European Growth Strategy - Staying The Course for Disaster

A few days ago some EU officials together wrote an op-ed in the WSJ claiming that "Europe's Crisis Response Is Showing Results, well of course it is; but those results just aren't good (via). In this article they had to say the following on growth:

The euro zone's economic prospects have improved over recent months. Modest GDP growth returned in the second quarter of the year. Industrial orders and output have increased, and many countries' sovereign-bond yields have decreased. Unemployment, while still much too high, appears to be stabilizing. Further modest growth is forecast for the second half of this year, and the recovery should pick up speed next year as long as we stay the course.

Bundesbank - Household net wealth

According to a Bundesbank study, the median net household wealth in Germany was € 51,400 in the Year 2010. Which when compared to other industrial nations this is rather low. The US had a family net worth of about € 59,000 ($ 77,300/1.3), after plummeting over 40 % compared to before the crisis.According to the Bundesbank the German number compares to other Euro-nations as follows:

Household median net wort	Euro
France	113,500
Germany	51,400
Italy	163,900
Spain	178,300
Austria	76,400
Western Germany	78,900
Eastern Germany	21,400

Some of that difference might be due to different statistics. The low value for eastern Germany can in large parts be attributed to the "Wiedervereinigung" and the main source of household wealth is real estate which is still very cheap in some parts of eastern Germany.

Additionally, the  average net household wealth Spain (€ 285,800) is "only" 1.5 times as large as that of Germany (€ 195,000). An Italian number is not available.

German Euro Sceptic Party

Germany now has its own Eurosceptic party, founded this Year by the journalist Conrad Adam, economics Professor Bernd Lucke and former IBM manager Henkel among others, the Alternative für Deutschland (Alternative for Germany) hopes to get into the Bundestag this September. The primary goal is to end the Euro of course but it is interesting how they want to achieve it.

We want to change the European Contracts so that any state is able to leave the Euro. Every nation has to be able to decide democratically over their currency.

Ok sounds reasonable. A nation can only be considered souvereign if it is able to choose its own currency. Of course this is for them just a means to achieve their goal of ending the Euro. The current plan sounds quite sinister, though:

We want that Germany enforces this right to leave the Euro by vetoing further  ESM loans.

So actually they don't want other nations to decide. Germany - through its power - will help them make this decision. This is also contrary to Lucke's statement that they want an orderly end of the Euro. What happens when Germany threatens its veto can currently be observed in Cyprus and nothing is orderly there.

There are a few more such talking points ranging from reduced EU bureaucracy to a simplified tax code but those wont help the all that much, since Merkel's CDU has either has a similar position or they are just generalities like: "Germany doesn't have enough children. It has to become more child and motherfriendly (sic)."

 In Germany a party has to get at least 5 % of the votes to get into the parliament. At this time it seems unlikely that the party will jump that hurdle. Even if it does AfD will definitely not become part of a coalition, so they will be rather irrelevant. But they might reduce the chances of the smallest partner in the Merkel government the struggling FDP to be in the next Bundestag.Thereby possibly preventing Merkel from being reelected. So we might see the former finance minister Steinbrück as chancellor.

This one bulletin point party is and will be irrelevant. But it got the media in Germany all dizzy, because some right wingers also want the Deutsche Mark back and therefore AfD is Hitler or something. Also it is dangerous, naive and have I mentioned Hitler? But the media also believes that the German economy is ever growing. They just make a habit of being wrong.