Schauble Supports European Treasury, Which might Fight Recessions

July 31st, 2015
in Op Ed

by Dirk Ehnts, Econoblog101

The German weekly Die Zeit reports that Schäuble support the idea of a Treasury at the European level. It seems that some taxes are thought to be part of the idea, but a member of the Christian Democrats in Brussels and Member of the European Parliament, Elmar Brok, is quoted to have said that the Euro Treasury can smooth the business cycle.

Follow up:

After the lost years of 2010-2014 this would be a first step in the right direction. The euro zone needs more demand, and not less. Why this change? Perhaps it's the numbers:

Change in the number of unemployed persons (compared to previous month, in thousands), seasonally adjusted, January 2006 - May 2015
800px-Change_in_the_number_of_unemployed_persons_(compared_to_previous_month,_in_thousands),_seasonally_adjusted,_January_2006_-_May_2015

source: Eurostat

The net change is now close to zero, and the unemployment rate in the euro zone in May was 11.1%. It is time for expansionary measures, and, with repeated devaluations of the euro being ruled out because of likely retaliation, since the private sector cannot be forced to spend, the public sector should take up the slack.

The proposal of a Euro Treasury is a first ray of light that the euro zone's policy makers have learned the lessons from 2010-14. However, it critically depends on the capability to deficit-spend, meaning that a Treasury that can use only taxes would be useless to fulfill its job of fighting recessions in the euro zone.









Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.















 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved