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Comment by nickbauman | Hacker News Reader

This is a "moral hazard" line of thinking that distracts from the underlying fundamentals of the economics here. Even without the corruption, Greece would eventually be in this situation in the EU because of the structural trade imbalance. Nations like Germany, Sweden, Norway, etc, export far more than they import and do no share the profits. The EU has become a giant capital vacuum cleaner from the poorest nations to the wealthiest. Without fundamental changes to this, the EU is doomed. Greece is just a symptom.

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Correct, its also worth noting that the US do have mechanisms in place to transfer funds from surplus areas to deficit areas.

As does the EU.

> As does the EU.

Are you trolling? What kind of mechanism does the EU have? How does Germany have such a high surplus if such a mechanism is in place?!

It has TRADE surplus. You were talking about funds. There is a substantial amount of money flowing from Germany, France and others into less fortunate countries via EU governed programs.

No I'm talking about TRADE surplus.

But EastLondonCoder and davrosthedalek were not talking about trade surplus. You are yelling at them for saying something that is true, because they're not talking about what you think they're talking about.

Not the same kind of money, though. This is money that is part of the problem. The money goes in and the debt goes up twice as much. Not the same as the California example above.

Trade surplus is neither evil nor a problem in itself.

Trade surplus without a safety valve (the ability to devalue a currency) is very much a problem since it leads to unsustainable debt buildups.

Germany should be running a trade deficit with the rest of Europe right now but it refuses to.

Unless your currency policy is fixed by those you buy from. That's the fundamental problem here.

It has some sharing, but it's not enough.

For example, California sends 180 billion in tax revenues to the fed while accepting approximately 30 billion in federal spending. In the EU this kind of thing occurs only in the single digit billions.

Indeed. The problem is that populist politicians in "paying" countries can use this as an argument for an EU exit. See Brexit. It's hard to sell to pay billions, especially if stuff like hours/week, retirement age etc. are often nicer in those countries that need the money.

The problem is that the populists are able to make that argument at all. Most establishment politicians in Europe are trying to be as much like Weimar as possible in all the wrong ways (austerity, wage repression, pension slashing, privatizations, etc.).

You are going to need to be more precise there.

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