Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

ineteconomics.org

Post reply on HN
Print view View original

101–110 of 154 posts

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

#101

Post by chewz »

ironic_ali wrote: post #99
chewz wrote: post #93

It isn't fair to blame euro for Italy's troubles. You should rather look at poor governance: * high public debt and as a consequence high percentage [over 3%] of GDP going for public debt servicing. [Just stop and think about it - Italy is spending on debt servicing the same percentage of GDP that US is spending on military] * failure at attracting foreign greenfield investments * one of lowest percentage of youths w…

I replied to another poster and although your points are valid, each members debt load had a greater effect. Please see https://www.armstrongeconomics.com/international-news/europe...

We are not at odds. My point is since 1992 we have era of rapid globalization and many economies adapted (usually at the expense of ordinary folk ie. economy is doing great and people not so much). Debt, currency etc. is just technicality.

The rules have changed, the world is playing brutal Texas Holdem now and Italy is still trying to play chess.

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

#102

Post by [deleted] »

thefounder wrote: post #78
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)

[deleted]

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

#103

Post by behindmyscreen »

heavenlyblue wrote: post #79
orbifold wrote: post #75

Earlier quoted context omitted.

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 worki…

Which is crazy.... in the US, a developer from Nebraska is just as expensive as one from California for any given company.

The location of the company dictates the wages ( costs of living), not the source of the developer.... (unless we’re talking an H1B visa sham hire which isn’t the same as your situation)

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

#104

Post by behindmyscreen »

jacobmoe wrote: post #86
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…

Generally, freedom of movement is a good thing, allowing the most productive people to go to places that enable them to produce the most. The issue appears to be that the EU isn't a real country. Taxing winners and transferring resources to losers of the open borders/single currency zone turns out to be really important.

Almost like MMT is real.

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

#105

Post by behindmyscreen »

rorykoehler wrote: post #88
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…

Whilst I agree with your analysis I would prefer fewer currencies and better redistribution instead. Though there are significant risks the EU could really benefit in terms of cohesion from federalisation.

Perhaps what the EU needed wasn’t a common primary currency but a common secondary currency that was used as a medium to convert currency between members.

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

#106

Post by presidente20 »

alanpetrel wrote: post #19
lenticular wrote: post #2

This is a great article. The EU has done tremendous damage through its obsession with austerity.

Were austerity instructions handed down by the EU or did the individual member states decide to implement it themselves?

Handed down. The austerity has been a condition of the bailouts from the ECB & IMF. The Greeks even voted against the terms in a referendum which was immediately overturned. In Italy the EU even went to the lengths of appointing their own man to oversee the terms: https://en.wikipedia.org/wiki/Mario_Monti#Prime_Minister_of_...

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

#107

Post by behindmyscreen »

pmontra wrote: post #96
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…

> So... is there some way to have both the benefits of multiple currencies and a single one? Look at the USA as an example. The difference with the EU is that the USA are vastly more homogeneous and I believe there is very little opposition to redistribute wealth from richer to poorer states. The EU is fragmented, almost nobody wants a tight political and fiscal integration. What would be of the USA if state governor…

Welcome to the debacle that was the United States Articles of Confederation.

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

#108

Post by kazen44 »

behindmyscreen wrote: post #105
rorykoehler wrote: post #88

Earlier quoted context omitted.

Whilst I agree with your analysis I would prefer fewer currencies and better redistribution instead. Though there are significant risks the EU could really benefit in terms of cohesion from federalisation.

Perhaps what the EU needed wasn’t a common primary currency but a common secondary currency that was used as a medium to convert currency between members.

this already existed before the euro.

It was called the ECU[1]

1: https://en.wikipedia.org/wiki/European_Currency_Unit

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

#109

Post by behindmyscreen »

monocasa wrote: post #27
k__ wrote: post #14

Earlier quoted context omitted.

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.

Yeah... everyone I talked at the time to said austerity is the wrong tactic.

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

#110

Post by behindmyscreen »

durnygbur wrote: post #21
k__ wrote: post #14

Earlier quoted context omitted.

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.

Are you saying Germany succeeded in economics where war had failed?
Post reply on HN