“Germany’s Inflation Fetish”

NEW YORK | Debt market turmoil and Spain’s borrowing squeeze is now hot news in the US. Experts are talking about investors fears, record-high interest rates and credit freeze but some of them are also lining up for an idea: Berlin and others with big surpluses need to save less and spend more.

For The Huffington Post Business editor, Peter S. Goodman, “Germany’s inflation fetish is a major global economic threat”:

“The world’s most irresponsible global citizen of the moment is not North Korea or Iran, despite the obvious dangers each poses. It is not China, favored target of blame for job losses from Indiana to Istanbul. Rather, it is one of the primary beneficiaries of global integration, a country now contributing aggressively to the risks mounting in the global economy. It is Germany.

“Stimulating the economy risks stoking inflation. This horrifies Germans but would help suffering southern Europeans by raising Germany’s real exchange rate,”

points out a Reuters’ analysis about the situation.

For The New York Times,

“practically every euro zone country is paying the price in higher interest costs and ebbing economic growth […] German leaders are wrong if they think their country will remain unscathed as its major trading partners and neighbors unravel.”

In an op-ed, the newspaper considers that Angela Merkel is standing in the way.

“She needs to challenge her voters’ simplistic stereotypes of southern European sloth and tell them the truth: The real threat to Germany isn’t inflation; it is an economic collapse across Europe. And Germany has a huge amount to lose from a fracturing of the European Union.”

About the Author

Ana Fuentes
Ana Fuentes is The Corner Editor-in-Chief. Currently based in Madrid, she has been a correspondent in New York, Beijing and Paris for several international media outlets such as Prisa Radio, Radio Netherlands or CNN en español. Ana holds a degree in Journalism from the Complutense University in Madrid and the Sorbonne University in Paris, and a Masters in Journalism from Spanish newspaper El País. You can contact her at: anaf[at]thecorner.eu

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