Hasn’t the fiscal stimulus argument won the day?

First published 23 January 2010

At the end of 2008 a European challenge had emerged – cash injection or hands on heads.

French President Nicolas Sarkozy who voiced his aggravation with German Chancellor Angela Merkel for not implementing a measure of fiscal stimulus said, “While France is working, Germany is thinking.”

Merkel was actually remaining loyal to the “Stability and Growth Pact” (SGP), the purpose of which was to tune the euro so it would be able to compete with the US Dollar and strengthen the stability of the euro-zone. (Continue)

German Economy waits for Gold, Frankincense, and Merkel (A Modern Day Keynesian Controversy)

First posted December 10 2008

Despite criticism from leading bankers and other European leaders, German Chancellor Angela Merkel remains defiant on her refusal to spend her way out of the recession, criticising the short-term initiatives employed by Britain, the US and France. Proof of her distinct agitation and non-compliance, if proof were needed, reverberates in her recent joke during a cabinet meeting: “What’s the difference between Communism and Capitalism? Communists nationalised companies first before running them.” (continue)