How Angela Merkel has DRAINED Germany’s wealth to prop up ailing banks and failing EU
ANGELA Merkel has deliberately overseen a “draining” of Germany’s wealth to “prop up” the EU’s failing economies in a desperate bid to save the European Union project, a senior economist has said today.
By NICK GUTTERIDGE, BRUSSELS CORRESPONDENT
Express.co.uk
Thu, Aug 24, 2017
Professor Thorsten Polleit described the chancellor’s economic programme as a “vicious policy” which is “impoverishing” younger generations who can no longer afford to buy a house or build up significant savings.
The respected financier and academic warned increasing EU protectionism could harm the German economy in the future and said the “lose-lose” approach to Brexit being pursued by Brussels would punish ordinary Europeans.
He made the remarks after recent figures showed Germany’s resilient economy is leading eurozone growth once more, expanding by 0.6 per cent in the first quarter of this year.
Professor Polleit in particular highlighted the issue of German taxpayers’ cash being redistributed to struggling parts of the continent, something he said would have “huge consequences” down the line.
His comments referred to Target 2, which is ostensibly a payment system that allows eurozone central banks to transfer money between each other, which the EU Commission says “provides the plumbing that allows money to flow in the economy”.
But, it emerged in 2012 that a massive imbalance had built up between the German Bundesbank and other institutions, with many commentators observing the system had turned into a “stealth bailout” of struggling economies like Italy, Greece and Spain.
Professor Polleit said: “Economic growth isn’t stellar but it’s reasonable, so most Germans don’t really feel the problems that have been building up in the EU and the costs that will come with pursuing the current policy approach in Europe. It’s an illusionary state at the moment.
“If you look at the Target 2 balances, Germany’s balance is now 840 billion euros, or 25 per cent of German GDP. It’s money gone and it will show up in low profits from the Bundesbank and presumably higher taxes.
He added: “All these measures that have been implemented to drain German wealth to support ailing banks and prop up Europe…most people won’t realise because it’s so complex.”
The leading economist also hit out at the European Central Bank’s policy of taking interest rates to rock bottom – at one point they even entered negative teritory – to prop up debt-ridden Mediterranean economies.
He said: “The zero interest rate policy, it does all sorts of bad investment and it pushes up real estate prices so people can no longer afford to buy houses in Germany.
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