Prodi lays into Germany
In an interview in Quotidiano Nazionale, Romano Prodi gave a devastating criticism of German policy, saying that the combination of Germany’s c/a surplus, low inflation, and weak growth is hampering the economic recovery in the eurozone. He says the Germans were obsessed with inflation, not understanding that the issue today is deflation. He says the Germans were doing just enough to prevent the breakup of the eurozone, but not enough to resolve the crisis. He also reiterated his famous comment about the stupidity of the stability pact, of leaving it unchanged for 20 years, and of not adjusting the deficit number. France, Italy and Spain should really get together and form a coalition against Germany.
The Vito Lops blog on Il Sole 24 Ore has a very short but thoughtful entry in which he recalls Prodi’s statement at the beginning of the euro, according to which we would all work one day less a week, and earn money for one day more. It did not quite turn out this way. second point is that France, Italy and Spain would be best served by forming an alliance against Germany, but this is not happening because each one of them believes that they are better off going it alone.