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Comment by legulere | Hacker News Reader

There’s a lot of subsidies for chip production in eastern Germany. So it seems like you can do something like that under the EU rules.

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-Public subsidies come from public expenses. If you are already importing more than exporting, you will have a public deficit. Public deficit are not allowed beyond a limit. So, if you are already a successful export economy, you have the resources to invest, otherwise you don't.

-It's a common market, so not import taxes are allowed. That means that any new industry will have to compete with developed companies already established.

-Public companies are encourage to be privatized, so, you can't keep an industrial base that it's not, for now, competitive.

-The result is desindustrialization. Then those desindustrialized countries are accused of not being competitive.

-In some cases, at the European level they realize that they are losing the strategic edge to other blocks, and some kind of program at the federal level is created. Like the current thing with the chips. Of course this programs never will result of giving the edge to one of the PIGS.

Of course you can. There's tons of subsidies all over Europe as there is in many other places. He is talking out of his ass.

It's a complex matter. Subsidizing single companies, like say, a national airline, is explicitly forbidden, under the principle of "level playing-field"; but subsidizing an entire sector is typically not forbidden, as long as the market is open and subsidies don't discriminate.

In practice this is gamed in many ways, and there have been winners and losers.

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