{"id":152,"date":"2010-06-07T16:28:02","date_gmt":"2010-06-07T15:28:02","guid":{"rendered":"http:\/\/timiacono.com\/?p=152"},"modified":"2019-06-16T16:29:20","modified_gmt":"2019-06-16T15:29:20","slug":"germany-applies-the-debt-brake","status":"publish","type":"post","link":"https:\/\/timiacono.com\/index.php\/2010\/06\/07\/germany-applies-the-debt-brake\/","title":{"rendered":"Germany Applies the \u201cDebt Brake\u201d"},"content":{"rendered":"

For those of you who don\u2019t know it (and I don\u2019t know why you would), your humble scribe with the Italian last name is also half German, some great, great, \u2026 great grandparents having come to Pennsylvania Dutch country from Baden Baden sometime in the early 1800s, or so I\u2019m told.\u00a0 As such, austerity is not an unfamiliar concept and, according to this\u00a0reportin Spiegel Online, the rest of Europe is getting more familiar with that word today.<\/p>\n

\n

German Government Agrees on Historic Austerity Program<\/h4>\n

The German government put together the largest austerity package since World War II on Monday, with spending cuts and new business levies aimed at saving 80 billion euros by 2014. Chancellor Angela Merkel says Germany, as Europe\u2019s largest economy, must set an example.<\/strong><\/p>\n

The German government on Monday announced plans to reduce spending by \u20ac80 billion ($95.7 billion) by 2014 in the largest\u00a0package of cuts\u00a0since World War II. The austerity program aims at reducing the budget deficit and helping to protect the euro as it continues its slide.<\/p>\n

\u201cWe have to save \u20ac80 billion by 2014 to put our financial future back on a solid footing,\u201d Merkel told a press conference on Monday afternoon.\u00a0She said the budget cuts for Germany, Europe\u2019s largest economy, were a \u201cunique show of strength\u201d that signalled her government\u2019s commitment to tackling the European debt problems<\/strong>\u00a0that have plunged the euro single currency into crisis.<\/p>\n<\/blockquote>\n

Of course, others in Europe are probably calling it something quite different while, here in the U.S., Keynesian economists are probably just shaking their heads again, muttering something about how\u00a0\u201cthe Germans just don\u2019t get it\u201d<\/em>.<\/p>\n

<\/span>Right or wrong \u2013 whether this plunges the whole world into a deflationary abyss from which there is no escape or if, somehow, this has the desired effect of restoring financial stability over time \u2013 it\u2019s nice to see that there are at least a few elected officials in the world who question the idea of simply piling on more debt to cure the world\u2019s economic ills.<\/p>\n

\n

\u201cGermany as the largest economy has a duty to set a good example,\u201d she said. A number of European nations have fashioned similar austerity programs, with Spain passing sharp cuts last week and Greece having pushed through far-reaching emergency savings measures earlier this year in a last ditch attempt to avoid bankruptcy.<\/p>\n

The government plans to cut social spending in such areas as jobless benefits and will also shed many civil service jobs.<\/strong>\u00a0There will be no reductions in government spending on education and research and no increases in income or value-added-tax, Merkel said.<\/p>\n

Business subsidies, however, will be reduced and a new levy will be imposed on air traffic. Power companies will be charged a new nuclear fuel rod tax and there will also be a financial markets tax. The government also plans to save money through a comprehensive reform of the German army, the Bundeswehr, though conscription is to continue, despite musings to the contrary by German Defense Minister Karl Theodor zu Guttenberg.
\n\u2026
\nMerkel said there was no alternative to drastic savings.\u00a0\u201cThese are serious and difficult times,\u201d she said. \u201cWe can\u2019t afford everything we would like if we want to be able to shape our future.<\/strong>\u201cThe government has to make radical budget savings to meet its commitments to reduce the budget deficit. The Stability Pact governing Europe\u2019s monetary union calls for Berlin to reduce the deficit from its current level of 5 percent of GDP to below the 3 percent ceiling by 2013.ty, the euro fell again against the dollar over the weekend and was trading on Monday below $1.20.<\/p>\n<\/blockquote>\n

Angela Merkel even looks a little bit like my late grandmother.<\/p>\n

There\u2019s a pretty neat\u00a0graphic\u00a0that goes along with this story, one that has projections for national debt going in a direction that is surely quite unfamiliar to American readers.<\/p>\n","protected":false},"excerpt":{"rendered":"

For those of you who don\u2019t know it (and I don\u2019t know why you would), your humble scribe with the Italian last name is also half German, some great, great, \u2026 great grandparents having come to Pennsylvania Dutch country from Baden Baden sometime in the early 1800s, or so I\u2019m… Continue Reading Germany Applies the \u201cDebt Brake\u201d<\/span><\/i><\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"yoast_head":"\nGermany Applies the \u201cDebt Brake\u201d - The Mess That Greenspan Made<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/timiacono.com\/index.php\/2010\/06\/07\/germany-applies-the-debt-brake\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Germany Applies the \u201cDebt Brake\u201d - The Mess That Greenspan Made\" \/>\n<meta property=\"og:description\" content=\"For those of you who don\u2019t know it (and I don\u2019t know why you would), your humble scribe with the Italian last name is also half German, some great, great, \u2026 great grandparents having come to Pennsylvania Dutch country from Baden Baden sometime in the early 1800s, or so I\u2019m… Continue Reading Germany Applies the \u201cDebt Brake\u201d\" \/>\n<meta property=\"og:url\" content=\"https:\/\/timiacono.com\/index.php\/2010\/06\/07\/germany-applies-the-debt-brake\/\" \/>\n<meta property=\"og:site_name\" content=\"The Mess That Greenspan Made\" \/>\n<meta property=\"article:published_time\" content=\"2010-06-07T15:28:02+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-06-16T15:29:20+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Estimated reading time\">\n\t<meta name=\"twitter:data1\" content=\"3 minutes\">\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebSite\",\"@id\":\"https:\/\/timiacono.com\/#website\",\"url\":\"https:\/\/timiacono.com\/\",\"name\":\"The Mess That Greenspan Made\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":\"https:\/\/timiacono.com\/?s={search_term_string}\",\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-GB\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/timiacono.com\/index.php\/2010\/06\/07\/germany-applies-the-debt-brake\/#webpage\",\"url\":\"https:\/\/timiacono.com\/index.php\/2010\/06\/07\/germany-applies-the-debt-brake\/\",\"name\":\"Germany Applies the \\u201cDebt Brake\\u201d - The Mess That Greenspan Made\",\"isPartOf\":{\"@id\":\"https:\/\/timiacono.com\/#website\"},\"datePublished\":\"2010-06-07T15:28:02+00:00\",\"dateModified\":\"2019-06-16T15:29:20+00:00\",\"author\":{\"@id\":\"https:\/\/timiacono.com\/#\/schema\/person\/a06ca3e96a3bd4687b6cf4059cc533c9\"},\"inLanguage\":\"en-GB\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/timiacono.com\/index.php\/2010\/06\/07\/germany-applies-the-debt-brake\/\"]}]},{\"@type\":\"Person\",\"@id\":\"https:\/\/timiacono.com\/#\/schema\/person\/a06ca3e96a3bd4687b6cf4059cc533c9\",\"name\":\"timiacono\",\"image\":{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/timiacono.com\/#personlogo\",\"inLanguage\":\"en-GB\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/643084f9dd2199caa1626e7fc69324fb?s=96&d=mm&r=g\",\"caption\":\"timiacono\"}}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","_links":{"self":[{"href":"https:\/\/timiacono.com\/index.php\/wp-json\/wp\/v2\/posts\/152"}],"collection":[{"href":"https:\/\/timiacono.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/timiacono.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/timiacono.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/timiacono.com\/index.php\/wp-json\/wp\/v2\/comments?post=152"}],"version-history":[{"count":2,"href":"https:\/\/timiacono.com\/index.php\/wp-json\/wp\/v2\/posts\/152\/revisions"}],"predecessor-version":[{"id":154,"href":"https:\/\/timiacono.com\/index.php\/wp-json\/wp\/v2\/posts\/152\/revisions\/154"}],"wp:attachment":[{"href":"https:\/\/timiacono.com\/index.php\/wp-json\/wp\/v2\/media?parent=152"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/timiacono.com\/index.php\/wp-json\/wp\/v2\/categories?post=152"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/timiacono.com\/index.php\/wp-json\/wp\/v2\/tags?post=152"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}