German ridicule for UK policies

Datasafe_2

The German finance minister has launched an outspoken attack on the UK government's plans to help pull Britain out of the economic downturn.

'Debt generation'
Criticising the UK government's decision to cut VAT from 17.5% to 15%, Mr Steinbruck questioned how effective this will be.
"Are you really going to buy a DVD player because it now costs £39.10 instead of £39.90?" he said.
"All this will do is raise Britain's debt to a level that will take a whole generation to work off."
Saying the UK government was now "tossing around billions", Mr Steinbruck questioned why Britain was now closely following the high public spending model put forward by 20th Century economist John Maynard Keynes.
"The switch from decades of supply-side politics all the way to a crass Keynesianism is breathtaking," he said.
"When I ask about the origins of the [financial] crisis, economists I respect tell me it is the credit-financed growth of recent years and decades.
"Isn't this the same mistake everyone is suddenly making again, under all the public pressure?"

http://news.bbc.co.uk/1/hi/business/7776462.stm

nickmason

Surely not - I thought Gordo was saving the world from this crisis, like a superhero?
I thought the whole of the world was listening to his way of solving it?

hearts

nickmason wrote: »

Surely not - I thought Gordo was saving the world from this crisis, like a superhero?

I thought the whole of the world was listening to his way of solving it?

.....and the torys wil come along and save the world. lol

themanbearpig

He is quite right. Fiscal stimulus is fair enough, but a 2.5% cut in VAT? What a joke.
Its almost like Flash G expected us to rejoice and run to the nearest overprice high street retailer and spend all of our money.

But what is his motive?
Why would he feel its his place to say this?

econo_2

themanbearpig wrote: »

He is quite right. Fiscal stimulus is fair enough, but a 2.5% cut in VAT? What a joke.
Its almost like Flash G expected us to rejoice and run to the nearest overprice high street retailer and spend all of our money.

But what is his motive?
Why would he feel its his place to say this?

This is not the first time he has been critical of the UK/US model and warned of mounting problems sometime ago, apparently to be dismissed by the UK and US governments.

I'd imagine that he feels Germany has been caught up, mainly in the turmoil and worsening situation due to them being unable to break free from the interrelated relationship of the 'world economy' and the fact they have had very little input into the financial model adopted over the last 2 decades or so that is now falling around our ears.

I think I'd be just as frustrated as he is.

purch

It's a major change in position from the Germans

Previously they were doing nothing and hoping it'll all come right in the end....

Now they are doing nothing and hoping it'll all come right in the end, and "having a pop" at countries that are trying to do something.

It'll be interesting to see if their tactics have worked 2 -3 years down the road.

Datasafe_2

The empire strikes back............:rolleyes:

http://news.bbc.co.uk/1/hi/business/7776718.stm

THX-1139

Always two there are, no more, no less: a master and an apprentice.

econo_2

purch wrote: »

It's a major change in position from the Germans

Previously they were doing nothing and hoping it'll all come right in the end....

Now they are doing nothing and hoping it'll all come right in the end, and "having a pop" at countries that are trying to do something.

It'll be interesting to see if their tactics have worked 2 -3 years down the road.

Purch, it may appear commendable that the US/UK governments are 'doing something' but all their doing is making it a far bigger disaster down the road. Having 'a pop' is because the Germans can see where this is heading and being so closely tied in the EU haven't the independence they'd like to be able to do enough.

Our chancellor and the US fed's notion that you can spend your way out of the problem is nothing short of total recklessness and madness, and don't be fooled into thinking that this is for anything other than votes.

Germany has much more of a 'real economy' built on exports and production, not a 'fake economy' like ours and the US's built on consumption.

Heyman_2

It is difficult to see where the VAT cut fits in, in terms of helping the economy, given the little impact it will have on essentials (i.e. doesn't apply to food, clothes, utilities etc etc).

I think it was supposed to be some kind of symbolic gesture to inspire confidence, which would make a lot more sense.....if the government hadn't preceded it by banging on about a 'fiscal stimulus' which this most certainly is not.

purch

don't be fooled into thinking that this is for anything other than votes

It's ok I won't be fooled, even though I might take a slightly less cynical view

I also won't be fooled into thinking that everything is rosy in Euroland. The Fiscal problems in Germany and throughout Europe will ultimatey dwarf those of the U.K. and those who put their faith in the Euro might regret being so hasty.