We can’t all be Germans, so what’s next?
My American friends are always amazed when I tell them that as a student in the mid 1980s if you wanted heat or hot water you frequently had to feed the meter with 50 pence coins.
The pathetic scrambling for coins in the dead of winter epitomized the short term, the desperate. But feeding the meter is the phrase that comes to mind when contemplating Europe’s bailout package.
Most economists that I have read seem to agree that this, while being a tepid triumph born by the lowest of expectations, does little to fix the underlying problem and address the fundamental debate: what is the right mix between austerity and stimulus?
Greece may eventually reach some kind of fiscal health but at the expense of what? A very weak economic pulse and plenty of social unrest.
Britain has tightened belts admirably but the patient can barely breathe. Economic growth is pathetically weak. We can’t all become Germans overnight, which seems to be what the ECB is asking the likes of Greece, Spain or Portugal to do.
America has been sitting nervously on the sidelines, praying that the strange beast of the EU can get its act together. The sighs of relief steamed up cold windows all over the White House yesterday.
President Obama said he hoped for rapid implementation. In other words can some please hand the Europeans a big bag of 50 pence coins.
But what about his own meter? It has been over a month now since the President announced his jobs package with great fanfare and buttock-clenching urgency on Capitol Hill. It has been languishing there ever since, pushed around the plate like some unwanted vegetables. The Republicans are primarily to blame but nor is this programme bold enough to convince people it will make a difference.
And aren’t there hints of the debate over state’s rights and the “tyranny” of the federal government which crop up periodically to ruffle this democracy?
Think of Greece as Alabama and Italy as California. The difference of course is that Brussels or Frankfurt can’t impose a federal European tax and the ECB unlike the Fed is not the lender of last resort.
Enough already. A combination of mildly better growth numbers here and a deal of sorts in Europe means that in the coming week we can all focus on being scared by Halloween and not by the state of the economy.
But once the seasonal skeletons are mothballed for another year it will be high time to think beyond the meter and the 50 pence coins once and for all.
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