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Comment by wiz21c | Hacker News Reader

Does it mean that every german will have to pay about $10B / 80m = 125 euros for that ? So it means that they'll have, for example, to wait a little longer to buy their next phone, or lunch ? (I ask the question here because that's the kind of reasoning I read in the press but I'd like to know if it's as simple as that)

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Nope. Because they have already paid all of this in taxes. It means, that the 10 bn won't get 'invested' by the government in another project, e.g., welfare benefits, infrastructure, health, or education. Alternatively, it means: nothing of all of those, but inflation will rise an additional 0.0001% (if the funding source is printing money vs. using tax payer money)

There is no direct link between printing money and inflation. But 0.0001% seems too optimistc.

For example the EZB has about 5 Trillion Euros out. 10B more would increase the amount of EZB money by 0.025%.

> There is no direct link between printing money and inflation

what....

Academically, there is a link, but it has not been born out in recent times by central bank policy and the resulting economic observations.

https://www.frbsf.org/economic-research/publications/economi...

The bailouts that are happening now will increase the state debts, so no, they did not pay all of this in taxes already.

Airline is the infrastructure tho, cheap air travel is available throughout EU. If you remove that, economy will take major hit. There is hardly any reading block with cooperation like EU. You fly from France to Italy and work with people there then you fly to Switzerland and demonstrate your product their and then you deal with marketing agency in UK to market your products at global level. It becomes inefficient without cheap air travel.

Lufthansa is never close to cheap flights...

Yes, quite the contrary. It's one of maybe 10 five stars airlines. It's an elite airline.

I was under impression that executive class adds most value in a company which might be the target market of this airline company.

It seems I've been proven wrong already.

Sure the flights under the Lufthansa brand are premium. But they do have other brands like Germanwings which are more affordable (though barely I will admit).

That sounds like an ad for some lifestyle product, not reality. Frequent in-person meetings aren't that important to the economy. It's cheap, quick and simple transport of goods throughout Europe that is important, not some executive traveling to four countries in an afternoon.

> Nope. Because they have already paid all of this in taxes. It means, that the 10 bn won't get 'invested' by the government in another project, e.g., welfare benefits, infrastructure, health, or education.

Knowing the German government, I wouldn't be worried about welfare and healthcare (they're too important to get the votes).

But you're right about infrastructure and education. You can throw defence and internal security with that.

Are you kidding. We citizen will earn money by that. Germany will borrow 10 billion with negative interest and invest in a solid company at a low point.

Now you can argue, that the flight sector will never recover, which I agree too, but that will not change anything. Lufthansa is a very solid airline. There will be hundreds of small airlines leaving the market with the Lufthansa to pick the market shares up.

I'm not sure whether you are serious. But if you are: There are not many people who agree on your opinion, otherwise the share price would be way higher.

Airlines have a very low profit margin business. They earn very less for the amount of money they invest in the product. Therefore, capitalists are not very interested in the dividend. It is also a high risk business as the market is very volatile (see current crisis) and have a high merger/fail rate.

Lufthansa is one of the top carriers in the world with a solid infrastructure and network. The eliminated many competitors by just letting them starve themselves in low prices while Lufthansa never compete. I personally do not doubt their value. But the overall market is not an investment friendly one.

And increasing the ticket prices Germans pay with their own money through the continuation of their government-sponsored monopoly.

Well.. Lufthansa does not have a monopoly in Germany. We have solid railway infrastructure within Germany, other Airlines servicing us in all directions. Lufthansa will have to offer competitive prices.

However, yes, flying will become more pricy. Around the world. We will see lower passenger numbers for many many years, mid-term many have to financially recover, long term environmental and viral concerns will be a permanent affect on tourism. Increased digitalization will reduce business travel. And all of that while the costs of the airlines increases due to stable fix costs and increased security/hygiene/... regulations.

So yes, flying will become more expensive. But not due to government sponsorship and monopolies (for LH in Germany).

You're right about the railways and other European railways. But DB is constantly late. A friend of mine has a BahnCard 100 but gave up on the train and now flies-- Dusseldorf to Berlin has taken him up to 9 hours in the past with delays.

And most economists would agree LH definitely has a monopoly on the German market, especially for international travel: https://www.neweurope.eu/article/lufthansa-reaps-home-market...

It also gets special tax treatment from the government versus Easyjet and Ryanair: https://pointmetotheplane.boardingarea.com/germanys-climate-...

I guess, if they started paying now. But the (high) taxes have been collected for so long the state has some considerable savings by now...

Haha. Really. NRW is bankrupt by now.

There are no savings on the federal level (or any level, really). Federal, state and county level are generally driven by debt and steadily increasing their budget due to mission creep.

Not only Germans but whole EU. The way EU works is by letting monopolies in a few west European countries expand their market to east and capture more value from everywhere.

Yes, East European companies can also do that but usually, there is first mover advantage and other policies at local level which influence the ability to form monopoly through investment and expansion.

I'd love to know why downvoters disagree, if you start a competition between companies where some companies have better technology, state help or finance and put them against companies who don't have all that, yes big companies are more likely to become bigger if you combine the market where all these companies operate.

Perhaps because the claim "The way EU works is by letting monopolies in a few west European countries expand their market to east" is clearly ludicrous as a summary of how the EU works?

I mean, the EU - ignoring the name changes over the years - had existed for over 30 years before the fall of the Iron curtain and nearly 50 years before admitting new members from the the East. The idea that the whole thing was set-up and run based on the goal of economically exploiting recent entrants from the East decades in the future is simply silly.

If it didn't work this way, protectionism wouldn't exist.

There are various economics models which show Germany has benefited the most from creation of EU

Sure countries in middle of Europe and east are improving their baseline but it's nothing compared to what Germany has achieved.

Germany is effectively china of EU.

It's funny to see the same people who oppose China's currency manipulation are in favour of EU

I suggest you read this: https://www.conradbastable.com/essays/the-germany-shock-the-...

I remember seeing an interesting talk on the Target2 system, which suggests a part of those intra-EU German export achievements may just amount to risky credit anyway :

https://youtu.be/q2QYaJGgtw8

Hmm takes about 5 minutes of googling to find annualised GDP per-capita growth rates for countries.

Using the 1990-2015 period (because the numbers are directly available on wikipedia: https://en.wikipedia.org/wiki/List_of_countries_by_GDP_growt...).

The following countries all grew by MORE than Germany: Poland (8.5%), Romania (6.9%), Lithuania (6.9%), Slovakia (6.7%), Czech Republic (6.6%), Estonia (6.4%), Ireland (6.2%), Latvia (5.8%), Hungary (5.5%), Malta (5.1%), Bulgaria (4.7%), Luxembourg (4.6%), Norway (3.9%), Portugal (3.6%), Slovenia (3.3%), Croatia (3.1%), United Kingdom (3.1%) and the Netherlands (3.0%).

Germany's rate for the same period was 2.9%.

So you're theory that Germany has benefited the most from the EU - at least for this period - is clearly false.

Germany started from much stronger position, so grow rates don't tell us the whole story.

Compare the living standards, so you want to argue Poland with 8.5% growth has higher living standards than Germany?

"So you want to argue Poland with 8.5% growth has higher living standards than Germany" - why would I want to argue that?

I mean I've said absolutely nothing about living standards and neither did you? Why not simply read what I've written instead of inventing arguments for me to make?

I've provided some basic numbers and references which directly contradict your claim that Germany benefitted most from the structures of the EU.

I give up. I tried to explain some reasons why you might be getting downvoted but it's been a waste of time.

The link is a rambling mess. What exact are we supposed to learn from it?

Germany was against monetary union in Europe, they saw it as giving away their ability to be fiscally conservative. This is of course what happened with the ECB finally printing their way out of the Euro debt crisis.

The fact that Germany retained their manufacturing capacity and still takes pride in it is the reason they are an export economy. The economics of the Euro are just working for them rather than against them.

Other countries threw away their manufacturing capacity for a service sector, most notably Britain which centralised their economy in London.

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