4 ms·

Yes, because things are going so well in Italy and Spain and forcing them to use the same monetary policy as Germany and France is a superb idea

madaxe_again 10y ago
It depends on whether you choose to take a short or long term view. Part of the purpose of the EU and its instruments, such as the euro, is normalisation of European economies into a single framework, with the ultimate goal of parity, which would not only bring about a more efficient and frictionless market (I.e. Simple cross-border trade for services and products), but also ultimately elevate the standard of living for all citizens. This is why some states which are less developed are currently net beneficiaries of European funds, and others are net donors. Currently. Wealthier nations beget wealth in their neighbours. To look at monetary policy in a vacuum is a mistake, as it ignores the substantial eu development funds which Italy and Spain are beneficiaries of. If you look at things in the short term, then poor Britain is being ripped off, the Spaniards are starving, the Greeks are broke - but if you take a longer term view, you'll take into consideration that all normalisation processes inevitably have over and undershoots, which can result in an imperfect present - but only define the future if you choose to let them do so.
- mirekrusin 10y ago
  You don't need to use euro currency to take advantage of unified trade/no borders etc. ie. currently Poland.
- thatfrenchguy 10y ago
  "which would not only bring about a more efficient and frictionless market (I.e. Simple cross-border trade for services and products), but also ultimately elevate the standard of living for all citizens." But you would have to have a working culture that is similar, which is not the case in the EU. People in Spain don't work like people in France or Germany, their government are different and wanting to have a single fiscal policy is doomed to fail. Also, the 1 to 5 salary for entry level workers is killing entry level workers in Western Europe, and that's one of the reasons behind so much euroskepticism
  - madaxe_again 10y ago
    And the money returns to their home state, which increases wealth, which increases consumption, which increases prices, which increases salaries. Again, it's a question of looking at the bigger picture rather than the immediate situation.
    - blibble 10y ago
      it's all very well to say "wait 30 years", however the Italian/Spanish/Greek governments will realise at some point that their young citizens will not permit them to sacrifice their life chances in their 20s/30s/40s so that Eastern Europe can increase its GDP
      - madaxe_again 10y ago
        Or they'll wait them out. As we've seen in Britain, older voters who aren't feeling the pain in the same way will remain a dominant force for a good 20-30 years yet. That said, many are voting with their feet - those reviled eastern states are havens for mobile youth, particularly those versed in technology. I also don't think 30 years is the timescale. It's more like ten, given the already accelerating pace of growth in previously impoverished states. Do look at gdp per cap graphs for, say, Latvia. It's impressive. The financial crash hurt, but they're already back on a healthy sigmoid upramp. https://www.google.co.uk/search?q=latvia+gdp+per+capita&rlz=1CDGOYI_enGB590GB590&oq=latbia+gdp+&aqs=chrome.2.69i57j0l3.4099j0j8&hl=en-GB&sourceid=chrome-mobile&ie=UTF-8 https://www.google.co.uk/search?q=latvia+gdp+per+capita&rlz=...
        thatfrenchguy 10y ago
        It's been ten years and the trend has been darkening for people in Western Europe. In my low-middle class family there has been noticeable cases of factories or offices moving to Eastern Europe (Poland notably), and it is fueling extreme right wing parties, for good reasons. You can talk about "mobile youth", but learning French when you're a low class Czech person is not something that's easy: the mobility in the EU is very restricted for that reason.
- mseebach 10y ago
  What exactly are the normalisation processes that will allow what meagre wealth that does exist in the EU to 'beget' fixing the epic clusterfucks (largely caused by the euro) in the south?
- abell 10y ago
  How long term should the view be? In Italy, political and monetary union hasn't led to anything approaching parity between North and South after 150 years. And as far as I understand, the outcome of German reunification is still quite disappointing for East Germans after 25 years.
  - davedx 10y ago
    Really? Can you provide a link for that?
    - abell 10y ago
      For the German reunification, I read a quite interesting essay by Vladimiro Giacché: "Anschluss. L'annessione. L'unificazione della Germania e il futuro dell'Europa" (also available in German). A few potentially interesting links after a quick googling: https://www.theguardian.com/world/2015/oct/02/german-reunification-25-years-on-how-different-are-east-and-west-really https://www.theguardian.com/world/2015/oct/02/german-reunifi... http://fortune.com/2014/11/09/germany-east-west-economy/ http://fortune.com/2014/11/09/germany-east-west-economy/ http://www.economist.com/blogs/graphicdetail/2015/10/daily-chart-comparing-eastern-and-western-germany http://www.economist.com/blogs/graphicdetail/2015/10/daily-c... And for Italy: http://www.citymetric.com/business/italys-north-south-divide-one-chart-361 http://www.citymetric.com/business/italys-north-south-divide...
  - madaxe_again 10y ago
    As long as infrastructure investment fails to materialise or lands in corrupt hands, then no, you will not make progress. EU projects tend to go better than domestic ones due to the increased accountability and oversight they demand. I drove across Europe in the late 90's and it took weeks, navigating awful roads and overtaking horse carts. Now, there are motorways, a very visible physical embodiment of investment done well. Hell, you can drive to China from the UK in four days now. It's nothing to sniff at.
    - zigzigzag 10y ago
      EU funding is notoriously wasteful hence the phenomenon of "ghost airports" and other stuff: http://www.reuters.com/article/us-poland-airports-specialreport-idUSKBN0JS06K20141214 http://www.reuters.com/article/us-poland-airports-specialrep... I can believe the EU is slightly more competent than, say, Greece. I can believe it's not exactly corrupt. But that doesn't mean it's progress.
- wott 10y ago
  No, that process used to work relatively OK when then number of countries was limited. Italy, Greece and Spain benefited from transfers which allowed them to close the gap with core countries. But those were basically the days of EEC. Then came EU with its dogmatic liberalisation and the inclusion of all Eastern Europe countries. The combination of these factors broke the balance between the European countries, creating competition between these countries that cannot compete fairly, for the level difference is too huge and the Eastern Countries only advantage is engaging a race to the bottom. Salaries can be more then 5 times lower in East than in West! and they even wanted at some point Ukraine to join without any preparation, Ukraine which has 10 to 12 times lower salaries!! They have removed all barriers and regulations that could soften transitions and imbalances. Meanwhile, countries are stuck with Euro and cannot opt for different economic models to adapt to this internal unfair competition. And transfers do not work any more, because it is not in the interest of Eastern countries to reach the level of Western ones, because they would lose their only advantage. This even annihilates the past benefits of EEC time transfers, disrupting the Southern countries.
  - madaxe_again 10y ago
    I take it you've never been to any "Eastern" countries, and rely on your local media for your warped view. The standard of living in the baltics, for instance, has grown enormously over the last decade - to the extent that I am considering moving from the UK to Vilnius. Wages are lower, yes, but so is the cost of goods and services. Now that they have functioning service economies, wage inflation is happening, in lockstep with price inflation. Parity happens quickly once you get the basics (infrastructure etc.) in place, which has been much of where investment has sat over the last decades. Investment is the key word here - it's a rash investor who wants his return on a venture before it reaches fruition. Also - would you rather they were getting cozy with Russia?
    - deleted 10y ago
      [deleted]

madaxe_again 10y ago

It depends on whether you choose to take a short or long term view. Part of the purpose of the EU and its instruments, such as the euro, is normalisation of European economies into a single framework, with the ultimate goal of parity, which would not only bring about a more efficient and frictionless market (I.e. Simple cross-border trade for services and products), but also ultimately elevate the standard of living for all citizens. This is why some states which are less developed are currently net beneficiaries of European funds, and others are net donors. Currently. Wealthier nations beget wealth in their neighbours. To look at monetary policy in a vacuum is a mistake, as it ignores the substantial eu development funds which Italy and Spain are beneficiaries of. If you look at things in the short term, then poor Britain is being ripped off, the Spaniards are starving, the Greeks are broke - but if you take a longer term view, you'll take into consideration that all normalisation processes inevitably have over and undershoots, which can result in an imperfect present - but only define the future if you choose to let them do so.

mirekrusin 10y ago
You don't need to use euro currency to take advantage of unified trade/no borders etc. ie. currently Poland.
thatfrenchguy 10y ago
"which would not only bring about a more efficient and frictionless market (I.e. Simple cross-border trade for services and products), but also ultimately elevate the standard of living for all citizens." But you would have to have a working culture that is similar, which is not the case in the EU. People in Spain don't work like people in France or Germany, their government are different and wanting to have a single fiscal policy is doomed to fail. Also, the 1 to 5 salary for entry level workers is killing entry level workers in Western Europe, and that's one of the reasons behind so much euroskepticism
- madaxe_again 10y ago
  And the money returns to their home state, which increases wealth, which increases consumption, which increases prices, which increases salaries. Again, it's a question of looking at the bigger picture rather than the immediate situation.
  - blibble 10y ago
    it's all very well to say "wait 30 years", however the Italian/Spanish/Greek governments will realise at some point that their young citizens will not permit them to sacrifice their life chances in their 20s/30s/40s so that Eastern Europe can increase its GDP
    - madaxe_again 10y ago
      Or they'll wait them out. As we've seen in Britain, older voters who aren't feeling the pain in the same way will remain a dominant force for a good 20-30 years yet. That said, many are voting with their feet - those reviled eastern states are havens for mobile youth, particularly those versed in technology. I also don't think 30 years is the timescale. It's more like ten, given the already accelerating pace of growth in previously impoverished states. Do look at gdp per cap graphs for, say, Latvia. It's impressive. The financial crash hurt, but they're already back on a healthy sigmoid upramp. https://www.google.co.uk/search?q=latvia+gdp+per+capita&rlz=1CDGOYI_enGB590GB590&oq=latbia+gdp+&aqs=chrome.2.69i57j0l3.4099j0j8&hl=en-GB&sourceid=chrome-mobile&ie=UTF-8 https://www.google.co.uk/search?q=latvia+gdp+per+capita&rlz=...
      - thatfrenchguy 10y ago
        It's been ten years and the trend has been darkening for people in Western Europe. In my low-middle class family there has been noticeable cases of factories or offices moving to Eastern Europe (Poland notably), and it is fueling extreme right wing parties, for good reasons. You can talk about "mobile youth", but learning French when you're a low class Czech person is not something that's easy: the mobility in the EU is very restricted for that reason.
mseebach 10y ago
What exactly are the normalisation processes that will allow what meagre wealth that does exist in the EU to 'beget' fixing the epic clusterfucks (largely caused by the euro) in the south?
abell 10y ago
How long term should the view be? In Italy, political and monetary union hasn't led to anything approaching parity between North and South after 150 years. And as far as I understand, the outcome of German reunification is still quite disappointing for East Germans after 25 years.
- davedx 10y ago
  Really? Can you provide a link for that?
  - abell 10y ago
    For the German reunification, I read a quite interesting essay by Vladimiro Giacché: "Anschluss. L'annessione. L'unificazione della Germania e il futuro dell'Europa" (also available in German). A few potentially interesting links after a quick googling: https://www.theguardian.com/world/2015/oct/02/german-reunification-25-years-on-how-different-are-east-and-west-really https://www.theguardian.com/world/2015/oct/02/german-reunifi... http://fortune.com/2014/11/09/germany-east-west-economy/ http://fortune.com/2014/11/09/germany-east-west-economy/ http://www.economist.com/blogs/graphicdetail/2015/10/daily-chart-comparing-eastern-and-western-germany http://www.economist.com/blogs/graphicdetail/2015/10/daily-c... And for Italy: http://www.citymetric.com/business/italys-north-south-divide-one-chart-361 http://www.citymetric.com/business/italys-north-south-divide...
- madaxe_again 10y ago
  As long as infrastructure investment fails to materialise or lands in corrupt hands, then no, you will not make progress. EU projects tend to go better than domestic ones due to the increased accountability and oversight they demand. I drove across Europe in the late 90's and it took weeks, navigating awful roads and overtaking horse carts. Now, there are motorways, a very visible physical embodiment of investment done well. Hell, you can drive to China from the UK in four days now. It's nothing to sniff at.
  - zigzigzag 10y ago
    EU funding is notoriously wasteful hence the phenomenon of "ghost airports" and other stuff: http://www.reuters.com/article/us-poland-airports-specialreport-idUSKBN0JS06K20141214 http://www.reuters.com/article/us-poland-airports-specialrep... I can believe the EU is slightly more competent than, say, Greece. I can believe it's not exactly corrupt. But that doesn't mean it's progress.
wott 10y ago
No, that process used to work relatively OK when then number of countries was limited. Italy, Greece and Spain benefited from transfers which allowed them to close the gap with core countries. But those were basically the days of EEC. Then came EU with its dogmatic liberalisation and the inclusion of all Eastern Europe countries. The combination of these factors broke the balance between the European countries, creating competition between these countries that cannot compete fairly, for the level difference is too huge and the Eastern Countries only advantage is engaging a race to the bottom. Salaries can be more then 5 times lower in East than in West! and they even wanted at some point Ukraine to join without any preparation, Ukraine which has 10 to 12 times lower salaries!! They have removed all barriers and regulations that could soften transitions and imbalances. Meanwhile, countries are stuck with Euro and cannot opt for different economic models to adapt to this internal unfair competition. And transfers do not work any more, because it is not in the interest of Eastern countries to reach the level of Western ones, because they would lose their only advantage. This even annihilates the past benefits of EEC time transfers, disrupting the Southern countries.
- madaxe_again 10y ago
  I take it you've never been to any "Eastern" countries, and rely on your local media for your warped view. The standard of living in the baltics, for instance, has grown enormously over the last decade - to the extent that I am considering moving from the UK to Vilnius. Wages are lower, yes, but so is the cost of goods and services. Now that they have functioning service economies, wage inflation is happening, in lockstep with price inflation. Parity happens quickly once you get the basics (infrastructure etc.) in place, which has been much of where investment has sat over the last decades. Investment is the key word here - it's a rash investor who wants his return on a venture before it reaches fruition. Also - would you rather they were getting cozy with Russia?
  - deleted 10y ago
    [deleted]