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Italy’s austerity-fueled crisis is a warning to the Eurozone

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Re: Italy’s austerity-fueled crisis is a warning to the Eurozone

#21

Post by durnygbur »

k__ wrote: post #14
johnzim wrote: post #7

The Eurozone was never intended to do the damage it has done to PIGS economies but it has. What is worse, is that it has unquestionably been of benefit to Germany, which has one of the strongest hands in shaping the future of the EU. If a macroeconomist had sat down to devise a currency that suffocated Italy, Portugal, Greece and Spain - export driven economies (remember that tourism is an export as you have to buy t…

Wasn't the problem of countries like Greece and Italy corruption?

Germany’s byzantine buearoucracy and regulations spilling over the whole EU at this point are a corruption, just different form of it.

Re: Italy’s austerity-fueled crisis is a warning to the Eurozone

#23

Post by gridlockd »

bjelkeman-again wrote: post #12
johnzim wrote: post #7

The Eurozone was never intended to do the damage it has done to PIGS economies but it has. What is worse, is that it has unquestionably been of benefit to Germany, which has one of the strongest hands in shaping the future of the EU. If a macroeconomist had sat down to devise a currency that suffocated Italy, Portugal, Greece and Spain - export driven economies (remember that tourism is an export as you have to buy t…

I am not sure the Euro in itself was the problem, but countries where included before they where ready and not enough mechanisms across the union to help those regions/countries that where struggling. But,hey, I am but an armchair economist.

You mean countries like France and Italy?

Re: Italy’s austerity-fueled crisis is a warning to the Eurozone

#24

Post by sampo »

k__ wrote: post #14
johnzim wrote: post #7

The Eurozone was never intended to do the damage it has done to PIGS economies but it has. What is worse, is that it has unquestionably been of benefit to Germany, which has one of the strongest hands in shaping the future of the EU. If a macroeconomist had sat down to devise a currency that suffocated Italy, Portugal, Greece and Spain - export driven economies (remember that tourism is an export as you have to buy t…

Wasn't the problem of countries like Greece and Italy corruption?

Italy and Greece have always had corruption. But they didn't always have recession.

Re: Italy’s austerity-fueled crisis is a warning to the Eurozone

#25

Post by gridlockd »

k__ wrote: post #14
johnzim wrote: post #7

The Eurozone was never intended to do the damage it has done to PIGS economies but it has. What is worse, is that it has unquestionably been of benefit to Germany, which has one of the strongest hands in shaping the future of the EU. If a macroeconomist had sat down to devise a currency that suffocated Italy, Portugal, Greece and Spain - export driven economies (remember that tourism is an export as you have to buy t…

Wasn't the problem of countries like Greece and Italy corruption?

The problem is the lack of free float. Nobody in Europe is as productive as the Germans, therefore they become uncompetitive while being tied to the same currency.

The corruption narrative is just a diversion from the fact that the whole Euro concept was a bad idea to begin with.

Re: Italy’s austerity-fueled crisis is a warning to the Eurozone

#26

Post by thenaturalist »

Consultant32452 wrote: post #20
johnzim wrote: post #7

The Eurozone was never intended to do the damage it has done to PIGS economies but it has. What is worse, is that it has unquestionably been of benefit to Germany, which has one of the strongest hands in shaping the future of the EU. If a macroeconomist had sat down to devise a currency that suffocated Italy, Portugal, Greece and Spain - export driven economies (remember that tourism is an export as you have to buy t…

In my opinion the long term goal is to transition the EU (over the course of multiple human generations) into a single nation, similar to the way the United States operates. In that case, the conditions you described are an expected part of the process. In the US the states and local municipalities have different economic situations, different taxes, etc. And if our states broke off into 50 currencies, some would ben…

Your thoughts are on point imo. One must never forget the context of how the EU and it’s main political objective came to be: the culmination of centuries of small scale wars and two world wars within 30 years of each other.

Juncker - who is the only European politician who signed the Maastricht treaty in ‘92 still active today - reiterated at a 20 year commemoration mid January this year that for him, the European Fiscal Union remains an unconventional measure of politics for common peace.

Re: Italy’s austerity-fueled crisis is a warning to the Eurozone

#27

Post by monocasa »

k__ wrote: post #14
johnzim wrote: post #7

The Eurozone was never intended to do the damage it has done to PIGS economies but it has. What is worse, is that it has unquestionably been of benefit to Germany, which has one of the strongest hands in shaping the future of the EU. If a macroeconomist had sat down to devise a currency that suffocated Italy, Portugal, Greece and Spain - export driven economies (remember that tourism is an export as you have to buy t…

Wasn't the problem of countries like Greece and Italy corruption?

Austerity didn't help. The R&R paper that they based the austerity on turned out to not be properly peer reviewed, and surprise, had a some arthmetic errors that when fixed contradict the original result.

Re: Italy’s austerity-fueled crisis is a warning to the Eurozone

#28

Post by alecco »

bjelkeman-again wrote: post #5

I thought it was going to be about Britain. They have been drivning towards the abyss in the last decades. I used to live in London. The difference in public infrastructure and company facilities between the UK and Northern Europe is quite staggering. Now, add the “Ever shrinking Britain” (Scotland leaving after Brexit…, Northern Ireland more part of EU/Ireland than Britain in the future?) to the events and it makes…

Sure but they are close to a balanced budget. And have the best employment rates in a long time. Unlike France, a closer example.

Re: Italy’s austerity-fueled crisis is a warning to the Eurozone

#29

Post by avar »

Consultant32452 wrote: post #20
johnzim wrote: post #7

The Eurozone was never intended to do the damage it has done to PIGS economies but it has. What is worse, is that it has unquestionably been of benefit to Germany, which has one of the strongest hands in shaping the future of the EU. If a macroeconomist had sat down to devise a currency that suffocated Italy, Portugal, Greece and Spain - export driven economies (remember that tourism is an export as you have to buy t…

In my opinion the long term goal is to transition the EU (over the course of multiple human generations) into a single nation, similar to the way the United States operates. In that case, the conditions you described are an expected part of the process. In the US the states and local municipalities have different economic situations, different taxes, etc. And if our states broke off into 50 currencies, some would ben…

The EU already has a version of this. Some countries in the Eurozone are net recipients of EU money. Just like California is a net contributor and Mississippi a net recipient.

It can be argued that the Euro has certain structural issues, or that the wealth transfer is too big/small, but the EU demonstrates that you don't need to become one nation just to have wealth transfers.

Re: Italy’s austerity-fueled crisis is a warning to the Eurozone

#30

Post by geezerjay »

sampo wrote: post #24
k__ wrote: post #14

Earlier quoted context omitted.

Wasn't the problem of countries like Greece and Italy corruption?

Italy and Greece have always had corruption. But they didn't always have recession.

Countries get recessions when they pile double-digit deficits and triple-digit sovereign debts hidden from the world with years of accounting fraud, and suddenly banks cease lending them the money they need to keep burning through the cash they don't have.
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