[RobertoG]

It's not about boogie men, it's about economic realities.

Very different countries can't be in a functional monetary and banking union without a common fiscal capacity. In terms of the USA it would be like there was a Fed without a treasure. Or another way to see it, it's like the countries in the Euro use a foreign currency that they don't control. If you are interested I recommend this prescient article by Wynne Godley (1).

So, if the design of the Euro is bad, why don't change it? Because for some countries is very advantageous. Germany being the best example, they are an export powerhouse that now have unrestricted access to the common market and, because is a common currency, it will no appreciate or devaluate following the commercial balance. Of course, this is sell like they don't want to finance the lazy pigs in the south.

(1) - https://www.lrb.co.uk/the-paper/v14/n19/wynne-godley/maastri...

[turbinerneiter]

And Germany is stopping the EU from further integration?

If we do this fiscal union, are all countries willing to adopt German fiscal discipline? Are all countries ok with levelling out retirement age? Social benefits?

Also, why are you not mentioning that Germany already agreed to the EU taking on common debt during the corona crisis? That the new government is very much pro further integration?

I hear a lot about what Germany is doing wrong. What are the others doing wrong? Germany was desolat themselves after the reunification, they were called the sick man of Europe. They then did harsh and brutal labour market reforms, and a bunch of luck probably as well. Now they are an economic powerhouse. With 0 natural resources, they are all imported.

It's not the Germans fault that Italy has loads of debt. It's not the Germans fault that Spain built useless ghosttowns in the middle of nowhere. They can only export what others are willing to import. And they are not exactly exporting cheap cars at dumping prices, are they?

Sure, Germany is far from perfect and they do lots of things in their own self interest. But maybe the other countries can also try to do better? How long did the Italians keep Berlusconi in power? Draghi threw the towel today, again, because the parties in parliament are unwilling to cooperate to better Italy.

Maybe try to copy what Germany is doing well, instead of feeling like a victim of German evilness.

[toyg]

You should take a breath and chill with the Jingo.

> are all countries willing to adopt German fiscal discipline?

Most of them have already, you just don't read about it. If anything, German authorities have been excellent at gaming the EU framework, siphoning state aids to this or that industry with all the possible loopholes they could find, while everyone else had to renounce (or even denounce) the practice.

> Are all countries ok with levelling out retirement age?

The pension age in Germany is 65 years ("and 10 months", in my best Lester Freamon accent). In profligate Italy? 67. So yeah, let's have that.

> Social benefits?

Honestly, you don't want to trade benefits with the army of temp workers that Italian "reforms" have generated. They get hardly any paid holiday or sickness, can be fired with no recourse year by year, and so on. German workers get trade union representation at board level, something that simply does not exist in Italy even in the most enlightened companies. They get loads of paid holidays and so on.

> Now they are an economic powerhouse. With 0 natural resources

Ah yes, the Ruhr never existed. From wikipedia: "The Ruhr was at the centre of the German economic miracle Wirtschaftswunder of the 1950s and 1960s, as very rapid economic growth (9% a year) created a heavy demand for coal and steel." All that coal must have been a dream.

Italy had an economic boom in the postwar age too. After all, they were fellow victims of Allied carpet-bombing of industrial infrastructure, and fellow enjoyers of the Marshall Plan. The main difference is that Italy made a few bad choices in the '80s (and possibly another one in the late '90s, when they accepted an Euro/Lira rate too low).

In any case, this attitude is not constructive. It's good that the German political classes, at least, have finally realized that the hipocrisy of privately benefiting from a sclerotic status quo while publicly denouncing it, could not go on forever. Let's build the United States of Europe, everyone doing their bit so we can fulfil the federal dream and be done with these petty rivalries from 200 years ago.

[turbinerneiter]

> You should take a breath and chill with the Jingo.

I had to look up what that means. I'm not German. Now what?

> So yeah, let's have that.

Yeah, let's. Italian pensions are about 90% of the former salary? Germany is 50%. Italians make higher payments tough as well. The difference is, Germany is doing that from a much lower debt ratio.

Temp workers are a thing in Germany as well, they get no inion representations. And again, the difference here: German economy is doing well.

Sure the Ruhr existed, have you been there lately? Crazy decline since the 70s. Wasn't a coincidence that the heaviest german metal bands come from there.

> The main difference is that Italy made a few bad choices in the '80s

Exactly. That's why they have this huge debt now, which results in the whole Eurozone shaking whenever interest rates go up. That's why we had low interest rates, which the Germans were very unhappy with. Draghi tried to work on that, but now he is out. Seems like a right to far right coalition might ein the election in the promise of flat tax and not raising retirement age. Will that be the Germans fault as well?

> Let's build the United States of Europe, everyone doing their bit so we can fulfil the federal dream and be done with these petty rivalries from 200 years ago.

Yes, please! But that only works if everyone is in and works on themselves. I don't thinkt the attitude of blaming everything on the Germans is very constructive either.

[toyg]

> I'm not German

Well, then you've absorbed a biased outlook pushed mostly by the German press.

> Italian pensions are about 90% of the former salary?

Ahaha, they were, maybe, 30 years ago. This has long changed, but obviously these changes take generations to be reflected in stats - and we're obviously not going to kill existing pensioners.

> Sure the Ruhr existed, have you been there lately?

Does it matter? You said the German miracle was achieved with 0 natural resources, and I've just proven that statement to be utterly false - which should maybe prompt you to revise your positions.

The truth is that Germany powercharged its economy with coal; since then they've been good at maintaining that advantage, but it's undeniable that they had an advantage like few other European countries. Another advantage is a largely flat surface that makes it very easy to build transport infrastructure, something much more complex in mountainous areas like most of Italy, Spain, and Greece. In fact, it's half a miracle that Italy developed complex manufacturing districts in the Alpine valleys.

> Draghi tried to work on that

Pretty much every Italian PM since the 90s tried to work on that, with various degrees of success. As shown by the Twitter thread linked in another post, Italy actually shrunk their debt faster than any other country over the last 25 years, with wide-ranging cuts. But 80s stereotypes refuse to die even in the face of facts, generating self-fulfilling prophecies in the speculative markets. It's in everyone's interest, including northern countries', that these stereotypes be removed from the public debate. If this cannot be done, sharing debt is the only other option to stabilize a currency from which norther countries benefit disproportionately. And that's what the ECB is effectively doing, measure after measure. It should have been done 20 years ago, as many people asked; but apparently doing it the hard way was politically necessarily, so here we are.

[kgwgk]

> The pension age in Germany is 65 years ("and 10 months", in my best Lester Freamon accent). In profligate Italy? 67. So yeah, let's have that.

https://www.oecd.org/italy/PAG2021-ITA.pdf

"Many options to retire below the statutory retirement age result in low average labour market exit ages, at 61.8 years on average against 63.1 years for the OECD average. Granting relatively high benefits to relatively young retirees contributes to the second highest public pension expenditure among OECD countries, at 15.4% of GDP in 2019."

[toyg]

Most of those historical benefits have been effectively precluded to anyone born in the '70s, the movement to close that gap has been steady over the last three decades of reforms and is supported by pretty much the entire political class. They even started cutting already-granted pensions, with retroactive moves that are on the border of legality. What I'm saying is that this particular element has already been normalized, and we'll seeit reflected in stats in less than a decade (when the '70s generations will be stopped from retiring in their mid-50s like their parents did).

[RobertoG]

That's an interesting point.

After the reunification, Germany, as a country, is the poster child of economic success. The balance of trade of Germany, has been just ridiculous. Still, the conditions of the average German have not improve, if something, they are worst.

So, where are all that wealth going? I suppose if you ask the politicians they will tell you that to those lazy guys in the south. Well, that's not it. The Germans should take a good look at what's going on there.

Is that the model others should copy?

[turbinerneiter]

Germany has a lower gini coefficient than Spain. Germany is higher on the quality of life indexes as well.

Also, you keep railing about "the lazy guys in the south". I'm sorry these stereotypes exist. I don't believe them.

Do you seriously believe the problems of the Spanish economy are all because of Germany? There is absolutely not even a single thing that Spain is doing wrong?

[RobertoG]

There are many things that Spain have done wrong, but the most important one is that it gave away power over its currency to people that have not its best interest in mind.

https://marketmonetarist.com/2015/07/14/the-euro-a-monetary-...