• user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '3:bb02acf009aece98e10789308e4a9030' in /home/cer/staging/includes/cache.inc on line 27.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<p style=\"text-align: justify;\">Sir, Paul Betts (“All for one, but none for all to revive Europe’s fortunes”, November 24) argues that Germany should wait for other countries to boost their economies (and hence demand for German exports) rather than taking steps to boost German domestic demand. This is close to advocating a beggar-my-neighbour strategy. If all developed economies were to respond to the economic crisis in this fashion, a deep economic slump would become inevitable.</p><p style=\"text-align: justify;\">If the financial and now economic crisis has shown anything, it is that global imbalances are not sustainable indefinitely. The Germans, Japanese and Chinese cannot run huge current account surpluses ad infinitum without at some point investors taking fright at the liabilities being piled up in the deficit countries. The days of external huge deficits in the US and elsewhere are over.</p><p style=\"text-align: justify;\">This has huge implications for Germany. Its export-led model will not now deliver economic growth, however good German companies are at holding down costs. Ignoring domestic demand and further increasing the economy’s dependence on exports is the last thing the German economy needs just now.</p>', created = 1508713113, expire = 1508799513, headers = '', serialized = 0 WHERE cid = '3:bb02acf009aece98e10789308e4a9030' in /home/cer/staging/includes/cache.inc on line 112.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '3:d41d8cd98f00b204e9800998ecf8427e' in /home/cer/staging/includes/cache.inc on line 27.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '', created = 1508713113, expire = 1508799513, headers = '', serialized = 0 WHERE cid = '3:d41d8cd98f00b204e9800998ecf8427e' in /home/cer/staging/includes/cache.inc on line 112.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '3:a0105a06fbb973e3b5108beee2b9f742' in /home/cer/staging/includes/cache.inc on line 27.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<p>\"The consequences are likely to be far-reaching. Not only will governments struggle to push through the needed reforms, but there is a risk of a broader backlash against the market economy and the European Union,\" said Simon Tilford of the CER,</p><p></p><p>The risk, however, is that these and other structural reforms become discredited because voters associate them with declining living standards and rising inequality, according to Simon Tilford, chief economist at the Centre for European Reform, a London think tank. \"The consequences are likely to be far-reaching. Not only will governments struggle to push through the needed reforms, but there is a risk of a broader backlash against the market economy and the European Union,\" he said.</p>', created = 1508713113, expire = 1508799513, headers = '', serialized = 0 WHERE cid = '3:a0105a06fbb973e3b5108beee2b9f742' in /home/cer/staging/includes/cache.inc on line 112.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '3:2778adf9e1ff3311837d4917e34b5cfe' in /home/cer/staging/includes/cache.inc on line 27.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<p>\"The consequences are likely to be far-reaching. Not only will governments struggle to push through the needed reforms, but there is a risk of a broader backlash against the market economy and the European Union,\" said Simon Tilford of the CER,</p><p></p>', created = 1508713113, expire = 1508799513, headers = '', serialized = 0 WHERE cid = '3:2778adf9e1ff3311837d4917e34b5cfe' in /home/cer/staging/includes/cache.inc on line 112.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '3:d41d8cd98f00b204e9800998ecf8427e' in /home/cer/staging/includes/cache.inc on line 27.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '', created = 1508713113, expire = 1508799513, headers = '', serialized = 0 WHERE cid = '3:d41d8cd98f00b204e9800998ecf8427e' in /home/cer/staging/includes/cache.inc on line 112.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '3:ce93cc6ce230422e1cfd1c41a4735734' in /home/cer/staging/includes/cache.inc on line 27.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<p>According to Philip Whyte, a senior research fellow at the&nbsp;CER in London, to accept that the eurozone suffers from a structural flaw that can only be corrected by more federalism is politically explosive. In his <a href=\"http://www.cer.org.uk/sites/default/files/publications/attachments/pdf/2012/essay_bankingunion_5dec12-6704.pdf\" target=\"_blank\"><span style=\"text-decoration: underline;\"><span style=\"color: rgb(0, 102, 204);\">analysis</span></span></a>, he points out that a more federal structure goes at the heart of sovereignty because it allows European bodies to dictate the fate of national banks, putting taxpayers\' money at the disposal of the eurozone to solve problems in other member states. This is the reason, the analyst believes, why it takes so much time to accept the idea of a banking union and all its implications.</p><p>It is clear that a fully fledged banking union in the euro area will not emerge any time soon, Philip Whyte writes, because political constraints are too big. Acquiescing a partial federalisation, embodied in the supervisory mechanism for the banks, however, will not solve the problems, the analyst is convinced underscoring that the rest of the bitter medicine - direct recapitalisation of banks, creating a resolution mechanism and deposit guarantees - cannot be avoided. Moreover, he explains, partial solution creates another problem - destabilisation of the EU-27 by diminishing the status of the non-euro countries.</p>', created = 1508713113, expire = 1508799513, headers = '', serialized = 0 WHERE cid = '3:ce93cc6ce230422e1cfd1c41a4735734' in /home/cer/staging/includes/cache.inc on line 112.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '3:99e4bd91606e8192f07cc9ba49dbcd04' in /home/cer/staging/includes/cache.inc on line 27.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<p>According to Philip Whyte, a senior research fellow at the&nbsp;CER in London, to accept that the eurozone suffers from a structural flaw that can only be corrected by more federalism is politically explosive. </p>', created = 1508713113, expire = 1508799513, headers = '', serialized = 0 WHERE cid = '3:99e4bd91606e8192f07cc9ba49dbcd04' in /home/cer/staging/includes/cache.inc on line 112.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '3:d41d8cd98f00b204e9800998ecf8427e' in /home/cer/staging/includes/cache.inc on line 27.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '', created = 1508713113, expire = 1508799513, headers = '', serialized = 0 WHERE cid = '3:d41d8cd98f00b204e9800998ecf8427e' in /home/cer/staging/includes/cache.inc on line 112.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '3:233339d68a8a06c84db000c563b06502' in /home/cer/staging/includes/cache.inc on line 27.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<p>\"For two decades Britain\'s EU debate has been one-sided: Eurosceptic politicians and commentators have set the agenda, while few politicians (or business leaders) have argued the merits of the EU,\" Charles Grant of the CER wrote in a recent paper. \"Pro-EU politicians have seen the short-term advantages of saying little about an unpopular subject. So they have lost the argument by default.\"</p>', created = 1508713113, expire = 1508799513, headers = '', serialized = 0 WHERE cid = '3:233339d68a8a06c84db000c563b06502' in /home/cer/staging/includes/cache.inc on line 112.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '3:e256a2ee010e8de98e588d195c312a05' in /home/cer/staging/includes/cache.inc on line 27.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<p>\"For two decades Britain\'s EU debate has been one-sided: Eurosceptic politicians and commentators have set the agenda, while few politicians (or business leaders) have argued the merits of the EU,\" Charles Grant of the CER wrote in a recent paper.</p>', created = 1508713113, expire = 1508799513, headers = '', serialized = 0 WHERE cid = '3:e256a2ee010e8de98e588d195c312a05' in /home/cer/staging/includes/cache.inc on line 112.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '3:d41d8cd98f00b204e9800998ecf8427e' in /home/cer/staging/includes/cache.inc on line 27.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '', created = 1508713113, expire = 1508799513, headers = '', serialized = 0 WHERE cid = '3:d41d8cd98f00b204e9800998ecf8427e' in /home/cer/staging/includes/cache.inc on line 112.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '3:3227d4f886a611271ccddf1b6a607299' in /home/cer/staging/includes/cache.inc on line 27.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<p>Europe\'s common security policy is \"stuck between the strategic realities of declining defence budgets, waning European power in the world and a lack of will and ability to project strategic force outward\", said Hugo Brady, a senior research fellow at the CER.&nbsp;\"And on the other side, political inertia to do serious stuff in defence.\"</p>', created = 1508713113, expire = 1508799513, headers = '', serialized = 0 WHERE cid = '3:3227d4f886a611271ccddf1b6a607299' in /home/cer/staging/includes/cache.inc on line 112.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '3:3e26c168f6a83a76ff57499d20e30887' in /home/cer/staging/includes/cache.inc on line 27.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<p>Europe\'s common security policy is \"stuck between the strategic realities of declining defence budgets, waning European power in the world and a lack of will and ability to project strategic force outward\", said Hugo Brady, a senior research fellow at the CER.</p>', created = 1508713113, expire = 1508799513, headers = '', serialized = 0 WHERE cid = '3:3e26c168f6a83a76ff57499d20e30887' in /home/cer/staging/includes/cache.inc on line 112.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '3:d41d8cd98f00b204e9800998ecf8427e' in /home/cer/staging/includes/cache.inc on line 27.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '', created = 1508713113, expire = 1508799513, headers = '', serialized = 0 WHERE cid = '3:d41d8cd98f00b204e9800998ecf8427e' in /home/cer/staging/includes/cache.inc on line 112.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '3:2d2a95bc47e87c107a40d6395646833f' in /home/cer/staging/includes/cache.inc on line 27.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<p>\"È stata una risposta un po\' emotiva - precisa Philip Whyte economista del think-tank Centre for European Reform - nel senso che i timori politici sono apparsi dominanti sulle considerazioni tecniche\".</p>', created = 1508713113, expire = 1508799513, headers = '', serialized = 0 WHERE cid = '3:2d2a95bc47e87c107a40d6395646833f' in /home/cer/staging/includes/cache.inc on line 112.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: SELECT data, created, headers, expire, serialized FROM cache_filter WHERE cid = '3:2d2a95bc47e87c107a40d6395646833f' in /home/cer/staging/includes/cache.inc on line 27.
  • user warning: Table './cer_staging/cache_filter' is marked as crashed and should be repaired query: UPDATE cache_filter SET data = '<p>\"È stata una risposta un po\' emotiva - precisa Philip Whyte economista del think-tank Centre for European Reform - nel senso che i timori politici sono apparsi dominanti sulle considerazioni tecniche\".</p>', created = 1508713113, expire = 1508799513, headers = '', serialized = 0 WHERE cid = '3:2d2a95bc47e87c107a40d6395646833f' in /home/cer/staging/includes/cache.inc on line 112.
Crisis shows imbalances are not sustainable indefinitely

Crisis shows imbalances are not sustainable indefinitely

Written by Simon Tilford, 27 November 2008
From Financial Times

Sir, Paul Betts (“All for one, but none for all to revive Europe’s fortunes”, November 24) argues that Germany should wait for other countries to boost their economies (and hence demand for German exports) rather than taking steps to boost German domestic demand. This is close to advocating a beggar-my-neighbour strategy. If all developed economies were to respond to the economic crisis in this fashion, a deep economic slump would become inevitable.

If the financial and now economic crisis has shown anything, it is that global imbalances are not sustainable indefinitely. The Germans, Japanese and Chinese cannot run huge current account surpluses ad infinitum without at some point investors taking fright at the liabilities being piled up in the deficit countries. The days of external huge deficits in the US and elsewhere are over.

This has huge implications for Germany. Its export-led model will not now deliver economic growth, however good German companies are at holding down costs. Ignoring domestic demand and further increasing the economy’s dependence on exports is the last thing the German economy needs just now.