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The problem with this specific subsidy is that it will disproportionately benefit the already industrialized states. The economies most likely to take advantag

The problem with this specific subsidy is that it will disproportionately benefit the already industrialized states. The economies most likely to take advantage of it are those with automotive foundations. Essentially, it's Spain funding Germany's leap ahead. Germany will import Polish Engineers and workers to support it - and those 'lost bodies' represent a hugely problematic issue for E. European economies. In addition to that, general free market access to E. European industry has resulted in more money exported to foreign owners of Polish industry than Poland receives in direct transfer subsidies. Particularly when combined with the essentially 'hard money' requirement of the currency union, which favours Germany, and you have serious problems. It's a thorny issue. I think this subsidy probably makes sense, but it should be on a national level, not EU level.

daanlo 5y ago
I don‘t know the proper solution, but building 27 ‚excellent clusters‘ for battery technology wouldn‘t make any sense. If it was national programmes then it would probably also be nationally funded and bigger economies (like Germany/Italy) would also have bigger budgets.
- jollybean 5y ago
  The bigger economies have bigger budgets is just fine, and the investments would be proportional to size their respective automotive sectors. Sweden for example, has an outsized auto industry, but they can afford the investment. If the EU wants to do this, they should be building the factory in Spain. Failing that, France, Germany, Italy and possibly Sweden could each build their own, that would work an be 'fair'. The worst option would be to use EU money to centralize it in Germany, with a large cohort of foreign workers. It exemplifies the systematic centralization of wealth and power in Germany which is literally the opposite of what the EU is supposed to be doing. Since France has been ailing, and the UK is out, the very original objective of the project is now turned upside down.
  - panick21 5y ago
    > The worst option would be to use EU money to centralize it in Germany That not happening. > with a large cohort of foreign workers that is equally nonsense. You seem to be totally misunderstanding what going on here. Go and actually read about the strategy that is being followed.
    - jollybean 5y ago
      It's actually sad for HN that none of you have been able to cobble together a coherent argument. The only actual point made (ad nauseum) was that 'Germany contributes a surplus to the EU' - which is common knowledge. You've lost the gambit if you can't make a point and only resort to name calling, you're only making yourself look bad. The very fact that a mutlibillion dollar EU subsidy is going to Germany, ahead of less developed economies is a hint of evidence of consolidation in Germany. The battery subsidy makes up more than 10% of the 'transfer imbalance' paid out to Germany to the EU, so it's fairly significant. But the greater theme of centralization of power in Germany is obviously happening, it's not even controversial. "The country’s outsized economic clout has made Berlin Europe’s political fulcrum, " [1] Given a weak France and absent UK, Chanceller Merkel has the 'final word' on all important issues. She appointed a unelected and unknown member of her own political party to the President of the EU Commission as a pretty good example of that. GDP per capita in Germany, France, Italy and Spain since 1990 [2] quite clearly demonstrates how after the introduction of the Euro, beyond a small bump of financial euphoria, that the Euro has considerably favoured Germany over those countries. Absent any control over monetary policy, Spaniards etc. are left in the lurch and there's no reason to believe they will ever get out. They are held in a financial straight jacket. The few billion pounds they receive in EU subsidies are worthless next to to the existential harm to their economy. They are being turned into a Poland, with much of their talent leaving -> for Germany. "Spaniards move to Germany in record numbers last year" [3] The EU is beginning to look like what would happen if all of the Americas i.e. USA, Canada, Mexico, Brazil, Colombia formed a 'Federal Superstate' - there would be massive consolidation of power in the US via acquisition, talent migration etc.. "Germany is Doomed to Lead Europe [4] The mechanisms of the trend are still debatable, but that it's happening is obvious. [1] https://www.politico.eu/article/eurozone-problem-country-germany-coronavirus/ https://www.politico.eu/article/eurozone-problem-country-ger... [2] https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?end=2020&locations=DE-FR-IT-ES&start=1990&view=chart https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?end=2... [3] "https://english.elpais.com/elpais/2013/05/07/inenglish/1367940037_345858.html https://english.elpais.com/elpais/2013/05/07/inenglish/13679... [4] https://www.economist.com/europe/2020/06/25/germany-is-doomed-to-lead-europe https://www.economist.com/europe/2020/06/25/germany-is-doome...
allendoerfer 5y ago
> Essentially, it's Spain funding Germany's leap ahead. No it is not. Germany is by far the biggest net payer, while Spain is a net receiver of EU funds. It is Germany getting a share of its own funding. https://www.statista.com/chart/18794/net-contributors-to-eu-budget/ https://www.statista.com/chart/18794/net-contributors-to-eu-... You can argue all day about the Euro or the market benefitting Germany and how Spain was hit hard by the financial crisis. But EU budget wise the claims you are making are not only false, but exactly the opposite.
- jollybean 5y ago
  1) There are many countries which are 'net investors' in the EU which will have less of an opportunity to leverage this money than Germany and thus, end up funding Germany. But that's moot: the program is paid for by EU members and yet will benefit Germany first, which is not ideal. 2) "But EU budget wise the claims you are making are not only false, but exactly the opposite. " This makes no sense at all. "The EU has a budget therefore you are wrong" is not an argument.
  - allendoerfer 5y ago
    > 2) "But EU budget wise the claims you are making are not only false, but exactly the opposite. " > This makes no sense at all. Let me rephrase: You are saying Spain is paying for investments in Germany. Not only is Spain not paying for investments in Germany, Spain is receiving money from the EU. It gets paid more out of the EU budget than it is putting into it. Germany on the other hand pays way more money into the EU budget than it receives. So you are not only slightly wrong, but the absolute opposite of what you are writing is true: Germany effectively invests into Spain through the EU. It can be easily googled so I do not know why you would even write something like this. I just added the fact that Germany is of course still profitting from the EU, which is way it pays more into programs described in the article than it receives from them. Mabye I phrased that a bit convoluted. > 1) There are many countries which are 'net investors' in the EU which will have less of an opportunity to leverage this money than Germany and thus, end up funding Germany. You might have a point here. The statistic I posted is from 2018, so we will see how this will play out. It could be that Germany's net payments will be smaller. We will just have to wait to see the actual numbers. The net payment surplus of Germany is way bigger than the program though, so it will not turn negative. Germany will still pay for investments into other countries and not receive money from other EU members. A quick googling showed, that Finland (net payer), Belgium (net receiver), Poland (giant net receiver), Italy (net payer), France (net payer) and Sweden (net payer) are also receiving money out of the program. > But that's moot: the program is paid for by EU members and yet will benefit Germany first, which is not ideal. Again: Germany pays more into the EU budget than all other members. Since it is the biggest net-payer it receive less than it pays. What you are writing is just wrong. Just look at the numbers. If this was some evil German plan to get money out of the EU, the most effective way for Germany would be to just pay less into the EU budget in the first place and just pay the grants out nationally instead.

daanlo 5y ago

I don‘t know the proper solution, but building 27 ‚excellent clusters‘ for battery technology wouldn‘t make any sense. If it was national programmes then it would probably also be nationally funded and bigger economies (like Germany/Italy) would also have bigger budgets.

jollybean 5y ago
The bigger economies have bigger budgets is just fine, and the investments would be proportional to size their respective automotive sectors. Sweden for example, has an outsized auto industry, but they can afford the investment. If the EU wants to do this, they should be building the factory in Spain. Failing that, France, Germany, Italy and possibly Sweden could each build their own, that would work an be 'fair'. The worst option would be to use EU money to centralize it in Germany, with a large cohort of foreign workers. It exemplifies the systematic centralization of wealth and power in Germany which is literally the opposite of what the EU is supposed to be doing. Since France has been ailing, and the UK is out, the very original objective of the project is now turned upside down.
- panick21 5y ago
  > The worst option would be to use EU money to centralize it in Germany That not happening. > with a large cohort of foreign workers that is equally nonsense. You seem to be totally misunderstanding what going on here. Go and actually read about the strategy that is being followed.
  - jollybean 5y ago
    It's actually sad for HN that none of you have been able to cobble together a coherent argument. The only actual point made (ad nauseum) was that 'Germany contributes a surplus to the EU' - which is common knowledge. You've lost the gambit if you can't make a point and only resort to name calling, you're only making yourself look bad. The very fact that a mutlibillion dollar EU subsidy is going to Germany, ahead of less developed economies is a hint of evidence of consolidation in Germany. The battery subsidy makes up more than 10% of the 'transfer imbalance' paid out to Germany to the EU, so it's fairly significant. But the greater theme of centralization of power in Germany is obviously happening, it's not even controversial. "The country’s outsized economic clout has made Berlin Europe’s political fulcrum, " [1] Given a weak France and absent UK, Chanceller Merkel has the 'final word' on all important issues. She appointed a unelected and unknown member of her own political party to the President of the EU Commission as a pretty good example of that. GDP per capita in Germany, France, Italy and Spain since 1990 [2] quite clearly demonstrates how after the introduction of the Euro, beyond a small bump of financial euphoria, that the Euro has considerably favoured Germany over those countries. Absent any control over monetary policy, Spaniards etc. are left in the lurch and there's no reason to believe they will ever get out. They are held in a financial straight jacket. The few billion pounds they receive in EU subsidies are worthless next to to the existential harm to their economy. They are being turned into a Poland, with much of their talent leaving -> for Germany. "Spaniards move to Germany in record numbers last year" [3] The EU is beginning to look like what would happen if all of the Americas i.e. USA, Canada, Mexico, Brazil, Colombia formed a 'Federal Superstate' - there would be massive consolidation of power in the US via acquisition, talent migration etc.. "Germany is Doomed to Lead Europe [4] The mechanisms of the trend are still debatable, but that it's happening is obvious. [1] https://www.politico.eu/article/eurozone-problem-country-germany-coronavirus/ https://www.politico.eu/article/eurozone-problem-country-ger... [2] https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?end=2020&locations=DE-FR-IT-ES&start=1990&view=chart https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?end=2... [3] "https://english.elpais.com/elpais/2013/05/07/inenglish/1367940037_345858.html https://english.elpais.com/elpais/2013/05/07/inenglish/13679... [4] https://www.economist.com/europe/2020/06/25/germany-is-doomed-to-lead-europe https://www.economist.com/europe/2020/06/25/germany-is-doome...

allendoerfer 5y ago

> Essentially, it's Spain funding Germany's leap ahead. No it is not. Germany is by far the biggest net payer, while Spain is a net receiver of EU funds. It is Germany getting a share of its own funding. https://www.statista.com/chart/18794/net-contributors-to-eu-budget/ https://www.statista.com/chart/18794/net-contributors-to-eu-... You can argue all day about the Euro or the market benefitting Germany and how Spain was hit hard by the financial crisis. But EU budget wise the claims you are making are not only false, but exactly the opposite.

jollybean 5y ago
1) There are many countries which are 'net investors' in the EU which will have less of an opportunity to leverage this money than Germany and thus, end up funding Germany. But that's moot: the program is paid for by EU members and yet will benefit Germany first, which is not ideal. 2) "But EU budget wise the claims you are making are not only false, but exactly the opposite. " This makes no sense at all. "The EU has a budget therefore you are wrong" is not an argument.
- allendoerfer 5y ago
  > 2) "But EU budget wise the claims you are making are not only false, but exactly the opposite. " > This makes no sense at all. Let me rephrase: You are saying Spain is paying for investments in Germany. Not only is Spain not paying for investments in Germany, Spain is receiving money from the EU. It gets paid more out of the EU budget than it is putting into it. Germany on the other hand pays way more money into the EU budget than it receives. So you are not only slightly wrong, but the absolute opposite of what you are writing is true: Germany effectively invests into Spain through the EU. It can be easily googled so I do not know why you would even write something like this. I just added the fact that Germany is of course still profitting from the EU, which is way it pays more into programs described in the article than it receives from them. Mabye I phrased that a bit convoluted. > 1) There are many countries which are 'net investors' in the EU which will have less of an opportunity to leverage this money than Germany and thus, end up funding Germany. You might have a point here. The statistic I posted is from 2018, so we will see how this will play out. It could be that Germany's net payments will be smaller. We will just have to wait to see the actual numbers. The net payment surplus of Germany is way bigger than the program though, so it will not turn negative. Germany will still pay for investments into other countries and not receive money from other EU members. A quick googling showed, that Finland (net payer), Belgium (net receiver), Poland (giant net receiver), Italy (net payer), France (net payer) and Sweden (net payer) are also receiving money out of the program. > But that's moot: the program is paid for by EU members and yet will benefit Germany first, which is not ideal. Again: Germany pays more into the EU budget than all other members. Since it is the biggest net-payer it receive less than it pays. What you are writing is just wrong. Just look at the numbers. If this was some evil German plan to get money out of the EU, the most effective way for Germany would be to just pay less into the EU budget in the first place and just pay the grants out nationally instead.