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Surprise: Germany Leads!

By Shlomo Maital

source: IMF

Quiz: Which country in the world is highly conservative fiscally, avoids deficits like the plague (oops, sorry for that one), hassles spendthrift EU nations (like Greece) for excess debt, and in general has acted like Scrooge?

     You got it. Germany.

   Part two: Which country has seen the extent of the COVID-19 plague clearest and acted most decisively, including massive emergency spending?

       Surprise. Germany. Never would have guessed it.

Lame duck Chancellor Angela Merkel, a trained scientist, trained well in the former East Germany, was among the first to predict massive deaths, and drew scorn at the time – but she is proving right, even though Germany, for many reasons, has the lowest relative death toll (relative to the number of cases).

   And now, she has led Germany to implement the most extensive, massive emergency bailout plan including huge spending, covering salaries of employers and guaranteeing emergency loans for businesses. No other country comes close. (Alas, my own country is right there at the bottom – though, of course, we do not have as deep pockets as Germany does).

   According to the International Monetary Fund, Germany’s bailout package is fully 28% of GDP! And Germany guarantees 90% of emergency loans. All this, to keep businesses afloat, so they can bounce back.

   But I have on caveat, or quibble. Germany: all this largesse goes to Germans. How about Italians and Spaniards? Can you spare just a small slice of your luscious pie for fellow EU countries, suffering badly?   They’re waiting.

Blog entries written by Prof. Shlomo Maital

Shlomo Maital

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