Germany ‘on course to meet EU fiscal rules’

[Onkel Neal]

Wasn't it a requirement for new members to join the EU that countries meet these guidelines created by France and Germany??


Germany ‘on course to meet EU fiscal rules’

By Ralph Atkins in Frankfurt and Hugh Williamson in Berlin
Published: July 5 2006 18:38 | Last updated: July 5 2006 18:38

Germany’s public finances have been brought under control, setting the country on course to comply with European Union fiscal rules for the first time in five years, the government declared on Wednesday.
http://www.ft.com/cms/s/ee5d08d0-0c4c-11db-86c7-0000779e2340.html

[Skybird]

Yes. And that requeirement was broken from day one on. That's the art of policy-making...

BTW, you are on the safe side when doubting the content of the news that the next fiscal plan is a safe thing - it will blow up and again violate both German constitutional rules, and EU criterias, i tell you. It already became known that certain positions on social and job issues got excluded or clean-calculated (=forged) in order to give the impression the plan could work. It will not, I promise you. The irony is that Merkel has started with the promise during campaign not to clean numbers and turn them for nice appearences, and later needing to correct them for worse - one of her preferred arguments against the ruling SPD - but that she always would give statistiscs and numbers as they really are, that way avoiding to need correcting them again and again afterwards

She also said there would not be any tax raises with her in command. In fact she has given us the biggest boost in taxes in modern Germany's history ever.

Great coalitions - small effects. :lol: Coalitions of this kind are simply unnatural. and they mean to hollow out democracy even further.

[Spoon 11th]

Yes. And that requeirement was broken from day one on.
I recall otherwise. Germany was doing fine until the change of the millennium. So was France. On the other hand Greece and Italy have never met all of the criteria and Greece recently (last year?) got caught of faking budget records. What a bunch of ragged beggars.

[Skybird]

The criterias of the EU for a solid currency were softened up roughly around that time when Schroeder took over, and Schroeder helped in changing these criterias when it was clear that Germany else would not be able to join the launch of the new currency. The Euro never was that hard a currency like it was planned, those minds that participated in designing it almost univocally say they do not see what their plans have to do with the way the Euro is handled today. I do not remembver the ranks and names, but a French and a German leading banker who participated in designing the currency in leading positions, since then stepped back in protest and protested against the softening up that meanwhile has taken place in several stages. They say that in it's current form the euro is not solid enough to keep down inflation. They indicated that they consider the events that took place when Schroeder and others changed the intitial rules, to be irresponsible, and very dangerous.Germany was not alone in this, though. It's just that the small ones received sharp warnings, while Germany negotiates for exceptions year after year, successfully because it comes up for one quarter of the total EU budget. But the euro by far is not that solid and hard currency as it's fathers wanted it to be. It is also interesting to see that Germans - initially welcoming the Euro - now have turned into opponents to it by majority. I personally do not know a single person who does not want to get rid of it now. We curse about it every day when looking at the prices. In other countries, comparable processes seem to be present, but that I conclude by subjective news-reading only. It has caused a significant raise in costs for goods of everyday life. The government tries to hide that fact, though, by influencing the statistics accordingly. Surprisingly, estimations on how big the raise is do not vary too much, but are quite consistent, many people agree that the raise all in all is by a factor of one third or one fourth, roughly. I agree to that and would estimate 30% myself, too. With a given sum I survive one third lesser time than before with the same money in D-marks.

[thanos]

Even though the euro has indeed brought some significant inflation and a general rise in prices, you must also take note of the fact than in the last few years, oil prices have gone up more than 200%. So that by itself is a prime reason for inflation, especially in countries that import oil and natural gas (i.e. the vast majority, if not all of euro-using countries).

Similar trends exist in the US (or more likely in LA that I am familiar with). Some things like for example parking permits have *doubled* since 2001. Food has also increased by more than 30%. Rent by 20-30% and of course gas, by more than 100%.

And despite all of this, the "official" inflation rate is something like 3%...

[Skybird]

Note that I talked of goods of everyday life: food, drugstore articlesetc. I exclucded oil, gas, gasoline, and restaurant prices. If you take them onto the bill, too, mean price index would be even higher.The official German index, the socalled "Warenkorb" of the government, is under massive criticism since many years. It weights positions and articles that traditionlly were considered to be price-stable (rents for appartmenets, for example) in an over-representative manner, wehre as articles and position that see many small raises within short timeframes are underweighted. This collection of statistical goods has 700-800 single positions. The Warenkorb helps the government (all governments) to make numbers appear better than they are.

[Wim Libaers]

Note that I talked of goods of everyday life: food, drugstore articlesetc. I exclucded oil, gas, gasoline, and restaurant prices. If you take them onto the bill, too, mean price index would be even higher.The official German index, the socalled "Warenkorb" of the government, is under massive criticism since many years. It weights positions and articles that traditionlly were considered to be price-stable (rents for appartmenets, for example) in an over-representative manner, wehre as articles and position that see many small raises within short timeframes are underweighted. This collection of statistical goods has 700-800 single positions. The Warenkorb helps the government (all governments) to make numbers appear better than they are.

An almost irrelevant distinction. Food requires fuel. Without fossil fuels for the tractors, for the chemical industry that makes fertilisers and pesticides, and for the transport sector, there would be a significant reduction in available food.

[thanos]

An almost irrelevant distinction. Food requires fuel. Without fossil fuels for the tractors, for the chemical industry that makes fertilisers and pesticides, and for the transport sector, there would be a significant reduction in available food.
Exactly. Almost anything requires fuel, since everything requires energy to make. So be it in transportation where it has a direct effect (trucks need oil, ships need oil, diesel trains need oil, planes need oil) or in electricity production (diesel plants or natural gas plants), fossil fuel has an effect on the cost of production. The magnitude of the effect can differ, but after a 200% increace in the price, you need to expect that everything will be more expensive, euro or no euro. Besides, as I said, the situation is not much better in parts of the US (I try not to generalize since the US is a big country)

[XabbaRus]

The laugh of it was that the UK was one of only a couple of countries that actually met the requirements for entry into the Eurozone/currency.

It was the way Germany and France so blatently changed the rules they'd made when it was obvious they wouldn't be able to enter into teh single currency under the circumstances at the time and would have screwed it up but didn't want to see that so desperate they were. Ah the EU is a joke. Better to scrap it and start again. Saying that the one good thing is certain europe wide reulations for certain goods such as the ATEX directive.

[Skybird]

An almost irrelevant distinction. Food requires fuel. Without fossil fuels for the tractors, for the chemical industry that makes fertilisers and pesticides, and for the transport sector, there would be a significant reduction in available food.
Exactly. Almost anything requires fuel, since everything requires energy to make. So be it in transportation where it has a direct effect (trucks need oil, ships need oil, diesel trains need oil, planes need oil) or in electricity production (diesel plants or natural gas plants), fossil fuel has an effect on the cost of production. The magnitude of the effect can differ, but after a 200% increace in the price, you need to expect that everything will be more expensive, euro or no euro. Besides, as I said, the situation is not much better in parts of the US (I try not to generalize since the US is a big country)
Then why did the price index raise so dramatically - years before the oil price epxloded? I am aware of the link getween prices for other goods, and gasoline. I want to express that I am not taking about gas prices.

[Skybird]

It was the way Germany and France so blatently changed the rules they'd made when it was obvious they wouldn't be able to enter into teh single currency under the circumstances at the time
Exactly. And nthat had feeded back onto thinking about national economies and how one adresses püroblems. Don't change bad habits (spenindg more money than you have, for example) and non-working tatctcis, but chnage the definition of a problem so that it is no longer defined as a problem. If there is a structural problem, change the standards of definition - and then it disappears as if by magic.

[thanos]

Then why did the price index raise so dramatically - years before the oil price epxloded? I am aware of the link getween prices for other goods, and gasoline. I want to express that I am not taking about gas prices.

Because there is price gouging. I don't know about Germany but what happened in other places is that prices were rounded UP to the nearest 10-th percentile in the best case (i.e 3.21 became 3.30) and to the nearest 50-th percentile or nearest unit in the worst case (i.e. 3.21 became 3.50 or 4).

In other words, some people tried to make a fast one.

As for gas prices, what I am saying is that you can't disregard them even if you aren't explicitly talking about them, since they affect almost everything and the only thing that matters is the degree at which they do.

[tycho102]

Listen, I don't know how it works in Germany. I've only been there twice, for a combined total of about 7 days. However, I know Germany has social programs for it's social programs. We've got social programs for our social programs. We're going to have to (eventually, when the Crisis comes) start cutting social programs. I would imagine Germany is going to have to start cutting social programs, eventually.

As for petrol (otherwise known as gasoline, or octane [along with hexane and some heptane], in the US), we all should have been reducing it's importance, long ago. Like I was saying about a fiscal crisis, it simply takes a crisis to get things done. It takes people dying before the motivation to change is great enough. We all need to get off Arab oil. There is plenty of uranium and thorium available in the civilized areas of the world. Gasoline is just an energy storage medium, and there are other energy storage mediums available through our current technological advancement.



The term "price goughing" is always interesting to hear, especially when it comes from people who are not involved in the stock market, or "investing" in general.

[thanos]

The term "price goughing" is always interesting to hear, especially when it comes from people who are not involved in the stock market, or "investing" in general.

Would you prefer "profiteering" perhaps? I think their meaning is similar but in any case the idea I was trying to convey was that because of the change of currency, some people tried to make a fast buck.

[Wim Libaers]

Then why did the price index raise so dramatically - years before the oil price epxloded? I am aware of the link getween prices for other goods, and gasoline. I want to express that I am not taking about gas prices.

Because there is price gouging. I don't know about Germany but what happened in other places is that prices were rounded UP to the nearest 10-th percentile in the best case (i.e 3.21 became 3.30) and to the nearest 50-th percentile or nearest unit in the worst case (i.e. 3.21 became 3.50 or 4).

In other words, some people tried to make a fast one.

As for gas prices, what I am saying is that you can't disregard them even if you aren't explicitly talking about them, since they affect almost everything and the only thing that matters is the degree at which they do.


True, that did happen, but that alone doesn't get you to 30%. It may be bigger when salesmen use the psychological effect that the numbers are smaller than with currency units, but I think a bigger effect may be increasing taxes and extra taxes (not sure how things are in Germany, but the Belgian government keeps boasting about how they lowered taxes so much, while at the same time being happy about significant increases in tax income for the government, without there being much economical growth in that same period :-?)