5 ms·
This euro debates show the silliness of countries dismantling their factories: Germany has a social market economy with high taxes and large social contribution
by markessien 14y ago
This euro debates show the silliness of countries dismantling their factories: Germany has a social market economy with high taxes and large social contributions. It also has a highly skilled knowledge-based economy. In spite of that, it retains manufacturing ability and continues to develop and export machinery - having moved from simple machines to more high tech machines.
That's what countries should do - continue building machines right at home. When there is competition from other cheaper countries, build more complex or better functioning machines.
The countries in the south of europe have not done that, and so they cannot export, irrespective of what the euro value is. Devaluation hardly makes any sense for these countries that don't earn their money by exporting.
- mafribe 14y agoAnd indeed, which should the countries of the south do this, given that the north in general, and Germany in particular, have been giving them money for free? It would be highly irrational to do this.
- hielvis 14y agogood
- tonyedgecombe 14y agoCan you really see Greece turning its economy around from agriculture and tourism to manufacturing overnight? Not every economy can be a net exporter of technology, that just doesn't add up. Devaluation makes sense for them because they are indebted, they will devalue their debts and make imports unaffordable.
- nickik 14y agoYou woild be surpriesed how fast that can happen. There are many countys in history that have done it.
- lispm 14y agoNo. Not everyone can export high-tech machinery. Btw., Germany exports all kinds of other stuff, too. Adidas makes clothes. BASF makes chemicals. Allianz sells insurance. What Germany wants is that the other countries get their house in order: keep the housing market under control, get the banks under control, have people pay taxes, etc etc. Structural reforms. What Germany learned from Reunification is that MORE MONEY DOES NOT MAKE AN ECONOMY WORK. Work makes an economy work. Investments. Companies. Workers. Education. Ideas. Products. Services.
- skylan_q 14y ago"What Germany learned from Reunification is that MORE MONEY DOES NOT MAKE AN ECONOMY WORK." There was actually two lessons for them along these lines before reunification. The first was what you mention above, during the Wiemar hyperinflation. The second lesson was that high inflation isn't necessary for economic growth, as per "The German Miracle" post-WWII
- gaius 14y agoThe countries in the south of europe have not done that Except that they have. Machine tools is one of Italy's major industries.
- arethuza 14y agoItaly's GDP is larger than California's and they manufacture a hell of a lot of desirable high tech goods. http://en.wikipedia.org/wiki/Comparison_between_U.S._states_and_countries_by_GDP_%28nominal%29 http://en.wikipedia.org/wiki/Comparison_between_U.S._states_...
- riffraff 14y agoit's tipically meaningless to conflate "countries of southern europe" together because they have basically zero in common economy-wise. But, hey, who wants to get in the way of some good ole' rethoric?
- excuse-me 14y agoIt doesn't even make sense inside a country. The economy of Milan has nothing to do with Sicily. That was one of the UK's arguments against the Euro - that the economy of different Eu countries was far too different to have a single currency. And yet it was perfectly reasonable that the city of London had exactly the same financial needs as an ex-mining village in the North of England.