The more I read and hear about the debt problems of the Eurozone, I wonder how France and Germany ever got duped into joining in the first place.
Don't get me wrong, I have no animosity toward the UK or anything like this. I also find BBC's reporting to be of very high quality and I watch it daily. However there is total unfairness regarding the Europe thing at the BBC.
Basically I'd sum their coverage as "See what's going on? We told you so!".
That said, I disagree with you regarding the "stay out of the Euro". I now think that it is sad that the UK didn't get more involved in the Europe. The UK is probably the only country that could have weighed enough to get France and Germany to actually implement another management.
Europe is victim of the "small team" problem. It's a small team so it's ok if the two biggest guys manage it hand in hand because everybody's just ok with that and nobody can really challenge them. Problem arise with tougher times like we experience.
You guys should have really pushed us :) My opinion: we needed you to kick us and tell us it's not ok to just take the lead; it needs to be formalized AND democratic.
Hopefully we withdraw fully from the EU, and the Euro collapses.
Just watch the Eurovision song contest for an idea of how ridiculously different Europe is from the UK, and how widespread the whole "we like them but not them" thing is.
I don't want to pull the wrong rope but how can you group cultures like Slovakia, Spain, Greece... and saying "we" are different.
Europe as a whole is a bunch of countries with different cultures that team up together to be stronger. The only common treat is the continent.
You can be happy that you aren't involved in the "saving the euro" mess and you should be. But believing that you are somewhat distanced from the EU or that it would be possible to believe is totally delusional - the european integration is extremely deep even if the euro fails and in my opinion cannot be stopped or reversed.
In addition, the cultural differences are not really that large. Europe has a common fascination with arguments and alcohol, especially the Northern parts (which include Uk, Ireland, Scandanavia, Netherlands and Germany). Historically, there have been huge links between the UK (and ireland) and these countries. To claim that there are these huge differences based on the Eurovision is a little absurd.
That being said, while watching the Eurovision i often find myself regarding them with a mix or horror and bemusement, but thats mostly because they're the kind of people who go on the Eurovision, not because they are of different nationalities.
The UK does have a problem though, in many ways we are much more like america economically than the rest of europe, but european is trade is big part of our economy.
It's fairly obvious that our countries usual musical output is pretty decent, and if we entered any of that into the contest, we'd win (If it was actually anything to do with the song).
I love the Eurovision song contest though, because it highlights how ridiculous the idea of integrating Europe is. You get countries who always vote for each other even when the song is rubbish, and you get no one voting for us, even when we have a half decent song. The Eurovision song contest is the best advert for a 'euro-skeptic'.
Apparently Europe created the Eurozone because they were afraid of the newly united Germany
I do get where you're coming from though, since Germany and France have been the motors of the EU's economy. Fair enough.
But the original claim from the ancestor was that Germany and France created the Eurozone and others joined later. That's simply factually untrue.
Anyway...
Beneficiaries have been the former east and farmers. Italians can buy German milk that would otherwise be expensive.
Here's some speculative fiction on Germany without the Euro: the DEM is a very strong currency. Bankers drive fast German-branded but Eastern-europe-manufactured cars along a financial-sector corridor that stretches between Zurich and a much larger Frankfurt am Main and which has sucked the momentum out of the city of London.
Munich has some strength for being in the middle of this but has been hit hard by the loss of manufacturing jobs. Most regions are less fortunate still. Production for export is impractical. There's significant social unease, particularly against hard-working migrants from other European areas "taking german jobs".
There are many poor regions that haven't crossed over into services mindset and vast regions of poverty. Wealthy western states resent seeing all their taxes disappear to weaker regions. There's general dissatisfaction with the reunification project.
In short - a harsher take on the UK.
(I've no ideas about France.)
But with the Euro, other countries in the Eurozone which have had a negative balance of trade (a trade deficit) balanced out Germany, preventing the Euro from appreciating too much. This helped Germany's export sector, helping keep them competitive.
The other issue with the Euro is that Germany's economy was already adjusted for low interest rates; but the introduction of the Euro meant low interest rates in countries which had not historically had them.
Ireland didn't have a big government deficit problem; Ireland's problem was a property bubble driven by reduced rates on mortgages. It only turned into governmental debt when the government guaranteed bank debt, having been convinced by the banking-political cabal in the middle of the 2008 crisis that the bank problem was liquidity, not solvency; but with banks holding assets formed from inflated house prices, they didn't have as much capital as they thought.
Let's take porsche cars as an example. Porsche pegs a price in euros, and the price that US customers pays is the equivalent price in dollars (plus some extra fees, but those are generally negligible). A weaker euro means that 1 dollar is worth more euros, so that the dollar cost of the porsche to US customers is lower than it would have been otherwise.
On the other side, US exporters are hurt because the stronger dollar means that they have to charge more euros for items.
A similar issue exists between US and china
http://seattletimes.nwsource.com/html/businesstechnology/201...
Wouldn't it be better for Germans to work less and have other people send valuable goods to them?
Aren't we considering the counterfactual where Germany never entered the Euro and had it's currency dragged down by weaker nations? In that counterfactual, the currency appreciation would have been slow and there would have been plenty of time to adjust. So the unemployment effects would have been minimal.
So ultimately, all the Euro did was reduce German buying power and force Germans to work more.
ADBOC[0].It seems to me that it actually works out more like redistributive taxation than one might naively think from what you wrote. An artificially cheap currency means more manufacturing jobs at static wages more than the same number of people working more hours. It has very approximately similar effects to progressive taxation, or more accurately it acts as a subsidy to the German manufacturing sector.
I don't know (but doubt) if the German people would have signed up for this, but the possibility is stronger given that Germany is in the extremely unusual situation, for a developed country, of having a larger manufacturing sector than a services sector.
I don't think I actually disagree with you on any point.
[0]Agree denotationally but object conotationally
(Did I misread you? What you write seems rather xenophobic besides being somewhat economically illiterate. From a strict economic point of view, there is no surplus of jobs. The price of labour should rise until the demand for labour abates; and the German workers would be better off. To the degree that that isn't happening (though Germany's population overall is decreasing, not increasing), it is because Germany has an open economy with free movement of labour. If you're attacking that, you're attacking the whole foundation of the EU, and I don't want much more to do with you.)
Unless you are looking to increase your population you don't design policy to encourage immigration, you design policy to improve the lives of people already living there (indigenous or not). After all the government has invested in these people prior to working via services and schools. It is not xenophobic to put your needs ahead of those outside the country or suggest it should be so.
The reason the price of labour doesn't increase needs only a simple answer; that demand is met by supply from an open economy and free movement of labour. This benefits immigrants from weaker economies, of course, but also German businesses who employ them. If the EU did not have this freedom, ordinary Germans would be better off, but we would all lose out for three reasons described by DuncanIdaho.
Furthermore, I don't actually think tsotha was being Islamophobic, just that that was a potential misreading; it seemed slightly xenophobic at best, given the reality that a combination of healthy market for labour and an economy open to free movement of labour naturally gives rise to immigration.
Plenty of countries design policies to encourage immigration, of the right people, for different values of "right". Your assertion seems to me to be flat out wrong; the qualification of "looking to increase your population" seems semantically meaningless in this context, as it is assumed in encouraging immigration.
I also strongly dispute your assertion that if the EU didn't have freedom of labour, then ordinary Germans would be better off, on far more grounds than DuncanIdaho. Germans would be at least worse off from lacking freedom of labour themselves (these things are normally reciprocal); and they'd have a lot fewer opportunities to trade, and more obstacles, without all the rest of what the EU brings to the table. Furthermore, the character of the European continent would be dramatically different; I think it's questionable that it would have been as peaceful has it has been. Germany would still be split without the EU, for one thing.
No, obviously you don't see at all. My point was there's no benefit for a country to create more jobs than it has people. The rest is just projection. It must be easy pride yourself in a good post when you respond to things people didn't write.
>From a strict economic point of view, there is no surplus of jobs. The price of labour should rise until the demand for labour abates; and the German workers would be better off. To the degree that that isn't happening (though Germany's population overall is decreasing, not increasing), it is because Germany has an open economy with free movement of labour.
Which was my point. This doesn't benefit the Germans. They would have been much better off allowing the price of labor to rise, which would have meant broadly-shared prosperity. As it is, only the large corporations and the state will benefit. But that was the point of the EU, wasn't it?
> If you're attacking that, you're attacking the whole foundation of the EU, and I don't want much more to do with you.
Oh my! Has the EU become a sacred thing now? It was a stupid idea, or at least a stupid implementation, one that Europe will be regretting for generations. Personally, I try to see the humor in it all - beyond that it's not my problem. Now, if you'll excuse me I need to find a soft shoulder to cry on now that you don't want anything to do with me.
Specifically, I live, work and travel in many different European countries, none of which are the country of my birth; and so too does my (German) girlfriend. The way of life I've experienced would not be possible without the EU or something very like it. Your opinion, as expressed, is in opposition to my way of life. That's the source of the vehemence of my opposition.
(Hopefully you'll note that I am neither a state nor a large corporation, yet I've benefited in many different ways.)
(This nationalistic notion that nations are important, that they should look after their own above others, I think is responsible for many evils in history, some very recent. I think humanistic cosmopolitanism is far better than "us for ourselves" ideologies.)
These people will become centres of new productive hubs, where there has be nothing of the sort thus far.
It is just globalisation on smaller scale. Europe is trying hard to integrate and mix all the countries and cultures in Europe to the level that would make warfare between their citizens too costly to anyone.
That's what the Germans thought, originally. Turns out to be wrong. If you move to a new place and live there for a few decades, raising your family there, you don't leave unless you don't have any choice. That place is home, especially for your children.
>Europe is trying hard to integrate and mix all the countries and cultures in Europe to the level that would make warfare between their citizens too costly to anyone.
Yes, and it's not working. Even the leaders acknowledge that now. And before they get too comfortable they should remember Yugoslavia tried to do the same thing.
>Yes, and it's not working. Even the leaders acknowledge that now. And before they get too comfortable they should remember Yugoslavia tried to do the same thing.
Hmm. Saying its not working is rash. It didn't work as well as optimists hoped for it also didn't works so bad as pessimists hoped for. What leaders are realizing now is not that EU integration isn't working. It's just that current approach is losing steam.
And one should note, that current approach was more of an amalgam of inertia and half assed attitudes than something coordinated and sincere.
The reasoning is approximately as follows:
It was obvious by 1989 that monetary policy for European countries was de facto set in Frankfurt by the Bundesbank. The further you moved from the D-Mark interest rate the less D-Marks your currency would buy and reality would kick in inflating your currency. Mitterand had personal experience of this dynamic having been elected on a Socialist platform and ramped up spending without increasing taxes as much as would have been necessary to pay for the spending.
So he wanted a voice in European monetary policy, so a European currency with a central bank modelled on the Bundesbank.
So France wasn't duped at all.
One proposed end game I've heard is the solid Euro zone currencies (DE,AT,NL,LX,FI, maybe FR, eventually PL and Estonia, maybe others) seceding to a new currency which would end with the ECB managing two currencies.
The Euro, not as bad an idea as it looks in hindsight, though the scrutiny for countries that wanted in should have been much higher.