[nhaehnle]

At the very least, the position of Germany is deeply hypocritical.

After all, Germany was among the first batch of countries who violated the 3% deficit-to-GDP rule in the Maastricht treaty.

The German approach is a holier-than-thou approach, believing in blindly following rules that are elevated to moral principles ("Thou shalt not have a deficit.") without regard for the implications that this has for the well-being of their people.

What the Eurozone really needs is functional finance: define your goals for the real economy (e.g. full employment, high real living standards) and then do whatever it takes to achieve that in the financial arena.

[1010011010]

"What the Eurozone really needs is functional finance: define your goals for the real economy (e.g. full employment, high real living standards) and then do whatever it takes to achieve that in the financial arena."

... just wish away reality by printing more Euros?

[nhaehnle]

... just wish away reality by printing more Euros?

The term "printing more Euros" is rather inaccurate. When people talk about "printing money" it tends to be an indication that they either (a) don't know what they're talking about or (b) are not interested in an honest discussion.

Printing money is irrelevant. Spending money isn't.

As for the reality: The reality is that there is vast under-utilization of resources in the real economy. That's what a recession is all about, after all. I'm not a growth-fanatic, but real people are hurt by that development via the crazy amounts of unemployment, especially youth unemployment.

Furthermore, this under-utilization is an indication that if someone were to massively increase spending in the real economy, the economy would likely react significantly by adjusting the size of its production, and the reaction in terms of price level would be minimal.

So in that sense, if I indulge your misguided metaphor for the moment, it is actually the anti-printing folk who are wishing reality away: in their fantasy world, the recession will just end without any spending involved. Out here in the real world, this is not how it works.

(But note that the type of spending matters. Just throwing more money into the hands of the financial sectors is not going to help. Direct job creation is necessary, and in the case of Europe, there are some very obvious candidate projects, such as installing large amounts of solar energy capacity around the Mediterranean, along with the transmission capacity. That's just one pet idea though, there are plenty of other useful things to do.)

[1010011010]

Recessions are about liquidating previous malinvestment. Thanks to expansionist credit policies, in part.