Even with the rest of the comments here, the single market has issues, especially in the energy sector.
I live in slovenia, and with some minor modifications we have enough electricity for our country (two factories shift to half-production, and we're there). We also don't use a lot of russian gas, but mostly rely on hydro, some coal (we even have a coal mine) and nuclear... so, no problem for us, we're safe for the winter.
But, we've joined a single market for electricity, and (to very very simplify it), all the power goes into a single "pool", and countries buy it "at an auction"). ... this means, that we will produce enough power for us, but that power will be on the market for foreign buyers, especially the ones who earn 2-3x as much as we do (monthly wages) and whose governments will add aditional taxpayer money to offset individuals prices... one of those countries is germany.
So the result will be, that instead of keeping our own, and let 'the big ones play politics, they're the ones who started this whole mess', we'll be fucked with reductions in power too.
I guess after the Nord Stream sabotage they need another issue. The whole of Europe took gas from Russia, but Nord Stream was the incarnation of evil. The press was full of Nord Stream articles and never mentioned the other pipelines.
Poland took gas well into May 2022, and only stopped after Russia demanded payment in rubles. The Yamal pipeline is still standing. Europe still gets Russian gas via the Ukraine transit pipelines.
So apparently the issue is that there must not be a direct connection between Germany and Russia, so the transit states have leverage.
What does Poland do itself? It routes the new pipeline from Norway via Denmark and the sea, avoiding transit via Germany.
Perhaps Germany should leave the EU like Britain if it is so horrible.
Germany was a huge winner from introduction of the Euro. Some other countries, especially the Latin bloc, cannot cope with the common currency.
(Ironically, it was the German economists who used to be very skeptical against the common currency and were loud about it.)
At the end of the day, the single market will only be popular if growth and prosperity are shared across the continent. If the economic periphery plagued by anemic growth and high debt burden expands, so will populist sentiments. And the economic periphery of the EU is already rather sizeable - even the former GDR could be counted in it, at least when looking at the structural unemployment and migration patterns of young qualified people.
In the US, Trump won his mandate riding on a wave of such populist sentiments from the Rust Belt. In Europe, ethno-national differences run much deeper than interstate differences in America, so the end result may be a fatal split in the Union.
Italy used to be quite an industrial powerhouse when I was young.
I still remember visiting the country in 2000, and even though the lira was weak, the overall atmosphere was much more lively, optimistic and vibrant. Contemporary Italy feels worn down and without hope. Too many young people with diplomas have simply fled.
I get the same vibe in Spain, by the way, and in many cities of the former GDR, which is actually part of Germany. Dresden is fine, but Hoyerswerda, Chemnitz or Zittau are semi-deserted and feel distinctly "over": no future for them, only slow decay. The local political scene reflects that: the anti-system AfD gets plurality of votes, just to stick it to the "elites".
Perhaps read a comment twice before publicly dismissing it as childish, in case you were not able to fully grasp what you read.
The only thing I said regarding intentions is that the “Latin block” intentions portrayed above were overly simplistic.
The mechanism by which german exports sharing a currency with weaker economies makes german currency appreciate less than otherwise is not a conspiracy theory but simple, generally accepted and well understood economics.
If you look at the USA then the profits are made at the periphery. Profits can be made anywhere. Sooner or later, they will be made where living is more pleasant and that's at the European periphery.
Which cultural problems exists that keeps the periphery poor? I would like to argue that the cultures of the periphery are what will attract people and customers and what will allow the periphery to develop.
Germany is making a killing in selling their cars and tools to the “periphery”. East europe being their largest export market - some 30%.
The main cultural issues that keep the periphery poor are those stemming from the “core”. Always shitting on the south and east is what keeps those regions stagnating. What upsets me is that they turn the other cheek instead of slapping right back.
To an extent, the political climate and the weight of existing institution can uphold the culture.
People governed by politicians with suboptimal characteristics don't necessarily get to make decisions with perfect information, or to enjoy a voting system where votes have equal weight and reflect popular sentiment.
A sufficiently corrupt system can self-sustain for many years. With enough indirection and few votes, people have correspondingly increasingly limited input into their political decisions (or the indirect decisions of their representants).
Is porn banned in germany or why do people enjoy poverty porn so much? The periphery is anything but poor. There are gaps between eu countries but east south and west are consistently ranking high in term of economic development. Anaemic growth doesnt equal poverty.
My wife speaks Spanish fluently and we often travel to Spain.
Spain as such may not be exactly poor, but quite a lot of people are living in very subpar conditions. Andalusia in particular has a lot of visibly poor natives. Even African migrants do not want to stay there and if they manage to cross the Strait of Gibraltar, they immediately travel north to France/Britain/Germany.
Germany loves the common market due to the way their economy is structured. Normally what happens for a major exporting country is that their currency (Deutschmark) would go up in value because of high demand to pay for German goods. This drives up the cost of their goods making them less attractive.
But in the common market with a shared currency they are able to keep the cost of their goods artificially low due to other countries absorbing the demand for the currency.
So where Germany wins, you can guess that other countries lose.
Agreed. If change doesnt happen in everyone’s interest it will result in a fatal split. The biggest loser will be germany tho. Without access to the markets that prop up its economy it will suffer an economic contraction it’s never seen in modern times.
Go to Sevilla or Malaga and look around. Houses have old facades, people drive old cars, pavements have been last repaved 20 years ago and meeting a highly educated beggar is a common occurrence. That is not how a wealthy community looks like.
Spanish economy may be nominally big, but random folk in the streets do not seem well off. The contrast to, say, Austria or Denmark, where most of the population seems to live just fine, is big.
My friend, a nurse in Madrid, makes less than 1000 euro net. She and her son live in a small Franco era apartment where one of the tiny rooms does not even have a window.
True, but at this point the only thing that prevents her from moving to Czechia to make better money is the fact that her son likes Madrid and she does not want to uproot him.
That would be unthinkable some 20-25 years ago. Spain back then was, relatively taken, much richer than any post-Communist country and your living standard would have gone measurably down if you moved from Spain to Czechia.
There was a DW article that presented spain as one of europe’s poor countries. Cant find the link unfortunately. I swear these people get a boner when throwing around the word poor.
But also note that the Economist is reliable factually, relatively unbiased, and is in general respected in the UK and further afield for both of those things. Its coverage of Brexit and EU matters more generally is usually balanced, and probably leans towards remain/EU if anything.
> the Economist is reliable factually, relatively unbiased, and is in general respected in the UK and further afield ... coverage of Brexit and EU matters more generally is usually balanced, and probably leans towards remain/EU if anything
What motivation could we have? Most British people you talk to on the internet are distinctly unhappy about Brexit and, if anything, are motivated to talk up the single market
~37% of the electorate voted for it, six years ago. If you think it has become more popular in the intervening time then it may be that you're in the echo chamber.
I don't know about the economist but there's certain stipulations that went into the foundation of the single currency that favored Germany heavily, and Germany behaved the whole time like it didn't happen.
Most of the european resentment comes from that fact. Most southern european countries were taken for a ride during those negotiations, and have paid (and continue to) a steep price.
I was a strong believer in the common currency but after reading about it for a while I'm not convinced it was a good idea anymore - if you're anyone except Germany or France.
Paul Krugman wrote at length about why that was a mistake, and he was 100% right about it.
Note that it is a "single currency", not a "common currency". In the same way that the "single market" is different from the prior "common market".
So if the UK had joined at the inception, it would have started as a common currency, but when the UK decided not to join, it reverted to the preferred form of some of the other members, namely the "single currency".
I imagine that the rules would have been different with a common currency, possibly with the national currencies not replaced, and still operating in tightly tracked bands; but I guess the UK fate there was written when it dropped out of the ERM as part of "Black Wednesday", caused by it entry peg being overvalued.
So a common currency may well have allowed for more north vs south flexibility...
France hasn't really benefited much. Italy has been the talking point for a long time and rightly so for the amount of debt plus the chronic political instability, but France is very much on a similar decline path.
Edit: cheap Russian gas + high productivity + political stability + undervalued currency (the Deutsche mark would have been way stronger than the euro) is what fueled German dominance in Europe. Italy/France/Spain/Greece/Portugal all struggled with varying degrees with low productivity, political instability (apart from France) and a currency that was too strong for their macro-economic fundamentals.
If I had one euro for every time The Economist has said that the Euro/EU were wobbly/breaking/etc I could balance Liz Truss'es budget and have money left for some fish'n'chips.
The Economist lost a lot of credibility with some of us around the turn of the century, when it fatally misunderstood US politics and wrote columns addressing people like Karl Rove and asking them to follow their better nature. (Karl Rove does not have a better nature.)
I've been reading Economist since a teenager it is by far the best source of general global news in bite sized format. Excellent in every way from writing to admitting to mistakes.
It is actually amazing that it is still relatively in the same shape despite of all the polarization in the world.
HN has a strict bias for attacking Economist because they tend to take positions on things HN doesn't want to confront (anti-EU in this article). My honest view of this place. So you see attacking Economist rather than actually debating the talking points, quite a pattern.
Well the Euro area has been an unmitigated disaster for more than a decade and could have fractured at multiple times during that period. It's prospects are terrible going forwards.
Geopolitics doesn't unfold at the pace of the 24 hour news cycle. Correct theories can play out in days, decades, or centuries. 10 years is a flash for these types of topics. Gloating that someone else was wrong on that time frame for Geopolitical events is not nearly as clever as it seems.
This just helps Germany to avoid the repercussions of their gas supply going away.
After improverishing other European countries by pushing to them the IMF-style neoliberal loans after forcing them to bail out PRIVATE German banks in those countries back in 2008 and then blaming the people of those countres for 'being lazy', they will be scarcely motivated to help Germany that way.
Especially considering how German industry's competitiveness hangs on other countries' industries being weaker, bringing the Euro down to keep German exports competitive.
This is a chance for all the other European countries in recovering their industries back - German industry shutting down means that domestic and foreign markets that those industries were dominating will now be open to other European countries. Couple this with the Euro going down and making European products more competitive, you can understand that why other countries are not so enthusiastic in bailing out Germany.
> Because of healthy state finances, it can afford to borrow up to 5% of GDP to create a “protective shield” that will insulate Germans from the cost of higher energy.
I find this kind of insulting to Germans actually, since the energy prices were already high to begin with in Germany and the personal wealth of the lower 90% is actually so low that it is not hard to imagine how quickly society can collapse after the government has set so much money on fire just because they can.
The problem with this "protective shield" is not that the intent is unjustified, but it comes way too late and I don't think it is going to help for long. I am honestly not sure there is a solution at this point anymore. They print money to dampen the price hikes, therefore increasing prices/devalue currency, therefore they need to print money.
Peter Zeihan also has quite a different perspective.
> those in Europe’s biggest economy will be able to behave as if not much is going on
It seems like the shut down of the Nord Stream will have a big impact on German manufacturing. I'm not sure how they'll be able to "behave as it not much is going on".
The article is really about something called the NGEU:
> ... Thus, as the pandemic raged, a novel form of European solidarity was agreed in the form of a €750bn bail-out fund, Next Generation eu (ngeu). The money is a form of redistribution: it is borrowed by the eu, but will in effect be paid back by its richest members while being doled out to its poorest. This gave fiscal capacity for southern Europeans to stimulate their own economies in the recovery.
I can't imagine something like this is on the table now. Germany's balance of trade, peaking at 2.5 trillion euro in 2015 is now almost zero. That's fine for a country that issues its own currency, but not one like Germany that doesn't. The days of German largesse are in the rear-view-mirror now. Europe will need to find a way to cope without its economic Willy Wonka.
I don't think it's the NGEU, that was for Covid, but recently Germany just said it will borrow 200 billion Euro to be distributed to German businesses as help, and the article is saying that's not very fair.