I used to think their coverage of Japan was awful but their coverage of the Euro crisis is far fucking worse. The commentators seem to have more intelligence than the newspaper (I read the comment section by 'recommendation') This one explains exactly what I feel:
and this one:
here is the article:
I'm glad I don't pay for this garbage.
For long years, I used to believe that The Econmist was the very definition of pragmatic, calm common sense and logic. The Econmist was always the place o turn to to get some well thougt about and balanced view in the the midst of the great media cacophonie. This belief has vanished over the course of the euro crisis.
All the Economist seems to be able to suggest is Keynesian politics, where massive public debtis supposed to ignite the economy, and mutualisation of debt.
Looking at the current G-7 budgets it is clear to everybody except the people behind The Economist, that this "buy-now-pay-later"-thinking is exactly what brought us in the situation we are in now, and it is definitly not going to get us out of there. Giving an alcoholic more booze is not going to get him sober (whatever he may promise).
The southern countries will never be able to py back their debts (much like England and the US). The only result that Eurobonds will yield therefore is that it will ruin the relatively healthy neorthern countries.
What good does the Economist think may come out of that? asks a very disappointed reader who has just cancelled his subscription
and this one:
Well, nothing new here in The Economist. What The Economist does not explain is that German newspapers are full of the current choices and consequences. Merkel does not need to explain that, she is not our grand teacher and we are not the stupid pupils.
What The Economist is not taking into consideration either is that the majority of Germans simply does not want to be liable for other countries debts without a proper control, e.g. a fiscal union. And this fiscal union is not wanted in most European countries. Do you think France is eager for giving real souvereignity to Bruessels??? And as far as I am informed, the USA are not liable for Mexico either, or Texas does not bail out California if necessary. The supposed liberal Economist argues quite socialist.
Moreover, Merkel is not the European president but the German chancellor and she must by law protect her people and work for them. Other "leaders" are wellcome to come with proposals, but please with realistic ones. Maybe The Economist should consider that Germany is not willing to defend the Euro in its current form at all costs, we were forced to accept this currency by France and promised not to be liable for other countries. If a few countries need to leave the Euro, so be it.
I believe The Economist is representing some vested interests here. It is obvious to everyone why Obama or Cameron cry for Merkel's "bold actions". Well, they do not care for the consequences for Germany of those demands.
here is the article:
The global economy
Start the engines, Angela
The world economy is in grave danger. A lot depends on one woman
Jun 9th 2012 | from the print edition
TO THE lifeboats! That is the stark message bond markets are sending about the global economy. Investors are rushing to buy sovereign bonds in America, Germany and a dwindling number of other safe economies. When people are prepared to pay the German government for the privilege of holding its two-year paper, and are willing to lend Americas government funds for a decade for a nominal yield of less than 1.5%, they either expect years of stagnation and deflation or are terrified of imminent disaster. Whichever it is, something is very wrong with the world economy.
That something is a combination of faltering growth and a rising risk of financial catastrophe. Economies are weakening across the globe. The recessions in the euro zones periphery are deepening. Three consecutive months of feeble jobs figures suggest Americas recovery may be in trouble (see article). And the biggest emerging markets seem to have hit a wall. Brazils GDP is growing more slowly than Japans. India is a mess (see article). Even Chinas slowdown is intensifying. A global recovery that falters so soon after the previous recession points towards widespread Japan-style stagnation.
But that looks like a good outcome when set beside the growing danger of a fracturing of the euro. The European Union, the worlds biggest economic area, could plunge into a spiral of bank busts, defaults and depressiona financial calamity to dwarf the mayhem unleashed by the bankruptcy of Lehman Brothers in 2008. The possibility of a Greek exit from the euro after its election on June 17th, the deterioration of Spains banking sector and the rapid disintegration of Europes cross-border capital flows have all increased this danger (see article). And this time it will be harder to counter. In 2008 central bankers and politicians worked together to prevent a depression. Today the politicians are all squabbling. And even though the technocrats at the central banks could (and should) do more, they have less ammunition at their disposal.
Made in Athens, made worse in Berlin
Nobody wants to test these various disaster scenarios. It is now up to Europes politicians to deal finally and firmly with the euro. If they come up with a credible solution, it does not guarantee a smooth ride for the world economy; but not coming up with a solution guarantees an economic tragedy. To an astonishing degree, the fate of the world economy depends on Germanys chancellor, Angela Merkel (see article).
In one way it seems unfair to pick on Mrs Merkel. Politicians everywhere are failing to actfrom Delhi, where reform has stalled, to Washington, where partisan paralysis threatens a lethal combination of tax increases and spending cuts at the end of the year. Within Europe, as Germans never cease to point out, investors are not worried about Mrs Merkels prudent government, whose predecessor restructured the economy painfully ten years ago; the problem is a loss of confidence in less well-run, unreformed countries.
But do not get too sympathetic. To begin with, past virtue counts for little at the moment: if the euro collapses, then Germany will suffer hugely. The downgrading of some of its banks this week was a portent of that. Moreover, the undoubted mistakes in Greece, Ireland, Portugal, Italy, Spain and the other debtor countries have been compounded over the past three years by errors in Europes creditor countries. The overwhelming focus on austerity; the succession of half-baked rescue plans; the refusal to lay out a clear path for the fiscal and banking integration that is needed for the single currency to survive: these too are reasons why the euro is so close to catastrophe. And since Germany has largely determined this response, most of the blame belongs in Berlin.
Be bold, bitte
Outside Germany, a consensus has developed on what Mrs Merkel must do to preserve the single currency. It includes shifting from austerity to a far greater focus on economic growth; complementing the single currency with a banking union (with euro-wide deposit insurance, bank oversight and joint means for the recapitalisation or resolution of failing banks); and embracing a limited form of debt mutualisation to create a joint safe asset and allow peripheral economies the room gradually to reduce their debt burdens. This is the refrain from Washington, Beijing, London and indeed most of the capitals of the euro zone. Why hasnt the continents canniest politician sprung into action?
Her critics cite timidityand they are right on one count. Mrs Merkel has still never really explained to the German people that they face a choice between a repugnant idea (bailing out their undeserving peers) and a ruinous reality (the end of the euro). One reason why so many Germans oppose debt mutualisation is because they (wrongly) imagine the euro could survive without it. Yet Mrs Merkel also has a braver twin-headed strategy. She believes, first, that her demands for austerity and her refusal to bail out her peers are the only ways to bring reform in Europe; and, second, that if disaster really strikes, Germany could act quickly to save the day.
The first gamble can certainly claim some successes, notably the removal of Silvio Berlusconi in Italy and the passage, across southern Europe, of reforms that would recently have seemed unthinkable. But the costs of this strategy are rising fast. The recessions spawned by excessive austerity are rendering it self-defeating. Across much of Europe debt burdens are rising, along with the appeal of political extremes. The uncertainty caused by the muddle-through approach is draining investors confidence and increasing the risk of a euro disaster.
As for Germanys idea that it could all be saved at the last minute, by, for instance, the European Central Bank (ECB) flooding a country with liquidity, that looks risky. Were Spain to see a full-scale bank run, even an emboldened Mrs Merkel might not be able to stop it. If Greece falls out, yes, the German public would be more convinced that sinners would be punished; but, as this newspaper has argued before, a Grexit would cause carnage in Greece and contagion around Europe. Throughout this crisis, Mrs Merkel has refused to come up with a plan bold enough to stun the markets into submission, in the same way that Americas TARP programme did.
In short, even if her strategy has paid some dividends, its cost has been ruinous and it has run its course. She needs to lay out a clear plan for the single currency, at the latest by the European summit on June 28th, earlier if Greeces election spreads panic. It must be specific enough to dispel all doubt about Germanys commitment to saving the euro. And it must include immediate downpayments on deeper integration, such as a pledge to use joint funds to recapitalise Spanish banks.
This would risk losing her support at home. Yet with these risks comes the possibility of rapid reward. Once Germanys commitment to greater integration is clear, the ECB would have the room to act more robustlyboth to buy many more sovereign bonds and to provide a bigger backstop for banks. With the fear of calamity diminished, a vicious cycle would become virtuous as investors confidence recovered.
The world economy would still have to grapple with ineptitude elsewhere and with weak growth. But it would have taken a giant step back from disaster. Mrs Merkel, its up to you.
I'm glad I don't pay for this garbage.