Monetary policy in Germany has been more a response to a successful economy than a cause. So, if Stormin' Norman and Major John want 'German-style' growth, they should import German-style cross shareholding, German-style technical training and education systems; German after-sales service, production and efficiency standards. The hard truth is that sticking to an exchange rate is much cheaper and less hassle. So, don't blame anything but the Government's shortsightedness for the boom-inflation-recession cycle we're once again facing.
In a quiet moment, I'm sure that even Lamont and Major would confess that Britain joined the ERM essentially because the Government could not trust itself to run the economy (more specifically its own anti-inflationary policies) anymore. If you want German growth, import the cause of that growth; don't just tie yourself to the Deutschmark, lie back and think of Frankfurt.
Tokai Bank, London Branch
6 OctoberReuse content