The ECB’s stealth bailout

Hans-Werner Sinn, 18 November 2011The first major crisis in the era of independent central banks is severely testing that independence – nowhere more so than the Eurozone. This column argues that the ECB is monetising the sovereign debt – a view widely held in Germany. It argues that the ECB is the Eurozone’s economic government with the power to enforce comprehensive rescue measures, up to and including a fiscal transfer union.Full Article: ECB crisis actions: The printing press perspective

Karl Whelan, 9 June 2011In a recent Vox column, Hans Werner Sinn of the prestigious Institute for Economic Research claims that the German Bundesbank is effectively propping up banks across the Eurozone’s periphery. He adds that doing this risks a major crisis. Here, Karl Whelan of University College Dublin argues that Professor Sinn’s analysis is incorrect and that his policy prescriptions are extremely unhelpful and even dangerous. Full Article: Why Hans Werner Sinn is missing the target

Hans-Werner Sinn, 19 February 2011According to their government accounts, Ireland, Portugal, and Spain only need €310 billion. This column argues that analysts calling for a larger fund must have something else in mind, for example, using EU capital to reduce national debt via debt buybacks. While debt buybacks are reasonable, granting EU loans for this purpose is not. Full Article: Why the Eurozone rescue fund is large enough

The euro-area economy will shrink in back-to-back years for the first time, driving unemployment higher as governments, consumers and companies curb spending, the European Commission said. Gross domestic product in the 17-nation region will fall 0.3% this year, compared with a November prediction of 0.1% growth, the Brussels-based commission forecast Friday. Unemployment will climb to 12.2%, up from the previous estimate of 11.8% and 11.4% last year.

from Merijn Knibbe Hans Werner Sinn is a leading German economists. He has rightly opened out eyes to the importance of the Target2 balances which at this moment provide the liquidity which keeps the Eurozone afloat. But ccording to Sinn, in a recent article in which he laments the past and regrets the future, interest [...]

Ramon Marimon, 17 March 2011Europe’s history is littered with crises. This column argues that the latest Eurozone crisis is the latest in a long line out of which the region has to evolve. The problem, it says, is that the current package being discussed fails to draw a line under this crisis. While the proposal is reasonable, is not credible.Full Article: A credible economic order for the Eurozone?