COMMENTARY ROUNDUP

The Big Ideas: Deutsche Mark recession, China’s failed green subsidies, and why France matters

Be careful what you wish for, Germany. For Bloomberg View, Clive Crook explains that a German exit is a fine solution (better than giving Greece the boot) but a return to the Deutsche Mark could very well lead to a recession in the Motherland. “The counterpart of growing exports and higher employment across the rest of the euro system would be falling exports and higher unemployment in Germany.” Maybe this’ll scare Germany into playing nice with the EU.

Green envy of China’s government subsidies is misguided. Patrick Chovanec writes for The Wall Street Journal that Obama’s desire to emulate green energy subsidized businesses and high-speed rail in China fails to take into account a reality of massive losses. In the first half of 2012, China’s Railway Ministry reported $1.4 billion in losses; BYD electric automobile company’s profits dropped 94% year over year; top wind turbine manufacturers saw earnings fall by more than 80% and on, and on. Back to the drawing board, Mr. President.

Why France matters. For Project Syndicate, Kemal Derviş , points out that while all eyes are focused on Germany, France’s role in the eurozone is just as critical. They possess a healthier demographic, have a more widely spoken language and hold more clout in many international organizations. And “…while France exports much less than Germany outside the EU, many large French enterprises rival Germany’s in global reach and technical know-how… France not only is a link between Europe’s north and south, but also contributes substantially to linking Europe to the rest of the world.”

Beijing’s farcical markets—too red to fail.
In Foreign Policy, Carl Walter and Frasier Howie, explore the way in which Chinese markets will never operate like Wall Street because private property doesn’t exist in China. Rather than true company valuation and foreign investment, the government prices state-owned companies’ shares based on need and the government maintains 51% ownership.

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