by an ordo/neo-liberal ideology.

      ‘shambles’ or not Brexit will happen. Brexit happened in large measure because many people for once had a real opportunity to express there dissatisfaction with the current social contract in the UK. Had Brexit not happened nothing would have changed in the UK. At least Brexit offers us the chance to change how most of us live in the UK. Rather than moan we should be working towards making the UK a better place for most people.

    16. Andy Smith says:

      Not exactly relevant to the blog but I think interesting. From the European Law Monitor – Latest EU News emailed on 11th August 2017:

      10 years since the start of the crisis: back to recovery thanks to decisive EU action

      Vice-President Valdis Dombrovskis, responsible for the Euro and Social Dialogue, said: “Thanks to the determined policy response to the crisis the EU economy is now firmly recovering and the Economic and Monetary Union is stronger than before. We need to build on this progress, completing the financial union, reforming our economies to foster convergence, inclusiveness and resilience, and maintaining sustainable public finances. In doing so, we should pursue a balanced approach where risk reduction and risk sharing go hand-in-hand and the unity of the single market is preserved.”

      Commissioner Pierre Moscovici, responsible for Economic Affairs, Taxation and Customs, said: “Ten years after the global crisis began, the recovery of the European economy has firmed and broadened. We must use this positive momentum to complete the reform of our Economic and Monetary Union. Not all legacies from the past correct automatically. We have seen greater social and economic divergences develop in and among Member States. It is essential that our work going forward contributes to the real and sustained convergence of our economies.”

    17. Bill Hawil says:

      Andreas Bimba; you are writing a lot of nonsense in your posts; read the following:

      [Bill added source: http://www.spiegel.de/international/europe/poor-germany-it-is-time-for-a-debate-on-euro-crisis-burden-sharing-a-894398.html%5D

      The numbers are potentially explosive. For instance, the average German household has assets of €195,000, almost €100,000 less than the average Spanish household. The average net wealth of households in Cyprus is €671,000, more than three times the German value. Italian and French households are also significantly wealthier than their German counterparts.

      The differences are even more pronounced when it comes to median net wealth, which is the level that the lower half of the population just reaches and the upper half exceeds. On this measure, Germany, at €51,400, is actually in last place in the euro zone. The corresponding value for Cyprus is five times as high. Median net wealth is even higher in crisis-rattled Portugal than in Germany.

      The worst part of Germany, that the rich own almost all the wealth, and the average citizens own nothing.

      Typical of the western world. Australia is not much better; governed by the rich for the rich; almost a tax haven when super is considered.

    18. Andreas Bimba says:

      Bill Hawil, I’m afraid you will need to be a bit more specific about where the nonsense label applies.

      In regard to your revelation that the Germans are in fact the paupers of Europe, did you read the last three paragraphs from the article you referenced?

      “More convincing was the note that the differences in wealth were mainly attributable to property ownership habits in the various countries. Whereas just over 80 percent of households own their own homes in Spain (83 percent) and Slovenia (81.6), and even 90 percent in Slovakia, this is true of only 44 percent of Germans.”

      “The following comparison shows what a significant role property ownership plays in wealth statistics: While the median wealth of a German household that owns its own house or condominium is €216,000, it’s only €10,300 for renters.”

      “It is also clear that homeowners in Spain and Cyprus are not nearly as wealthy as the ECB study suggests. The data for most EU countries are from 2010, while some of the information for Spain is even from 2008. In both countries, the value of many houses and condominiums has declined sharply. Spain alone has seen a decline of 36 percent in the meantime.”

      So it appears the figures you quoted are a reflection of home ownership levels and levels of property speculation in the ‘PIGS’ rather than levels of income or levels of unemployment?

      What is most appalling in the article you referenced is the absurd revelation that the poor unfortunate German taxpayers are bailing out, or at least guaranteeing the loans, for those ‘wealthy’ countries Greece, Ireland, Portugal, Spain and Cyprus. Perhaps this article could have mentioned incomes rather than just assets or the massive reductions in GDP, or the harsh Troika imposed austerity measures, state owned asset sell offs at bargain prices or the massive increases in unemployment especially for younger age groups in Greece, Cyprus and some of the others? The article could also have mentioned that the ECB and IMF provided bailout money nearly went entirely to the German, French and other northern banks to compensate them for the bad loans they made to the rich elites of these countries and that it is the totally innocent taxpayers of the ‘PIGS’ that have now been lumbered with this debt. Further it is not the German taxpayer that is guarantor for these debts but the ECB, and the ECB can issue as many Euros as it wants at no cost to compensate for any defaults. If the German taxpayers are indeed forced at some point to payoff these unpayable debts of the ‘PIGS’ with taxation revenue then they are being ripped off by the ECB, or IMF? This would be a failure of German governance.

      Germany is indeed the parasite of Europe because of its huge trade surplus with the rest of Europe and with the rest of the world which simply could not have occurred to this extent if they retained their Deutschmark. The Deutschmark would have appreciated reducing their competitiveness. Similarly when other European nations imported more and exported less, their currencies would have depreciated if they had their own currencies, thus restoring their relative competitiveness. The ability for national currencies to adjust depending on their trade balance is not possible within the Eurozone and the result is that industries will tend to centralise where they are most competitive. German industry is competitive because of economies of scale, the presence of major locally based corporations, generous government incentives, excellent education and so forth. German industry has achieved ‘critical mass’ and it is now very difficult for other European nations to compete as they were able to in the past.

      That article confirms in my mind that the nations of Europe remain very different from each other and that the Eurozone and the current structure of the EU are doomed and that each European nation is better off regaining its full sovereignty and national currency, but ideally within a Europe wide preferential trade zone.

    19. larry says:

      Andreas, I didn’t take you to be trying to tell anyone what to think. I trust I did not imply that in what I said.

    20. Jake says:

      @Andreas Bimba
      Your point stands but it is true that cypriots,greeks,spaniards have a lot of property wealth compared to a german.
      It is quite unfair that say for example places like malta got huge eu investment in infrastructure whilst most people own villas and huge plots of land.where as a german worker typically with no property wealth pays rent sees no investment.
      Southerners and westerners(of europe) tend to have lots of proptery wealth so it is unreasonable that they got huge investment.uplift the value of their properties so they can live of the income of holiday rentals that the german worker would have saved up for over 18 months.but this is tangental and bill has written about the possible need of some type of value capture mechanism to address these types of inequities.even supporting lvt to some extent.

      It is interesting to see germany fall behind due to ordoliberalism;but we will know the tide has turned if and when merkel and schaubel ever get voted out;which doesnt look likely to happen anytime soon.germany has been grossly arrogant towards greece;I think if they continue on with this austerity path we may begin to see larger problems in the future.

    21. Andreas Bimba says:

      Alles ist gut. :)

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