Die Schwarze Null. Resurrected.
Turns out the Black Zero is resurrecting faster than Jesus. According to Reuters “The German government will return to its savings policy once the coronavirus crisis is over, Economy Minister Peter Altmaier told ZDF broadcaster on Tuesday. “We’re taking the money out at favourable conditions on the capital market and the conditions are only so favourable because everyone believes in us and trusts that we will only do this as long as is necessary,” he said.
As Heiner Flassbeck points out : “Statements such as those made by the Federal Minister of Finance and the President of the Deutsche Bundesbank, that Germany is doing well because it has successfully consolidated in recent years, are completely inappropriate. Germany has only been able to reduce its national debt because it has used its current account surpluses to use the other countries in Europe as debtors. … All in all, the corona shock requires unprecedented fiscal cushioning by states around the world. Beyond the immediately unavoidable damage, the economy must be prevented from going into a downward spiral. This is doable, but it requires an immediate departure from many entrenched prejudices about debt and monetary policy.” More Deutsche Version
And Branco Milanovic argues : “Either Western governments, with few exceptions, are not capable of comprehending the consequences of the coronavirus crisis, or they are determined to continue their neo-liberal class war. … Attention … is wrongly directed to the preservation of some fictitious parameters (like stock market quotes) or equally wrongly on the financial viability of companies. It is not that they are unimportant. But in conditions of severe disruption of economic activity, of a crisis which is akin to a war, focus on financial indicators is distractive. The focus should be (as indeed it has been in all wars, including in the US during the World War II) on physical quantities.” More
Just follow the money…