Former Chief Economist of European Central Bank Warns of Crash
May 24, 2021 (EIRNS)—As reported by the Tichy’s Einblick (Tichy’s Insight) website, former ECB chief economist Jürgen Stark points out that Germany has basically lost its fiscal sovereignty, that the country and Europe are in the middle of a profound systemic change in financial policy and in danger of a financial crash.
“In my view, the erosion of national sovereignty in terms of fiscal policy has already occurred,” Stark assessed, saying that every new step in what euphemistically has been called “integration progress” has undermined this national sovereignty in the years since 2010. The other factor mentioned by Stark as having had a particular eroding effect has been the bond-purchasing program of the ECB, which has proceeded at the expense of financial stability and has favored the explosion of state indebtedness, especially of the southern EU member countries. This program of the ECB will have provided an unbelievable total of €1.8 trillion by the first quarter of 2022, Stark charged, the net effect of that being a decoupling of the bond markets from the real economy—with fatal consequences: “I do not want to provoke a crash, but it cannot be ruled out.”
Stark furthermore denounced the Next Generation EU program which the EU called a “recovery program,” as “having nothing, really absolutely nothing, to do with the consequences of the pandemic.” The program is designed to expand the powers of the EU, Stark charged, stressing that this has nothing to do with the treaties on economic and financial stability, including the 1992 Maastricht Treaty, that have been signed by Germany: “We are in the middle of a systemic change.”