by George Dorgan
My articles My siteAbout meMy videosMy books
Follow on:LinkedINTwitterSeeking Alpha
CFA SocietyEconomicBlogs
The first German full-blown bailout, namely the integration of the Eastern German part (only 17 million people) caused the German debt (see right) to triple from 430 bln. euro in 1989 to 1200 bln in 1999, a decade during which even the US managed to reduce debt for a couple of years. Germany greatly underestimated the integration costs. It let the country see a long phase of slow growth till 2006, and still now the west pays subsidies to the east. Spain, Italy, Portugal, Ireland, Cyprus and Greece might be better developed now than the former communist GDR. But they count over 100 million people and might need more time than the 20 years the former Eastern Germans (still they are hard-working Germans) needed to cope up. This first bad experience is may be the main reason why Angela Merkel says that people should not overestimate Germany.
The french president Francois Hollande said that he expects Eurobonds to come in "up to ten years". We hope that Merkel will survive these ten years or that at least one of these two statesmen is a liar………..a new form of the ancient Greek liar paradox.
Full story here
Are you the author?
George Dorgan (penname) predicted the end of the EUR/CHF peg at the CFA Society and at many occasions on SeekingAlpha.com and on this blog. Several Swiss and international financial advisors support the site. These firms aim to deliver independent advice from the often misleading mainstream of banks and asset managers.
George is FinTech entrepreneur, financial author and alternative economist. He speak seven languages fluently.
Tags: Bailout,ESM,Eurobonds,franc,Hollande,Merkel,Other Periphery,Spain,Swiss National Bank
