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Covid-19 Unmasks Faulty Euro Structure

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Posted on 30 May 2020 Written by John Lounsbury This week Lynn Fries of Global Political Economy newsdocs interviewed the outspoken German economist Heiner Flassbeck about the economic crisis brought on in the the EU with the COVID-19 pandemic. Flassbeck said that the crisis is simply the result of the faulty construct of the European Monetary Union.Please share this article - Go to very top of page, right hand side, for social media buttons.From theAnalysis.news:Heiner Flassbeck shows it defies macroeconomic logic to promote surpluses for Germany, prohibit government deficits everywhere else and forbid the central bank from acting as the central bank of each and every EURO member.Flassbeck asserts that the defect in the European Monetary Union is that it contradicts the

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posted on 30 May 2020

Written by

This week Lynn Fries of Global Political Economy newsdocs interviewed the outspoken German economist Heiner Flassbeck about the economic crisis brought on in the the EU with the COVID-19 pandemic. Flassbeck said that the crisis is simply the result of the faulty construct of the European Monetary Union.

Covid-19 Unmasks Faulty Euro Structure


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From theAnalysis.news:

Heiner Flassbeck shows it defies macroeconomic logic to promote surpluses for Germany, prohibit government deficits everywhere else and forbid the central bank from acting as the central bank of each and every EURO member.

Flassbeck asserts that the defect in the European Monetary Union is that it contradicts the fundamental principles of sectoral balances. He says it is faulty because it violates the basic rules of bookkeeping.

Also from theAnalysis.news:

Heiner Flassbeck is a German economist and public intellectual. From 1998 to 1999 he was a State Secretary (Vice Minister) in the German Federal Ministry of Finance where he also advised former finance minister Oskar Lafontaine on a reform of the European Monetary System. From 2000- 2012 Flassbeck worked for the UN Geneva at UNCTAD. As Director of the Division on Globalisation and Development Strategies, he was lead author of UNCTAD’s flagship Trade and Development Report. Since January 2013, Heiner Flassbeck has been Director of Flassbeck-Economics, a consultancy for global macroeconomic questions (www.flassbeck-economics.com).

Source: YouTube.

Hat tip to Naked Capitalism.

Note: The observations by Heiner Flassbeck are not new. A most famous analysis of the same defect was made by Wynne Godley in the early 1990s. A most widely cited paper is "Maastricht and All That" (London Review of Books, October, 1992). Despite the inarguable validity of Godley's analysis, it has been ignored by the political structures of Europe for almost 30 years. The consequences of that action may finally be coming home to roost.

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