Free world searching for economic equilibrium
Diversity and collaboration
The world economies are largely capitalist-dependent. Capitalism is the fundamental economic model hosted by eclectic forms of governments. Government economic systems operate with varying degrees of constraints upon entrepreneurial freedom.
Governments perform with some notion of optimizing return on national resources such that prosperity is shared to varying degree so citizens benefit. Governments and economic systems operate with symbiotic relationships among workers, corporate entities, governments and powers to produce gross domestic products. GDP is an indication of economic prosperity, though governments regulate the rate at which it is consumed by government and shared among people.
History shows in countless examples a couple of important factors:
1. Diversity is a good thing
2. Collaboration is a good thing
European nations remain very diverse in culture, character, and values even though freedom of access may cause a propensity to amalgamate. Diverse peoples live and work together throughout the EU nations. Governments collaborate for the common economic good. These behaviors can be most advantageous in a world that is reaching the limit of the current economic model that is based on endless consumption without regard for environment and scarcity of resources to sustain people.
“German economic slowdown yields more sour news for Europe
By Howard Schneider, Published: August 16
BERLIN — The economy of Germany, Europe’s headline performer, slowed to a virtual standstill over the past three months, according to new figures released Tuesday, a further blow to international efforts to contain the financial crisis on the continent.
The discouraging news came just hours before German Chancellor Angela Merkel and French President Nicolas Sarkozy called for closer European coordination in setting economic policy and new steps to discipline governments whose lax budget practices prompted the debt crisis.
Meeting in Paris, Merkel and Sarkozy sought to address the challenge that has long bedeviled the 17 countries that share the euro. Although they use the same currency, they have lacked common oversight of tax and spending policies, leaving much of the continent vulnerable to the fiscal failures of individual nations.
The pair proposed that countries harmonize their tax policies, adopt a new tax on financial transactions and commit to balancing their budgets, as well as set up an economic council of national leaders that would meet at least twice a year. But the post-meeting news conference did little to cheer U.S. and euro-zone stock markets, which were down after the poor German growth report.
The abrupt slowdown in Europe’s largest economy comes at a time when Germany is expected to fund a major portion of the emergency loans extended to struggling neighbors such as Greece, Ireland and Portugal. Germany’s contribution is unpopular at home, and the new economic troubles could make it hard for politicians to sell any additional bailouts if Europe’s debt crisis worsens.
The new figures call into question whether Germany can remain the economic engine that officials in the United States and elsewhere have been counting on to power Europe’s recovery. Amid recent signs that the U.S. recovery is flagging, the news that Germany grew only 0.1 percent during the second quarter is an especially grim development for the world’s economy.
The German economy had bounced back from the recent global recession, looking — in the words of one analyst in Berlin — “like a swimmer in a neoprene suit.” But that strong growth, about 3.5 percent last year, was largely the result of a post-recession export boom that economists did not consider sustainable. The reality is more sobering: weak domestic consumption, stagnant wages, an aging population and underlying growth — estimated at barely more than 1 percent annually — that looks little different from that of anemic neighbors such as Italy and Spain.
“Trend growth is not that high,” said Thomas Mayer, chief economist for Deutsche Bank. “It would have been false to think that Germany would turn into a locomotive for Europe. That is not a viable proposition.”
According to a release from the Federal Statistical Office of Germany, flagging investment and household consumption were behind the slowdown — particularly disappointing for those, including U.S. officials, who have urged Germany to stoke local demand. The figures for June 2010 to this past June were more encouraging, showing that Germany grew 2.8 percent. But even that represented a decline.”