France & Germany - how did they do it?

Murra

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Encouraging to see that France and Germany are on the upswing, in a relatively short time. Perhaps all of you armchair economists out there can tell us how they did it? What have they done right that we could take from?
 


Catalpa

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Encouraging to see that France and Germany are on the upswing, in a relatively short time. Perhaps all of you armchair economists out there can tell us how they did it? What have they done right that we could take from?
What you have here is Stagnation not Growth in any acceptable sense.

Time will tell whether this is a turning point

TBH I think at best there will be very very slow growth patterns for some years to come.

Just as likely is another almighty Crash......


:eek:
 

McDave

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It's only one set of data, so I wouldn't be calling the end of the downturn in such a hurry! There's plenty of legs in this recession yet.

Generally speaking, with more state policy and less consumer-driven growth, those countries have lower but much steadier growth over time. They were among the last into the recession, and I suspect they'll be among the first out.
 

red leveller

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I hate to quote myself (no, really) but:

This is true in itself, but a certain caution is required in interpreting these growth figures. A lot of the recovery is based on government spending which is only sustainable for a short period. And the German recovery is based on the fact that imports fell more than exports - not a great sign of an upturn.

Europe's economies: Sailing away | The Economist

Good article here on the prospects for recovery globally. Reading between the lines, you would have to say there is a possibility of a double-dip once government spending dries up.

Rebalancing global growth: A long way to go | The Economist
 

asknoquestions

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Well Germany went in for lots of counter cyclical spending.
Bailouts for banks and also all kinds and colours of companies including Opel and Quelle (a catalogue retailer).
A cash for clunkers scheme to give the motor industry a shot in the arm.
If Ireland was a German state, Dell, Element 6 and Setanta would probably have been bailed out.
 

McDave

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Well Germany went in for lots of counter cyclical spending.
Bailouts for banks and also all kinds and colours of companies including Opel and Quelle (a catalogue retailer).
A cash for clunkers scheme to give the motor industry a shot in the arm.
If Ireland was a German state, Dell, Element 6 and Setanta would probably have been bailed out.
By German standards, probably only Setanta. They only really bail out their own (Opel was originally German and is a big employer locally).
 

Sierra

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By spending billions on economic stimulus packages, which could take its toll on the economy down the road.
 

Thoreau

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By German standards, probably only Setanta. They only really bail out their own (Opel was originally German and is a big employer locally).
Oh no!

No, no, no, no, no, no.

That cannot possibly be so.

The EU Commission would never, ever, permit the government of a member state to discriminate between commercial enterprises on the basis of their national origin.

Would they?
 

lobby

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Having been on holidays in France recently, I witnessed the french gov reducing the VAT on restaurants from 19% to 5%. This is in the same EU that our gov tells us restricts such actions. And every (and I mean every) restaurant had a sign shoing that they passed the reduction on to the customers, including having the old price and the new price on the bill.
 

toughbutfair

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Having been on holidays in France recently, I witnessed the french gov reducing the VAT on restaurants from 19% to 5%. This is in the same EU that our gov tells us restricts such actions. And every (and I mean every) restaurant had a sign shoing that they passed the reduction on to the customers, including having the old price and the new price on the bill.
VAT is a European tax. Ireland can follow suit if we want.
 

DeGaulle 2.0

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By spending billions on economic stimulus packages, which could take its toll on the economy down the road.
Unfortunately we spent billions on economic stimulus packages when the economy was booming.
 

McDave

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Oh no!

No, no, no, no, no, no.

That cannot possibly be so.

The EU Commission would never, ever, permit the government of a member state to discriminate between commercial enterprises on the basis of their national origin.

Would they?
There's a bit more leeway for State aid. While it's not exactly open season, normal rules of competition and free trade do not apply.
 

FutureTaoiseach

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In the case of Germany the answer has a lot to do with the Hartz IV reforms that forced people to accept job offers or lose benefits.
 

Pauli

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Oh no!

No, no, no, no, no, no.

That cannot possibly be so.

The EU Commission would never, ever, permit the government of a member state to discriminate between commercial enterprises on the basis of their national origin.

Would they?
They didn't. Art 87 prevents that happening.
 

Supermanpolitician

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Neither country had the same reckless attitude towards public finances that Ireland had.
Also companies built up reserves rather than paying divs and running off finance from banks.
 

wombat

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VAT is a European tax. Ireland can follow suit if we want.
Its a national tax but the EU gets a cut. There was no EU objection when FF raised the VAT rate & despite what the cute hoors say, there would be no objection to reducing it.
 

Pauli

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Its a national tax but the EU gets a cut. There was no EU objection when FF raised the VAT rate & despite what the cute hoors say, there would be no objection to reducing it.
But not below 15%
 

MookieBaylock

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What you have here is Stagnation not Growth in any acceptable sense.

Time will tell whether this is a turning point

TBH I think at best there will be very very slow growth patterns for some years to come.

Just as likely is another almighty Crash......


:eek:
Slow consistent growth is the plan I believe but I would prefer that to the fly high sometimes, burn others policy of the Anglo Saxon World.

A good book to read on this topic is The Spirit Level. They argue that we are the end of hectic economic growth in the west. I would tend to agree.

There is another point Germany and France win on as well. In terms of infrastructure and equality they are light years ahead of Ireland, UK, USA etc.
 

MookieBaylock

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Neither country had the same reckless attitude towards public finances that Ireland had.
Also companies built up reserves rather than paying divs and running off finance from banks.
That's very true.. Most German companies have huge cash reserves. The only Irish company I can think of that runs like that is Ryanair.
 
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They're coming out quickest because they didn't put all their money (and borrowings) into building houses as a way of getting rich quick and poorer even quicker.

They've got grown up politicians whose grandaddys weren't in the GPO.
 


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