(p. A9) Cash-for-clunkers programs have no lasting economic benefit and could even lead to a “substantial weakening” in euro-zone automobile sales next year, the European Central Bank said.
The findings, though far from original, amount to an official slap on the wrist to European governments including those of Germany, France and Spain that rolled out the popular programs to stoke demand in their auto sectors at the height of the financial crisis.
. . .
Such incentive measures should be applied “with caution,” the ECB said, “as they may hamper the efficiency of the functioning of a free-market economy and may delay necessary structural change, thereby undermining overall income and employment prospects in the longer term.”
For the full story, see:
BRIAN BLACKSTONE. “Clunker Plans Are Risky Route, Central Bank Says.” The Wall Street Journal (Fri., OCTOBER 16, 2009): A9.
(Note: ellipsis added.)