The stability and growth pact (SGP) is the EU’s public debt management rules and embedded in a separate treaty to the T[F]EU treaties. I have commented on these treaties elsewhere on this wiki. Elsewhere in several articles, on the blog, I criticise the SGP on my blog, including here, here, and here. My main criticism is that it binds its members to austerity and monetarism by treaty, with no ability to democratically amend the goals of these policies. Actually, it seems there is a periodic review. …

One problem is that the German’s still have a collective memory of the Weimar Hyperinflation, which they ascribe to loose money and are determined not to repeat it. They have a political consensus in favour of strong debt restraint, except when their banks are the debt holders.

The wikipedia page argues, with many citations that Germany’s hyperinflation was caused by deliberate policy, of printing money, caused by the need to buy foreign currency to make the war reparation payments imposed by WW1’s victors. The public finance situation was exacerbated by Germany’s decision to fund the war through borrowing, although that’s what everyone came to do.

Image: By A.Savin – Own work, FAL,

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