Thursday, May 23, 2013

New Deal for Europe

Germany and France have come up with a "plan" to "solve" the youth unemployment problem in Europe. The European Investmank Bank will provide up to € 60 billion in cheaper loans to companies, that hire. They decided to call this drop in the occean "New Deal for Europe". This is either really cynical or just outright stupid. The first is probably true since this sum is so small that even polititians should realize that it won't change much for the millions of unemployed in Europe. 

€ 60 billion for seven years is around 8.5 billion per year. Last time I checked GDP for the euro zone was around € 9.5 trillion in current prices and falling at a rate of 0.4 % larger than the not even 0.1 % of additional funds they are proposing for this year. The Association of German Chambers of Industry and Commerce just reduced the its 2013 growth expectation from 0.7 % to 0.3 % in current euros that is about 10 billion. So our government is proposing a "New Deal" for all of Europe that is smaller than the damage they are letting happen to the German economy in the name of growth inducing austerity.

But fear not there is additional € 22 billion of relabled EU funds coming. Because releabling money solves problems in todays economy. "Germany and France are expected to lead" German employment minister von der Leyen said according to FAZ. The others should all follow on what is all to obviously the way into the Abbyss. But hey we at least come up with funny names ("New Deal", "Growth Innitiative") for aweful ideas, what are the others doing to make the journey more comfortable?

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