Tuesday, June 26, 2018

Bill Mitchell — The Meseberg Declaration – don’t hold your breath waiting

France and Germany signed an agreement last week (June 19, 2018) – the so-called Meseberg Declaration – which saw Europhiles shouting out that Germany has finally bowed to pressure from Emmanuel Macron and agreed to reforms of the Eurozone. Commentators applauded the ‘momentum’ that the ‘Declaration’ introduced to the European integration debate, although they admitted the shifts were slower than a snail might achieve on a bad day. Soon after the ‘Declaration’ was released the revolt of the so-called Hanseatic League of nations broadened as three more Member States joined the rebellion. The 12 rebel states (see below) have told France and Germany in no uncertain terms that many of the key propositions in the Meseberg document – particularly to create a Eurozone budget capacity – will not be acceptable. The ridiculous part of this is that the Germans have only signalled European-level budget changes that would actually cut the current fiscal capacity. So not only are the Europhiles wrong on the importance and substance of the ‘Meseberg Declaration’, but the 12 rebel states have signalled that many elements of the minimal agreement that the French and German came to last week are unacceptable. This is the EU reform process we are talking about. Don’t hold your breath waiting for anything to happen.
Meanwhile the approval ratings of both Macron and Merkel are tanking.

Bill Mitchell – billy blog
The Meseberg Declaration – don’t hold your breath waiting
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia


Konrad said...

All these agreements and reforms are just an endless arranging and rearranging of deck chairs on the sinking Titanic. Everyone knows this, but some people make a living (for the present) by denying it.

The Titanic is sinking because, as Bill Mitchell says, there is a eurozone-wide monetary policy, but no fiscal capacity.

The only way a common currency area can work is if nations that have trade deficits are given (not lent) money.

The U.S. government creates about $4 trillion per fiscal year out of thin air (that we know about). That money is put into circulation in the U.S. economy. If the U.S. government created no money at all, then the weaker U.S. states would be quickly destroyed by debt, like Greece.

Noah Way said...

Outsourcing management of a sovereign economy to a bunch of private bankers is a recipe for disaster.

Just ask Greece, Italy, Spain, Portugal, Ireland, and 250m US citizens.

Andrew Anderson said...

Outsourcing management of a sovereign economy to a bunch of private bankers is a recipe for disaster. Noah Way

The provision of checking accounts has ALWAYS been outsourced to private banks which is a fatal dereliction of duty by a monetary sovereign - which should certainly provide them to all citizens since it is an inherent right of citizens to safely use their Nation's fiat.

Andrew Anderson said...

Especially since it is the duty of government to protect against both foreign AND domestic enemies and government-privileged banks have certainly proven to be domestic enemies.