German economists denounce summit decisions

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German economists denounce summit decisions

The Associated Press

AP Photo/dapd/Maja Hitij
A group of German economists has denounced decisions made during last week's European Union summit, arguing Thursday that they risk increasing the exposure of taxpayers, retirees and savers to the debts of struggling banks.

BERLIN (AP) — A group of German economists has denounced decisions made during last week's European Union summit, arguing Thursday that they risk increasing the exposure of taxpayers, retirees and savers to the debts of struggling banks.

EU leaders agreed in Brussels that the European bailout fund could in the future pump money directly into ba

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July 05, 2012

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8 readers comments


1. Philip Vorgias wrote on July 05, 2012 11:59 AM	The Germans need to offer the EU more than just austerity. They themselves would NEVER put up with the degree of recession Portugal, Spain and Greece have had to suffer under. Samaras is right about one thing, EU policy needs to be equal parts growth-stimulus as well as fiscal restraint. The Germans are being forced to do what they should have done in the beginning.

2. Nicholas Kostopoulos wrote on July 05, 2012 1:53 PM	The Germans are the main problem in why the recessions in all of the ECC have happened. Their too conservative way in as far of balance budget first, than growth, has destroyed Europe. This will lead to a ECC meltdown in the near future. Germany has controlled Europe for too long, and the other countries have got to give Germany altar-motive, either chance your ways, or we all will get rid of you and your one-sided ways of economic parity.

3. Philip Vorgias wrote on July 05, 2012 8:07 PM	Using spending reductions/tax increases is fine if the situation is too far gone and if you're not in a global recession, but it's ridiculous to prescribe that for a nation battling the worst recession since the Great Depression-and a nation with FAR too big a federal payroll at that. It's politically not possible, as I've argued with Armodios-this is where Adam Smith theory meets the reality of national unions, strikes every other day and violent riots.

4. ARMODIOS PAPAGIANAKIS wrote on July 06, 2012 12:38 AM	The economists include Hans-Werner Sinn, the head of the prominent Ifo think-tank and a vocal critic of European leaders' rescue policies. They argued that "banks must be allowed to fail," with creditors who knowingly took investment risks bearing the burden. All together now: "...banks must be allowed to fail..."

5. Philip Vorgias wrote on July 06, 2012 9:22 AM	What about banks that were coerced into buying sovereign debt, Armodios? What about those banks?

6. ARMODIOS PAPAGIANAKIS wrote on July 06, 2012 11:21 AM	They should be REWARDED with infinite recapitalization, and without fear of loss, so they can purchase sovereign debt ad infinitum to provide governments/bureaucrats a ready pool of capital to borrow from. Then, when governments/bureaucrats have to pay back the loans, and, after squandering or redistributing to other incompetents, governments/bureaucrats can raise taxes, or borrow some more to further burden their respective taxpayers and reward creditors…what else?

7. Philip Vorgias wrote on July 06, 2012 12:17 PM	When you're ready to cut the tethers that handcuff banks to national governments, fine. Until then you're advocating capitalist actions in a non-captilast banking environment.

8. ARMODIOS PAPAGIANAKIS wrote on July 06, 2012 1:36 PM	Failure cuts the tethers.
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