Samkomulag 26 Evrópuríkja fyrir helgi um “lausnir” á skuldavandamálum aðildarríkjanna og vanda evrusvæðisins hefur verið blásið upp hér á landi sem endanleg lausn sem muni lagfæra allt sem í ólagi er í ESB.

Gylfi Arnbjörnsson segir um “lausnina” að “ef markmið umsóknar um aðild að ESB var að fá traustari gjaldmiðil sem grundvöll fyrir efnahags- og atvinnulífið og meira aðhald að stjórn efnahagsmála mun þessi sáttmáli einungis færa okkur nær því markmiði,”

Össur Skarphéðinsson sagði það “fráleitt nú þegar ESB er loksins búið að samþykkja aðgerðir sem sérfræðingar telji líklegt að leysi núverandi skuldavanda ríkja í álfunni og lagfæri galla á umbúnaði evrunnar og komi þannig í veg fyrir frekari kreppur af þessu tagi.”

Vandinn er að erlendir sérfræðingar og álitsgjafar í efnahagsmálum eru hreint ekki sammála þessum Bakkabræðrum.

Paul Murphy hjá FT.com/alphaville setur á skýran hátt fram af hverju “lausnin” er hreint engin “lausn” og mun hreinlega aldrei ganga upp:

Fines all round?

Posted by Paul Murphy on Dec 12 13:11.

From the new-fangled EU fiscal compact declaration:

5.  The rules governing the Excessive Deficit Procedure (Article 126 of the TFEU) will be reinforced for euro area Member States. As soon as a Member State is recognised to be in breach of the 3% ceiling by the Commission, there will be automatic consequences unless a qualified majority of euro area Member States is opposed. Steps and sanctions proposed or recommended by the Commission will be adopted unless a qualified majority of the euro area Member States is opposed. The specification of the debt criterion in terms of a numerical benchmark for debt reduction (1/20 rule) for Member States with a government debt in excess of 60% needs to be enshrined in the new provisions.

Now, its been pointed out repeatedly that even Germany has struggled to stay below the Maastricht thresholds. But these two tables from Eurostat, reproduced by Macro Business (h/t Yves Smith) really hammer the point home.

What was supposedly agreed in Europe on Friday just ain’t gonna happen.

And you might want to check out what countries would have to do to comply with the compact’s requirement to get structural deficits down below 0.5 per cent of GDP. (And also to reduce debt to GDP annually by — deep breath — one-twentieth of the difference between their current debt to GDP and the Maastricht 60 per cent target). Here’s a chart via Societe Generale’s James Nixon:

Getur þetta verið mikið skýrara?   En vilji menn fara dýpra ofan í það af hverju þetta samkomulag mun ekki leysa vanda evrusvæðisins eða ESB til frambúðar má benda á pistil Martin Wolf, viðskiptaritstjóra Financial Times um mistök Neyðarfundarins og sterkan pistil Delusional Economics á Macrobusiness.com um sama vandamál. Látum niðurlagið þar verða niðurlagið hér:

The basis issue I have with the entire plan is that for some odd reason, against ever mounting evidence, European economic policy is still being implemented on the basis of an ideology that using bailout loans and “expansionary fiscal contraction” is a workable economic recovery strategy for Eurozone nations that are bound to a non-deflatable currency. The periphery continue to prove this point wrong and even the IMF, and more recently the OECD, have admitted that the policy is failing in Greece. Yet despite this, all I can see that has come out of this latest summit is even more plans based on this same underlying premise.

I noted yesterday that Paul Krugam had linked an article discussing this exact point in the context of Ireland:

One lesson that the world has learned since the financial crisis of 2008 is that a contractionary fiscal policy means what it says: contraction. Since 2010, a Europe-wide experiment has conclusively falsified the idea that fiscal contractions are expansionary. August 2011 saw the largest monthly decrease in eurozone industrial production since September 2009, German exports fell sharply in October, and now-casting.com is predicting declines in eurozone GDP for late 2011 and early 2012.

A second, related lesson is that it is difficult to cut nominal wages, and that they are certainly not flexible enough to eliminate unemployment. That is true even in a country as flexible, small, and open as Ireland, where unemployment increased last month to 14.5%, emigration notwithstanding, and where tax revenues in November ran 1.6% below target as a result. If the nineteenth-century “internal devaluation” strategy to promote growth by cutting domestic wages and prices is proving so difficult in Ireland, how does the EU expect it to work across the entire eurozone periphery?

The world nowadays looks very much like the theoretical world that economists have traditionally used to examine the costs and benefits of monetary unions. The eurozone members’ loss of ability to devalue their exchange rates is a major cost. Governments’ efforts to promote wage cuts, or to engineer them by driving their countries into recession, cannot substitute for exchange-rate devaluation. Placing the entire burden of adjustment on deficit countries is a recipe for disaster.

Yes it is. But it is now the recipe Europe is using. Another “summit to end all summits” is guaranteed.