Economics and politics - comment and analysis
29. December 2016 I Will Denayer I General

A Happy New Year to our readers

Flassbeck-economics wishes our readers a very happy New Year 2017 and a happy, fruitful and productive 2017. We have not been publishing in December. We apologise for this. Heiner Flassbeck had an enormous amount of commitments and Will Denayer moved away from Ireland. However, now everything is set up for the new year. It is almost certain that 2017 will be crucial for the politics in the euro zone: next May, there are presidential elections in France and, next September, there are elections in Germany. It remains to be seen what the Trump Administration is going to do in the USA. On several sites and in several publications a sometimes very heated debate is raging concerning the question why the global economy, a full eight years after the financial crash, fails to return to growth. We will pick up on this discussion in the next couple of weeks and months. The questions that interest us the most are inherently practical and strategic ones: should the Left be for the Brexit or against it, should it advocate the end of the euro zone or try to reform the European institutions? The Left should, of course, favour solidarity between people and countries, but it has to be consistent. We can promote solidarity all day long – as some in Germany do – but as long as it remains possible for German to follow its course – wage moderation and mercantilism – the European economy cannot recover and all the rhetoric about solidarity will be in vain. At the same time, inequality and poverty are increasing in Germany also. In the next couple of months, we will try to quantify the effects of the euro zone and German wage moderation on countries which are not a member of the euro zone (such as Sweden). This will provide us with a measure, or, at least, a very reasonable estimate of the effect of German wage moderation on the global economy. Of course, the Right does not agree with any of this, but this is not our concern. It is essential that the progressive and democratic forces in Europe unite behind a consistent and intelligent political program so that, finally, progress can be made. This is how Flassbeck-economics sees its contribution. The year 2016 has also been a disastrous year for climate change. 2016 broke the previous record (2015) as the warmest year ever since humans walk the earth. The world’s emissions are still rising. Many established scientists are panicking because it is clear that climate change advances much faster than almost everyone had ever anticipated. New feed-back mechanisms are being discovered all the time. Hopefully, the world will take a new direction in 2017, so that we will address our economic and social problems and climate change.

But this is for next year.

A very Happy New Year to you and yours.