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Wednesday, February 05, 2014

BILD up in arms about Greek bailouts once again

This is the front page of Germany’s (and Europe’s) largest  newspaper Bild. The headline reads:
“Greeks richer than us! ...But [the German] government plans new billions of aid.”
Now this is not exactly a surprising or rare occurrence – we have pointed out the tabloid's concern with the bailouts and other eurozone crisis actions before.

The story is based on the ECB wealth survey published last year. But as as we detailed on the blog at the time, the survey is actually quite misleading since it is based on old data and distorted by the much higher home ownership in peripheral Europe than in Germany. It also misses the point that tapping into such ‘wealth’ would be incredibly difficult.

In any case, with Greece continuing to struggle, even while the rest of the eurozone posts some positive results, the chances are that further assistance will be needed at some point. This remains a tricky proposition in Germany (and Greece, given the strings attached, we might add).


Rik said...

'Great timing' just a few months for the EP elections.
Very unlikely that the average Bild-reader will be very convinced by the fact that Germans rent more btw. And with the PR wise 'best country' on top of that.
Traditionals largely campaigning by being negative about the Euro-sceptics again on top of that.
AfD (already at more than double the required 3%) looks like a very safe bet this way.

Imho that (renting more) is a very weak argumentation anyway. Own houses are simply part of people's assets and in general the most important part.
Taxation is very simple as well via deemed rent in Income tax or as a seperate 'housetax' like in the US. Several other options as well. Not necessarily in one year. If you seperate the extra revenue effectively give it as collateral to creditors. Likely borrowing at a decent rate would not be a huge problem.

Anonymous said...

A bailout is required to cover Greek government bond tranches that mature in May and August of this year.

What Bild (or the German government) hasn't said is that Greece will require further bail outs - as will other MananaZone countries.

Germany is prospering via an artificially lower currency than it would have had if it wasn't in the Euro.

Tough luck Germany. You have to pay up either way!


Average Englishman said...

All more huff and puff nonsense again really. As Anonymous said, if the German people do not pay the Greeks et al to keep the Euro alive then it will fail and any 'New Mark' or 'Northern European Euro' or whatever that may replace it will be so strong that the German economy will be clobbered anyway.

However, if this second route were to be followed, the good people in Greece, Spain, Portugal, etc., would at least be able to generate some proper jobs for their young people, unlike the current appalling mess.

It's make your mind up time people; if an integrated European 'United States of Europe' is to happen like Barosso and the profligate boys in The Commission all want then BILD and the German people had better get used to the idea that they will have to pay their Greek etc., brethren dump trucks full of gold ad infinitum. If the German taxpayer does not feel so philanthropic then the sooner the current Euro arrangement is ditched in favour of a system that will work for the long term, the better.

As for the UK joining this party; don't even think about it. As a tax payer from the South East of England I'm already paying for plenty of my own people who are having a hard time of it in Wales, Scotland, Northern Ireland and the North of England in general (which I do not begrudge doing at all incidentally) and I am not about to add Stavros and Pedro to the list, even if I do like saying hello to them on holiday. Selfish? No realistic.