Monetarism and deflation not written into the Euro project

Is there any way this obsession with balancing budgets might not have been put into the Euro project.

My reading of the problem is a German obession with a fear of hyper inflation.
(This in turn is linked to bad history, the idea that the inflation caused the Nazi triumph)

Could it have happened?

Could the ECB be printign and lending money at sensible rates to Greece whilst that country started getting all the back taxes owed
 
Actually the German feelings about inflation is more: the government gets an enormous debt and than pays it back by making our "Sparbuch", we were told from the age of three to fill, worthless. The nazi-fear is only a distant second, and not totally unfounded, since before the inflation of 23/24 an overwhelming majority of the electorate supported the democracy. The hyperinflation was a major blow for the democratic parties and the feeling totally turnedwith the second major economic crisis within not even a decade in 29.

That said there is not a chance of an Euro with Germany which allows inflation, short of a pod at Versailles 1919 or earlier. Even iotl Kohl received massive opposition for supporting the Euro. And that at a time when pro European enthusiasm was at it heights after the reunification. And those critics who did not simply wanted to keep the Mark at all costs, wanted tighter rules not looser ones (although those might have lessened the crisis in their own way). Frankly had there been a plebiscite about the Euro in Germany it would have gone down in flames. The highest approval rate it ever had here had been 41 per cent in 2008! And that with the things you want to get rid of and after it seemed to work for almost a decade!

Btw, this might be more fitting in pol chat.
 
Is there any way this obsession with balancing budgets might not have been put into the Euro project.

My reading of the problem is a German obession with a fear of hyper inflation.
(This in turn is linked to bad history, the idea that the inflation caused the Nazi triumph)

Could it have happened?

Could the ECB be printign and lending money at sensible rates to Greece whilst that country started getting all the back taxes owed

What historyfool said.
And just to add to it:
- Part of the debts that were inflated away in 1923/1924 were the WW1 German war bonds. A lot of them owned by the middle class. They lose their life savings and support for the political system will take a hit.
- Which explains partly why the German government after 1929 hesitated to use the printing press.
- And not to forget, Hitler after 1933 essentially used the printing press (Mefo bills for example) to pay for his rearmament programs. After WW2 once again the German currency was pretty much worthless.
A German (40-50 year old for example) likely had parents who experienced the post-WW2 situation as children or teenagers. And grandparents who experienced the 1923 hyperinflation as adults.
- There is also the fact that the household savings rate in Germany today is 10+%. While house-ownership (mortgage debt) is lower than in many other Western countries. So inflation in Germany would hit savings but not help with mortgage debt. A double hit so to speak.

And then there´s also the assumption that it would just be a temporary thing. You mentioned Greece.
I read back in summer 2010 in international newspaper (Greek ones included) that the Greek state was owned Euro 41 billion in back taxes and fees. Plus there were estimates that Greece was losing Euro 10-20 billion per year due to tax evasion.
Then the topic vanished from the media.
It returned briefly 3-4 months ago in late 2011 when the new Greek "name and shame" program was mentioned.
Then it vanished again.
(For comparison the Greek budget in the last years was around Euro 70-80 billion per year.)

So it looks like nothing really happened in more than 18 months on this side? Cuts for the average Greek but no real efforts on the tax side?
Unless you count that the 2 prosecutors heading the task force on tax evasion resigned in December 2011?
What makes you think that Greek politicians and the Greek administration would put more effort into "getting all the back taxes owed" when they have the easy option of more money printed?

And recall Berlusconi in Italy a few months ago.
His government proposed a plan for less debts in the future (some cuts, some tax raises). The ECB then bought Italian debt, reducing the interest rate. And Berlusconi immediately started to muse that maybe higher taxes for rich people won´t be needed.

Things like that get noticed in Germany.
Why should Germans volunteer to take a hit to their savings with higher inflation when reducing tax evasion doesn´t seem that high a priority in some Eurozone countries?
And just how is this currency union supposed to work with some countries trying to get a balanced budget while others just happily pile on debt expecting it to get "inflated" away? What you called "Is there any way this obsession with balancing budgets might not have been put into the Euro project".

If you ask me if the current austerity programs will work, I´ll say no.
But simply inflating the debts away won´t work either. It just means we´ll face the same situation in 10 years again.
 
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