European Central Bank – Playing with Fire – Süddeutsche.de

European Central Bank – Playing with Fire – Süddeutsche.de

ECB President Draghi wants to smuggle at least 500 billion euros in the euro zone – and for the purchase of government bonds. But money alone does not create wealth. On the contrary: It almost seems as if the world economy is allergic to that money.

A comment by Markus Zydra

It is the world economy can indeed once thought of as a big bonfire, in which all people want warm. These days, one or the other sweater must there be drawn, since the thick woods glow only. The fire guardian throws desperately straw after, but with the fall of the Berlin Wall by opening world markets once so strongly fueled flames threatening yet to go.

For this reason, the European Central Bank (ECB) probably this Thursday, To continue the metaphor, lots of fresh straw nachwerfen. ECB President Mario Draghi wants to smuggle at least 500 billion euros in the economy of the euro zone, through the purchase of government bonds. The American, Japanese and British central bank has pumped in this way trillion into the financial system. At the same time the interest rate in the industrialized countries is close to zero percent. Throughout history there has been no period in which money was available and cheap.

No growth

Actually, as we read in the textbooks, the iron of the economy would have already glow. But the old reflexes no longer function. It almost seems as if the world of business is allergic to that money. It borrows and does not give it to the extent as would be expected. The reality defies academic teaching.

It is therefore time to realistically assess the power of central banks. With the money from the printing press can alleviate catastrophic consequences of a financial crisis and ensure the survival of the system. But the effect of this measure reaches the point where it now only fizzles. The Euro-zone is still breathing – thanks Draghi. But there is no growth – despite Draghi

Cheap money can flank the recovery at best, but do any damage at worst.. The stock markets have gone global hot again, as investors take high risks in times of low interest rates. If the ECB buys government bonds, then it expresses the financial market credit spreads for euro countries and thus indirectly subsidized national budgets. Italy and France have more money left over, and governments could lose interest to perform such an important economic reforms.

ECB in advance

Buying a good argument, government bonds, there: By the flood of money the ECB, the exchange rate of the euro would further weaken the US dollar. This will strengthen the export sector, which benefits the entire economy in the euro zone. But that alone will not suffice. The government must do more. Ireland, Spain and Portugal have shown the way. They have reformed, now comes the growth. In France and Italy the context of the economy must be re-inserted. Changes create friction, new jobs and ideas arise. These are thick boards that burn long.

Also needs to be done for the next generation more. What, for example, with the many unemployed in Southern Europe? Young people need jobs and training. If there done enough? Why are there in German primary schools still classes with 30 students, which makes the promotion of the weaker almost impossible? With good educational policy responses to these questions would have to do more for growth than it could ever create a central bank.

Draghi knows this, yet he shall pay in advance. The result of the unfavorable impression that the ECB can be driven by the financial markets. The stock market calls what the ECB now intends for years. Even politicians appeal to the responsibility of the monetary authorities. But the belief in the ECB is a reflection of the political breakdown.

central bankers are considered heroes of our time. No wonder they are the final authority with Money sleeve. Some scientists have been demanding that the ECB could even give away money next to the citizens. Unique 500 or 1000 Euros for each – to kick-start the recovery. Who would say no to that?

But money alone creates neither growth nor wealth. Since it takes a lot more. But who throws straw into the fire, which lacks the time to chop fresh wood.