[mmarq]

> The idea being, why would Italy, France and Greece agree to open their market and give up their currencies (ie ability to devalue) in the face of the German juggernaut?

Because they couldn’t manage their currencies and always dreamt of low inflation, in a few words: they wanted the Mark. Calling it Mark would have upset the nationalists, so they made the Euro.

> The Euro zone was a mistake.

Outside of the eurozone, Italy would have gone bankrupt in the mid 2000s, Greece a few years later.

[quarantaseih]

"they couldn’t manage their currencies "

Typical Northern Protestant bigotry. As if Italians and Greeks don't have economics courses in college.

Italians, Greeks, etc would purposely devalue their currencies to effectively lower wages (which are sticky) wrt to international markets, making their exports competitive while manufactured imports more expensive. The French created the CFA (under the bayonet) to have a larger economic mass to play with (the most egregious post WW2 colonial abuse by Europe).

of course this policy results in (very well managed) inflation which results in the middle class saving through real estate, hence these countries' high rates of home ownership (Greece in particular).

So the single market (ie no protective tariffs) and a single currency are poison to Southern Europe's industry so why should the agree to it? They agreed under the condition that Germany's industrial appetites wouldn't be rapacious. Which was a great plan, after all when has Germany ever tried to swallow its neighbors? /sarcasm

[mmarq]

> Typical Northern Protestant bigotry. As if Italians and Greeks don't have economics courses in college.

For your information I am Italian, I won’t reply to the rest of your fantasy, but I have to say that I’m very surprised that this CFA thing is popular also outside Italian economic conspiracy websites.

> They agreed under the condition that Germany's industrial appetites wouldn't be rapacious.

So you are saying that when Italy joined the euro, they asked the Germans to slow down research and development and to artificially reduce the productivity of its industry? Or does “rapacious” mean that the Germans send assassins to kill good Italian managers? Are you implying that Italians are inherently less productive than Germans?

[quarantaseih]

"For your information I am Italian"

So was I until I grew out of it. What's your point?

"Are you implying that Italians are inherently less productive than Germans?"

... yes? The data is very clear about that including significantly less cars made per employee hour in FIAT's Napoli plant than in, say, Poland.

I didnt venture an explanation as to why Neapolitans make less cars, nor do I care. The role of Rome, or any government, is to represent the interest of its citizens.

If Napoli makes less cars because there's less capital invested or because they all get sick during the world cup is of secondary concern to me. My primary concern is that the internal market ensures my citizens are employed in a dignified labor (and not that story of a woman offered 200euros/month to work 6 days a week as a cashier)

"but I have to say that I’m very surprised that this CFA thing is popular also outside Italian economic conspiracy websites."

The CFA is not a conspiracy theory, ask Congo (or Gaddafi. Or do a HN search in the bottom of this page), and you'll find websites in all languages talking about it. Especially French, but Ive read websites in Spanish, and in English.

The only language I haven't read about the CFA is in Italian, but the Italian internet is... dull.

"Or does “rapacious” mean that the Germans send assassins to kill good Italian managers?"

I think German appetites are well known in Europe going back a millennia. Im hardly the first to note that the Germans have, through the EU, accomplished exactly what they've wanted what they've failed to do in a thousand years of warring.

"So you are saying that when Italy joined the euro, they asked...."

Read my original comment. I clearly state that I dont know if it was in the treaties or not, however it is a common complaint that there supposedly was an agreement. I then explained why that agreement would make sense, since no rational actor could possibly enter a single market without some safeguards.

[mmarq]

> So was I until I grew out of it. What's your point?

That I’m not Nordic nor Protestant.

> ... yes? The data is very clear about that including significantly less cars made per employee hour in FIAT's Napoli plant than in, say, Poland.

So, is it a racial thing? The Italian is inherently less productive because he doesn’t have the German spirit?

> The CFA is not a conspiracy theory, ask Congo (or Gaddafi.

I’m not sure Gaddafi opinion would be relevant.

> I think German appetites are well known in Europe going back a millennia. Im hardly the first to note that the Germans have, through the EU, accomplished exactly what they've wanted what they've failed to do in a thousand years of warring.

So the Germans are back at the Reich thing and Frau Merkel is a cover up because we are scared of people with moustaches.

> Read my original comment. I clearly state that I dont know if it was in the treaties or not, however it is a common complaint that there supposedly was an agreement. I then explained why that agreement would make sense, since no rational actor could possibly enter a single market without some safeguards.

So you read it on a blog and you think it makes lots of sense but you can’t explain how? What are these safeguards supposed to be? If Audi makes too many Audis than Frau Merkel has to drive a Fiat Punto?

I don’t think you should continue with this.

[thriftwy]

Or maybe they would devalue their currencies and reindustrialize?

[mmarq]

To reindustrialise, whatever it is supposed to mean for a country like Italy, has nothing to do with debasing a currency, unless the plan is to surreptitiously cut real salaries and hope nobody will ask for pay rises. They have been doing that in the UK since 2007, all they got is lower salaries.

[v4dok]

Instead they got hush money to keep rotting away their industrial base and make sure that the best thing they have is German products consumers. I am forever angry at German "high politics", how did they think this is going to turn out? And they didn't even have the guts to say to their citizens "Hey you know all this EU-growth? It is because we suppress the periphery"

[mmarq]

I hear this quite a lot. Italy received free money, but that was a secret plan of the Germans to take over the country, because they know that Italians are stupid and would destroy their industry and buy lots of Audis. But this eventually destroyed Italy and now nobody is buying Audis.

This implies that Italians are dumb and that Germans are still in the business of making evil plans that fail at the end, because good always triumphs.

[quarantaseih]

"whatever it is supposed to mean for a country like Italy,"

Go look at the econ stats circa 2000 of Veneto, Lombardy and Piedmont and compare them to Germany's.

[mmarq]

I mean that Italy, especially the north, has one of the strongest industrial sectors in the EU. It’s not a country that has to reindustrialise and even if it were, it would be doing it by debasing its currency.

[imtringued]

Germany cuts wages in response to cuts in neighbouring countries. It must remain the export champion after all.

[mmarq]

Germany doesn't cut salaries because it's not the Soviet Union where salaries are centrally planned nor a lady that can change prices turning a knob. Besides, salaries in Germany have been increasing every year in the past 20 years (bar 2020, for obvious reasons).

[rightbyte]

You can decrease real wages too. It is the same thing.

[imtringued]

Poland is doing far better precisely because it isn't in the Eurozone.

[mmarq]

One would have to admit that Poland is still catching up, otherwise they would have to explain why the UK is doing so bad outside of the eurozone.