nonsens – fiscal pact … der Fiskalpakt-nonsens und Konsequenzen für den ESM

Das folgende Essay von Dr. Stephan Schulmeister von Ende März hat mir so gut gefallen das ich mich entschlossen habe es (mit freundlicher Genehmigung durch ihn) jetzt noch einmal bei mir im Blog einzustellen. Schulmeister arbeitet für die Wifo in Wien und ist eifrigen Bloglesern bereits bekannt durch seine Arbeit zur Finanztransaktionssteuer und der selbstreferenziellen Vermehrung des Geldes.


Die Reduktion des strukturellen Defizites der GIPS-Länder kann funktionieren, wird aber ein sinken des BIP zur Folge haben. Die zusätzliche Auflage die Staatsschuldenquote welche anhand des BIP gemessen wird zu senken ist jedoch unmöglich zu schaffen ohne Depression. Damit werden durch den Fiskalpakt absehbar auch Italien, Spanien und Portugal den Griechen folgen… was für den ESM den worst-case bedeuten könnte/würde, nämlich das das Geld abzuschreiben wäre.

Wie schon mehrfach im Blog behandelt und das seit „Jahren“ sowie zuletzt auch auf zwei Vortragsveranstaltungen in Freiburg den dort anwesenden erklärt….. hach ja, Schulmeister schreibt es am Ende wunderschön, daher zu Beginn noch ein Zitat:

Any sustained fiscal consolidation thus requires a change in the rules of the game which would shift profits – the core energy of capitalism – from the financial sphere to the real sphere of the economy.

Und hier der Volltext:

The fiscal pact contains two rules:

1. Each country is only permitted to run a maximum structural deficit of 0.5% of GDP.

2. Each year the debt-to-GDP ratio must be reduced by one twentieth of the difference between the current debt ratio and the target of 60%.

The simplicity of these rules prevented the leaders from fully considering the economic consequences of the fiscal pact. This concerns in particular the interaction between both rules in dampening economic growth. The case of Spain serves as concrete example.

According to the deficit criterion Spain has to reduce its current deficit of 8.5% of GDP as fast as possible. The recent agreement with the European Commission calls for a deficit ratio of 5.4% in 2012 and 3.0% in 2013, respectively. As Spain is already in a deep recession at extremely high unemployment, additional austerity measures will worsen the situation even more.

Suppose, a deficit reduction by 1 percentage point of GDP reduces overall output by the same amount, and that inflation comes to a halt or tilts into a slight deflation. Under these conditions nominal GDP of Spain might shrink by as much as 5% in 2012 and 2013.

If the budget targets were reached in spite of the prolonged recession, Spain needed not to continue an austerity policy according to the deficit criterion. This is so because the output gap widens to at least 5% of GDP so that the structural deficit is by more than 2.5% lower than the overall deficit.

But now the debt rule comes into effect, which does not take cyclical factors into account. In 2012 and 2013, the debt-to-GDP ratio would have risen from roughly 70% to almost 90%. The budget deficits contribute 8.4 percentage points to this rise (5.4 plus 3.0), even more important is the shrinking of the nominal GDP by 10%. According to the debt criterion Spain has therefore to reduce its public debt for 20 years by 1.5% percentage points of GDP a year.

Through the interlinkage between the deficit and the debt rule, the fiscal pact leads most EU countries onto the „Greek road“. Strict austerity measures reduce the deficit but also the GDP, the debt-to-GDP ratio rises strongly and this in turn enforces a permanent austerity policy.

It is important to realize that the disastrous consequences of the pact do not stem from the deficit rule but from the 1/20th-debt rule. Italy, for example, has to reduce its debt-to-GDP ratio by 3% of GDP year after year. The synchronized austerity policy of almost all EU countries sets in force vicious cycles which will deepen the European crisis for a long time.

These consequences are directly related to the arbitrary target value of the debt ratio. In 1992, when the Maastricht criteria were introduced, this was a reasonable target – consistent with the prevailing rates of growth at the time. But economic growth slowed down since then. On my calculcations, a debt-to-GDP ratio of 86% would now be consistent with the Maastricht deficit rule. For Italy to comply with both the debt and the deficit rules at the same time, Italy would have to reduce its public debt over 20 years by 5.4% of GDP every year. Good luck.

The European crisis needs a systemic therapy based on the insight that the development of public finances is for the most part the result of the malfunctioning of the overall system. If the savings of private households are taken over by the business sector in the form of investment credits, the financial balance of the public sector is in balance. The business sector will do so if the rate of return on real investments is significantly higher than the return on financial investment. This was the case during the age of „real capitalism“ in the 1950s and 1960s. Hence, the public debt declined continuously relative to GDP.

Since the 1970s unstable exchange rates, commodities prices, interest rates and stock prices have dampened real investment and fostered finance alchemy activities. These activities were not only carried out by banks and hedge funds, but also by non-financial business. Financial innovations, in particular derivatives of all kinds, facilitated the shift in profit-seeking from the real to the financial sphere. As a result, non-financial business became a surplus sector, together with the financial sector and the household sector. Under this condition, governments suffered from persistent deficits due to the rise in unemployment and the decline in tax receipts.

Any sustained fiscal consolidation thus requires a change in the rules of the game which would shift profits – the core energy of capitalism – from the financial sphere to the real sphere of the economy. Enhancing austerity policy under the prevailing finance-capitalistic conditions will not reduce the public debt ratio. It will only reduce economic growth. The economic consequences of the fiscal pact will therefore be depressing.

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