5 ms·

Surely a major factor for problems in both Italy and Spain is the crippling effect of the Euro and EU regulation. If the Euro were scrapped, it could make the

by rleigh 8y ago

Surely a major factor for problems in both Italy and Spain is the crippling effect of the Euro and EU regulation. If the Euro were scrapped, it could make the economies much more competitive. Just look at how the drop in the pound over the last two years boosted British industry and exports. That's not an option for countries shackled to the Euro.

ItsMe000001 8y ago
So, the same problem that the poor(er) states in the US have. And yet, they seem to be content to stay within the union - so I think there may be a little more to it than a single variable? I'm open to the argument, it just seems a little... well, short. Especially in a reply to a comment that said "The problems are more complex" :-) (now it's simple after all? I doubt it)
- michaelt 8y ago
  America has accepted massive, permanent subsidies from high productivity states to low ones. It’s one country, after all. Do the rich countries of the EU have the same appetite?
  - mschuster91 8y ago
    > Do the rich countries of the EU have the same appetite? As a matter of fact, Germany and the other EU countries do massively finance the poorer EU countries (per https://en.wikipedia.org/wiki/European_Union_statistics#EU_budget https://en.wikipedia.org/wiki/European_Union_statistics#EU_b...). Problem is corruption: EU funds too often get shunted sideways (e.g. for Hungary, https://www.theguardian.com/world/2018/feb/12/how-hungarian-pms-supporters-profit-from-eu-backed-projects https://www.theguardian.com/world/2018/feb/12/how-hungarian-...).
    - laurencerowe 8y ago
      Those figures do not show massive inter-regional financing. All but 2 countries have net EU expenditures of +/- 250 Euro per person. Per capita spending by the EU is 215 Euro per person compared to federal government spending of $9,961 per person in the US. https://en.wikipedia.org/wiki/Federal_taxation_and_spending_by_state https://en.wikipedia.org/wiki/Federal_taxation_and_spending_... The EU budget is 1% of GDP while the US federal budget is 20% GDP, 60% of which goes on social security / medicare / safety net programs. US federal spending acts as a huge inter-regional stabilizer. Regional transfers must significantly increase within the Eurozone if the Euro is to avoid breaking up or immiserating huge numbers of citizens.
- Kenji 8y ago
  > So, the same problem that the poor(er) states in the US have. And yet, they seem to be content to stay within the union - so I think there may be a little more to it than a single variable? Are you seriously comparing the USA to the EU? Are you retarded? The USA is way more homogenous than Europe. The USA barely has any history, it's such a young country! European history goes back many thousands of years, you can't just force incompatible cultures together.
- whack 8y ago
  rleigh is making the same argument as people like Paul Krugman. It's a controversial topic for sure, but I think it's unfair to call it "short" https://www.npr.org/2011/01/25/133112932/paul-krugman-the-economic-failure-of-the-euro https://www.npr.org/2011/01/25/133112932/paul-krugman-the-ec...
  - ItsMe000001 8y ago
    > I think it's unfair to call it "short" I replied to a comment here, not to Krugman. This should be obvious?
ciguy 8y ago
Most of the beauricracies I've dealt with in Italy have nothing to do with the Euro or the EU. And yet they are horribly mis-managed and run by corrupt nespotic maniacs. It's a cultural problem, not a regulatory one. And thanks to brain drain the young people are leaving instead of affecting change.
- rleigh 8y ago
  And yet, these cultural problems have existed for many decades. While I'm certainly not claiming that the Euro and EU are the sole causes of today's problems, the introduction of the Euro is the more recent change, and I think a more likely contributor to the recent economic problems.
  - Anderkent 8y ago
    Well, introduction of open borders is also fairly recent, don't you think that might have more impact on the within-eu migration than shared currency?
    - rleigh 8y ago
      I'm sure that both are factors. However, it was fairly easy to work in different European countries before the EU or the EEC existed, it just needed some paperwork filling out, so I'm inclined to think this is a lesser factor. There was migration for work between western European countries such as UK/Germany/France/Italy for well over a century. It has certainly increased in recent decades, but it's not at all new. In contrast, the Euro affects entire nations, which can depress weaker economies as a result of it being tied to stronger economies like Germany. This affects every manufacturing and export business, with no way to become more competitive relative to stronger economies within the Euro zone. Wealth will continue to drain out to stronger economies. The currency itself is an insurmountable problem, it's not a level playing field, and there's no way to correct that without reverting to a freely floating national currency or political and monetary union. And the latter is not going to be acceptable to the public any time soon; the Euro zone is more likely to collapse before that ever happens. I'd also suggest that a lot of the migration out of Italy and Spain is a consequence of the Euro-induced economic collapse, not the primary cause. Though it certainly will have a reinforcing effect. I've met plenty of Italians who migrated to work in the UK and US over the last decade+, and for most it wasn't because migration to the UK or US was a life goal for economic or other reasons, it was because there were simply no opportunities or a future for them at home. They would have liked to stay if they could. Open borders would have made this choice easier, but that's an enabling factor, not the primary driver. The situation for these countries is increasingly desperate; they need to have a future for their own people.
ben_w 8y ago
British industry growth has become unstable rather than higher since the pound collapsed. British exports have mainly gone up because gold (which doesn’t come from the UK, it just happened to be stored there) is being moved out of the country in economically significant quantities. https://www.ft.com/content/0407854e-f9d0-11e6-9516-2d969e0d3b65 https://www.ft.com/content/0407854e-f9d0-11e6-9516-2d969e0d3... This isn’t to say the Euro is brilliant or not, I don’t have the knowledge necessary to argue that topic pro or con.
- repolfx 8y ago
  The pound hasn't collapsed, that's why. Look at a graph of GBPUSD. The pound spent all of 2017 increasing in value, and you'll see that by the start of 2018 the pound had erased the entire drop that followed the EU referendum - it was back to the value it was at the start of 2016. The fluctuations since then have been within the same sort of range as is normal for such a currency: the fall since April is of about the same size as the falls in July 2011, Summer-Winter 2014 etc. The narrative that the UK economy or currency is collapsing is trivially disproven by simply looking at a graph. With respect to gold, the story you linked to says it's being moved by Chinese investors as a hedge against problems with their own currency. It's unrelated to the politics of the EU.
  - tigershark 8y ago
    Before looking at the numbers you need to understand what the numbers actually mean. The gbp value has indeed collapsed. Whoever is telling the contrary is plainly lying. The gbp eur fx before the Brexit was over 1.40, now it is 1.11. Obviously you look at the gbp usd graph that has nothing to do with the strength of the gbp because the major business partner of the UK is the EU, not the US, and by far. The gbp usd graph that you are using as a proof of your fantasies just highlights that the USD also lost value in the last two years. Can I please know where do you live? I live in UK and I can attest for sure to the GBP collapse and the economy that is growing at half the pace as before. I lost thousands of pounds already because of the Brexit.
    - 8y ago
tigershark 8y ago
British economy went from a growth of ~3% before the Brexit to half of that after the Brexit. Italy economy with the lira in the ‘90s was completely stagnant. Please avoid spreading misinformation passing your conjectures for facts.
- growlist 8y ago
  Correlation does not imply causation.

by rleigh 8y ago

ItsMe000001 8y ago

So, the same problem that the poor(er) states in the US have. And yet, they seem to be content to stay within the union - so I think there may be a little more to it than a single variable? I'm open to the argument, it just seems a little... well, short. Especially in a reply to a comment that said "The problems are more complex" :-) (now it's simple after all? I doubt it)

michaelt 8y ago
America has accepted massive, permanent subsidies from high productivity states to low ones. It’s one country, after all. Do the rich countries of the EU have the same appetite?
- mschuster91 8y ago
  > Do the rich countries of the EU have the same appetite? As a matter of fact, Germany and the other EU countries do massively finance the poorer EU countries (per https://en.wikipedia.org/wiki/European_Union_statistics#EU_budget https://en.wikipedia.org/wiki/European_Union_statistics#EU_b...). Problem is corruption: EU funds too often get shunted sideways (e.g. for Hungary, https://www.theguardian.com/world/2018/feb/12/how-hungarian-pms-supporters-profit-from-eu-backed-projects https://www.theguardian.com/world/2018/feb/12/how-hungarian-...).
  - laurencerowe 8y ago
    Those figures do not show massive inter-regional financing. All but 2 countries have net EU expenditures of +/- 250 Euro per person. Per capita spending by the EU is 215 Euro per person compared to federal government spending of $9,961 per person in the US. https://en.wikipedia.org/wiki/Federal_taxation_and_spending_by_state https://en.wikipedia.org/wiki/Federal_taxation_and_spending_... The EU budget is 1% of GDP while the US federal budget is 20% GDP, 60% of which goes on social security / medicare / safety net programs. US federal spending acts as a huge inter-regional stabilizer. Regional transfers must significantly increase within the Eurozone if the Euro is to avoid breaking up or immiserating huge numbers of citizens.
Kenji 8y ago
> So, the same problem that the poor(er) states in the US have. And yet, they seem to be content to stay within the union - so I think there may be a little more to it than a single variable? Are you seriously comparing the USA to the EU? Are you retarded? The USA is way more homogenous than Europe. The USA barely has any history, it's such a young country! European history goes back many thousands of years, you can't just force incompatible cultures together.
whack 8y ago
rleigh is making the same argument as people like Paul Krugman. It's a controversial topic for sure, but I think it's unfair to call it "short" https://www.npr.org/2011/01/25/133112932/paul-krugman-the-economic-failure-of-the-euro https://www.npr.org/2011/01/25/133112932/paul-krugman-the-ec...
- ItsMe000001 8y ago
  > I think it's unfair to call it "short" I replied to a comment here, not to Krugman. This should be obvious?

ciguy 8y ago

Most of the beauricracies I've dealt with in Italy have nothing to do with the Euro or the EU. And yet they are horribly mis-managed and run by corrupt nespotic maniacs. It's a cultural problem, not a regulatory one. And thanks to brain drain the young people are leaving instead of affecting change.

rleigh 8y ago
And yet, these cultural problems have existed for many decades. While I'm certainly not claiming that the Euro and EU are the sole causes of today's problems, the introduction of the Euro is the more recent change, and I think a more likely contributor to the recent economic problems.
- Anderkent 8y ago
  Well, introduction of open borders is also fairly recent, don't you think that might have more impact on the within-eu migration than shared currency?
  - rleigh 8y ago
    I'm sure that both are factors. However, it was fairly easy to work in different European countries before the EU or the EEC existed, it just needed some paperwork filling out, so I'm inclined to think this is a lesser factor. There was migration for work between western European countries such as UK/Germany/France/Italy for well over a century. It has certainly increased in recent decades, but it's not at all new. In contrast, the Euro affects entire nations, which can depress weaker economies as a result of it being tied to stronger economies like Germany. This affects every manufacturing and export business, with no way to become more competitive relative to stronger economies within the Euro zone. Wealth will continue to drain out to stronger economies. The currency itself is an insurmountable problem, it's not a level playing field, and there's no way to correct that without reverting to a freely floating national currency or political and monetary union. And the latter is not going to be acceptable to the public any time soon; the Euro zone is more likely to collapse before that ever happens. I'd also suggest that a lot of the migration out of Italy and Spain is a consequence of the Euro-induced economic collapse, not the primary cause. Though it certainly will have a reinforcing effect. I've met plenty of Italians who migrated to work in the UK and US over the last decade+, and for most it wasn't because migration to the UK or US was a life goal for economic or other reasons, it was because there were simply no opportunities or a future for them at home. They would have liked to stay if they could. Open borders would have made this choice easier, but that's an enabling factor, not the primary driver. The situation for these countries is increasingly desperate; they need to have a future for their own people.

ben_w 8y ago

British industry growth has become unstable rather than higher since the pound collapsed. British exports have mainly gone up because gold (which doesn’t come from the UK, it just happened to be stored there) is being moved out of the country in economically significant quantities. https://www.ft.com/content/0407854e-f9d0-11e6-9516-2d969e0d3b65 https://www.ft.com/content/0407854e-f9d0-11e6-9516-2d969e0d3... This isn’t to say the Euro is brilliant or not, I don’t have the knowledge necessary to argue that topic pro or con.

repolfx 8y ago
The pound hasn't collapsed, that's why. Look at a graph of GBPUSD. The pound spent all of 2017 increasing in value, and you'll see that by the start of 2018 the pound had erased the entire drop that followed the EU referendum - it was back to the value it was at the start of 2016. The fluctuations since then have been within the same sort of range as is normal for such a currency: the fall since April is of about the same size as the falls in July 2011, Summer-Winter 2014 etc. The narrative that the UK economy or currency is collapsing is trivially disproven by simply looking at a graph. With respect to gold, the story you linked to says it's being moved by Chinese investors as a hedge against problems with their own currency. It's unrelated to the politics of the EU.
- tigershark 8y ago
  Before looking at the numbers you need to understand what the numbers actually mean. The gbp value has indeed collapsed. Whoever is telling the contrary is plainly lying. The gbp eur fx before the Brexit was over 1.40, now it is 1.11. Obviously you look at the gbp usd graph that has nothing to do with the strength of the gbp because the major business partner of the UK is the EU, not the US, and by far. The gbp usd graph that you are using as a proof of your fantasies just highlights that the USD also lost value in the last two years. Can I please know where do you live? I live in UK and I can attest for sure to the GBP collapse and the economy that is growing at half the pace as before. I lost thousands of pounds already because of the Brexit.
  - 8y ago

tigershark 8y ago

British economy went from a growth of ~3% before the Brexit to half of that after the Brexit. Italy economy with the lira in the ‘90s was completely stagnant. Please avoid spreading misinformation passing your conjectures for facts.

growlist 8y ago
Correlation does not imply causation.