If only there was some sort of regional currency, less susceptible to a single country’s economic changes, that one could use...
First, I didn't say it would be better if Britain was in control of Euro. Obviously it would be better if the Euro was controlled to the interests of all the Eurozone, not particular to the interests of some top-dog states. Which might even need a "two/three zone" currency.
Second, if you ask whether it be better for Britain to control its own currency, that's a given. EU aside, that's what any economist will tell you: a country is better off when it controls its own currency. Denying that is as kooky as being an anti-vaxxer.
Please note that I am not taking any position, I just want to get more informed about the internal EU problems.
The facts show that GB had way more rights and power to decide than Germany (exlusions from certain EU rules everyone else accepted etc.)
Germany is also by far the single biggest financial contributer to the EU.
The GB politicians used to blame the EU for all their own problems. There will be a hard awakening coming at the end of the year, but I‘m sure the EU will still be their scapegoat somehow.
Seriously, nobody in Britain, Remainer or Brexiteer, is arguing for us to join the Euro. That argument is not currently live.
The ECB does not have to balance interests. It‘s independent and it‘s job is monetary stability, not economic interests.
It‘s also not widely accepted that it‘s in Germanys interest. In fact it is against it. Germans hold most of their wealth in cash. They received interest for it. That‘s hundereds of billions now gone. Germans are poorer than most other Europeans (even than Spaniards and Italians) At the same time the southern countries have so high debt loads that they would be bankrupt without QE.
The Euro is too weak for North Europe and to strong for the South.
er, citation needed? Or is this due to the former DDR?
https://jakubmarian.com/wealth-per-capita-by-country-in-euro...
It's describing the median wealth based on a Credit Suisse Wealth Report
You can also find these results in the ING research ("Surprising differences between countries", page 14ff): https://www.ezonomics.com/pdf/Household-wealth-in-Europe.pdf
"When dividing the Eurozone into a group of countries often labeled as ‘core’11and a group of Southern-European12countries, it turns out that Southern-European households are more capable of keeping up their standard of living compared with those living in the core countries (see figure 18)"
"It is striking that German households have fewer assets than Eurozone households have on average. They not only own relatively little real estate(see figure 20)but also hold less financial assets than is common in the Eurozone(see figure 21)."
You get to read some things here that you don't know whether to laugh or cry.
Median wealth (USD) per adult:
#13 Spain 87,188
..
#15 Italy 79,239
..
#29 Germany 35,169
#30 Slovenia 34,043
https://en.wikipedia.org/wiki/List_of_countries_by_wealth_pe...
"poor" is simply a generic term, personally I think it's income what defines if you live a poor's life or a rich's life.
Wealth is worth much more than income.
That's the version one would teach to high schoolers, not the real political/historical truth by any margin. In fact it's so naive I don't even know where to start addressing it.
You can follow the power plays in the ECB in all kinds of outlets, if leftist ones are not your thing, even Le Monde, Die Zeit, Frankfurter Allgemeine Zeitung, Corriere della sera, The Economist and co will do.
>It‘s also not widely accepted that it‘s in Germanys interest. In fact it is against it. Germans hold most of their wealth in cash. They received interest for it. That‘s hundereds of billions now gone.
When Germany has control over EU/ECB policies, it could not give less ducks about the German people. It's about German banks and elites doing good.
Historical experience, including recent historical experience. Naively, most discussions of EU power balances resolve in the nominal voting system, and the vote count allotted to each country. Germany uses its economic and political might to push around smaller nation states, secure satellite votes, and do as it pleases within the EU, far more than its allotted voting power (besides a lot of the serious decisions are taken in backroom deals, and informal bodies like the "Eurogroup", through raw power, bypassing voting altogether).
Here's a good take: https://www.opendemocracy.net/en/can-europe-make-it/germany-...
Even this Spiegel article simultaneously downplays and confirms that Germany runs Europe:
"When Angela Merkel travels to Brussels, she does so as the leader of by far the strongest economy in the euro zone. Policies she doesn't agree with don't get passed. Power as such isn't a bad thing when those that have it use it wisely. But do they? There is a new tone in Germany. It is one that no longer abides by the noble customs of diplomacy. Whispering, suggesting and hinting have been replaced by ranting and blustering. (...) The economically powerful Germany got its way. In order to put the struggling countries on the right track -- on the German track, that is -- Merkel brought in the International Monetary Fund so as to free Germany from having to play the strict overseer. Still, it has not escaped notice that Berlin is in charge. (...) German sociologist Ulrich Beck, who has since passed away, referred to the pressure being exerted on Europe from Berlin as "Merkiavellismus." [2]
As a matter of fact, one of the stated goals of the bureaucrats that created EEC was (and remains) to contain Germany.
"The German question produced the Europe of today, as well as the
transatlantic relationship of the past seven-plus decades. Germany’s
unification in 1871 created a new nation in the heart of Europe that was
too large, too populous, too rich, and too powerful to be effectively
balanced by the other European powers, including the United Kingdom. The
breakdown of the European balance of power helped produce two world wars
and brought more than ten million U.S. soldiers across the Atlantic to
fight and die in those wars. Americans and Europeans established NATO
after World War II at least as much to settle the German problem as to
meet the Soviet challenge, a fact now forgotten by today’s realists—to
“keep the Soviet Union out, the Americans in, and the Germans down,” as
Lord Ismay, the alliance’s first secretary-general, put it. This was also
the purpose of the series of integrative European institutions, beginning
with the European Steel and Coal Community, that eventually became the
European Union. As the diplomat George Kennan put it, some form of
European unification was “the only conceivable solution for the problem of
Germany’s relation to the rest of Europe,”
So in essence it was taking money from Northern taxpayers to give to Northern banks to save them from illiquidity.
People in the South and their country budgets haven't seen a cent of these money.
1) QE did not transfer money with any caveat to pay bondholders. QE is not like giving cash to a country. The ECB buys up bonds on the open market (thus mostly from banks, which supports your point).
2) The buying up of bonds drastically reduces interest rates, because artifical demand is created.
3) The South can now borrow money for pretty low interest rates on high debt-loads. Italy wouldn't be able to afford high interest rates very long.
4) Northern banks holding higher paying bonds in their portfolio profited because the high-coupon bonds values increase.