[ChuckNorris89]

>The ECB has a real problem with asymmetry. Can't cut rates just for Germany.

It's as if a single currency and a single central bank for 25 different economies with different levels of debt, doesn't really work that well in every situation.

> At the same time there's high inflation in Austria

Inflation in Austria is now mostly due to greedflation. If you cross the border into Germany the same goods are suddenly cheaper.

[dmm]

A monetary union without a fiscal union doesn't really make sense, imo. The US (mostly) works because states run balanced budgets(if you ignore underfunded pensions) and the federal govt corrects trade imbalances by taking money from some states and sending it to others.

Economists in the EU must have understood this and if I had to guess they assumed a fiscal union would develop at some point?

[logifail]

> A monetary union without a fiscal union doesn't really make sense [..] Economists in the EU must have understood this [..]

They almost certainly did, there are two other groups who may not have done - European politicians ... and European voters.

Although it's more likely that politicians did understand it, but were reluctant to talk about, at least in front of the voters.

[rhaway84773]

True, but every system has flaws. For the most part the Euro and ECB has been a benefit for every country in it.

Even a country like Greece. As bad as the single currency was for Greece, outside the EU and Eurozone, Greece could very likely have been closer to Venezuela with even fewer resource wealth to benefit from.

[yyyk]

>True, but every system has flaws. For the most part the Euro and ECB has been a benefit for every country in it.

Except Italy alas.

[mantas]

Was it really a benefit? The only benefit is belief that Germany won't let euro fail and will bailout anybody no matter how shitty situation is. On the other side, this prevents fixing root causes. Why fix anything and make people angry if you can ride the wave, hope for the best and in worst case someone will bail you out?

That's why we have this massive inflation. No real value is created, yet everybody is flush with the money. Pandemic was just a perfect excuse for BS that is brewing since at least 08 crisis.

[ChuckNorris89]

>That's why we have this massive inflation. No real value is created, yet everybody is flush with the money.

Indeed. Most of EU's economic growth since the 2008 crash was just printing money and propping up assets. A bunch of wealthy boomers buying expensive houses from one another does not mean actual economic prosperity.

We just printed our way into prosperity but Covid supply chain disruptions, the energy shortage, and the Ukraine conflict exposed the EU emperor had no clothes.

[mantas]

And lots of money poured into various „EU-funded“ (= money pulled out of thin air) programmes. All sorts Bs training that creates no wealth. Sure, topics may read nice on paper. But does it create any value? All while basic economy is going down the drain.

Who cares if everybody and his or her dog can discuss emotional intelligence, yet we end up relying on China more and more? Both to import crucial stuff and export crappy extravaganza nobody else is buying.

The green whatever plan is great example. Let's fuck over our farmers and kick out remaining manufacturing. Just to pretend we're soooo environment-friendly. And then import fuckton of stuff from far away. Thankfully there will be CO2 import tax. But CO2 regulations is not the only thing curbing local economies while faking low CO2 reports in far away countries may be a lucrative industry...

[sottol]

What's the alternative? Brexit for everyone?

[c00lio]

Maybe not outright exiting the EU. But maybe exiting the Eurozone and removing some other problematic economic straightjackets like overly large tax-financed subsidies.

[mantas]

Or at least several different eurozones. Germany and Italy or Spain are rather different economies to say the least.

[mytailorisrich]

Greece's problem is internal, not external. Endemic bad management that used to be dealt with by devaluing the currency. With the euro there is nowhere to hide but at least that indeed prevents runaway devaluation.

[johngladtj]

Other way around. The euro has been a net loss for all but 2 countries

[epups]

Then why are a lot of countries trying to get in it? Why didn't Greece go out when it had the chance?

[pier25]

Doesn't the US do the same with states instead of countries?

[alenrozac]

Not really. US is in a better position for a federal-wide monetary union. Labor mobility is a key component, and it is easier when you don't have different languages and cultures.

[yieldcrv]

Top level EU has no capability of being a fiscal union, only a partial monetary union.

This has limitations and reduces how analogous it can be to the US' and its member states.

[mcv]

To what extent does each state run its own economy? The EU does not have centralised taxes or a centralised economic policy, but it does have a single currency. It's possible a single currency also requires more centralised financial/economic policies.

[galangalalgol]

State economies do differ dramatically though, and monetary policy can indeed affect them in opposite ways at least for a while. And state revenues are almost entirely collected by the state aren't they? There are funds for interstates and railroads, and schools, but often schools are primarily funded at the city level by property taxes.

[laratied]

There is really just the US economy. We would not say that Pennsylvania is in recession but New York is not.

The major difference between states is tax rates. Labor, transacting, anything else economically is practically transparent and frictionless.

[ChuckNorris89]

>The major difference between states is tax rates.

Also tax spending. For example there's no central EU funded military but each member budgets it differently, just like how there's no New York military and Pennsylvania military.

[blensor]

Austria is always lagging behind Germany. I'd say about 6-12 months. So I have no worry that Austria will go down to roughly the same level as in Germany.

Gas prices have already dropped to a level where it is slowly getting in the range of pre-covid