The eurozone may have avoided calamity, but all the underlying problems
are still there - despite what Germany's finance minister. It was perhaps unwise of George Osborne to
cite the recent run of relatively positive data on the economy as final
vindication of his policies – for by doing so, the Chancellor has made himself
a hostage to fortune.
Yet as calculated gambles on eventually being right go, it looks a
rather better bet than the almost delusional triumphalism of Mr. Osborne’s
opposite number in Germany, Wolfgang Schäuble. “Rejoice,” the latter said in an
article this week for the Financial Times, “at the positive economic signals
the eurozone is sending almost continuously these days … The eurozone is
clearly on the mend, both structurally and cyclically.”
That five years after the collapse of Lehman Brothers, the US Federal
Reserve still finds itself unable to give up its monthly injection of
quantitative easing demonstrates that nowhere is the world economy even
remotely “fixed”. And the place where it remains most unfixed of all is the
eurozone, where Germany’s disciplinarian mix of austerity and structural reform
has manifestly failed on a monumental scale.....To Read More....
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