Contents page 1 — panic as program page 2 — The Italian strategy could work On a page

Gustav A. Horn the Institute for macroeconomics and economic research at the Union-affiliated Hans-Böckler-Foundation. He is a member of the SPD and an Advisory member of the basic value Commission of the party.

burn The fuse, but her way to the powder keg is not clear. This makes Deletion difficult, and there is a great danger that we face in the foreseeable future from the wreckage of the European building, because the rescue was tried in the wrong Places.

The wrong place, this is the much-discussed Italian state budget. The Italian government’s targeted deficit of 2.4 percent of gross domestic product (GDP) represents a break from the Commitments of previous governments, and gnaws in this respect, on the basis of trust. Taken by itself, this value is not an economic disaster. Under realistic assumptions, a semi-intact economic development and a slow rise in the inflation rate, the state would decrease in this value and the debt ratio in Italy easily. Add to this that Italy is currently a slight Surplus in foreign trade. The explosive combination of increasing government is not the debt ratio and growing foreign debt, which drove Greece to the international financial markets into the abyss. Italy’s debt is, however, stronger in the case of its own citizens and companies, and they have to live with the consequences.

It is currently not clear whether this higher deficits, the fiscal game in the future really narrow significantly. The introduction of a basic security can be given, so far, totally insufficient social security coverage in Italy as a blessing. The expenditure for this benefit with the increased consumption of the receiver to the economy, and you could serve in addition, more people will be taken back to the labour market. The remainder of the additional expenditure is, however, questionable, since it is used in the core to support the own clientele. Of the expenses such as the tax cuts have no significant economic benefits. They will increase the already extremely high burden of the debt from the past.

All-in-all, this action by the Italian government, however, is any reason for anger at the European level, but not for disaster scenario. The financial markets might be quiet. They are not and unfortunately.

The reason lies not in the dubious economic logic of the proposals, but in its explosive political Intention. The government coalition in Italy will be finally held in the face of their otherwise completely opposing political orientations only by one: the fight against a rogue, the true interests of the people allegedly injurious Establishment in Rome, Berlin, Brussels and elsewhere. This is the stuff of populist governments in this time. Your driving force you get from the fear of Immigration, in which all cultural and economic Concerns of the globalised society are projected, and the Belief that they are the Only ones who would represent the people against the so-perceived elite project of globalization. All of this is half true to false, and in any case hypocritical, but politically effective.