Crushing unemployment among the young people in the EU

[Admiral Yi]

I don't think there's much to hope on that front. Only Merkel can save the day, but she's mired in the lazy PIGS fallacy.

I think she's mired in the numbers: PIIGS borrowing needs and non-PIIGS lending ability.

[Martinus]

Isn't the employee-side of the internship deal is that while getting some income you also gain some semblence of work experience, so you don't hit the market with a fancy-sounding degree but not being able to navigate the most basic office tasks/enviroment?

No.

[Zanza]

I don't think there's much to hope on that front. Only Merkel can save the day, but she's mired in the lazy PIGS fallacy.

What could she do to save the day?

[HVC]

invade poland.

[Zanza]

LONDON—A rebound in German manufacturing helped slow a six-month-long contraction in euro-zone factory activity in January, giving the latest sign the region may escape a severe downturn in the first quarter.

[...]

While a few countries, like Germany and Austria, are showing signs of recovery, others continue to face a bleak outlook—especially those at the heart of the debt crisis.

http://online.wsj.com/article/SB10001424052970204652904577196384128312336.html?mod=googlenews_wsj

[Iormlund]

I don't think there's much to hope on that front. Only Merkel can save the day, but she's mired in the lazy PIGS fallacy.

I think she's mired in the numbers: PIIGS borrowing needs and non-PIIGS lending ability.

The you too are mired along with her.

Rotating interns every three months is cheaper than employing a full time admin assistant even though, though the interns don't know this, there's no hope of a job at the end of it.

Ok, shit like this should be illegal and to the point of such thing, if proven, should be considered a criminal fraud punishable with prison.

It's one thing to have a low pay trial scheme for prospective hirees, and another to have this.

That has been the norm in many businesses over here since before I entered the job market.

I don't think there's much to hope on that front. Only Merkel can save the day, but she's mired in the lazy PIGS fallacy.

What could she do to save the day?

At this point? Eurobonds will probably fall short on their own. She needs to start by unleashing the ECB.

[Sheilbh]

I don't think there's much to hope on that front. Only Merkel can save the day, but she's mired in the lazy PIGS fallacy.

What could she do to save the day?

I think Eurobonds, more unconventional monetary policy and, as Monti's asked for, demand side reforms from Germany would help.  Help the parts of Europe to grow, they are cutting budgets, raising taxes, enacting structural reforms within a comparatively constrained monetary environment.

[Sheilbh]

I heard she went begging money from the Chinese this week.  It says alot about how desperate we all are that the Chinese just might start throwing money at the problem.

Yeah.  I remember when the Chinese were going to buy into the EFSF which would somehow transform the rather paltry contribution of Eurozone nations into trillions.  If you're not willing to save your own currency it's tough to expect the Chinese to do it.  They weren't interested then and, it seems to me, made polite sounding noises this time round.

[Zanza]

I think Eurobonds

I somehow doubt it would help if she signed up for those and then the Constitutional Court would say that Germany may not participate. Open-ended, unlimited guarantees were ruled out in their last decision on the ESM or EFSF (forgot which).

more unconventional monetary policy

May be news to you, but Merkel isn't actually making monetary policy. That's the ECB's task. Blaming Merkel for their policy is a bit simple. The ECB by itself is very much wedded to orthodox monetary policy.

as Monti's asked for, demand side reforms from Germany would help.

People aren't stupid. Demand side reforms such as direct stimulus or indirect measures like tax cuts won't work because people know they'll have to eventually pay for that. We have heard years about how the state won't be able to take care of our pensions anymore and how the health system is overburdened etc. If you cut taxes now, a considerable amount of that will go for savings. In the end, the only thing that can make people confident in the future is taking their fear. Lower unemployment already happens here, solid state finances that suggest that the state will still be able to take care of your basic needs in the future helps too.

Help the parts of Europe to grow, they are cutting budgets, raising taxes, enacting structural reforms within a comparatively constrained monetary environment.

So we are back to monetary policy, which Merkel can't set?

[Iormlund]

If Germany's constitution is such an impassable obstacle to save the € you should just be honest about it and leave the EZ. Maybe the rest of us could work it out.

[Zanza]

I thought Germany was pretty open and honest about not participating in Eurobonds.

As far as leaving the Eurozone is concerned, that's hardly in our interest.

How about the rest of you start without us on Eurobonds? The last EU summit set a precedent regarding treaties in which not all members participate. The supposed advantages of debt-pooling should work even without Germany.

[Sheilbh]

I somehow doubt it would help if she signed up for those and then the Constitutional Court would say that Germany may not participate. Open-ended, unlimited guarantees were ruled out in their last decision on the ESM or EFSF (forgot which).

Aside from the name I can't remember there being a significant difference in what I read between Juncker's Eurobonds proposal (60% of national debt mutualised, all above that national) and the 'stability bonds' Germany's economic wise men proposed last year.  I assumed the latter would be constitutionally legit.

But I'm not as strident as Iorm but the German constitution and Constitutional Court do seem difficult to reconcile with further integration.  That's my shallow understanding of their rulings on Lisbon and the Eurozone situation.  That and they're always held up by Eurosceptics in this country as an example of a court willing to stand up for national law in the face of the EUSSR

May be news to you, but Merkel isn't actually making monetary policy. That's the ECB's task. Blaming Merkel for their policy is a bit simple. The ECB by itself is very much wedded to orthodox monetary policy.

The ECB's the most legally independent central bank in the world, but I think over the past two years has been the most dirtily political and understandably so.  But I think the very vocal German opposition to bond purchases, such as the President suggesting they may be illegal and the Bundesbank's opposition, make them very difficult for the ECB to even consider.  Though you're right there's some attachment to that within the ECB.

So we are back to monetary policy, which Merkel can't set?

No.  I think we could do more to enhance the single market.  I believe Monti suggested a number of sectors of the economy that should be liberalised in Germany to give Italian companies a chance.  Monti and Lagarde have both asked Germany as an economy that's doing well to do more to stimulate demand while the other countries in Europe are going through fiscal austerity in a tight monetary space that seems reasonable.  I'm not sure what their exact suggestions are but the idea makes sense.

But the problem is if Monti and Rajoy fails because they've not had sufficient support from the rest  of the Eurozone, if they've got clean hands but get treated just a bit better than Silvio.  Another worry is if Sarko comes third behind Le Pen, which is currently where he's polling.  I think in the current context there'll be a grass-roots nationalist response to this crisis.

As Monti's pointed out there's more Euroscepticism in Italy now and it's growing week-by-week, his phrase is that this 'impatience-cum-hostility to the EU, ECB and Germany is mounting'.  Luckily Berlusconi's discredited or I imagine he'd take that mantle.  I think it's a threat that Orban stops being a Hungarian exception and you actually see his style of nationalism spreading.  Fischer had a good line about the possibility that the EU could disintegrate from the bottom up if there's no change in policy.

How about the rest of you start without us on Eurobonds? The last EU summit set a precedent regarding treaties in which not all members participate. The supposed advantages of debt-pooling should work even without Germany.

Would Germany really allow EU institutions like the ECB to go ahead with that?

[Iormlund]

I thought Germany was pretty open and honest about not participating in Eurobonds.

As far as leaving the Eurozone is concerned, that's hardly in our interest.

How about the rest of you start without us on Eurobonds? The last EU summit set a precedent regarding treaties in which not all members participate. The supposed advantages of debt-pooling should work even without Germany.

Germany is at the core of the problem, so leaving it aside solves nothing. It restrains the ECB, drives the value of the € upward, serves as a safe haven for capital flight and is at the center of EZ trade imbalances. There is no real solution to the crisis that keeps the status quo regarding Germany. Unless you consider global recession a solution, as Merkel seems to do.

[Zanza]

The ECB's the most legally independent central bank in the world, but I think over the past two years has been the most dirtily political and understandably so.  But I think the very vocal German opposition to bond purchases, such as the President suggesting they may be illegal and the Bundesbank's opposition, make them very difficult for the ECB to even consider.  Though you're right there's some attachment to that within the ECB.

Maybe it was just not reported in the media I read, but I have not heard anybody from Spain or wherever publicly suggesting that we should change the EU treaty that explicitely forbids the ECB buying bonds. Without such a treaty change, the ECB bankers would overstep their mandate. Did Zapatero or Rajoy bring that to the table in any of the EU summits? Especially when everybody criticizes Merkel for her hesistant actions, you would really expect some more bold measures proposed by other governments.

No.  I think we could do more to enhance the single market.  I believe Monti suggested a number of sectors of the economy that should be liberalised in Germany to give Italian companies a chance.

His proposal regarding service market liberalization. Yes, I think we should do that and I don't understand why Merkel doesn't support that. That's a fair point.

Monti and Lagarde have both asked Germany as an economy that's doing well to do more to stimulate demand while the other countries in Europe are going through fiscal austerity in a tight monetary space that seems reasonable.  I'm not sure what their exact suggestions are but the idea makes sense.

I think no one, not even them, know what their exact suggestions are. That's the problem with "stimulating demand". Demand is not something a heavily indebted government can just create out of thin air.

But the problem is if Monti and Rajoy fails because they've not had sufficient support from the rest  of the Eurozone, if they've got clean hands but get treated just a bit better than Silvio.  Another worry is if Sarko comes third behind Le Pen, which is currently where he's polling.  I think in the current context there'll be a grass-roots nationalist response to this crisis.

As Monti's pointed out there's more Euroscepticism in Italy now and it's growing week-by-week, his phrase is that this 'impatience-cum-hostility to the EU, ECB and Germany is mounting'.  Luckily Berlusconi's discredited or I imagine he'd take that mantle.  I think it's a threat that Orban stops being a Hungarian exception and you actually see his style of nationalism spreading.  Fischer had a good line about the possibility that the EU could disintegrate from the bottom up if there's no change in policy.

That's a possiblity. But if an open-ended, unlimited fiscal transfer or imperial administrators being sent from Brussels to right Greece's economy or the central bank losing its independence and mandate not to finance governments is what it takes to keep it together, I am not sure if that price isn't too high.
We have achieved a lot in Europe over the last half century, but it becomes more and more obvious that the people of Europe are not willing to go further on integration.

Would Germany really allow EU institutions like the ECB to go ahead with that?

What's the ECB's role in Eurobonds? I thought the idea was mutualizing government debt.

[Zanza]

Germany is at the core of the problem, so leaving it aside solves nothing. It restrains the ECB, drives the value of the € upward, serves as a safe haven for capital flight and is at the center of EZ trade imbalances. There is no real solution to the crisis that keeps the status quo regarding Germany. Unless you consider global recession a solution, as Merkel seems to do.

So what you say is that Germany signing up for Eurobonds wouldn't actually solve anything because it would still drive up the value of the Euro, would still be a safe haven, would still have trade imbalances.