Friday 2 December 2016

ECB respects strong team opponents

Marc Coleman believes that the ECB could be misinterpreting its own legal regime in relation to our bank debt

Published 13/04/2014 | 02:30

Sticking up for the European Central Bank is not dissimilar to being a Bayern Munich fan - German teams always have their critics here
Sticking up for the European Central Bank is not dissimilar to being a Bayern Munich fan - German teams always have their critics here

Sticking up for the European Central Bank is a bit like being a Bayern fan. If they win you know you're in for a dig (when Bayern beat Man United on Wednesday I sank my pint and slipped out of the pub).

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On these islands, German teams have their detractors. But as the Government was taking money out of our pockets in taxes over the last seven years, it is worth noticing that the Frankfurt side was – at least for tracker mortgage holders – shovelling it back in. With interest rates nearly zero, the ECB is blamed for "not doing enough". Some commentators see the ECB as the "European Centre for Blame". How convenient for lazy economists and timid politicians to have someone to blame for excessive public spending, taxes that are too high, a welfare system that is a trap rather than a ladder and a cost of doing business that is uncompetitive relative to new trading partners.

This last point is especially important. To survive, Europe must lower its cost base relative to new emerging markets. Here the National Competitiveness Council last week reminded us that our costs must fall. The same applies across most of the EU. A race to the bottom? Not quite. But certainly a race to a place where we have a chance of giving jobs to 26 million people currently out of work.

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