Hans-Werner Sinn
Hans-Werner Sinn is Professor of Economics and Public Finance, University of Munich, and President of the Ifo Institute.
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2011-12-29
| The eurozone's sovereign-debt crisis is eating its way from the periphery to the core, and the exodus of capital is accelerating. If the eurozone does not want to embrace capital controls, it has only two alternatives: stop the local printing of money, or provide investment guarantees in countries that markets view as insecure.... read |
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2011-10-25
| When it comes to refinancing Italy, bond purchases are just the tip of the iceberg: in August alone, Italy’s central bank drew €40 billion in credit from the ECB system, and it probably drew roughly another €50 billion in September. This is not the end of the world – not even for the ECB – but the eurozone has entered dangerous territory.... read |
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2011-08-25
| Europe needs to face reality and initiate the difficult adjustment processes within the real economy that are necessary to rebalance the eurozone. Eurobonds would numb the distressed countries’ current pain, but, by failing to treat the underlying disease, they – and the eurozone as a whole – would end up far sicker than before.... read |
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2011-06-30
| It is time to face the fact that Europe’s peripheral countries have to become poorer. The only question is whether they will take the euro down as well.... read |
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2011-04-29
| For many, Greece, Ireland, and Portugal had to seek an EU bailout, and Spain is a potential candidate, because international markets no longer wanted to finance their current-account deficits. But international markets have not financed any of them for the past three years; the European Central Bank has.... read |
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2011-02-25
| Having agreed to double the European Financial Stability Facility's capacity to lend to distressed eurozone members, EU countries are now mulling how the EFSF’s funds will be made available. The crucial issue is the extent to which creditors will have to participate in rescue measures by accepting “haircuts” – that is, partial losses on their claims.... read |
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2010-12-22
| The new European Stability Mechanism may stabilize Europe in the short run and help it to withstand better the current speculative attacks on the euro. But while financial contagion today is limited to bank interaction, the EU’s measures have broadened the channels for contagion to include government budgets.... read |
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2010-10-22
| The US accepted the undervaluation of the renminbi as long as China returned the dollars that it earned from bilateral trade by financing America’s budget deficit. Now that the Chinese prefer to invest that money in raw materials in Africa and elsewhere, they have aroused the full ire of American policymakers.... read |
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2010-08-26
| The world is currently divided into two groups of countries: those that are off to a strong recovery, and others that lag behind and are signaling new problems. This division, in turn, reflects a process of portfolio rebalancing, which is reversing the international ranking of growth rates relative to those before the crisis. ... read |
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What Euro Crisis?
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Hans-Werner Sinn 
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European leaders, led by French President Nicolas Sarkozy, declared in May a systemic crisis of the euro, thereby invoking a clause of the EU Treaty intended to help member countries facing the effects of natural disaster. But there is no crisis of the euro, only a search by markets for a new equilibrium on interest-rate spreads – which are still far below pre-euro levels.... read
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2008-12-29
| German Chancellor Angela Merkel has been widely criticized for playing the spoiler in the competition to provide billions to prevent a breakdown of the world economy. But there are good economic reasons for Germany to wait before implementing a stimulus package, and Merkel's stance can also be explained by justified fears of the EU's redistribution machinery.... read |
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2005-03-23
| France’s decision effectively abolishing its 35-hour workweek by allowing employers to increase working hours – and pay – marks a reversal of a decades-old trend. In the 1980’s and 1990’s, most European countries reduced working hours: Germany went from more than 40 to 38 per week, the UK from 40 to 37, Denmark from 39 to 37, and France from 40 to 35. Today, however, as Europeans struggle with high unemployment and stagnating living standards, they may have to work longer to cope with globalization. ... read |
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2005-10-14
| Germany is the world’s industrial bazaar. No other country can offer its international clients such a broad variety of industrial products. Germany has 450 hidden world champions for niche products, and is home to 15 of the 20 biggest trade fairs in the world. It is also the world’s top exporter of merchandise and the second-largest exporter of goods and services. ... read |
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2005-01-31
| When German officials pushed in the 1990’s for the Stability and Growth Pact as a prerequisite for giving up the Deutschmark, they did not anticipate that Germany would be the first country to violate the pact. While the pact says that a government cannot borrow more than 3% of its GDP, Germany’s public-finance deficit reached 3.7% of GDP and more from 2002 to 2004. ... read |
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2005-05-25
| Germany invented socialism. Karl Marx and Friedrich Engels were Germans. The Social Democratic movement that shaped the modern European welfare state also originated in Germany. Although the country profited greatly from its reintegration into the world trading system after World War II, Germany never really came to terms with Anglo-Saxon capitalism and skepticism about it still runs deep. ... read |
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2005-07-28
| Over the last decade, Germany has been the slowest growing economy in the European Union, and Europe has been the slowest growing continent in the world. From 1995 to 2005, Germany will have grown by only 14.6%, while the old EU on average will have grown by 24%, the US by 39.9%, and the world economy by 45.6%. Why has Germany performed so badly?... read |
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2005-12-28
| In 2004, the world economy grew at a rate of 5.1%, the fastest pace in the last 28 years. While Ifo`s World Economic Climate indicator, generated from quarterly surveys of 1,200 experts in 90 countries, worsened slightly during the first three quarters of 2005, it rose again in the last quarter, indicating a continuation of the boom. In 2005, growth is estimated to have been about 4.3%, and a similar rate can be expected in 2006, marking a period of sustained rapid global growth unseen since the 1970’s.... read |
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2006-10-25
| While most of the world’s advanced countries face increasing difficulties in coping with the forces of globalization and competition from low-wage countries, the Scandinavian countries -- Denmark, Finland, Norway, and Sweden -- seem to have managed these challenges quite well. To be sure, Scandinavian growth is mediocre. With average yearly GDP growth of 2.2% from 1995 to 2005 it fell short of the non-Scandinavian countries of the EU-15, which grew by 2.8% on average. But Scandinavia is good in terms of levels of per capita GDP and unemployment. Its average per capita GDP was 39% above that of the other EU countries, and on average the unemployment rate stood at 6.7%, compared to 8% elsewhere in the old EU. ... read |
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2009-02-26
| To paraphrase Winston Churchill, never have so many billions of dollars been pumped out by so many governments and central banks. But fears of inflation, shared by Germany and other countries, are simply not well founded.... read |
2011-10-25
