Is the end nigh for the Euro? [vol. 3]

[Rovinghawk]

fblm said:

That’s a very interesting point but I suspect reunification may have had the opposite effect to what you imagine. With the post unification depression and boom of the early 90’s out the way the massive investment in East Germany over the previous decade should have had a huge effect on poor East German productivity and subsequent GDP growth post Euro...

Are we comparing like with like?

Perhaps one set of figures is purely for BRD and the later set that of the reunified Germany.

[anonymous-user]

Rovinghawk said:

Are we comparing like with like?

Perhaps one set of figures is purely for BRD and the later set that of the reunified Germany.

I'm not using any figures just thinking aloud. It's reasonable to expect, I think, that other things being equal the potential real gdp growth potential of a low productivity economy is higher than that of one already firing on all cylinders. Ergo a low and high productivity economy jammed together a decade earlier should have a higher growth potential than the good one had in the first place, subject to a massive investment in the bad one, which happened.

[anonymous-user]

Ok, here it is.



Solid line is East German GDP per capita as a percent of West German. The economist reports East German GDP at 67% of the west in 2015 which is the same as other regional differences in Italy or Spain.

[Digga]

Gargamel said:

Tryke3 said:

Have you heard of east germany ? Why do you come on the internet and present fake data like its something you have any idea about ?

Ffs

Er... 1999 was nine years after unification, Plus I would have thought bringing all the western modernization to a low productivity area like east Germany would be a massive driver for GDP.


Have another go ...

Plus the figures are in an article published the Sunday Times, written by David Smith. As their economics editor, he has not taken a pro Brexit stance and is a relatively unbiased source. The numbers are the numbers, there is no 'fake' news about them.

[Blackpuddin]

Norfolkit said:

Enricogto said:

As i explained a million times in this thread and a couple of others, there is no chance, i repeat, NO chance that voters will be called to cast a preference on an Italexit-type referendum. It is constitutionally forbidden, and even this alliance hasn't got the necessary majority to change the constitution.

So, the politicians are so scared of the answer they might get, they've banned asking the question.

This. Economically, Germany is winning WW3 under EU rules, and the political elite who are responsible for making sure that this situation continues – including the Italian president, who is clearly under orders – aren't going to countenance any reform to the EU, no matter how moderate.

[smifffymoto]

The biggest thing I can't understand is,why are Germany being allowed to profit on such a large scale at the expense of other countries?

[rdjohn]

Digga said:

lus the figures are in an article published the Sunday Times, written by David Smith. As their economics editor, he has not taken a pro Brexit stance and is a relatively unbiased source. The numbers are the numbers, there is no 'fake' news about them.

Prior to the referendum, David wrote 7 articles setting out in very clear terms why it would have been economic madness to vote Leave.

The Sunday after the referendum hw wrote another piece saying that the public has made its view clear, let’s unite and make the very best we can of this result.

It is a great pity that others who shared his views have still failed to grasp this most basic concept.

It is time to just move on.

[tescorank]

smifffymoto said:

The biggest thing I can't understand is,why are Germany being allowed to profit on such a large scale at the expense of other countries?

Because they are the EU and this was brought in to appease them so we did not have another war in Europe.

[Blackpuddin]

tescorank said:

smifffymoto said:

The biggest thing I can't understand is,why are Germany being allowed to profit on such a large scale at the expense of other countries?

Because they are the EU and this was brought in to appease them so we did not have another war in Europe.

The whole thing is as bent as the proverbial nine-bob note.

[bludger]

smifffymoto said:

The biggest thing I can't understand is,why are Germany being allowed to profit on such a large scale at the expense of other countries?

When the Euro was formed national currencies were converted at a particular rate into Euros.

Over time the DM(if it still existed ) would be expected to appreciate against most other currencies in the EZ, reflecting better German trade performance. However, because they are locked in at the "founding" rate this cannot happen and so the German economy gets a permanent, and increasing, subsidy by being in the Euro.

If the Euro ceased to exist the DM would gradually appreciate against most of the other currencies.

This inbuilt advantage explains a good deal about the success of the German economy in the last twenty years.

The Euro cannot work without a fiscal union and you will not get that without political union and that you will not get because most do not want it. IMV the Euro is doomed to failure; it is not a question of if but when.

[FN2TypeR]

It's always tomorrow in crashist land.

[Tony427]

Forze Italia ( the Bunga Bunga party) have just swung behind FiveStar and Lega to reject the Presidents appointee government.

Looks like new elections under the " Take Back Control" agenda of both Five Star and Lega.

These three parties now stand at 62% of the popular votes, and that share will only increase as the Italian voters feel betrayed by their President and political elite. After the next set of elections the populist parties will be able change the constitution that will allow a referendum on continued membership of the EU.

Which they will.

Brexit is now becoming a sideshow for the EU.

To keep italy in the EU forcing a Greece style settlement on Italy with more austerity and even more unemployment will not work, debt forgiveness is the only option. However, how will Hans et al feel when they are faced with a trillion Euro bad debt that will never be repaid?

If Italy gets debt forgiveness, the Frenchies and others will indoubtedly press for their piece of the free cake.

Every day must seem like a nightmare in Brussels at the minute, and yet their answers to these problems only seems to be "More Brussels".

Madness.

Cheers,

Tony

[Blackpuddin]

Presumably the UK would also get a similar dispensation given that we are still members. Good on the Italian electorate for waking up and fighting oppression.

Edited by Blackpuddin on Tuesday 29th May 10:34

[Rovinghawk]

fblm said:

I'm not using any figures just thinking aloud. It's reasonable to expect, I think,...................

I'll take a different view. Nothing to back it up, just opinion & hearsay.

Reunification had significant costs to Germany, both financial & cultural. A team made of strength & weakness is a weak team. I think the German economy struggled more and for a longer period than most think; this is based on knowing a lot of Germans from both East & West.

[Mrr T]

Blackpuddin said:

Presumably the UK would also get a similar dispensation given that we are still members. Good on the Italian electorate for waking up and fighting oppression.

Edited by Blackpuddin on Tuesday 29th May 10:34

If by oppression you mean suggesting to Italians it might be a good idea they pay their taxes and stop spending money they do not have, then yes it oppression. However, for most people in the real world that’s common sense.

They want their cake and eat it.

[anonymous-user]

Mrr T said:

If by oppression you mean suggesting to Italians it might be a good idea they pay their taxes and stop spending money they do not have, then yes it oppression. However, for most people in the real world that’s common sense.

They want their cake and eat it.

Just like the Greeks eh Mr T.

Italy has the same problem as Greece, the currency is not fit for purpose for them.

[anonymous-user]

Mrr T said:

Blackpuddin said:

Presumably the UK would also get a similar dispensation given that we are still members. Good on the Italian electorate for waking up and fighting oppression.

Edited by anonymous-user on Tuesday 29th May 10:34

If by oppression you mean suggesting to Italians it might be a good idea they pay their taxes and stop spending money they do not have, then yes it oppression. However, for most people in the real world that’s common sense.

They want their cake and eat it.

Wow. You just don’t get it do you?

The Italians weren’t doing too badly at all, thank you, until the EU came along to affix it’s ball and chain.

Now, there is no share of cake to even think of eating, their debt is unconscionable and unemployment and immigration are running riot.

Way to go, the EU.

[Digga]

rdjohn said:

Digga said:

lus the figures are in an article published the Sunday Times, written by David Smith. As their economics editor, he has not taken a pro Brexit stance and is a relatively unbiased source. The numbers are the numbers, there is no 'fake' news about them.

Prior to the referendum, David wrote 7 articles setting out in very clear terms why it would have been economic madness to vote Leave.

The Sunday after the referendum hw wrote another piece saying that the public has made its view clear, let’s unite and make the very best we can of this result.

It is a great pity that others who shared his views have still failed to grasp this most basic concept.

It is time to just move on.

Kind of my point; his views are fairly impartial WRT Brexit, EU and Euro.

The numbers Tryke3 was objecting to as being "fake news" are, very much, the actual published numbers.

[anonymous-user]

Rovinghawk said:

I'll take a different view. Nothing to back it up, just opinion & hearsay.

Reunification had significant costs to Germany, both financial & cultural. A team made of strength & weakness is a weak team. I think the German economy struggled more and for a longer period than most think; this is based on knowing a lot of Germans from both East & West.

I don't follow your logic/analogy. Of course GDP per capita dropped as the un productive east averaged them down but I'm talking about GDP growth potential, which must surely have been higher as it is in most emerging market economies. Remember all government borrowing and spending is GDP too and they pumped 2 trillion into the east bringing their productivity up toward western levels. GDP measures economic activity; it's not hard to see how rebuilding an entire country will increase your GDP!

[Rovinghawk]

fblm said:

I don't follow your logic/analogy. Of course GDP per capita dropped as the un productive east averaged them down but I'm talking about GDP growth potential, which must surely have been higher as it is in most emerging market economies. Remember all government borrowing and spending is GDP too and they pumped 2 trillion into the east bringing their productivity up toward western levels. GDP measures economic activity; it's not hard to see how rebuilding an entire country will increase your GDP!

Bringing DDR up dragged BRD down.

Of course you're right about GDP- i'm thinking of actual Marks/Euros in pockets rather than a fabricated measure of economic activity. Reunification hit Germany quite hard.