← Autodidact Archive · Original Dissent · Petr
Thread ID: 20233 | Posts: 9 | Started: 2005-09-16
2005-09-16 00:26 | User Profile
[I]This information frankly surprised me, Germans seem to be planning some big tax breaks ... and look how the parasite Soros is on the move again.[/I]
[url]http://www.opinion.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2005/09/05/do0502.xml[/url] [FONT=Arial] [SIZE=5] Britain could soon be Europe's sick man again[/SIZE]
[B]By Ambrose Evans-Pritchard
(Filed: 05/09/2005)[/B]
[B]Barely noticed, Germany has overtaken America to become the world's biggest single exporter, shipping the hardware that powers the rising economies of Asia and eastern Europe. Its trade surplus is now greater than that of China, Japan and India combined, reaching a staggering 16.8 billion euros in June alone.[/B] The profits made by German companies are running at over 33 per cent of national income, the highest in 40 years.
Eyeing a bargain, the world's canniest are already piling into German assets for the great Teutonic rebound. [B]George Soros and fellow hedge funders are snapping up distressed banks. [/B]Britain's Terra Firma has bought 150,000 workers' flats in the rust-bowl around Essen, hoping to catch the new craze for home ownership.
Foreigners poured ã47 billion into German equities in May and June alone, says the Bundesbank. Yes, there are 4.8 million unemployed. There were still three million unemployed well after Britain had pulled out of its 1970s nosedive. Jobs are the last of the lagging indicators.
Deutschland AG has knuckled down. Now it is up to the German state. In two weeks, Germans are likely to close the book on seven years of half-measures - though half is better than none - by the Social Democrat Gerhard Schröder. Berlin will fall to Angela Merkel, the shy physicist who grew up under Communism as the daughter of a Lutheran pastor, a "non-person", learning young how to question the system. Those who assumed she would play safe are having to think again.
[B]Her putative finance minister, Paul Kirchoff, wants a 25 per cent flat tax and calls for the abolition of 90,000 tax rules. "We will smash down the tax barriers, break the cycle of resignation. I'll be there myself on hand with a big sledge-hammer. We want to give the citizens back their freedom and let them decide for themselves what they want to do with their incomes," he said last month. [/B]
[B]For good measure, he wrote the landmark 1993 ruling on the Maastricht Treaty as a top constitutional judge, defying the primacy of EU law in the most piercing assertion of national sovereignty ever issued by the supreme court of an EU state.[/B]
Change is afoot. Gordon Brown might pause next time he goes to Brussels to lecture fellow ministers on their failures. Germany, Holland, Denmark, Sweden, Austria, Belgium and Spain - not to mention the flat-tax fire-breathers Poland, Slovakia and the Baltics - have all starved the public sector over the past decade, while Britain swells ever fatter. Our state will take 45 per cent of GDP by 2006, against 46 per cent for Germany, on OECD data. It does not take much extrapolation to see that Britain could soon be Europe's sick man again, gasping and choking with the worst of the big-government sclerotics.
Indeed, with France. Give them their due, the French are still defending the citadel defiantly. The state sector remains 54 per cent of GDP. Jacques Chirac, leading his nation ever deeper into reactionary folly, is drawing up lists of strategic sectors to be defended against capitalist predators - EU rules be damned. His latest prime minister, Dominique de Villepin, hagiographer of Napoleon, has taken to ruling France by decree. And what is he doing with this riskily grasped power, beyond charging about with near maniacal energy and exhorting les citoyens to work harder? He wants to spend a further ã7 billion on big works. The French remain attached to their modèle sociale, he said. It cannot be touched. How long will it be before the ruling class summons the courage to tell France that this sacred model is bust?
It was fitting that a French judge this month should have ordered Nestlé to reopen a factory in Marseilles, closed in June after losing money for eight years. The 427 workers had been given a year's notice. Nestlé complied with every clause of the Byzantine labour laws. Not good enough. The judge nailed Nestlé for plotting "delocalisation" to cheaper plants abroad. Like the Second Empire, before the Prussian defeat at Sedan, France seems rigidly set in its ways. Its cuisine has become formulaic - unhealthy and too slow, suited to public servants on a 35-hour working week - while its red wines have been left behind by high-tech vintners of the New World.
It is hard to see how the EU's Franco-German axis can survive as the two wheels begin to spin apart. German unit labour costs in manufacturing have fallen by 4.4 per cent over the past year alone. Each year for a decade, the country has clawed back competitiveness with higher productivity against other euro-zone economies. The single currency, which so punished Germany at first, will soon work to its advantage - with ominous effects. Its firms are already sweeping southern Europe like conquering Goths. A senior economist at the European Commission told me that German success would ultimately break the euro itself, starting with the ejection of Italy. But France may not be spared either.
I am not sure that Britain's debate on Europe has quite caught up with fast-moving events on the ground. We love to hate the Franco-German axis, but it did deliver the stabilising compromises that held the EU's north and south together. The task of holding Europe together may now fall to Britain, since no other EU state can possibly do it. Or Britain could opt for the entirely different strategy of Anglo-German condominium, creating a fresh EU axis, this time run on free-trading, pro-American lines - and let the Latin chips fall where they may. Unwise perhaps, but very tempting.[/FONT]
2005-09-16 04:30 | User Profile
More proof things are getting real bad.
2005-09-16 11:33 | User Profile
You seem to be one of those "this glass is half empty"-types, for I interpreted it in the way that Germans are doing well for a change...
Petr
2005-09-16 11:39 | User Profile
I note they are exporting hardware, whereas, the US's two biggest exports are soybeans and scrap metal.
2005-09-16 13:00 | User Profile
[QUOTE=Petr]Its trade surplus is now greater than that of China, Japan and India combined, reaching a staggering 16.8 billion euros in June alone.[/QUOTE]
This seems counterintuitive. Where are all these German products? Where are the German Home Depots and Costcos? Not that I don't believe the article, but it doesn't seem right.
2005-09-16 15:00 | User Profile
[COLOR=DarkRed][FONT=Arial][B][I] - "Where are all these German products? Where are the German Home Depots and Costcos?"[/I][/B][/FONT][/COLOR]
In the Far East and in Eastern Europe, like the article said?
Petr
2005-09-16 20:28 | User Profile
I checked out the current CIA Fact Book.
Germany : China : US
Exports: $893.3 billion f.o.b. (2004 est.) : $583.1 billion : $795 billion
Imports: $716.7 billion f.o.b. (2004 est.) : $552.4 billion : $1.476 trillion
Yep, Germany is a bigger exporter than China and has a much larger trade surplus than China. We see China's stuff, lots of cheap stuff at WalMart. So, I guess that distorts our expectations.
BTW, looking at US trade history, before 1976, the US was running surpluses. Deficits between 1976 and 1995 (with a big jump in 1994). But, then in 1997, the trade deficit starts to explode:
1997: 108 billion 1998: 165 billion 1999: 263 billion 2000: 378 billion 2001: 363 billion 2002: 421 billion 2003: 497 billion 2004: 617 billion (est.)
It looks like the US is on the fast-track to trouble.
2005-09-16 20:34 | User Profile
Interesting - it looks like US trade deficit began its explosion already during the last years of Clinton presidency.
Petr
2005-09-18 15:07 | User Profile
[QUOTE=Petr]Indeed, with France. Give them their due, the French are still defending the citadel defiantly. The state sector remains 54 per cent of GDP. Jacques Chirac, leading his nation ever deeper into reactionary folly, is drawing up lists of strategic sectors to be defended against capitalist predators - EU rules be damned. His latest prime minister, Dominique de Villepin, hagiographer of Napoleon, has taken to ruling France by decree. And what is he doing with this riskily grasped power, beyond charging about with near maniacal energy and exhorting les citoyens to work harder? He wants to spend a further ã7 billion on big works. The French remain attached to their modèle sociale, he said. It cannot be touched. How long will it be before the ruling class summons the courage to tell France that this sacred model is bust?
It's so true.
Its cuisine has become formulaic - unhealthy and too slow, suited to public servants on a 35-hour working week - while its red wines have been left behind by high-tech vintners of the New World.
It's so English.
It is hard to see how the EU's Franco-German axis can survive as the two wheels begin to spin apart.
It can survive because the only state that could change the deal is not in the Euro zone.
The task of holding Europe together may now fall to Britain, since no other EU state can possibly do it.
But in fact it won't, since UK is not in the Euro zone. Therefore no alternative other than the so-called "Franco-German axis" can exist.
Or Britain could opt for the entirely different strategy of Anglo-German condominium, creating a fresh EU axis, this time run on free-trading, pro-American lines - and let the Latin chips fall where they may. Unwise perhaps, but very tempting.[/FONT][/QUOTE] Simple question: with which currency? The Pound perhaps? I think that the writer is yet another guy from th UKIP or comparable.