Another year and austerity still doesn’t work!

So, Germany’s GDP has shrunk in the fourth quarter and growth for the entire year was weak ( – weaker than in Japan, China or the US, countries that did not go (full) austerity. This doesn’t come as a surprise to those that understood that the “debt brake” and drive towards a budget surplus would continue to undermine domestic demand while austerity all over the EMU would undermine exports. In fact, the headline of the article should be the other way around: “Germany experiences some growth despite budget surplus”. Drivers of this growth were those profligate non-austerity countries that still imported German goods.
The numbers *do* seem to be a surprise to the macroeconomic organizations that only nine months ago predicted higher growth ( In fact, most of them still got it quite wrong only five months ago ( And now those same organization try to predict GDP developments for 2013, and are predicting, predictably, that further austerity will lead to growth and not, as the last 5 years showed, to shrinkage.

This entry was posted in austerity, belief systems, economic policy, eurocrisis, media, neo-liberalism. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s