The global economy

Start the engines, Angela


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Readers' comments



The economist keeps recommendng the same old keynesian voodoo. spend and print your way into prosperity. utter nonsense.

Mike Fisch in reply to Miberg

Only witch doctors recommend Keynesian voodoo. Unfortunately there are witch doctors in many positions of influence, including the editorial board of The Economist. These fools would do less harm if they merely advocated for burning incense and sacrificing chickens.


Come on, Deutchers, pay up!
Just imagine this instalment being the interests not paid on the WWII reparations.

Overall, you must see it is a most fair thing, you can't expect us down south to work as much as you do on this scorching heat, it's a brain-killer!


Surprisingly, the negative comments on this article are almost exclusively couched in moral rather than economic terms. For such a supposedly rational nation, Germans seem to be incapable of weighing up their present dilemma in terms of the relative costs of the two scenarios Europe faces.

Rather than lecturing the rest of Europe on best way to live under the currency union you inexplicably imposed on the rest of Europe 10+ years ago, you might think about the dilemma in these terms:

costs of limited fiscal transfer to the PIIGS to stave off break up of the euro and worldwide depression


costs of collapse of global financial system (not even the political costs of dicatorship and war, let's just focus on the economic costs for now)

You might also ponder the usefulness of making all those nice shiny BMWs if there are no markets left to export them to.

dfgfdfffgfgffg in reply to bZtjPKEgKx

I guess you know the difference between short term and long term costs, right? Short term it would certainly work to provide the FPIIGS with all the money they need (to retire at 60 for example). Everything would be great for 5 years, maybe 10. Then? I guess the financial system would collapse anyway. And the problem would be way bigger by then. Or do you believe that Greece or Spain would change with all these free lunches provided and all over a sudden build those shiny BMWs themselves? Plus that the main issue is not even taken into account - an ageing population all over Europe. So the longer you wait, the harder it gets.

As for the BMWs - you're proposing a great business model ... maybe you should implement it in your own company? Provide your own money to potential customers - that you know will never be able to pay the money back - so that they might buy whatever you produce and enjoy it. Sounds like a great deal to me. Somehow I just have the feeling that you might not be the one to benefit from this setup. Specifically if there are other customers that are actually still able and willing to pay. Why would you not just walk away and work for these customers instead?

And if you feel like blaming somebody for the Euro, start with the French. It was the price Germany had to pay for the re-unification. Economically the Euro was a very bad idea and doomed from the beginning. It is a political project. So, rationally it makes no sense at all to continue with this setup. Either there are real changes in the FPIIGS (the rich Greeks paying their taxes would be a start) or the northern part of the EZ just needs to walk away and accept huge losses on a bad idea. Better than decades of transfers to people that keep asking for more and more and more and more and more...

Zhouzhou_1 in reply to bZtjPKEgKx

Ignoring the plenty of contradictions and faults in your comment and just focussing on your proposed dilemma, shouldn't Brits, Americans and Chinese be equally concerned about the "costs of collapse of global financial system" and therefore equally willing to pay the "costs of limited fiscal transfer to the PIIGS" like the Germans?

Not that its anywhere near reality, but I'd love to see the headline "Obama grants $3 trillion bailout to Portugal, Republicans in the House support it".

Explorer71 in reply to bZtjPKEgKx

It seems that the deep-rooted prejudice against Southern Europe combined is so strong that Germans - hopefully a minority - have lost their minds. It sounds like that if even a god guaranteed immediate destruction to the whole of Germany unless they acted to fix the current situation, they would choose destruction. No use mentioning that Italy and Spain have strong industrial bases, large markets; that Portugal is reforming hard; that Ireland is not Latin, it's only Catholic. This is irrational, it's Gollum and the Ring: nobody can help that.

fdsfgsfdfgsfdfg in reply to Explorer71

You don't get it, do you? The Euro's design cannot work. The countries are simply too different to share a common currency. Both economically and mentality-wise. It would take generations to fix this. And before you start the good old prejudice story - I have worked in every single one of the FPIIGS. So I know from experience. And it is not about right or wrong - France's approach to life is wonderful. It's just that it doesn't go with the Dutch approach, nor the German, nor the Finnish in financial and economical terms. And yes, Italy, Ireland, Spain do have a strong industrial base and smart and hard working people. That doesn't help though - the monetory policy that is good for one part of the EZ is poison for the other part at the same time. Spains problems primarily arise from a property bubble as do Irelands - the same thing is happening in Germany right now with all the Greek and Italian and Spanish money flowing in. That money goes into German property. Who knows, if the Euro survives Germany might be in need for some help in a few years.

There are two evils to choose from: big transfers for the rest of this century for Northern Europeans and their children to the FPIIGS or alternatively a loss of roughly 30 percent of their savings and 5 bad years. What would you go for? The Greek approach is obvious (don't worry now and wait for the really big bang), so is the German. You call it out of their minds, I call it an informed and rational decision. And it has to be clear we're not talking about destruction here. I'm so fed up with this blackmailing. We're talking about a severe crisis, maybe the biggest of our lifetimes. Still, life will go on afterwards. Better than before.

I'm afraid that the majority of Northern Europeans has come to this opinion - at least if you can believe the polls.

massel tov in reply to the maverick

"for cool headed pragmatism look to the English" - my astrolab!
importing 1000's of cultural enrichers, denying the own people
basic rights (to stay english!), ruining the british economy to
the point of beeing flat broke:i would prefer the "poets and thinkers"!


A German friend of mine some years before told me that the Germany will win the third world war which will not be fought in the battle fields!It will be a world wide economic war.It appears that the war has since started under the leadership of Angela of Germany!Greece is the first victim of this war.Spain is on way to follow Greece.It matters little to Angela!!

Seth Perkins in reply to creativemind

You do know that every one of those countries can ignore Germany whenever they want to? All they have to do is stop borrowing money and they can ignore German demands. Now if they want Germany to hand them more money then they have to meet Germany's terms.

Seth Perkins in reply to creativemind

They do have an alternative, don't spend money they don't have. Greek politicians made promises that they don't have the money to pay for. That sucks for Greece. How is that Germany's fault? Germany doesn't want to pay off Greek loans. How is that an "economic war" against Greece? Does Greece have some right to German wealth? If Greece wants Germany to give them money then they have to comply with German conditions. If one doesn't like the conditions then one shouldn't take the money.

creativemind in reply to Seth Perkins

They have no alternatives available to them now.They are already hooked up by Germany by allowing them loans fully knowing that many of the Eurozone countries like Greece may default payments on due dates.Why a lender should make a huge loan available to a country knowing that she may default payment unless the lender has other hidden political interest?Did Greece request Germany to pay off her debts?And why should a country like Greece do that? Germany had no right to American wealth.But did not hesitate to share a portion of the wealth after the the end of world war2 for rebuilding the German nation.One should not forget the parts played by Marshal Plan in this respect!!!

hedgefundguy in reply to creativemind

The outcome will be devastating for the world economy!!

That's a silly prediction, not a fact.

Though they couldn't form a gov't, the Greeks elected anti-bailout candidates a few weeks ago.

If Germany gives in now, the antis will sure to win in mid-June, creating a welfare state.


Seth Perkins in reply to creativemind

Germany accepted US terms of the Marshall Plan and met those terms. "Evil" Germany offered Greece below market rate loans on the condition that Greece make major governmental and labor market changes. These changes are painful in the short term but will improve the Greek economy in the long term. If Greece didn't like the terms they shouldn't have agreed to them. Greece can ignore the terms, even now, if they don't like them. They just have to stop asking for new loans.

creativemind in reply to hedgefundguy

It is not a prediction.But one can consider it as a warning about things that may happen in the near future.
Spain is the next candidate to be followed by Italy,Ireland and may be Portugal.
May be Greeks will again elect anti-bailout candidates in large numbers in mid June election so that they can form a viable Government.By the by,what is the harm in creating a welfare state?

creativemind in reply to Seth Perkins

So it is almost agreed that Nation States are sometimes required to depend upon each others assistance both political and economical and they have rights to bargain favorable terms.
Greece is no different.War torn Germany had unfortunately no such rights to bargain.She had to accept what were offered!
By accepting unjust terms,the then Greek Government lost Power.
A Nation usually does never help another Nation by providing loans at market rate of interest.The rate has to be much below the market rate for obvious reasons.Germany simply followed the practice!
Germany can also stop giving loans to Greece if she consider it prudent politically.


Can't blame the Greeks, they think they are the most hardest working country.

Everyone else says the Germans are.


Best to put the blame and costs of the Grasshopper onto the Ant.
(Wait a second, that's a fable by Aesop, a Greek!)


Pardot Kynes in reply to hedgefundguy

The difference is that the economist poll that you reference is a made up, it is a lie...and besides it is about what people ''say'' not actual facts...I can say what ever I want, I say that the Germans are the most lazy and stupid people in the world...does this mean anything?? No....but go to Eurostat, and look for which Europeans work the most according to registered hours that employers provide these data....and then you will see how hardworking people are the Germans and the Dutch and all the rest of the Northern Europeans...with the exception of the British all the rest belong to the lazy nations while the southerners are hard working...and don't start telling me about efficiency..hard work has got nothing to do with efficiency and the worker...southerners are doing this inefficient task that their employer puts them to do and they do it for dig??

Pardot Kynes in reply to aletia

yeah but if you could read my post then you would see that what you say is not a problem of the workers...the ordinary person goes to work and does what his boss tells him...if the whole system is inefficient what can the employee do? In the south people are trapped in doing this inefficient task for hours and hours...they work a lot and it is not their fault that their work is inefficient...what can they do? invest in their employers factory from their own pocket to make it more efficient?????

Pardot Kynes in reply to hedgefundguy

ohh this is what you think?? that the Greek debt is entirely their fault...if you by reading these graphs in Eurostat make these conclusions then I am sorry I will not go on with this conversation...I cannot discuss this issue with people that have hardly attended elementary school...and I don't have to look hard enough for understand this....

Giant Tortoise iawmaij

The 3 biggest problems in the global economy are (and preventing everybody to get competitive):

1) Moral hazard (or at least using the moral hazard as a bluff) - typical tactic "Waaaah, bail me out or we die together, waaaah!"

2) "Why me?" - Too many people say "Why me?" when they need to pay more taxes, save more, do not cave in to instant gratification and pull the plastic out from the wallet, and accept less benefits. Both the 99% and the 1% are at fault there.

3) "As long as I win election/juice my money out, who bloody cares!?" - obstructionist politics, rent seeking and abusing system flaws (and obstruct any attempts to fix the flaw) [abusing patent rules, tax/retirement/labour laws, credit default swap blah blah blah].

(Did I just summarize the biggest faults of human nature? And to be frank, Angela Merkel will need a lot of help to fix any of the above)


This is another typical article full of economic misconceptions and failed theory from the magazine which should be renamed ‘The Misinformer’. Despite having large trade and current account surpluses, it is impossible for Germany to save the world from the current economic meltdown. When the massive and growing deficits of the US, UK and all the rest are added up, it is clear that Germany cannot bail them all out and create a new wave of growth and prosperity. Germany cannot do much against the vehement ongoing attacks from the English speaking press, which are causing the global panic and uncertainty, and this magazine is right at the forefront. We have now reached the stage after over 60 years of continuous credit and deficit expansion where this economic model is no longer viable. Germany and a few other countries invested in productive assets and these are now paying off. Those that followed the Anglo Saxon model of ongoing deficit and credit expansion and investment in unproductive assets such as housing bubbles, banks, massive government institutions, etc. are now running out of the means to finance these. The correction will be difficult but has to be pushed through. Mrs. Merkel and other leaders of productive and progressive countries must stay the course and insist that the corruption, blatant theft, lack of accountability and ongoing credit and deficit expansion are brought under control.


You want growth? Shrink Government.

European Elitist in reply to MLSimon

A bit simplistic, are we? Government is us. The Governments of civilised societies hold same together, by giving the society rules in a democratic process. Otherwise it's Anarchy. You might want to visit Somalia, Chad, Sudan or Haiti to check for the growth that is created there, because they don't have any government to speak of. So why aren't they rated AAA by Moody's?

European Elitist in reply to MLSimon

Well, then you should have been more specific and told us to which measure you would want to shrink government. As you kept it open the logical conclusion is, the smaller the better. You know, like Grover Norquist said, small enough to drown it in a bathtub. Then there would none be left, hence the analogy with failed states mentioned above.

MLSimon in reply to European Elitist

I'd start with ending Drug Prohibition. At the Federal level that is officially counted at $25 billion a year. It is probably more. Total - Federal, State, and Local is accounted at $75 billion.

Second I'd get rid of the FDA. In similar circumstances a private agency like UL (for electrical eqpt.) seems to work better and the influence of politics (as opposed to engineering) is a whole lot less.

Similarly for the EPA. And all the other regulatory agencies.

I'd privatize all the government insurance agencies. So the government can't steal Social Security money and cover it by putting IOUs in a "lockbox". Or take $500 bn of Medicare money and use it for something else.

How is that for a start?

a piglet

This article is well written but it is still missing the point. It is all about jobs, production and distribution. That is the real economy. There is too much "fake money" going around just being used for speculation and not to building real wealth creation.
This article reeks of panic from the City casino economists if all this goes down. After all it was the hedge funders and all the other unregulated "investment" managers that created this mess after all and they probably will be punished. Economists, please focus on thechonolgy and creativity driven efficent goods productions and knowledge distribution, include the human asset in the balance sheets and all the other "externalities" properly. It is time to throw away all those obsolete textebooks or you will go down in history at best as irrelevant.


Class: How to get German money 101

5) Threaten them .....


Class dismissed

flyingdutch100 in reply to leo123

Completely agree! I wonder why there are so few voices to point this out.
See the dictionay bellow:
South North
"Germany should show leadership" Germany should pay
"Germany should stimulate growth" Germany should pay
"Germany should follow draghi" Germany let us print
"Germans need to show solidarity" The Germans should pay
my debts.
Why? You, such as us (the Dutch) are "guilty" of:
-working too hard
-being too productive
-accepting austerity too easily
-not holding politicians accountable for how they spend our money
-giving money for free to the South in the first place. Why should they accept responsability and accountability now? We created the precedent...

Pardot Kynes in reply to flyingdutch100

you work too hard??? ahahahhahha ahahahhahaha what a joke, ahahahahhaha I live in Holland and I am an expat and believe me I have never seen more lazy nation than yours...the Dutch are th emost spoiled Europeans I have even seen, you work like an average of 4 hours per day and you think that this is the most insane hardworking activity of the universe....ahahh like you work 12 hours per day.....
Besides according to the Eurostats you are by far from the most lazy people in Europe based on how many hours you work...and don't start telling me that you are efficient and so on...SAY we are efficient and dont't say that you are hard working and you work a lot...there is a HUMONGOUS difference between these two...and it is not a problem of the poor Spanish, the Greeks and the Italians that they are not efficient...and they work immensely a lot...they just do this inefficient thing that they do for many dig???

the maverick in reply to Pardot Kynes

I second that. Northern Europeans are generally pretty lazy but they do manage their countries better. In my workplace here in the US, the Dutch, Swedes etc. usually have a difficult time adjusting to the pace and hours. They're also used to taking 2 months off for vacationing every year. Southern Europeans work much harder from what I've seen.

klosterneuburg in reply to leo123

How to get European socialdemocrats to accept dismantling the European social model?

1) Talk about Mediterranean laziness ("everybody knows this")
2) Talk about Southern corruption ("a general fact")
3) Talk about Catholic irresponsibility ("it's general knowledge")
...if you run out of steroeotypes and generalizations, tap the endless Bild, Die Welt, or Kronen Zeitung pool of xenophobic prejudices and lies.

All of this, of course, as an alibi for your blackmail and theft, which you must never talk about: the fact that you have been controlling the monetary policy and pressuring the ECB to suit your own selfish interest, and STEALING your partners' possibility to defend theirs. And if they have credit problems, for whatever reason, don't trust them, undermine the markets' confidence in your partners, blame them, and refuse to acknowledge any responsibility.

aletia in reply to Pardot Kynes

What holds them back from being efficient? Easy money from other EU members? In real life it's the number of things you produce per hour that matter, not the number of hours that you are in your office (doing what?).

Pardot Kynes in reply to aletia

I agree with you 100% on this, easy money from the EU...but what holds them back? the local economic and political elite of course...they are the first that lay hands on these money you refer can ordinary people intervene on the the efficiency of the economy? it is on the politicians and the elites to do it in law and invest the money southerners are not lazy..they are insanely hard working compared to northerners but doing completely inefficient tasks...and for the economic elite and politicians is easier to just take the money and run and not invest anything than the opposite...

aletia in reply to klosterneuburg

Instead of reading Bild, Die Welt, Kronen Zeitung, ... you can also read the latest report from the international corruption watchdog “Transparency International”. Corruption costs the EU at least € 120 billion per year. The report cites Greece, Italy, Portugal and Spain as countries with the most deep-rooted corruption problems in their public administration. "The link between corruption and the debt crisis can no longer be ignored," says Transparency International in its report.

Icarus1982 in reply to leo123

Class: How to get richer on the back of people poorer than yourself 101

1) loan them money at reasonable interest rates... are you rich enough? (yes/no), if no, go to 2

2) sell them needlessly expensive products to be bought by above mentioned loans... are you rich enough? (yes,no), if no, go to 3

3) once first loans come to term issue new ones at higher rates because those miserable dogs seem to be having trouble paying them... are you rich enough? (yes/no), if no, go to 4

4) offer to 'help' by buying all property of any value your 'clients' have and force them to live by your rules... are you rich enough? (yes,no), if no, go to 5

5) feel smug because you have jobs, food on your plate, money in the bank and 0% interest rates on your national debt and the stinking 'loan dogs' haven't... are you rich enough? (yes,no), if no, go to 6

6) let's check back again in six months to see what else is on the menu... Delors, Monnet, Schuman and De Gasperi eat your heart out you fools!! Heinrich Brüning is the guy that did it all like it is suppose to be.

aletia in reply to Pardot Kynes

I agree with you. There is corruption in every EU country, but especially in the south it's more than problematic (see the latest report from Transparency International). To solve the debt problem, one of the things that has to be tackled is the corruption problem. In short, as you say, one of the things that has to change is the attitude of the local elites. - A Herculean task for the EU.

leo123 in reply to Icarus1982

Huge fan of your class here, cause i am poor and the money i earn somehow goes to my neighbour without asking me, but i'd like to get rich one day. So a couple of questions (although most points absolutely make sense in a capitalist and democratic society). 1) How can I sell poorer people than me products, which I myself cannot afford (I am not a dictator, and people are free to buy or not to buy any products)? 2) If the poorer people sell me their property, i wouldn't call that help, only making business, help would be if i lend (a lot of) money to my neighbour to low rates, because noone else wants to lend him anything anymore, although I know I won't see a dime back. 3) What happens, if the poorer people do not pay their loan back? Does that mean they will give all the products bought back to me? 4) What happens to those products already used??? Or are they gifted (then I will be poor as well although I worked to produce the product)? I am sorry for the questions, but I really do want to get an A in the class, but there seem to be many mistakes in the script.

Alejandro Guerrero in reply to leo123

I don't think you are following the policy reform developments in the PIIGS. Spain has gone through really painful reforms (slashing pensions, freezing public wages or hirings, curtailing social policies and workers' most basic rights). All sort of taxes have gone up beyond what any economy in depression can bare. And more is in the pipeline. Our Welfare State was a joke in comparison to Germany's or the North's prior to this crisis, and right now it's just absolutely vanishing away.

Yes, dysfunctional political systems with weak civil societies were compounded with huge inflows of capital to the country to inflate a housing bubble which seemed a bless -which politician is stupid enough to dare to stop the economic miracle growing above 4% for a decade? Now it's time to take individual responsibility for a collective fantasy, yes, but if the North doesn't come to terms with the reality of 30 years of deep economic integration within Europe has put us all together under a common economic fate, a huge meltdown is the final act of this play. We need help, and deepening the political union of Europe: every single Spaniard will nod at a German saying that.

acquatico in reply to leo123

Class: How to destroy Europe 101

1) Call them profligate, lazy and corrupt, does it work? (yes/no), if no, go to 2)
2) Remind them about WWII (70 years ago)and how you rebuilt your country (with other's people money and good will)....does this work? (yes/no), if no, go to 3)
3) Tell them they would benefit the most from poverty...does this work? (yes/no), if no, go to 4)
5) Threaten them .....

But never, NEVER, take any own responsibility, never accept that mostly is a system that works on your benefit that created the problem, never accept that by not removing uncertainty there is no solution no matter how much austerity others will follow, never blame own corrupt companies,....

Class dismissed

WMH 2012 in reply to leo123

Germany is not a victim.. It's a great country and is leading at the moment Europe, thankfully, so it has to cope with all the criticism but that's all...Nevertheless all the points are unfortunately true but again, which country has got no sins?
I believe in solidarity among Euro countries as we decided to share a currency. Do we have to give sovereignty to EU Institutions , that is the price..
Sometime ago, Euro helped some German problems, specially their reunification issue that was slowing down their economy. Now Germans help back. Nothing is free, there is a price for any help / action but there it is.
All this rhetoric of victim or guilty does not lead anywhere as it depends in which moment of time you focus.
The solution to all this is more Europe and, just an opinion, Germany happens to have the role to carry that weight, at least for some years. Nothing bad, they can write an important chapter of european history, and good history this time around.

WMH 2012 in reply to flyingdutch100

By the way, ... we should stop letting Holland get the lion stake of taxes that belonged to, among others, southern countries States like Italy and Spain of spaniard and Italians companies that are washing their transactions there. I believe there are thousands of billions missed there. Part of them, a mouse stake, being used to help this "lazy" states ...

Niels Kristian Schmidt

The Germans must be allowed to spend and that requires that the debtors produce something the Germans want to buy. And somehow labor markets in debtor countries do not clear until wages and regulations are at clearing levels. The alternative is continued deficits. They have to produce a surplus.

Printing robs everyone but the printers. Debt robs everyone but the debtor until the money is repaid. Exporting is robbing one self until one imports. Saving is robbing one self until one spends. Socialising debt together with spenders, debtors and printers makes you a slave.

It's time for the non-Germans to pack away the lash and roll up their sleeves so the Germans will want to buy their products.


well done, Economist - a brilliant piece really sorting out the pros and cons, and forcing everyone to understand just how serious the present crisis is, while showing too just how "national state" minded we all are (- see comments). We still have a long way to go before the knight on the white horse comes to the rescue but for the sake of the €uro I do hope he/she comes soon.


If she spends all of the German people's money, without changing the economic reality of the debtor, it would be start the engines for another few years and then your fuel will be out too. It will need reform, now or in five years, but the reform must happen.
A bit like your obesity article, if you want to get thin eat less and exercise, if you want to increase productivity take small wage increases and work smarter. Germans did this, we in the UK and Australia where I now reside don't seem able to grasp this and the Greeks and Spaniards (I lived in Spain for five Years) think they are worth a fortune to do little, especially in Government jobs.

soiam in reply to tasStuart

I fully agree with you. Before any money comes from Germany to Spain, Spain must change the way it works. Most public money is wasted and corruption is still normal way of doing business. In fact, most of what I see is that nothing is really changing in Spain. The people here have not yet grasp what is going on and have not yet changed their mind.
I'm Swiss and also have been living in Spain for about 5 years.
Oh, well. There is one think that is changing. Before they were adoring the Germans for their way they work; now more and more the Germans are the bad guys not wanting to be solidary (and pay for their profligacy).

dave watkins

Had you listened to Paul Krugman from the beginning, you would not be having to back-pedal so furiously now. Read his book (and practically every NYTimes column of his for the past 4 years, Economist Editors.

nickik in reply to dave watkins

Yes we all know that your god krugman new it all (dispite wrongly predicting almost everything) and that more spending will help with dept. Printing money dosn't creat inflation, inflation creats jobs bla bla bla

The only thing that should have been done is that people and governments lived within there means and not riot when the have do so.

AtlantisKing in reply to dave watkins

Well, had we listened to Krugman from the beginning, we'd be exactly where we are today, but with an additional $3 trn debt overhang.

And even then, he'd be loudly screaming "all in! All in! I wanna bet all in!"


By AT,

Every time I read these so called “economists” that are writing “solutions”, proposing them in a single article, I am thinking that that should all go “drown” or be putted in this boat, with the engines closed. The more you learn about Economics, you understand you know nothing….at all…

But it would be interesting seeing an economic school of thought arising nowadays, that manages to combat the current system “internal deficiencies”, such as:
• Ridiculously increasing “Agency Costs” (in both public and private sector). These (not measurable or even addressed) costs, are so big nowadays, that act as negative flow to the global economic development (that in the past was either lower or had been offset by economic growth). More importantly, a severe distortion exists in the case that costs of “falling” are less that profits of “succeeding”, for politicians or CEOs. Economists ignore these costs.
• The “Global Shift” of the economies in our days and the inability and limitation of researchers (studying the effects of a variable in various countries with a good sample would require years and is quite costly) to even grasp basics of the correlations between effects in Global economy (butterfly theory). How would the automobile industry growth in China affect the Bike Industry in Italy (substitute products)? Would that affect the demand for Energy Drinks in UK (complementary activity with biking)?

The answer currently, is simple. We can’t f**cken know! And as long as this system continuous to increase its complexity, its benefits will start to fall after a point (law of diminishing returns). If you hire more workers at a factory, after a point, Marginal Product < Marginal Benefit. It can’t work like that!

• In a merging Global Economy (increasing correlations between economic activity in one country and the effects in another), can we talk about development in a country scale level? Or is it ALL together or ALL in the nice boat?

• Macro economy nowadays is the Globe (instead of a country) and Micro economy has become each individual country (instead of the firms and civilians)

• Should we ever address “external” costs that are global and are transferred to the future generations, such as the environmental costs? If we should, how can we do this with the current system? Environmental pollution in China today, has profits for Chinese firm’s today, but will be paid by Swedish / Greek citizens in 200 years.

Hmmm, I am guessing if some nice Greek politicians knew this, they would like their debt to be further reduced by Germany, due to the pollution caused by its industry….

• How can we stop all rich US citizens from taking a Switzerland passport in 20 years, if taxes rise in US rise, but fall to 5% in Switcher land? Would Switzerland become the new “super - power” then?

The above questions are a minor picture of indicative issues never addressed, because they are hard to. Well economists are being very smart on this for years. They make a model and some crazy “assumptions” (that only 5 variables affects economy) and they leave happily ever after.

My opinion:
I am not an “economist”, but my naïve thinking says that as long as economic theories contrast G.D.P.(Gross domestic product - theoretical non cash measure) with Debt (real cash that have to be paid) – we are not going to see a lot of “growth” listening to these guys.

Also, as long as the Macroecomy that they study has changed its meaning, but they still try to find solutions looking at how their country (microlevel) will improve e.g. its employment – good luck with that.

nickik in reply to HowIMetYourMana

Its the "The Fatal Conceit", these economist think that they are smarth enougth to stir 'the world economy'. They have to realice that the market would take care better then there muddeling. Everybody (and governments too) have to trie to make there best and live within what they can pay and if not exept the result if they do not.


I feel pity that whole lot of people esp. from Europe(including this article) are blaming Angela for no mistake of hers. Yes, definitely she is asking people to sacrifice something today for better future. As proverb goes "Give a man a fish, he lives for a day. Teach a man to fish, he lives a life". This is the message which Angela is trying to provide and no one recognizes that. I know for sure with these spending approaches its not just Greece, but whole of Europe will be in trouble in a couple of years, might be the rest of the world too.

Icarus1982 in reply to firstthoughts

You must let me tell you how to fish (which you know how to do, she doesn't, Greek fish are different from German fish) and give me 10% of every fish you fish!! But keep buying subsidized BMWs and Thyssen elevators with your fish, you hear!! Is what Angela Merkel is telling Greeks now.


Do your thing Merkel!!!!

DO SOMETHING GOOD AND BRILLIANT AND HISTORY WILL REWARD YOU. History will NOT reward you for killing of Europe. History has proven this.








3NkQTNnGzX in reply to Gýldin


adrastheia in reply to 3NkQTNnGzX


Bull's eye :-) !

Gýldin in reply to 3NkQTNnGzX

I'm sorry, but the Eurozone has a debt to GDP ratio of 87% (2011) compared with the USA's 103% such an intervention should be managable. But what's happening now, is an escalation of the crisis and a multiplication of the debt in Southern Europe that would not be necessary, simply for the sake of letting them feel the fire. It's economic stupidity. Worse, it's the rise and the fuel of a disgusting new nationalism.



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