The problems in Europe

This is very good:

“Third, it makes no sense to blame the recipients of the capital inflows for causing the crisis. If enough money is sloshing around willing to invest in any stupid idea, you shouldn’t be too surprised that a lot of stupid ideas get funded. When, for example, Wolfgang Schaeuble, Germany’s finance minister, says: “The reasons for Greece’s problems can be attributable only to Greece and not to actors outside the country, and certainly not in Germany.” As he did during the press conference following his meeting with Yanis Varoufakis, his Greek counterpart, we have to remember that Schaeuble is talking nonsense. It’s logically impossible for excess borrowing to occur unless there is someone sufficiently reckless (or stupid) to provide the financing.”

And this is also good:

“I am hesitant to introduce what may seem like class warfare, but if you separate those who benefitted the most from European policies before the crisis from those who befitted the least, and are now expected to pay the bulk of the adjustment costs, rather than posit a conflict between Germans and Spaniards, it might be far more accurate to posit a conflict between the business and financial elite on one side (along with EU officials) and workers and middle class savers on the other. This is a conflict among economic groups, in other words, and not a national conflict, although it is increasingly hard to prevent it from becoming a national conflict.”

The German government, in collusion with the German business establishment, has wrecked Europe, first through its irresponsible lending, and then, later, through the pressure it put on the ECB to raise rates despite the weak European economy. The German government can try to blame others for the problems in Europe, but the driving force behind all of these problems has been Germany. Germany had a trade deficit at the end of the 1990s, and they wanted to develop a trade surplus, and they did so through a series of irresponsible measures that have done great harm to Europe.