{"id":738,"date":"2019-06-06T14:07:06","date_gmt":"2019-06-06T11:07:06","guid":{"rendered":"http:\/\/www.liberalglobe.com\/?p=738"},"modified":"2019-09-05T15:29:47","modified_gmt":"2019-09-05T12:29:47","slug":"the-liberal-growth-policy-for-the-eurozone-economy","status":"publish","type":"post","link":"https:\/\/www.liberalglobe.com\/?p=738","title":{"rendered":"The Liberal Growth Policy for the Eurozone Economy"},"content":{"rendered":"\n

The ECB and its implementing monetary policies have so far saved the Eurozone economy. The effectiveness of the policies implemented by the ECB, the almost zero basic euro-borrowing rate and the continued implementation of QE for the creation of artificial growth which will in turn cause inflationary pressures, have been exhausted until now due to a lack of common applied fiscal, economic and tax policy. <\/p>\n\n\n\n

by Thanos S. Chonthrogiannis-https:\/\/www.liberalglobe.com<\/em><\/strong><\/p>\n\n\n\n

The inadequacy of the economic policies to date in the\nEurozone<\/strong><\/strong><\/p>\n\n\n\n

The fact that the ECB announced a new round of low borrowing cost loans at\nits meeting last March through the exercise of an expansive monetary policy\n(continuation of the implementation of the Quantitative Easing (QE) policy) by\nproviding ample liquidity to the Eurozone to climb prices, it means that the Eurozone\nand the ECB have no alternative to existing data due to the Commission’s\ngeneral inaction.<\/p>\n\n\n\n

These ECB policies will continue to be implemented until the Commission and generally the governments of the Eurozone member-countries wake up to the slumber. <\/p>\n\n\n\n

The ECB ‘s recent report on the stability of the financial sector in the Eurozone https:\/\/www.ecb.europa.eu\/pub\/financial-stability\/fsr\/html\/ecb.fsr 201905~266e856634.en.html#toc3 <\/a> showed us that growth in the Eurozone will continue to move at the same anemic levels in the near future. <\/p>\n\n\n\n

More specifically, the continued implementation of the QE in the Eurozone in combination with the maintenance of the almost zero basic euro borrowing rate, would block the Eurozone in the same situation that Japan found in the decade of 1990 where the Japan tried to support its banking system with gigantic injections of liquidity and with the policy of zero interest rates (1995) leading to the well- known “lost decades” for the Japanese economy.<\/p>\n\n\n\n

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Logo of European Commission<\/b>
Photo by Author: European Commission, licensed public domain,
Source: https:\/\/ec.europa.eu\/
<\/figcaption><\/figure><\/div>\n\n\n\n

The appropriate solution for the Eurozone economy to\ndetach from this quagmire<\/strong><\/p>\n\n\n\n

The Commission, in cooperation with the leaderships of the governments of\nthe Eurozone member countries and by extension of the EU, will have to agree on\na new revised Stability and Growth Pact (November, 2011) (Source\u05c3 EU,  http:\/\/ec.europa.eu\/economy-finance\/economic_governance\/\nsgp\/index.el.htm<\/a>, 3\/8\/2015). <\/p>\n\n\n\n

This revised Stability and Growth Pact will explicitly include that the primary\nexpenditure of the public sector in the annual state budgets of the central\ngovernments of Eurozone member countries should never exceed a\ntotal of 15% of their GDP per annum, with 4% of GDP from this 15% of GDP being\ntotal wage and pension expenditure in the public sector.<\/p>\n\n\n\n

The reader who wants to have a full picture of the proposed development\npolicy that will lead to an explosive growth in the Eurozone while allowing the\nimplementation of a common fiscal, tax and economic policy in the Eurozone\nshould read our analyses entitled \u00abThe Sustainable Solution for the Eurozone Economy-Part I, II, III, IV\u201d\ncategory: fiscal, published in liberalglobe.com. <\/p>\n\n\n\n

The implementation of this centrally designed fiscal policy immediately\ndisappears any budget deficit in the annual budgets of the central and general\ngovernments of the Eurozone member countries, as well as all other factors that\nmake up the overall budget of the general government are showing balanced\nbudgets. <\/p>\n\n\n\n

In addition, it is possible to implement a common fiscal, tax and economic\npolicy across the Euro area, which will allow the ECB to issue T-bills and\nbonds for all durations of the euro yield curve.<\/p>\n\n\n\n

At the same time, huge resources are being released from state budgets\nwhich should, through equivalent value of drastic tax reductions-measures and\ntax exemptions, be directed towards the citizens of the member countries of\nEurozone and to citizens belonging to the lower- and middle-income scale.<\/p>\n\n\n\n

This will drastically increase consumption and\/or savings in the Eurozone by exerting real inflationary pressures that will force the ECB to drastically increase its borrowing rates in order to curb inflation in the Eurozone which in this case will try to exceed its 2% annual limit.  <\/p>\n\n\n\n

Of course, in this case, the QE strategy should be fully suspended, and the ECB will “detach” itself from the strategy of almost zero-euro basic borrowing rate.<\/p>\n\n\n\n

We hope that the composition of the new European Parliament and the\nCommission will reflects the wave of the Alliance of Liberals and Democrats\n(ALDE) and the cooperating Party of Emmanuel Macron to those who have won\nimportant number of seats in the recent European elections, to implement such\npolicies that will detach the Eurozone economy from the ‘development twilight ‘\nzone. <\/p>\n\n\n\n

Thanos\nS. Chonthrogiannis<\/strong><\/p>\n\n\n\n

The law of intellectual property is prohibited in any way unlawful use\/appropriation of this article, with heavy civil and criminal penalties for the infringer.<\/em> <\/p>\n","protected":false},"excerpt":{"rendered":"

The ECB and its implementing monetary policies have so far saved the Eurozone economy. The effectiveness of the policies implemented by the ECB, the…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5,860],"tags":[687,62,472,190,129,710,275,709],"class_list":["post-738","post","type-post","status-publish","format-standard","hentry","category-economic","category-fiscal-economics","tag-alde","tag-ecb","tag-emmanuel-macron","tag-eurozone","tag-gdp","tag-qe","tag-stability-and-growth-pact","tag-the-liberal-growth-policy-for-eurozone"],"_links":{"self":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/738","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=738"}],"version-history":[{"count":2,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/738\/revisions"}],"predecessor-version":[{"id":742,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/738\/revisions\/742"}],"wp:attachment":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=738"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=738"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=738"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}