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German parliament backs EU750B crisis spending package

  
Analysis, Economy
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That’s a big number

Germany’s parliament approved aid for smaller firms and the self-employed. It includes a 156B euro supplementary budget.
That’s a huge number. Germany’s GDP is one-fifth of the US which just unveiled an enormous $2 trillion package. In relative terms, this is much bigger. That said, the details matter. Parts of both programs are loan guarantees and those don’t necessarily cost anything because they will be paid back.

India’s worst-kept secrets, told by Rajan

  
  Analysis
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Raghuram RajanFormer Reserve Bank of India governor Raghuram Rajan has said that people in authority have to tolerate criticism and that any move to suppress it “is a sure fire recipe for policy mistakes”.

“What makes India strong is its diversity, debate and tolerance. What makes it weak is narrow-mindedness, obscurantism and divisiveness,” Rajan said in a long LinkedIn post on Monday, two days ahead of the 150th birth anniversary of the Father of the Nation.

He said governments that suppress public criticism do themselves a gross disservice.

“If every critic gets a phone call from a government functionary asking them to back off, or gets targeted by the ruling party’s troll army, many will tone down their criticism. The government will then live in a pleasant make-believe environment, until the harsh truth can no longer be denied,” he said.

“Undoubtedly, some of the criticism, including in the press, is ill-informed, motivated, and descends into ad-hominem personal attacks. I have certainly had my share of those in past jobs. However, suppressing criticism is a sure fire recipe for policy mistakes,” he added.

Last week, the Narendra Modi government had removed Rathin Roy and Shamika Ravi from the economic advisory council to the Prime Minister. Both had criticised some of the government’s policies. (more…)

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