A chara, – Tomorrow all eyes will be on the EU meeting and the position that the German government will take on this crisis. The crisis is, I believe, in part Germany’s fault as it funnelled massive loans to Irish banks and other major European banks during the so-called Celtic Tiger years. It is worth pointing out that with the 1953 debt agreement, Germany had its debt written off by over 50 per cent. This, in turn, laid the foundation for the massive growth of Germany as an economic power.
Nearly 60 years later, I call for some more imaginative thinking. Europe should cancel the outstanding debt and build a proper European-wide banking system. People are crying out for leadership. – Is mise,
A chara, – Bundesbank president Jens Weidmann said introducing common euro-region bonds, or eurobonds, would undermine the incentives for Greece's government to enforce fiscal discipline. "Nothing would destroy the incentives for a solid fiscal policy more rapidly and more permanently than joint liability for the state's debt," German newspaper Bild-Zeitungquoted Mr Weidmann as saying, and as reported in The Irish Timesonline edition (July 18th).
Employing the same logic, I presume the Bundesbank would not disagree that nothing would destroy the incentives for a solid fiscal policy more rapidly and more permanently than enforcing liability on citizens for bank debts. – Is mise,