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cloutchaser

Isn’t this what the German constitutional court already said was illegal? They are opening a minefield here.

Of course they have to, otherwise Italy is bankrupt.

But I don’t see the euro lasting another 10-15 years.

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That's what some said 10 years ago. And 10 years before. And still, here we are. Where there is a will, there is a way.

Germany needs the EU more than Italy, in many ways. Particularly with herr Putin knocking at the door. They'll come around.

i.e. they'll change the constitution

There are many ways to skin that cat.

I wouldn't be too sure about that the German people are rather more attached to the stability of their currency that the EU I'd say.

The stability of their own economy is guaranteed by the Eurozone. Because of the Euro, Germany can run a massive trade imbalance to export their goods. You nuke the Eurozone, and suddenly German goods become massively more expensive for hundreds of millions of people, which will tank their income.

The German people are better off subsidizing other Europeans to buy their cars, like Ford did with their workers.

> You nuke the Eurozone, and suddenly German goods become massively more expensive for hundreds of millions of people, which will tank their income.

Yeah, but the imports then also become massively cheaper, so it might even out: Germany will just start importing more stuff e.g. from Poland instead of producing it locally.

>Germany will just start importing more stuff e.g. from Poland instead of producing it locally

And this way, they lose their main advantage: a strong economy that focuses on export. They can't have their cake and eat it too. Especially when their auto industry is set to lose greatly with the EV transition (which they still try to slow down).

No, they would export some stuff and import other stuff. It would all balance out. In the end, it must: what’s the point of exporting things, if you don’t get other things in return? Exporting is not a charity, you must import things in order for exports to make sense.

> what’s the point of exporting things, if you don’t get other things in return?

This take is utterly naive. What you "get in return" from being a massive exporter is not all quantifiable. It's soft power, influence, prestige. When everyone uses your machinery, you control the standards and their evolution, you control the market.

Plus, even going back to purely economic terms, you can absolutely export and then keep the accumulated money sitting in coffers, financializing the gains (lower borrowing costs etc etc), or invest in local research to extend your advantage, and so on and so forth. None of these options require importing anything.

"Evening out" would weaken and impoverish Germany, compared to its position now. I mean, we can do it, but I guess that's not what the German public really wants.

In the past, that was true. But German's current trade balance is actually negative. It's importing more than it's exporting. That might change again of course, but as of now there is no "massive trade imbalance" anymore.

Well, right. Not because we are exporting so much less, but pay hugely more for the things we are importing, due to the ballooning gas prices.

> The German people are better off subsidizing other Europeans to buy their cars, like Ford did with their workers.

To me this sounds a bit like the broken window fallacy [0]. That it’s good if sometimes a window gets broken, because it generates economic activity. But this ignores the fact that economic value was destroyed in the process.

Those subsidies could be used in other ways as well, perhaps by helping startups grow.

——

[0]: https://en.m.wikipedia.org/wiki/Parable_of_the_broken_window

> But this ignores the fact that economic value was destroyed in the process.

Value gets destroyed in the process of using anything, so much that we have a special word for it: depreciation.

Cars and other machines will wear out after enough use. Even more static goods like windows (usually the seals) fail with time and need to be replaced.

Germany needs the EU to offset their aging population and to import younger, skilled workers from neighbouring countries who share similar values. Without this, they'd be already like Japan, South Korea, etc. that is facing an even worse demographic time bomb.

Germany is even worse off in that regard than Japan and South Korea. However, the EU isn't really needed for that, it just makes it a bit easier.

Neighbouring countries have "the same issue". There are close to no people to import with similar values without making matters worse for that country.

I live in Germany, an immigrant myself. Plenty of people from neighbouring countries choose to move here, from France, Spain, Italy, Poland etc. People vote with their feet. If you can’t get a decent career going elsewhere that’s on the local employers and labour market laws.

Germanies economy is in the shitter* and I have a feeling they will be tightening immigration shortly.

*Still a strong economy in the grand scheme of things, but during period of contraction unable to support short-term generalized expansion of foreign labor. I do think they are in a position to expand foreign labor again in the long term (although it may require finding a way to refactor their energy policies).

Tightening immigration isn’t easy with Schengen and other agreements with EU partners. Unless you exclusively mean non-EU migrants. I haven’t seen any proposal from the current government suggesting they’d clamp down on migration when the population is slowly dwindling and there’s a permanent shortage of workers in most industries in Germany.

Germany does seem to be a case study that open immigration does "work" at least to the extent it hasn't destroyed Germany? The job seeker visa is trivial at least as an American to get, it has me scratching my head why my own country doesn't offer something similar.

Yes, I thought it wouldn’t last this long. But with this structure it can’t survive, even France is now spiraling out of control in debt.

The question is whether a more federal eu is possible, and if northern states are willing to pay for the south.

Now, with the current economic situation in Germany, and the gas issue hanging over their heads, I think this is quite different to the 2008 crisis. Germany might be less and less willing to pay for everything

They don't "pay for everything", they effectively subsidize their own economy. Like what they've done with Greece, lending them money to buy their tanks, the current monetary setup effectively achieves the same, just with more intermediate steps.

Of course they do. If Germany wouldn't have lending Greece money, they could have just use that money to buy tanks from their companies for themselves. German's economy doesn't care if the tanks are being bought by Greece's or Germany's military.

There’s a good summary of Germany’s military procurement problems done by an Australian defense economist on YouTube - search Perun.

Essentially, weapons manufacturers aren’t able to do business with Germany because Germany isn’t able to fund projects that take more than one year to deliver. That leads to horrific procurement problems like showing up to NATO exercises without enough tents, or spending 10 years evaluating a helmet for German heads that the US already uses.

Without overhauling their government, he concludes that the best Germany can do to help NATO is to give funds to other countries that have more capable procurement processes.

But there is a practical limit to how many tanks they can sell to themselves. That limit is much higher when the market is 5x the size.

Well, not really. Instead of the government lending X dollars to Greece, they can just spend those X dollars on buying tanks, even if they are not used.

Would the government do that? Probably not, they might buy some tanks and spent the money for other things, so a different part of the economy is benefited. But when looking at the overall economy / gross product, it doesn't really matter.

But that's the thing - they can't spend those directly to buy tanks - until very recently, they were effectively forbidden from expanding their military capability, like Japan, and there is still a lot of political resistence against that sort of thing. So how do you forage a national defense industry then? You lend to others to buy their wares.

That is only one of many, many German industries that would suffer from the demise of the Eurozone. The benefits of the common currency sustaining demand across the continent waaaaay outstrip any perceived "loss of control" for the German economy.

I mean, the context here is the impact on the German economy. If they can't buy tanks, they buy something else. As long as the money goes into German companies then the original claim that this would hurt German's economy is just not true.

Okay, if the government actually cannot spent the money (even partially) at all, then yeah, the original claim would be true. I don't think this would be the case though.

> Isn’t this what the German constitutional court already said was illegal?

This seems to be exactly that.

The trick here is that it's not 'sovereign debt' as being held by one country , but rather it's a 'package of debt' with a normalize rate and more guarantee...

It's what Pro-EU have been advocating for decades , to avoid 'spread' within eu-zone...

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