Sunday, May 28, 2017

WHY MERKEL AGAIN????

Angela Merkel have played enough and now it might be time for her to move ahead since she is just getting austerity gifts every year for the troubled Euro-zone countries. The economic situation at the macro level has destroyed whereas the number of growth might be deceptible.  Being an Economist all I can she doesn’t underrated the subject any more. Greece economy is just under the period of World WAR 1 currently. 40% of retail business closed down between 2014 and 2017. The birth rate has dropped to World War I levels because few couples can afford children. Overall, GDP has dropped by 27%. Well Greece is not the only member in this club. Countries like Spain, Portugal and Italy also reporting dangerously low rates. Low birth rates means low consumption ,low economic growth as the economy will lag hugely in getting young generation in work over the next 20 years and hence the economic slow growth will be fearful.What she is doing is just keeping her position alive at the cost of Austerity.Time and Economic Theories have changed and now its time for some revolution to get growth.

Unemployment is the most important reason and the devil behind is Austerity measures imposed, discussed and implemented by heads of the Euro-zone decision makers who themselves have less at stake.   Merkel did a fantastic job by going for austerity measures and saving the Euro-zone from collapse but what she has done and the effect of the same will be dangerous and she will not be at that point of time manage anything. The common people of Greece and other member states are the prime suffers of the dramatic fall of life. Unemployment is Greece is around 23% where as for men it counts to 20% and for women it’s hopping 27%. Youth unemployment which is big damage for the long term growth of the economy is a whopping 48 per cent.

Low birth rates and poor economic conditions provoke people to opt for crime which is another big threat to the society. In French its being found that birth rates have fallen to the lowest level in 40 years. No jobs, no earnings, no future so why to get child land upon such a state of economy. Economist will find its hard to dig into the depth of pain and mentality ruling the people in these states where such dramatic step have been taken forward.

Austerity have never been  solution which many economist cried but all in Vain as Merkel was more focused in playing her flute. I don’t find any reason for re appointing her and getting the whole of Euro zone will be escalated to a further long term slow growth in macro levels which will not get captured in Manipulated economic numbers. Those who are betting on Greece Economic growth numbers well Greece's budget had a primary budget surplus  but that is, excluding debt repayments which is estimated at as much as 4.2 per cent, and that’s too depending upon the depending on accounting procedures. If there is a change in accounting procedures then debt might not reflect whole of it now which pushed the GDP numbers.

More austerity is in the wings to come as Greece's debt burden has actually got worse. It is at 179 per cent of GDP compared with around 109 per cent in 2008.  Another round of debt funding will come and this story of debt will keep revolving followed with Austerity. What Greece needs is write off the entire debt or let Greece be out of Euro zone.It time for Merkel to leave the position and let some new blood come up to look over the same subject from a different perspective. 

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