Italy’s austerity-fueled crisis is a warning to the Eurozone • Hacker News Board

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

#71

Post by Mirioron » Sat, Apr 13, 2019, 9:40 AM UTC

galaktb wrote: post #65

tempestn wrote: post #45

Earlier quoted context omitted.

So... is there some way to have both the benefits of multiple currencies and a single one? The convenience of a single currency in terms of cash is becoming less relevant as cash itself is used less, but my understanding is that the main theoretical benefit is that it strengthens the single market. Basically allows EU companies to have suppliers and customers in any EU state, without having to incur currency risks. H…

I’d say that has more to do with the regulations in place that ease the movement of goods and people. In that framework having the same currency and wildly different economies actually goes against the interests of your workers too, because it allows companies to outsource labour to other EU countries where the cost of living is radically less, with basically no drawbacks. The solution to this should be a consistent…

>but more than anything impose similar taxation policies throughout the EU.

But this would massively hurt the weaker and smaller economies though. Businesses congregate where other businesses are. Workers follow. Brain drain has been a big problem in the EU. If EU countries all have to adopt similar taxation schemes then why would you start a business in Romania if you could just start it in Germany instead?

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

#72

Post by [deleted] » Sat, Apr 13, 2019, 9:48 AM UTC

avar wrote: post #29

Consultant32452 wrote: post #20

Earlier quoted context omitted.

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.

[deleted]

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

#73

Post by Mirioron » Sat, Apr 13, 2019, 10:00 AM UTC

Udik wrote: post #52

avar wrote: post #29

Earlier quoted context omitted.

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.

But is the size of these wealth transfers comparable? I have the impression, maybe wrong (absolutely no data to confirm it, in fact) that wealth transfers within the EU are much lower than those that would take place between the regions of a single nation.

You're right. The wealth transfers are fairly small. The EU had a budget of €118 billion for 2016. There's only so much you can do with that money for 500 million people. Note that a large chunk of it goes back into the big countries as agricultural subsidies.

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

#74

Post by Mirioron » Sat, Apr 13, 2019, 10:04 AM UTC

kartan wrote: post #40

While one hand was trying to balance the budget cutting in investment (education that makes people happier and more productive, healthcare that keeps people healthy, ...) the other hand has been increasing the expenses and decreasing revenue (giving bailouts to bankers, allowing tax havens). How was austerity supposed to balance the economy when money was given away to the rich and taxes reduced? For each euro that w…

What's the point of investing the money into education if the people study in poor countries and then move to the rich countries? Brain drain is a real problem and there has been no solution for it. I'm being facetious about the education part, but you can't deny that those countries are paying for the education of many people who end up going to western Europe.

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

#75

Post by orbifold » Sat, Apr 13, 2019, 10:10 AM UTC

coryrc wrote: post #31

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…

Floating currency is just a way to automatically renegotiate all of a country's contracts. It will not magically create more wealth or lower the costs of materials. In the end, if you're importing something for $1 and you earn $100/yr or it costs $3 because of your devalued currency but you earn $300/yr, nothing has changed. What sucks is the most productive people left and the already massive state obligations fell…

I think your last point needs more investigation and I don’t think the EU really wants to examine it in detail. Freedom of movement means that really productive and educated people can go wherever they want. I encounter groups of Italian and Spanish students everyday here in Germany. I’ve met a really bright Greek politics and law student that has now a job here. At one conference an Italian guy working in Switzerland told me at the company in England he was before the office was dominated by Greek and Italian developers. All of these anecdotes point to the same thing young successful people from these countries try to start a life elsewhere in the EU. It’s obvious that this is a huge benefit to Germany and the UK (which the Brexit supporters failed to recognize)

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

#76

Post by abainbridge » Sat, Apr 13, 2019, 10:17 AM UTC

lainga wrote: post #42

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…

Yes, but the gap has been around since the 50s and was mostly born from Britain squandering their Marshall Plan aid playing at empire (instead of reconstruction) between 1948 and the Suez Crisis.

I think today it has more to do with the UK having low tax as a percentage of GDP, and therefore has less money to spend on infrastructure. Here's how the UK ranks compared to other European countries:

Norway 54.8%, Finland 54.2%, Denmark 50.8%, Sweden 49.8%, Belgium 47.9%, France 47.9%, Germany 44.5%, Italy 43.5%, Austria 42.7%, Bosnia and Herzegovina 41.2%, Iceland 40.4%, Netherlands 39.8%, Slovenia 39.3%, Cyprus 39.2%, Hungary 39.1%, Greece 39.0%, Spain 37.3%, Portugal 37.0%, Croatia 36.7%, Luxembourg 36.5%, Czech Republic 36.3%, Malta 35.2%, UK 34.4%.

Source: https://en.wikipedia.org/wiki/List_of_countries_by_tax_reven...

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

#77

Post by zizee » Sat, Apr 13, 2019, 10:18 AM UTC

pjc50 wrote: post #34

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…

The logical conclusion of most of these arguments seems to be that the US should have floating currencies between the states, to stop unfairly benefiting the few net productive export states?

The US has federal taxes and mechanisms to redistribute money from richer states to the poorer states to address this sort of imbalance.

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

#78

Post by thefounder » Sat, Apr 13, 2019, 10:25 AM UTC

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…

Do you think the United States need more currencies as well?(i.e the Texas dollar, California dollar etc)

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

#79

Post by heavenlyblue » Sat, Apr 13, 2019, 10:30 AM UTC

orbifold wrote: post #75

coryrc wrote: post #31

Earlier quoted context omitted.

Floating currency is just a way to automatically renegotiate all of a country's contracts. It will not magically create more wealth or lower the costs of materials. In the end, if you're importing something for $1 and you earn $100/yr or it costs $3 because of your devalued currency but you earn $300/yr, nothing has changed. What sucks is the most productive people left and the already massive state obligations fell…

I think your last point needs more investigation and I don’t think the EU really wants to examine it in detail. Freedom of movement means that really productive and educated people can go wherever they want. I encounter groups of Italian and Spanish students everyday here in Germany. I’ve met a really bright Greek politics and law student that has now a job here. At one conference an Italian guy working in Switzerlan…

>> At one conference an Italian guy working in Switzerland told me at the company in England he was before the office was dominated by Greek and Italian developers.

Yeah, but it doesn't mean they are brighter than British ones. It just means it's cheaper to hire a Greek or Italian developer (that and culture differences that British people would also need to deal with).

Saying this as a developer from Lithuania working in the UK.

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

#80

Post by znpy » Sat, Apr 13, 2019, 10:31 AM UTC

pif wrote: post #50

I am Italian. And I am happy to find out it was indeed the fault of EU. Wow, what a relief! I thought we Italian were the problem! I mean, we voted Democrazia Cristiana for decades, just because it had Cristiana in the name, and which party will do any effort to be re-elected when they know in advance they will be re-elected anyway? I mean, I always heard bad things about corruption, but the corrupted politicians wer…

> I heard about "voto di scambio" (litteraly: exchange vote) many many times, but I never got it completely: you are granted anonimity in the voting booth, and you vote for a mafioso because you made a promise to him... You have the possibility to counter mafia's power and you vote for him! Are you an idiot or what?

There are mechanisms to implement "voto di scambio". All a mafioso has to do to implement it is to to gain a blank vote card and apply a vote of his preference. Then when you come along the mafioso will give his voted card for you to submit as a valid vote and will expect you to give him the blank card that you were given before entering the voting booth.

In this way he the mafioso is assured that the pre-voted vote card has been submitted and will also have a new blank card to give to the next person selling his vote.

You can, at most, invalidate the mafioso's vote by applying more votes (thus making the vote card void) but you still won't be able to supply your own vote (and thus, making a difference).

In the end, it's always easy to think people are stupid and that bad actors didn't actually think trough stuff, ran tests and improved the processes as any organization of a sufficient size would do.

Please don't blame the victims. Stronzo/a.