Month: June 2012

Far, far from the troubles at the home front, Prime Minister John Key was visibly enjoying the military honours and his joint press conference with Chancellor Angela Merkel on his visit to Berlin last week. A better use of his time would have been studying the effects of delaying superannuation reforms.

Continuing the Target 2 madness prevents the long overdue adjustment of intra-European trade and payment balances. It locks both PIIGS and GNFL countries into a monetary system that works for neither. If Europeans only understood half the severity of this problem, there would be a revolution tomorrow morning. For the time being, however, the European soccer cup provides a most welcome distraction.

Aristotle was right. A great city does not need a big population. It can even be as small as Dunedin’s. But every great city needs a population that is passionate about itself, ambitious for its future, and optimistic about its outlook.

If newspaper reports last weekend are to be believed, Germany is pressuring Spain to accept a European bailout. The story is all the more credible as the Spanish government has strongly denied any such bullying. Veteran Euro crisis observers remember that Ireland’s bailout began in precisely the same way.

Vertrauen mag der Anfang von allem sein. Aber die Finanzkrise hat gezeigt, dass es auch unter ordnungspolitischen Gesichtspunkten am Ende nicht ohne eine intelligente Kontrolle des Bankwesens geht. Bankenzerschlagungen braucht es dazu gleichwohl nicht, wohl aber eine konsequentere Durchsetzung des Prinzips der Haftung sowohl für Bankaktionäre als auch für Topbanker.