Germany racked up one economic success after another for most of this century. But the loss of Russian natural gas due to the war in Ukraine has dealt a severe blow to its industry through higher energy costs.
Actually, it can’t. The issue is not printing it, the issue is issuing it: The way reserve banking works is that when the central bank wants to increase the amount of money in circulation it lowers the interest rates banks have to pay for ECB euros, which the banks then use to give out loans in private bank euros (hence reserve bankings – the banks can lend out more book money than they hold in ecb money).
The reason why the Eurozone has been in deflation or just barely scraped past is that the banks weren’t willing to give out loans – they were consolidating, reducing risk, because believe it or not they don’t like being nationalised and having bureocrats breathe down their neck. (if nothing else that gets in the way of shady business).
There were talks about “helicopter money”, that is, right-out giving every citizen money, no questions asked, to spend, an excellent idea but the thing never materialised not in the least because the infrastructure to do it simply isn’t there and getting politicians to cooperate in something that looks suspiciously like a UBI (even if short-term and all in all a low amount) is an uphill battle. It’s probably one of the reasons why the ECB is now thinking very loudly about a digital euro as then they could simply do it based on the stability mandate they already have.
Actually, it can’t. The issue is not printing it, the issue is issuing it: The way reserve banking works is that when the central bank wants to increase the amount of money in circulation it lowers the interest rates banks have to pay for ECB euros, which the banks then use to give out loans in private bank euros (hence reserve bankings – the banks can lend out more book money than they hold in ecb money).
The reason why the Eurozone has been in deflation or just barely scraped past is that the banks weren’t willing to give out loans – they were consolidating, reducing risk, because believe it or not they don’t like being nationalised and having bureocrats breathe down their neck. (if nothing else that gets in the way of shady business).
There were talks about “helicopter money”, that is, right-out giving every citizen money, no questions asked, to spend, an excellent idea but the thing never materialised not in the least because the infrastructure to do it simply isn’t there and getting politicians to cooperate in something that looks suspiciously like a UBI (even if short-term and all in all a low amount) is an uphill battle. It’s probably one of the reasons why the ECB is now thinking very loudly about a digital euro as then they could simply do it based on the stability mandate they already have.