4 ms·
While EU does subsidize poor EU countries but we must question what's the impact of that subsidizing. 1. EU is single market 2. Germany micraclously had strong
by econcon 7y ago
While EU does subsidize poor EU countries but we must question what's the impact of that subsidizing.
1. EU is single market
2. Germany micraclously had strong currency at the time EU was created, so Germany businesses bought everything in cheaper EU countries and winners became bigger winners engulfing all small players across whole EU
3. EU taxes winners of the game and sends some money to improve the quality of life in poor nations but this ensures that poor EU nation get trapped in middle range and never surpass Germany.
They've managed to get all benefits of "imperialism" without any of the downsides.
- conanbatt 7y agoArtificially strong currencies tend to produce trade deficits, not investment surpluses. I know Germans save and invest a lot, but I doubt they can go against such an enticing macro-economic rule.