Ten years of the Euro crisis: Why not print money?

The Euro crisis is ten years old. A waiver of cash anniversary – it might have been able to finish 2010 with a bold step. the ECB Would have printed ten years

Ten years of the Euro crisis: Why not print money?

The Euro crisis is ten years old. A waiver of cash anniversary – it might have been able to finish 2010 with a bold step.

the ECB Would have printed ten years ago, easy money, would you. of a "Euro crisis" never photo: Boris Roessler/dpa

A sad "anniversary belongs": The Euro crisis is ten years old In the spring of 2010, a rescue was mounted umbrella for Greece, Portugal and Ireland, followed a little later. These ten years of crisis, Europe is forever changed, especially by the errors of management.

among these errors, the basic assumption is that bankrupt countries alone were to blame and would be punished already. Not a word was lost about the fact that the European Central recognized Bank (ECB) to predict that dangerous credit bubbles aufpumpten. The supervision had completely failed. It is true that the Greeks had manipulated their statistics strong, so that the credit mountains stood out. But Portuguese and Irish, not bays, correctly, and also there step the ECB in a timely manner.

The credit bubble in the bankrupt countries has been long recognized, because it cared for growth. The construction industry boomed, unemployment fell, and wages rose, which stimulated, in turn, the consumer. In the edge States of the economy seemed to be happening a miracle, and you rose to Europe-wide models. Ireland was often referred to as the "Celtic Tiger", and Spain, Deutsche Bank wrote that it would overtake up to the year 2020, Germany and a higher economic output per capita. An embarrassing lapse of judgment.

Since all were in deep sleep, it is most unjust that the bankrupt countries have been punished: you radical austerity measures have been imposed on programs, in the hope that they would then pay the debt back, they had piled up in the banks of the rich Euro countries. Especially German and French credit institutions were awarded billion in the European peripherals.

However, the harsh austerity programmes strangled the economy so that the debt increased even more. Chancellor Merkel and French President Sarkozy were forfeited, therefore, soon to a new idea: they proposed a "haircut" for Greece. Owners of Greek government bonds have had to write off in the year 2012 to around 107 billion euros, which corresponded to a loss in value of about 65 percent. The procedure was according to the popular Motto that the punishment must be. Banks and insurance companies, the goods have been so stupid to lend to Greece too much money, should pay for it.

to be Human is to understand that revenge on the banks is a popular need. It is annoying when credit institutions and their incompetent Management need to be rescued by the state. Nevertheless, the debt haircut for Greece was wrong, because he has destroyed confidence in the Euro forever. Since the Greek debt haircut is considered possible that other Euro States and banks declared bankruptcy. Money is based on trust, otherwise it loses its value. Therefore, there is now not a Euro, but 19 Euro: A Greek Euro is worth as much as a German. The currency Union is blown up from the inside, yet while it exists.

Today, there are 19 Euros. The currency Union is blown up from the inside, while you does not exist

This strange phenomenon take place in Secret, but almost every European that thinks about its assets. Whether Greeks, Spaniards or Italians – they all believe that money is in the Federal Republic of especially safe. So, you can transfer your financial wealth, at least in part, to Germany. From a Greek, Italian or Spanish Euro is, therefore, a German Euro. Conversely, German investors and banks to withdraw their money from abroad, because Germany is also the safest. This joint flight of capital has reached gigantic proportions: at times, been parked in Germany, around 750 billion euros.

This wandering of the financial assets has unfortunately consequences: companies are now valued, as how risky your home country. An Italian company has to pay for a loan more than the interest on a German operation, even if both companies are equally successful. The conditions of competition in the Euro area are distorted in favour of Germany. The monetary Union may not, however, survive if it offers all countries the same opportunities.

But what would have been the Alternative? It is undisputed that Greece had to be cancelled. How to do it right, led to Ireland, which was also bankrupt after it to rescue had its ailing banks. But Ireland has moved a portion of its debt simply by the state to the Irish Central Bank, with the consent of the ECB. Most Europeans have heard of this action, never, because you went so silent vonstatten.

It is a very elegant solution to fight the debt crisis by the Central Bank to fill. However, the German government and the Bundesbank blocked this path is almost always because they feared that the unrestrained money "" would be printed. Only in the case of Ireland, they agreed finally, because of the urgent need of a success story was needed, so as not to have noticed how wrong the brutal austerity policy in Greece and Portugal.

It is unique in the world, that a Central Bank may not be active, if your own currency gets into trouble. The US Central Bank, the Fed, the Bank of England and the Japanese Central Bank to buy government bonds as soon as a crisis threatens.

imagine that the ECB would have printed ten years ago, just 200 billion Euro "" in order to reduce the debt of Greece, Portugal and Ireland is at an acceptable level. Of a "Euro crisis" would have you never heard of. You would immediately have come to an end.

Date Of Update: 23 February 2020, 10:00