For Germany to support the other countries and softening the pace of further austerity measures, it would have to let go a defining aspect of its post WWII self-perception: the German Constitution and its revered guardian, the German Supreme Court.
That is more than many are willing to pay, particularly as there is no guarantee that Southern Europe would put its renewed access to cheap credit to good use. In addition, none of these countries seem to be willing to put their own sovereignty at disposal either, but they demand it of Germany.
The one thing that Sinn underestimates in my opinion are the exit costs for Germany. We have no idea how that would affect the banks and what kind of Derivatives domino could be triggered. I also think that a country that is as export oriented as Germany would suffer economically much more than he is willing to admit.
My issue is that I do not see a constructive way forward. The coming months and years are going to be challenging.
I could not agree more. In fact, I think that we are already very close to reaching the point of zero growth, and that the second order effects of these resource restraints are at the heart of our financial difficulties. Yearly growth rates of more than 2% are probably not returning any time soon
All of these states share an impressive youth bulge, a shrinking resource base and an elite with a dwindling justification for their claim to power.
It is a pity that population growth is so underestimated in its influence on the conflicts the Arab state is experiencing now. All of these countries populations have at least tripled, while others more than quintupled (e.g. Jordan) in the last 50 years.
Regardless of your riches, there is no way that you can create enough economic growth to deal with the resulting problems.
Why is it so difficult for economists to understand that growth is unattainable without cheap energy? Energy is getting more expensive by the day. The Energy return on energy invested (EROI) has been dropping precariously, regardless of the type, such as unconventional oil, shale oil, oil shale et al.
The global energy pie is shrinking and that is what is driving Europe into depression. Have a look at gas consumption charts for European or US consumers. The yoy drop is frightening in its scale and pace.
We need cheap energy and we need it now, otherwise we will see revolutions like in Egypt and very few rich people among large masses of the destitute and starving.
Whichever view you take in the debate on Israel and whether it should have a Jewish identity or the "right" to exist, the fact of the matter is that Israel cannot survive without the continued support of the US. Similarly, European support is also important, as most of Israel's trade is with Europe.
As such, the extent of popular support for Israel in these regions carries weight. There is little doubt that this support is waning and opposition to further support is increasing.
Israel may behave in any way it wishes to, but should also understand that this comes with a price. No BRIC or Asian nation will come to Israel's rescue in times of need, and preferential treatments are not to be had.
This will be the attitude that Israel will have to come to expect from Europe and even the US in the not too distant future, if it does not change its policies towards the Palestinians or the emergence of a viable Palestinian state.