THE TRANSATLANTIC DIVIDE: STAGGERING DIFFERENCES IN FISCAL POLICY DEBATES

Here is an interesting article on the differing attitudes to what to do about the coming economic slowdown on the two sides of the atlantic. In the USA they are thinking about the best ways to provide a bit of stimulus to try and achieve as soft a landing as possible. In the Eurozone there is paralysis and just wishing it would go away as they don't think they can do anything about it. A comment to it is particularly good:

There may be a good reason whay [sic] European economists and policy makers have “file not found”, when talking about a fiscal stimulus package: they cannot do it! What would matter in the euro area is an aggregate fiscal stimulus, not uncoordinated policies by single member states. If Germany or France or Finland did it on their own, it would only disappear as a marginal stimulus for imports, while the borrowing government would be landed with the full debt burden. At the same time, interest rates would go up und that would take some of the effects away. So, the proper forum for such policies would be the Eurogroup.