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"Austerity" now a dirty word in Europe

 
 
Thomas
 
  1  
Reply Sun 13 May, 2012 12:45 pm
@Walter Hinteler,
Walter Hinteler wrote:
If they really wanted to do so, there problems would be greater than now since nearly 80% of their export is to the EU.

By "do so", are you referring to leaving the Euro or to leaving the EU? Their exports would benefit benefit from a devalued Drachma, but not from trade barriers between Greece and the rest of Europe. Indeed, I don't see how even speculators could profit from Greece leaving the EU.
hawkeye10
 
  1  
Reply Sun 13 May, 2012 12:48 pm
@Walter Hinteler,
from BBC
Quote:
Analysts say many voters rejected Mrs Merkel's tough line on fiscal discipline as a cure for state debt.

http://www.bbc.co.uk/news/world-europe-18048942

We now see if Merkel is willing to change course and commit to supporting some pro growth programs at the expense of debt reduction. If not her and her party will almost certainly go down in flames in 18 months time, as most of the EU leader have been as they face elections. This is the price leaders pay for the massive bungling of the EU project.
Walter Hinteler
 
  2  
Reply Sun 13 May, 2012 12:49 pm
@hawkeye10,
hawkeye10 wrote:

Are you sure?
I am sure. I don't only live here, worked today as a 'poll judge' but also did some campaigning.
Roettgen fault really was to focus his campaign on federal politics - that's what his own party here didn't like.

The previous government collapse, because the opposition (which had the majority in parliament) didn't vote for one aspect of the budget - obviously, they hadn't read our constitution, namely that by such they objected to the complete budget.

The SPD/Green government had done a really not too bad job in a) reducing the budget and b) not reducing all and everything for 'Jo on the street'.
The conservatives are and were ... more 'conservatives' here.


The reuters report you quoted is wrong, too, naming Northrhine-Westphalia Germany's most indebted state: there are at least five (out of the 16) with more debts.
Walter Hinteler
 
  1  
Reply Sun 13 May, 2012 12:50 pm
@roger,
roger wrote:
As opposed to Eruopeans who are more concerned with the spiritual rewards?
I've quoted here Finn
Walter Hinteler
 
  1  
Reply Sun 13 May, 2012 12:54 pm
@Thomas,
Yes, I do know ... it's more or less the same result as it has been the last couple of weeks:
CDU/CSU: 34%, SPD: 27%, Greens: 13%, Pirates: 11%, Left: 7%, FDP: 4%
Walter Hinteler
 
  1  
Reply Sun 13 May, 2012 12:56 pm
@Thomas,
I meant leaving the EU.
0 Replies
 
Walter Hinteler
 
  2  
Reply Sun 13 May, 2012 12:58 pm
@hawkeye10,
You kindly left out those lines which showed what were the topics of the winning SPD-campaign: "During the election campaign, state premier and SPD candidate Hannelore Kraft emphasised strengthening indebted local communities, investing in education and boosting the state's business appeal."
0 Replies
 
hawkeye10
 
  0  
Reply Sun 13 May, 2012 01:04 pm
@Walter Hinteler,
Quote:
The reuters report you quoted is wrong, too, naming Northrhine-Westphalia Germany's most indebted state: there are at least five (out of the 16) with more debts.


That would be a major journalistic error, but perhaps still the truth when city debts are included. You folks seem to be very unwilling to pay your public sector bills, as are so many of us moderns.

Quote:
There are a number of reasons for the financial crisis in German municipalities. In the course of the past 15 years the corporate tax reforms introduced by successive federal governments have ensured that one of the main sources of income for cities, business tax, has practically dried up.
Even in cities with major industrial plants, such as Leverkusen—headquarters of the international chemical company Bayer AG—the revenue from business tax has fallen to a record low, resulting in a growing debt burden for the city. Last year Bayer AG ratcheted up a record profit of nearly €2.5 billion ($3.3 billion) after tax. At the same time, Leverkusen is now one of a group municipalities in North Rhine-Westphalia that is implementing a drastic savings program to combat excessive debt levels.
In addition, the Social Democratic Party (SPD)-Green Party government headed by Gerhard Schröder (1998-2005) ensured that municipalities pay more of the bill for the growing numbers of unemployed in Germany who are dependent on welfare (Hartz IV) benefits.
According to statistics from the Federal Employment Agency, many municipalities in NRW spend about half or more of their revenues for social services such as housing and heating. In the city of Gelsenkirchen, this spending totals 73.1 percent, in Duisburg 60.6 percent, Mönchengladbach 53.7 percent, Dortmund 52.2 percent, Hagen 46.5 percent, and 45.9 percent in Essen.
The municipal debt crisis was then exacerbated by the financial crash in 2008, although this is not the underlying cause of the problem. Prior to 2008 municipal authorities had sought to free themselves from the dilemma of rising expenditures due to growing unemployment and falling tax receipts by privatising public utilities and municipal property. In so doing many municipalities sought to raise cash by playing roulette on the financial markets—with the ordinary taxpayer footing the tab for losses.
In the cities of Gelsenkirchen, Bochum, Dortmund, Recklinghausen, Dusseldorf, Lippe and elsewhere dubious cross-border leasing transactions were conducted, whereby schools, roads, sewage treatment plants, sewer systems, water systems, street railways and other essential public infrastructure and facilities were hawked off to US investors. These interests pocketed a short-term profit and then leased these services back to the municipalities. In the process, many municipalities lost large amounts of public money on the stock market.
As a result, one in three municipalities in NRW is operating on the basis of an emergency budget. Out of a total of 396 municipalities in the state, only eight have a balanced budget. At the end of 2010 the total debt of municipalities and municipal associations in North Rhine-Westphalia stood at €56.8 billion ($75 billion)

http://www.wsws.org/articles/2012/may2012/nrwe-m01.shtml

According to my quick calculations the debt of NRW between the state and the cities is running at 15,000 Euro's per citizen, which is significant.
Walter Hinteler
 
  1  
Reply Sun 13 May, 2012 01:07 pm
@hawkeye10,
hawkeye10 wrote:

That would be a major journalistic error, but perhaps still the truth when city debts are included. You folks seem to be very unwilling to pay your public sector bills, as are so many of us moderns.
Okay. Let's change the subject. It's now about German communities unwilling to pay there bills, correct? And that you think that our state's debt should include more than just the state's debt?


And to point at another "journalistic error", this time in your last quote: there is no city of "Lippe" in Germany. We have a county (district) Lippe, the town where I live is called Lippstadt, there's another town called Lippetal, ... ...
hawkeye10
 
  0  
Reply Sun 13 May, 2012 01:29 pm
@Walter Hinteler,
Quote:
Okay. Let's change the subject. It's now about German communities unwilling to pay there bills, correct? And that you think that our state's debt should include more than just the state's debt?


You have yet to document that the journalists quoted are factually not correct, but even if you can the fact remains that it is highly probable that the people in the German rust belt have the worst public sector debt loads in all of Germany. The journalists might here be technically wrong but in spirit correct. This remains to be seen.

Quote:
NRW is not just the Ruhr," said Michael Huether, president of the IW economic institute in Cologne.

"It is a highly industrialised state with strong companies in the machinery, automotive, chemicals and energy sectors. The problem is that you have regions on very different economic trajectories that have not been linked up."

The impact of the economic woes on local finances has been devastating. On top of the 180 billion euros in state debt, municipalities have amassed liabilities of nearly 50 billion.

Only eight of the 396 local governments in NRW have balanced budgets, putting the state at the centre of a mini-financial crisis that has gone largely unnoticed due to the overall strength of Europe's biggest economy and the health of finances at the federal level.

One of the worst hit areas is Oberhausen, a city of just over 200,000 where its last coal mine and a large Thyssen iron and steel mill shut down in the 1990s.

Since then, it has tried to transform itself into a service-based economic hub, opening what the city hails as "Europe's biggest shopping and leisure centre" on the site of a shuttered steel production plant.

But the results have been disappointing and Oberhausen now holds the ignominious distinction of being the city with the highest debt per capita in Germany. In a twist, its treasurer, Apolstolos Tsalastras, is the son of Greek immigrants

http://uk.reuters.com/article/2012/04/23/uk-germany-election-debt-idUKBRE83M0AC20120423
nimh
 
  3  
Reply Sun 13 May, 2012 01:45 pm
Just checking in to look up Walter and tell him congratulations! Looks like your party did very well today. Looks like they'll get an absolute majority in parliament?

Compared to the polls, it looks like the SPD did a little better, and the Left party a little worse than the last polls had suggested; and that the CDU did a *lot* worse, and the FDP significantly better than the polls were showing. So a kind of opposite dynamics: on the left, voters for the smaller, more radical party might have shifted to the SPD at the last moment to ensure a left-wing victory (and avoid voting for a party likely to fail the electoral threshold); whereas on the right, a lot of voters for the bigger party deserted it at the last moment - why? Did they lend their vote to the FDP to make sure it got over the threshold? Or had they wanted to vote FDP in the first place, and felt free to do so when they saw that the last polls made a CDU victory unfeasible anyway?
Walter Hinteler
 
  2  
Reply Sun 13 May, 2012 01:49 pm
@hawkeye10,
hawkeye10 wrote:

You have yet to document that the journalists quoted are factually not correct, but even if you can the fact remains that it is highly probable that the people in the German rust belt have the worst public sector debt loads in all of Germany. The journalists might here be technically wrong but in spirit correct. This remains to be seen.
Debts of municipalities in German states:
Saarland 5,912 Euro per inhabitant
Hesse 5,781
Northrhine-Westphalia 4,747
Rhineland-Palantine 4,730

... ... ... (Source)

Debts in the cities Berlin, Bremen and Hamburg aren't mentioned here because they are states.
0 Replies
 
Walter Hinteler
 
  1  
Reply Sun 13 May, 2012 01:51 pm
@nimh,
nimh wrote:
Looks like they'll get an absolute majority in parliament?
Try the spiegel-online graphics
Walter Hinteler
 
  1  
Reply Sun 13 May, 2012 02:00 pm
@nimh,
nimh wrote:
So a kind of opposite dynamics: on the left, voters for the smaller, more radical party might have shifted to the SPD at the last moment to ensure a left-wing victory (and avoid voting for a party likely to fail the electoral threshold); whereas on the right, a lot of voters for the bigger party deserted it at the last moment - why? Did they lend their vote to the FDP to make sure it got over the threshold? Or had they wanted to vote FDP in the first place, and felt free to do so when they saw that the last polls made a CDU victory unfeasible anyway?
I'm not sure, and anylyts' opinion vary .... on various tv programs.

When counting the votes in our predominantly conservative suburbian village (20 years ago: 80+% CDU - now 43% resp 40% resp 37% in three polling districts) we noticed some very 'conservative' voter attitudes (we got two votes, one for the candidate, the second for the party):
- most were identical for candidate and party,
- second most were those referring to traditional coalitions, mainly CDU/FDP
- the FDP got votes like usually and higher - mainly because of a local (neighbour community) lawmaker (he got there 15% in direct votes)
0 Replies
 
nimh
 
  2  
Reply Sun 13 May, 2012 02:18 pm
@Walter Hinteler,
Regarding whether today's vote is a slap to Merkel as well as local NRW Christian-Democrats, I have to disagree with Walter though.

I mean, if voters in NRW voted strictly on state-politics grounds and didn't let federal politics influence their vote in any way, as Walter says, they are more disciplined and more politically conscious than voters pretty much anywhere else in the world ... I think he might overestimate his fellow voters here. Generally you see a lot of instinctive backlash against (or, hypothetically, support for) the national government in local elections, alongside a response to local political developments. See the local British elections the other week - a couple of local LibDem parties held on because they'd performed very well in local government (eg Portsmouth), but most of them were swept out regardless of their local qualities.

Not digging into the archives right now, but from what I remember about past state-level elections in Germany, if the SPD, the CDU or the Left was doing badly nationally, they usually lost votes locally too, regardless of what might have been perfectly able performances by the party's local politicos.

Of course today's ringing victory for the SPD was primarily an endorsement of the party's very popular leader in the state [edit: and of the relatively popular government she led], and the CDU's poor showing a reflection of its state leader's relative impopularity. But the national mood always weighs in too. And that must be especially so if the CDU's Roettgen, as Walter pointed out himself, focused his campaign on federal politics.

A backlash against both the local and the national conservatives - suits me fine. :-) And it looks like the result will allow a new centre-left government to be built on a clear, stable majority, which can't be said for the outcome of the elections in Schleswig-Holstein last week.

Just a pity that even the SPD seems to be too wedded to the idea of balanced budgets, insufficiently aware of the need for Keynesian policies to stop Europe's economy from further circling the drain. But then again, it makes sense that the Germans will be the last to see the urgency for such a clear policy change: after all, relatively speaking, they're doing fine... Ezra Klein last year keenly observed the whats and whys of the German position, and Krugman has piled on since - more than once.
Thomas
 
  1  
Reply Sun 13 May, 2012 02:20 pm
@Walter Hinteler,
Intering, thanks! What has the FDP of Nordrheinwestfalen done so right?
nimh
 
  2  
Reply Sun 13 May, 2012 02:24 pm
@Walter Hinteler,
Ah great, thanks. So another red-green government, with a safe majority. Cool.
0 Replies
 
Walter Hinteler
 
  1  
Reply Sun 13 May, 2012 02:24 pm
@nimh,
Hmm. I agree (nearly) completely with what you said.

Two comments I've just heard in a discussion with editors-in-chief of our main regional papers:
- Röttgen has achieved his aim: he stays in Berlin,
- Hannelore Kraft is the new candidate as SPD chancellor
0 Replies
 
nimh
 
  1  
Reply Sun 13 May, 2012 02:27 pm
@Thomas,
They did very well last week in Schleswig-Holstein too - even in most of the national polls they've been slinking back up from 2-3% to 4-5% lately.
Walter Hinteler
 
  2  
Reply Sun 13 May, 2012 02:27 pm
@Thomas,
Not sure - I haven't talked to any (they have so few members that they couldn't man all voting stations).

I suppose that they got the votes from their core voters (Stammwähler). People like you ... Wink
0 Replies
 
 

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