It was correct of Heather Stewart to write that Germany`s "economic miracle" was made possible by the London Agreement of 1953 which "saw half of the debts it owed to the rest of the world written off", but she surprisingly failed to mention one other, very important factor.(Secret of the "German miracle",18/01/15) The western powers insisted at the same time that the then West Germany also introduce the system of Co-determination, whereby workers` representatives sat on the boards of all large companies. As a result, the pay gaps between employees and bosses were never allowed to increase exponentially as they have done in this country, and it is probably no coincidence that in Germany recently, with Co-determination policies still intact, the federal budget has been balanced. With an unemployment rate similar to that of the UK, the number of people in work has reached a record high, but unlike here, tax receipts have increased, and tax revenues climbed to 270.8bn euros last year, about 2.6bn higher than forecast!
Sadly, the European response generally has either been to introduce austerity measures or quantitative easing, with the former leading to job losses and pay cuts, and the latter only an option when deflation emerges along with the prospect of anti-austerity parties being elected in Greece, and perhaps in Spain. The European Central Bank does not seem to have learned from the British lesson, intending as it does to "flood the eurozone banking system with money". (So Draghi primes his late, great rocket, but he could end up shooting Europe in the foot,18/01/15) Has it forgotten that the £375bn of QE which went to the banks early on in the coalition`s administration did nothing to benefit the British economy or change the banking culture, was not loaned out to businesses as intended, and probably contributed instead to obscenely high salaries and bonuses?
Far better for Europe generally, and Britain in particular, to concentrate on increasing the spending power of those more likely to part company with their money, whilst setting limits on the incomes of those being paid obscene amounts, including CEOs, bankers and private landlords.The result could well be flourishing economies, and societies based on justice and fairness.
Naturally, I`m not holding my breath!