Tuesday, December 29, 2015

Bill Mitchell — German Ministry of Finance’s anti-Europe proposal

With Germany now the dominant economic and political force in Europe, bullying other nations to support pernicious policies in southern Europe, their latest plan demonstrates clearly that their conception of European integration bears no resemblance to a structure that might allow the common currency to function effectively in the interests of European citizens.

The article essentially summarises a leaked document – “a letter sent at the end of November by the Ministry of Finance to the heads of the Finance and Budget Committee of the German Parliament”.…
MMT takeaway:
Modern Monetary Theory (MMT) tells us that once the fiscal capacity is aligned with the currency-issuing capacity then there is no need for they government to continue to issue debt. Simple accounting transactions between the central bank and the treasury can facilitate government spending without any recourse to issuing debt.
That is a defining feature of a currency-issuing government, which floats its exchange rate. 
Bill Mitchell – billy blog
German Ministry of Finance’s anti-Europe proposal
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

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