Gordon Brown and government spinners generally are pushing the idea
that the German Finance Minister’s blunt speaking was the result of
internal politics in the German coalition.
But that doesn’t square with the FT’s assessment - - -
“ Unlikely team eases tensions in coalition
Of all the members of chancellor Angela Merkel’s cabinet, the one she
gets along with best is Peer Steinbrück, finance minister and, as a
Social Democrat, a political rival”]
Nor does it gel with the CDU’s endorsement of Steinbrück’s criticisms
by describing Brown’s policy as a “complete failure of Labour policy."
xxxxxxxxxx cs
===================
TELEGRAPH 12.12.08
Recession: It takes a German to talk economic sense
Rarely have the words of a German politician of whom few in this
country have heard caused quite such a stir.
Peer Steinbrück's trenchant observations on Gordon Brown's economic
rescue plan have injected a welcome blast of reality into a debate
that had become slightly surreal. The Left-wing finance minister has
demolished both the Prime Minister's recovery strategy and his
assertion that every country is following his lead by merrily
spending its way out of trouble. Such "crass Keynesianism", said Mr
Steinbrück, was both "breathtaking and depressing". The very people
(i.e. Mr Brown) who would never touch deficit spending are now
"tossing around billions", and borrowed billions at that. Deriding
the costly futility of the cut in VAT, he warned it would saddle the
nation with a debt "that will take a whole generation to work off".
Credit-financed growth got the world into this mess, he said – and
now we are making the same mistake again.
Mr Steinbrück's intervention is unusual because finance ministers are
something of a freemasonry and tend not to turn on each other. It is
also brilliantly perceptive, as the shadow chancellor, George
Osborne, gratefully observed yesterday, describing it as "an
emperor's new clothes moment". In passing, it debunks Mr Brown's
claim that the "do nothing" Conservative Party stands alone in
opposing his plans for economic recovery. This may mark the moment
when Mr Brown's luck starts to turn. For months he has defied
political gravity by benefiting from a British economic crisis he
insists has exclusively American parentage, but which was largely
conceived by a profligate Labour Government under his personal
stewardship as Chancellor.
Mr Osborne, in his response to the pre-Budget report last month, and
David Cameron, in his LSE speech this week, have shown that they have
now found the language to expose the enormous risk in the
Government's recovery strategy. These rushed and panicky measures,
built on an ever-growing mountain of debt, threaten to make the
recession deeper and longer. The Tories must now shout this from the
rooftops at every available opportunity. Not only does Mr Steinbrück
agree with their analysis – so do the currency markets, which have
simply lost confidence in the British economy. The pound yesterday
hit a new record low against the euro. At the current rate of
attrition, we will be at parity with the euro within months. When he
was shadow chancellor, in the mid-1990s, Mr Brown observed: "A weak
currency arises from a weak economy which is in turn the result of a
weak government." His words were right then; they are right now.
===================
CONSERVATIVE HOME Blog -11.12.08 - Centre right
Not much fraternal love in Brussels
Ruth Lea
This week’s EU Summit in Brussels has been, so far, a fractious and
contentious affair. Ireland has apparently been bamboozled into
holding another referendum on the Lisbon Treaty, thus dismissing
June’s decisive vote against the Treaty as of no significance. Such
high-handedness confirms, as if confirmation is required, the
monumentally undemocratic nature of the EU. The Irish people have
spoken already – but they said the wrong thing. So they must speak
again. Well, at least they have the opportunity to speak, whereas we
were denied our vote on the Treaty on some trumped up charge by the
man who is currently “saving the world”.
German finance minister Peer Steinbrück attack on Gordon Brown’s
fiscal rescue package was extraordinary. Whatever happened to
diplomacy? But his assessment of Brown’s squandering of the nation’s
finances was spot-on. Britain is back to one of the sick men of
Europe, not that any of Europe’s economies are in A1 condition, and
there is not much sympathy in the EU for the man who boasted and
boasted and boasted again about the British economy’s superior
performance and the end of “boom and bust”. The word “hubris” springs
to mind. And as for the suggestion of a major coordinated fiscal
stimulus package in the spirit Communautaire camaraderie and
fraternal love, the Germans seem reluctant to play ball.
Last but by no means least there are the struggles over the 20/20/20
climate change package, involving the Renewables Directive and
toughening up the emissions trading scheme (ETS), to combat
“dangerous global warming”. (These targets refer to the proposals to
attain a 20% cut in man-made carbon dioxide emissions by 2020
compared with 1990, combined with 20% of fuels to come from renewable
sources by 2020.)
Suffice to say Mrs Merkel has already thrown a very sizeable spanner
in the EU’s ETS works by demanding free carbon credits for 90-100% of
German factories until 2020. She is clearly concerned that the extra
costs associated with the climate change package will drive business
away from Germany to countries which do not have draconian climate
change policies – a development known in the eco-jargon as “carbon
leakage”. She was quoted back in September saying that she “could not
support the destruction of German jobs through an ill-advised climate
policy”. No longer loved by assorted middle class eco-activists and
eco-warriors, whose agenda is to undermine modern economies and wreck
people’s freedoms, she has been dubbed “Frau Nein” and suffered the
indignity of being depicted as a puppet with a bizarre hairstyle
which seems to have modelled on the Mayor of London’s.
Mrs Merkel’s comments have been echoed by nine former Iron Curtain
countries led by Poland, concerned about recession and lost jobs, and
Italy’s Sylvio Berlusconi has generally undermined the EU’s climate
change policies by saying “our businesses are in absolutely no
position at the moment to absorb the costs of the regulations that
have been proposed.” If these positions are maintained, Britain’s
hairshirt adherence to draconian carbon reduction policies would mean
the country was isolated in its, ultimately futile, attempt to
control global man-made carbon emissions – of which Britain accounts
for less than 2%.
The decarbonising caravan trundles on in Britain. The Committee on
Climate Change recently released a report which ramped up the
proposed greenhouse gas reduction targets to 34% by 2020. And they
estimated that their proposed policies for hitting these targets
would cost Britain at least £15bn a year and add 25% to household
electricity costs by 2020. Can they really be serious? Do they
understand what is happening to the British economy?
And as I show in a new paper entitled “The EU’s Renewables policy:
official cost estimates for Britain” (for Global Vision and the
Taxpayers Alliance), even BERR’s estimates of the costs of the
Renewables Directive are significant. Moreover, the estimates are
likely to be under-estimates. A study by the energy consultancy
Pöyry, commissioned by BERR, showed that the annual cost of meeting
the Renewable targets could be as high as £200 per household in 2020.
And BERR’s own Impact Assessments estimated that the average annual
cost per household could be as high as £120, up to 2030. In neither
report was their any suggestion that there could be any net cash
benefits. The reports were all about extra costs – and sizeable ones
at that. These are costs which not only damage industry – but also
hit the less well off (including pensioners) disproportionately. The
policies are cruelly regressive.
===============
POLITICS HOME Comment - 12.12.08
Today, Radio 4 at 08:16
Miliband: Strong pan-European commitment to address this economic
challenge
David Miliband, Foreign Secretary
Mr Miliband said there was strong pan-European commitment for an
economic package including a fiscal stimulus, and praised the
expected EU commitment to carbon reduction.
“What you’ll see from Ms Merkel, and Gordon Brown, is a clear
statement setting out their support for an economic recovery package,
including a fiscal stimulus.
"The important point is that from the leadership of Germany, from the
Chancellor of Germany, from the Prime Minister of Britain, from 25
other European leaders, you've got a widespread recognition that
whatever the national differences this is a time for fiscal stimulus.
“There is a strong pan-European commitment to address this economic
challenge.”
He said that internal politics [balderdash - see fourth below ] was a
factor in the German Finance Minister’s criticisms of the UK approach
to the economic crisis, and added, “His colleague, the Economics
Minister said clearly that his country had an obligation to introduce
measures to stimulate the economy." [measures - Yes; ineffectual
tinkering with VAT - NO!]
Of Ms Merkel he said, “she’s very engaged with the debate about the
economic future of Europe, very engaged with climate change [she
wants exemptions for coal!] , she’s very engaged with
us.” [‘engaged’ ? Like Napoleon and Hitler ? -cs]
On the expected agreement on an EU climate change package he said,
“The most important thing is that Europe is committing to a carbon
reduction commitment of at least 20% by 2020. Those legal commitment
have never been made before. We will get those carbon reduction
commitments.” [and then fail to deliver them]
08:40, Sky News
Speaking a short time later, Mr Miliband said that David Cameron and
Peer Steinbruck were "a minority of two" on the economy. [----- the
FT’s assessment - - -
“ Unlikely team eases tensions in coalition
Of all the members of chancellor Angela Merkel’s cabinet, the one she
gets along with best is Peer Steinbrück, finance minister and, as a
Social Democrat, a political rival”
He said: "The leader of Germany, the Chancellor, will join Gordon
Brown today in applauding fiscal stimulus. She's signing up to the
European Economic Recovery Plan which, at its heart, has the same
fiscal stimulus as the British plan.
"There is a minority of two politicians that are disagreeing with the
common sense approach. It's a responsibility in government to
provide fiscal stimulus.
===============
CONSERVATIVE HOME - International 12.12.08
German CDU joins attack on Gordon Brown's unfunded fiscal stimulus
(as Angela Merkel becomes 'Frau Nein')
The British Conservative Party was delighted yesterday when Germany's
left-leaning finance minister, Peer Steinbruck, used an interview
with Newsweek to describe Gordon Brown's large fiscal stimulus as
"crass Keynesianism" and "breathtaking". In today's Independent,
Shadow Chancellor George Osborne writes:
"How ironic. In the very same week that Gordon Brown stood up in
Parliament and claimed that he was saving the world, the world
answered back. In a matter of just a few days, the German Finance
Minister described Mr Brown's reckless borrowing as "crass" and
"depressing", international currency markets sent the pound to a new
low against the euro, and it has become clear that the British bank
recapitalisation plan is the most expensive in Europe."
Senior Labour figures attempted to suggest that Herr Steinbruck's
intervention was all about internal German politics but his view has
been backed overnight by the CDU half of Berlin's Grand Coalition.
Steffen Kampeter, who speaks on economic policy for Chancellor Angela
Merkel's CDU party, described moves to raise debt as "a failure of
Labour policy".
The BBC reports Herr Kampeter as saying:
"Peer Steinbruck's comments have nothing whatsoever to do with
internal German politics, as Prime Minister Brown has suggested. The
tremendous amount of debt being offered by Britain shows a complete
failure of Labour policy. In questioning the British government's
approach, Peer Steinbruck is exactly expressing the views of the
German Grand Coalition. After years of lecturing us on how we need to
share in the gains of uncontrolled financial markets, the Labour
politicians can't now expect us to share in its losses. The
tremendous amount of debt being offered by Britain shows a complete
failure of Labour policy."
Angela Merkel is supportive of a fiscal stimulus across the EU but
insists, like Britain's Conservatives, that it be fully-funded.
Rosemary Righter in The Times points to German history to explain the
caution:
"Germans are profoundly averse to debt and, since the collapse of the
currency in the Weimar Republic in the 1920s, they have remained
terrified of inflation. Nor do they trust pump-priming; they tried
that after the 1973 oil shock, they point out, and all it did was
drive up public debt. Their reaction to emergency spending by
government is to save against the day when the bills come due. More
debt today, they reckon, means higher taxes tomorrow. A Chancellor
who keeps her powder dry is just their cup of chocolate."
The Guardian has labelled Angela Merkel 'Frau Nein' after she adopted
'go-it-alone' positions on a range of issues. In addition to her
attitude to borrowing she "opposes any common EU policy that could be
seen as confrontational towards Russia"; "has led resistance to the
European commission's carbon trading proposals"; and "has frustrated
Washington, London and Paris by resisting the imposition of
meaningful economic sanctions on Iran over its nuclear programme".
that the German Finance Minister’s blunt speaking was the result of
internal politics in the German coalition.
But that doesn’t square with the FT’s assessment - - -
“ Unlikely team eases tensions in coalition
Of all the members of chancellor Angela Merkel’s cabinet, the one she
gets along with best is Peer Steinbrück, finance minister and, as a
Social Democrat, a political rival”]
Nor does it gel with the CDU’s endorsement of Steinbrück’s criticisms
by describing Brown’s policy as a “complete failure of Labour policy."
xxxxxxxxxx cs
===================
TELEGRAPH 12.12.08
Recession: It takes a German to talk economic sense
Rarely have the words of a German politician of whom few in this
country have heard caused quite such a stir.
Peer Steinbrück's trenchant observations on Gordon Brown's economic
rescue plan have injected a welcome blast of reality into a debate
that had become slightly surreal. The Left-wing finance minister has
demolished both the Prime Minister's recovery strategy and his
assertion that every country is following his lead by merrily
spending its way out of trouble. Such "crass Keynesianism", said Mr
Steinbrück, was both "breathtaking and depressing". The very people
(i.e. Mr Brown) who would never touch deficit spending are now
"tossing around billions", and borrowed billions at that. Deriding
the costly futility of the cut in VAT, he warned it would saddle the
nation with a debt "that will take a whole generation to work off".
Credit-financed growth got the world into this mess, he said – and
now we are making the same mistake again.
Mr Steinbrück's intervention is unusual because finance ministers are
something of a freemasonry and tend not to turn on each other. It is
also brilliantly perceptive, as the shadow chancellor, George
Osborne, gratefully observed yesterday, describing it as "an
emperor's new clothes moment". In passing, it debunks Mr Brown's
claim that the "do nothing" Conservative Party stands alone in
opposing his plans for economic recovery. This may mark the moment
when Mr Brown's luck starts to turn. For months he has defied
political gravity by benefiting from a British economic crisis he
insists has exclusively American parentage, but which was largely
conceived by a profligate Labour Government under his personal
stewardship as Chancellor.
Mr Osborne, in his response to the pre-Budget report last month, and
David Cameron, in his LSE speech this week, have shown that they have
now found the language to expose the enormous risk in the
Government's recovery strategy. These rushed and panicky measures,
built on an ever-growing mountain of debt, threaten to make the
recession deeper and longer. The Tories must now shout this from the
rooftops at every available opportunity. Not only does Mr Steinbrück
agree with their analysis – so do the currency markets, which have
simply lost confidence in the British economy. The pound yesterday
hit a new record low against the euro. At the current rate of
attrition, we will be at parity with the euro within months. When he
was shadow chancellor, in the mid-1990s, Mr Brown observed: "A weak
currency arises from a weak economy which is in turn the result of a
weak government." His words were right then; they are right now.
===================
CONSERVATIVE HOME Blog -11.12.08 - Centre right
Not much fraternal love in Brussels
Ruth Lea
This week’s EU Summit in Brussels has been, so far, a fractious and
contentious affair. Ireland has apparently been bamboozled into
holding another referendum on the Lisbon Treaty, thus dismissing
June’s decisive vote against the Treaty as of no significance. Such
high-handedness confirms, as if confirmation is required, the
monumentally undemocratic nature of the EU. The Irish people have
spoken already – but they said the wrong thing. So they must speak
again. Well, at least they have the opportunity to speak, whereas we
were denied our vote on the Treaty on some trumped up charge by the
man who is currently “saving the world”.
German finance minister Peer Steinbrück attack on Gordon Brown’s
fiscal rescue package was extraordinary. Whatever happened to
diplomacy? But his assessment of Brown’s squandering of the nation’s
finances was spot-on. Britain is back to one of the sick men of
Europe, not that any of Europe’s economies are in A1 condition, and
there is not much sympathy in the EU for the man who boasted and
boasted and boasted again about the British economy’s superior
performance and the end of “boom and bust”. The word “hubris” springs
to mind. And as for the suggestion of a major coordinated fiscal
stimulus package in the spirit Communautaire camaraderie and
fraternal love, the Germans seem reluctant to play ball.
Last but by no means least there are the struggles over the 20/20/20
climate change package, involving the Renewables Directive and
toughening up the emissions trading scheme (ETS), to combat
“dangerous global warming”. (These targets refer to the proposals to
attain a 20% cut in man-made carbon dioxide emissions by 2020
compared with 1990, combined with 20% of fuels to come from renewable
sources by 2020.)
Suffice to say Mrs Merkel has already thrown a very sizeable spanner
in the EU’s ETS works by demanding free carbon credits for 90-100% of
German factories until 2020. She is clearly concerned that the extra
costs associated with the climate change package will drive business
away from Germany to countries which do not have draconian climate
change policies – a development known in the eco-jargon as “carbon
leakage”. She was quoted back in September saying that she “could not
support the destruction of German jobs through an ill-advised climate
policy”. No longer loved by assorted middle class eco-activists and
eco-warriors, whose agenda is to undermine modern economies and wreck
people’s freedoms, she has been dubbed “Frau Nein” and suffered the
indignity of being depicted as a puppet with a bizarre hairstyle
which seems to have modelled on the Mayor of London’s.
Mrs Merkel’s comments have been echoed by nine former Iron Curtain
countries led by Poland, concerned about recession and lost jobs, and
Italy’s Sylvio Berlusconi has generally undermined the EU’s climate
change policies by saying “our businesses are in absolutely no
position at the moment to absorb the costs of the regulations that
have been proposed.” If these positions are maintained, Britain’s
hairshirt adherence to draconian carbon reduction policies would mean
the country was isolated in its, ultimately futile, attempt to
control global man-made carbon emissions – of which Britain accounts
for less than 2%.
The decarbonising caravan trundles on in Britain. The Committee on
Climate Change recently released a report which ramped up the
proposed greenhouse gas reduction targets to 34% by 2020. And they
estimated that their proposed policies for hitting these targets
would cost Britain at least £15bn a year and add 25% to household
electricity costs by 2020. Can they really be serious? Do they
understand what is happening to the British economy?
And as I show in a new paper entitled “The EU’s Renewables policy:
official cost estimates for Britain” (for Global Vision and the
Taxpayers Alliance), even BERR’s estimates of the costs of the
Renewables Directive are significant. Moreover, the estimates are
likely to be under-estimates. A study by the energy consultancy
Pöyry, commissioned by BERR, showed that the annual cost of meeting
the Renewable targets could be as high as £200 per household in 2020.
And BERR’s own Impact Assessments estimated that the average annual
cost per household could be as high as £120, up to 2030. In neither
report was their any suggestion that there could be any net cash
benefits. The reports were all about extra costs – and sizeable ones
at that. These are costs which not only damage industry – but also
hit the less well off (including pensioners) disproportionately. The
policies are cruelly regressive.
===============
POLITICS HOME Comment - 12.12.08
Today, Radio 4 at 08:16
Miliband: Strong pan-European commitment to address this economic
challenge
David Miliband, Foreign Secretary
Mr Miliband said there was strong pan-European commitment for an
economic package including a fiscal stimulus, and praised the
expected EU commitment to carbon reduction.
“What you’ll see from Ms Merkel, and Gordon Brown, is a clear
statement setting out their support for an economic recovery package,
including a fiscal stimulus.
"The important point is that from the leadership of Germany, from the
Chancellor of Germany, from the Prime Minister of Britain, from 25
other European leaders, you've got a widespread recognition that
whatever the national differences this is a time for fiscal stimulus.
“There is a strong pan-European commitment to address this economic
challenge.”
He said that internal politics [balderdash - see fourth below ] was a
factor in the German Finance Minister’s criticisms of the UK approach
to the economic crisis, and added, “His colleague, the Economics
Minister said clearly that his country had an obligation to introduce
measures to stimulate the economy." [measures - Yes; ineffectual
tinkering with VAT - NO!]
Of Ms Merkel he said, “she’s very engaged with the debate about the
economic future of Europe, very engaged with climate change [she
wants exemptions for coal!] , she’s very engaged with
us.” [‘engaged’ ? Like Napoleon and Hitler ? -cs]
On the expected agreement on an EU climate change package he said,
“The most important thing is that Europe is committing to a carbon
reduction commitment of at least 20% by 2020. Those legal commitment
have never been made before. We will get those carbon reduction
commitments.” [and then fail to deliver them]
08:40, Sky News
Speaking a short time later, Mr Miliband said that David Cameron and
Peer Steinbruck were "a minority of two" on the economy. [----- the
FT’s assessment - - -
“ Unlikely team eases tensions in coalition
Of all the members of chancellor Angela Merkel’s cabinet, the one she
gets along with best is Peer Steinbrück, finance minister and, as a
Social Democrat, a political rival”
He said: "The leader of Germany, the Chancellor, will join Gordon
Brown today in applauding fiscal stimulus. She's signing up to the
European Economic Recovery Plan which, at its heart, has the same
fiscal stimulus as the British plan.
"There is a minority of two politicians that are disagreeing with the
common sense approach. It's a responsibility in government to
provide fiscal stimulus.
===============
CONSERVATIVE HOME - International 12.12.08
German CDU joins attack on Gordon Brown's unfunded fiscal stimulus
(as Angela Merkel becomes 'Frau Nein')
The British Conservative Party was delighted yesterday when Germany's
left-leaning finance minister, Peer Steinbruck, used an interview
with Newsweek to describe Gordon Brown's large fiscal stimulus as
"crass Keynesianism" and "breathtaking". In today's Independent,
Shadow Chancellor George Osborne writes:
"How ironic. In the very same week that Gordon Brown stood up in
Parliament and claimed that he was saving the world, the world
answered back. In a matter of just a few days, the German Finance
Minister described Mr Brown's reckless borrowing as "crass" and
"depressing", international currency markets sent the pound to a new
low against the euro, and it has become clear that the British bank
recapitalisation plan is the most expensive in Europe."
Senior Labour figures attempted to suggest that Herr Steinbruck's
intervention was all about internal German politics but his view has
been backed overnight by the CDU half of Berlin's Grand Coalition.
Steffen Kampeter, who speaks on economic policy for Chancellor Angela
Merkel's CDU party, described moves to raise debt as "a failure of
Labour policy".
The BBC reports Herr Kampeter as saying:
"Peer Steinbruck's comments have nothing whatsoever to do with
internal German politics, as Prime Minister Brown has suggested. The
tremendous amount of debt being offered by Britain shows a complete
failure of Labour policy. In questioning the British government's
approach, Peer Steinbruck is exactly expressing the views of the
German Grand Coalition. After years of lecturing us on how we need to
share in the gains of uncontrolled financial markets, the Labour
politicians can't now expect us to share in its losses. The
tremendous amount of debt being offered by Britain shows a complete
failure of Labour policy."
Angela Merkel is supportive of a fiscal stimulus across the EU but
insists, like Britain's Conservatives, that it be fully-funded.
Rosemary Righter in The Times points to German history to explain the
caution:
"Germans are profoundly averse to debt and, since the collapse of the
currency in the Weimar Republic in the 1920s, they have remained
terrified of inflation. Nor do they trust pump-priming; they tried
that after the 1973 oil shock, they point out, and all it did was
drive up public debt. Their reaction to emergency spending by
government is to save against the day when the bills come due. More
debt today, they reckon, means higher taxes tomorrow. A Chancellor
who keeps her powder dry is just their cup of chocolate."
The Guardian has labelled Angela Merkel 'Frau Nein' after she adopted
'go-it-alone' positions on a range of issues. In addition to her
attitude to borrowing she "opposes any common EU policy that could be
seen as confrontational towards Russia"; "has led resistance to the
European commission's carbon trading proposals"; and "has frustrated
Washington, London and Paris by resisting the imposition of
meaningful economic sanctions on Iran over its nuclear programme".
Posts
