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On July 05 2012 06:44 WallieP wrote:Show nested quote +On July 05 2012 03:32 WhiteDog wrote:On July 05 2012 00:10 Gaga wrote:I will now kindly ask my fellow europeans to stop bullshitting about our internal affairs if you don't even know what's really going on. Merkel openly backing Sarkozy was deeply inapporpriate, and Cameron's declarations were simply outrageous. Mind your own business. the best part is that we(germans) are directly on the path of paying for the depts of whole europe and that includes the dept by lowering the pension age to 60 in france while we work till 67. and you tell us to shut up while begging for our money ? yeah ... why don't we just quit this Euro shit... then your arguments gets valid again. and dont start with germany profiting from the euro shit again ... delivering stuff on credit that won't be paid back is not profiting. we did very well with the DM if you remember history. You don't understand anything from the get go, how about you educate yourself before posting. For exemple, France will not lower pension to 60, only for some people, in certain type of hard physical work and who started early. And the idea about lowering pension is that we have such a high unemployment, that it is better to put people in retirement than having unemployed people. Sorry i have to pick on this, but had to react since you are viewing it only from your own side... Every country would love to have a rule for people that do certain hard physical work and started early to stop earlier, but since it costs to much that is just not happening.. The Netherlands got his economics on track a lot better then france for example, but we do not have a rule that let people stop early.. The thing is that some countrys, like Holland and Germany have putted up a lot of steps to get the economics back on track. Today i readed a news post that the German GDP shortage has gone from 4.3% to 0.5% (they expected 1%) so they just swapped stuff over to get everything right.. same thing in the Netherlands, 2011 we got a shortage of 5.4%, in 2012 4.1% if im right and we are aiming for 2.9% in 2013 and 1% (?) in 2014... Finland the same thing, we really tried to fix stuff before they got to bad. But then you got countrys like greece/spain/italy/portugal and in lower mention france which just didnt react as powerfull/fast or allready had a lot worse shortage on the GDP. They are getting hit hard now with this crisis but yeah, thats what you get if you dont follow the rules right? Asking the "better" countrys to help/give money cause of that is just strange and maybe even asocial behaviour if you ask me
You really think Germany did everything right while Spain did everything wrong? The ECB and markets have done everything in their power to ignore the mistakes made in investing in EU periphery nations, while simultaneously pursuing policies that reward their positions over the past decade. The situation Europe is in is nothing short of a money grab of economic powerhouses from the weaker ones.
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On July 05 2012 06:44 WallieP wrote:Show nested quote +On July 05 2012 03:32 WhiteDog wrote:On July 05 2012 00:10 Gaga wrote:I will now kindly ask my fellow europeans to stop bullshitting about our internal affairs if you don't even know what's really going on. Merkel openly backing Sarkozy was deeply inapporpriate, and Cameron's declarations were simply outrageous. Mind your own business. the best part is that we(germans) are directly on the path of paying for the depts of whole europe and that includes the dept by lowering the pension age to 60 in france while we work till 67. and you tell us to shut up while begging for our money ? yeah ... why don't we just quit this Euro shit... then your arguments gets valid again. and dont start with germany profiting from the euro shit again ... delivering stuff on credit that won't be paid back is not profiting. we did very well with the DM if you remember history. You don't understand anything from the get go, how about you educate yourself before posting. For exemple, France will not lower pension to 60, only for some people, in certain type of hard physical work and who started early. And the idea about lowering pension is that we have such a high unemployment, that it is better to put people in retirement than having unemployed people. Sorry i have to pick on this, but had to react since you are viewing it only from your own side... Every country would love to have a rule for people that do certain hard physical work and started early to stop earlier, but since it costs to much that is just not happening.. The Netherlands got his economics on track a lot better then france for example, but we do not have a rule that let people stop early.. The thing is that some countrys, like Holland and Germany have putted up a lot of steps to get the economics back on track. Today i readed a news post that the German GDP shortage has gone from 4.3% to 0.5% (they expected 1%) so they just swapped stuff over to get everything right.. same thing in the Netherlands, 2011 we got a shortage of 5.4%, in 2012 4.1% if im right and we are aiming for 2.9% in 2013 and 1% (?) in 2014... Finland the same thing, we really tried to fix stuff before they got to bad. But then you got countrys like greece/spain/italy/portugal and in lower mention france which just didnt react as powerfull/fast or allready had a lot worse shortage on the GDP. They are getting hit hard now with this crisis but yeah, thats what you get if you dont follow the rules right? Asking the "better" countrys to help/give money cause of that is just strange and maybe even asocial behaviour if you ask me
People who start to work at 16 are quite rare nowadays. They usually have small wages and hence will most likely get a shitty retirement plan. Also their life expectancy is lower than white collar workers, so i doubt it will really cost that much.
It is pretty much a bargain to cut other spendings. That's the same thing with the minimum wage raise (2% haha). People voted for the socialists because those fools believed that "the change is now" ("le changement c'est maintenant") lol.
So they try to make the herd happy and then they will cut (finance/defense/etc...), create/raise new taxes (that rich people will evade easily) and inflation will finish the job.
French socialists economics 101.
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On July 05 2012 07:00 Boblion wrote:Show nested quote +On July 05 2012 06:44 WallieP wrote:On July 05 2012 03:32 WhiteDog wrote:On July 05 2012 00:10 Gaga wrote:... ..... .. .. .. .. People who start to work at 16 are quite rare nowadays. They usually have small wages and hence will most likely get a shitty retirement plan. Also their life expectancy is lower than white collar workers, so i doubt it will really cost that much.
Its not about the exact costs of it, its the whole idea behind it. Some countrys are going full speed ahead to get out of this crisis and they make no exceptions and doing hard stuff like making the retirment age go up 2 years for -everyone- no matter what work you do and then you get france who is doing half stuff and makes rules that makes some peoples live easier.. sure it might be a good idea but not in crisis time
On July 05 2012 06:57 aksfjh wrote:Show nested quote +On July 05 2012 06:44 WallieP wrote:On July 05 2012 03:32 WhiteDog wrote:On July 05 2012 00:10 Gaga wrote:I will now kindly ask my fellow europeans to stop bullshitting about our internal affairs if you don't even know what's really going on. Merkel openly backing Sarkozy was deeply inapporpriate, and Cameron's declarations were simply outrageous. Mind your own business. the best part is that we(germans) are directly on the path of paying for the depts of whole europe and that includes the dept by lowering the pension age to 60 in france while we work till 67. and you tell us to shut up while begging for our money ? yeah ... why don't we just quit this Euro shit... then your arguments gets valid again. and dont start with germany profiting from the euro shit again ... delivering stuff on credit that won't be paid back is not profiting. we did very well with the DM if you remember history. You don't understand anything from the get go, how about you educate yourself before posting. For exemple, France will not lower pension to 60, only for some people, in certain type of hard physical work and who started early. And the idea about lowering pension is that we have such a high unemployment, that it is better to put people in retirement than having unemployed people. Sorry i have to pick on this, but had to react since you are viewing it only from your own side... Every country would love to have a rule for people that do certain hard physical work and started early to stop earlier, but since it costs to much that is just not happening.. The Netherlands got his economics on track a lot better then france for example, but we do not have a rule that let people stop early.. The thing is that some countrys, like Holland and Germany have putted up a lot of steps to get the economics back on track. Today i readed a news post that the German GDP shortage has gone from 4.3% to 0.5% (they expected 1%) so they just swapped stuff over to get everything right.. same thing in the Netherlands, 2011 we got a shortage of 5.4%, in 2012 4.1% if im right and we are aiming for 2.9% in 2013 and 1% (?) in 2014... Finland the same thing, we really tried to fix stuff before they got to bad. But then you got countrys like greece/spain/italy/portugal and in lower mention france which just didnt react as powerfull/fast or allready had a lot worse shortage on the GDP. They are getting hit hard now with this crisis but yeah, thats what you get if you dont follow the rules right? Asking the "better" countrys to help/give money cause of that is just strange and maybe even asocial behaviour if you ask me You really think Germany did everything right while Spain did everything wrong? The ECB and markets have done everything in their power to ignore the mistakes made in investing in EU periphery nations, while simultaneously pursuing policies that reward their positions over the past decade. The situation Europe is in is nothing short of a money grab of economic powerhouses from the weaker ones.
Yes Germany did everything right yes.. they are allready on this for 10 years, 10 years of strict rules to get their economics right, while most countrys just started that in the past year.
Also, thinking that the stable european countrys are the problem cause they grab money from the weaker ones is just strange, then your really got no clue... read post below 
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Source in dutch: http://forum.fok.nl/topic/1839946
I recently did a modest research about the economic divergence within Europe since the introduction of the euro (since this subject is actual), i collected a lot fo data and putted that into some graphics so that data are good and clear and i want to share that with you! The vertical black dash (01/01/2002), is the introduction of the euro, but that is what actually debatable because since 01/01/1999 the countries using the euro would use fixed exchange rates relative to each other and have put in practice the same effect as keeping the single currency. Keep this in mind. I only studied countries that are in the Euro-club since the beginning. Furthermore, all figures for the whole area (North or South) are as if it were one country. Example: if the growth in Germany is 10% and 5% in Belgium, then there is not an average of 7.5%, but the overall growth of the area Germany + Belgium slightly from 9% (for luck) because the German economy is much bigger and heavier so those numbers count.
#1 GDP
![[image loading]](http://i48.tinypic.com/1ptp1v.jpg)
http://i48.tinypic.com/1ptp1v.jpg
This graph is interesting to see. The real GDP of Northern and Southern Europe to grow over time is actually about as hard and they alternate and far down as leader, but there is absolutely no divergence between the two areas can be observed. Also, the introduction of the euro had no effect on growth in both areas ie it has not led to changes. It might be tempting to point at the decrease of> 2000 in the whole euro area to the introduction of the euro-currency allocation, but when we had a global decline as a result of the Internet bubble (as well as the global decline from 2008). Anyway, the conclusion in terms of real GDP, there are no differences in growth can be observed when comparing North and South, nor did the introduction of the euro had really much affect.
#2 Goverment dept
![[image loading]](http://i50.tinypic.com/34heu77.jpg)
http://i50.tinypic.com/34heu77.jpg
Here you can see quite a difference between Northern and Southern Europe. Debt as a percentage of GNP in Southern Europe since 1995 have a average about 85%, while those in northern Europe is on average only about 45-50%. It is thus clear that the two regions in that area quite different. What is striking is that the debt ratios of the two countries actually quite constant and over time (except, of course, since> 2008) have not changed and the introduction of the euro there is also no change has brought. Also in the period after the introduction of the euro debt in both areas just very constant. It is true that the starting position in which the South has more debt than the North course is no wonder that they first get into trouble when a crisis comes into it, such as is the case since 2008.
#3 Current account balance
![[image loading]](http://i45.tinypic.com/1zm0080.jpg)
http://i45.tinypic.com/1zm0080.jpg
Again, the two areas again treated as one country. Obviously there is also trade withint such a area (north or south), but you can exact trade-offs which makes it has no effect on the outcome.
This is perhaps the most fascinating graph. Where the other graphs in GDP and government debt showed no divergence, there is certainly one there if you look at trade balances! Where countries like Portugal and Greece used to be able to live on devaluation of their currency to be internationally competitive again, they have that option no longer and you will see that since 1999 these two regions in that area completely grown apart. The two lines appear to move opposite so perfectly, it's probably for a very large part be explained by trade between northern and southern Europe. Probably the trade within the EU also increased dramatically since the introduction of the euro, but it is one directional.
Bright spot is that southern Europe are finally forced into changing something fundamental into its economy instead of always be able to lean on a currency that depreciates a while without really changing or improving anything.
Conclusions:
1. No divergence in terms of real GDP.
2. No divergence in terms of public debt. Well you see that the debt in southern Europe is much higher.
3. However, big divergence in terms of trade.
Edit: pictures/link
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Do you have the same graphs with each countries ?
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+ Show Spoiler +On July 05 2012 07:33 WallieP wrote:Source in dutch: http://forum.fok.nl/topic/1839946I recently did a modest research about the economic divergence within Europe since the introduction of the euro (since this subject is actual), i collected a lot fo data and putted that into some graphics so that data are good and clear and i want to share that with you! The vertical black dash (01/01/2002), is the introduction of the euro, but that is what actually debatable because since 01/01/1999 the countries using the euro would use fixed exchange rates relative to each other and have put in practice the same effect as keeping the single currency. Keep this in mind. I only studied countries that are in the Euro-club since the beginning. Furthermore, all figures for the whole area (North or South) are as if it were one country. Example: if the growth in Germany is 10% and 5% in Belgium, then there is not an average of 7.5%, but the overall growth of the area Germany + Belgium slightly from 9% (for luck) because the German economy is much bigger and heavier so those numbers count. #1 GDP http://i48.tinypic.com/1ptp1v.jpgThis graph is interesting to see. The real GDP of Northern and Southern Europe to grow over time is actually about as hard and they alternate and far down as leader, but there is absolutely no divergence between the two areas can be observed. Also, the introduction of the euro had no effect on growth in both areas ie it has not led to changes. It might be tempting to point at the decrease of> 2000 in the whole euro area to the introduction of the euro-currency allocation, but when we had a global decline as a result of the Internet bubble (as well as the global decline from 2008). Anyway, the conclusion in terms of real GDP, there are no differences in growth can be observed when comparing North and South, nor did the introduction of the euro had really much affect. #2 Goverment dept http://i50.tinypic.com/34heu77.jpgHere you can see quite a difference between Northern and Southern Europe. Debt as a percentage of GNP in Southern Europe since 1995 have a average about 85%, while those in northern Europe is on average only about 45-50%. It is thus clear that the two regions in that area quite different. What is striking is that the debt ratios of the two countries actually quite constant and over time (except, of course, since> 2008) have not changed and the introduction of the euro there is also no change has brought. Also in the period after the introduction of the euro debt in both areas just very constant. It is true that the starting position in which the South has more debt than the North course is no wonder that they first get into trouble when a crisis comes into it, such as is the case since 2008. #3 Current account balance http://i45.tinypic.com/1zm0080.jpgAgain, the two areas again treated as one country. Obviously there is also trade withint such a area (north or south), but you can exact trade-offs which makes it has no effect on the outcome. This is perhaps the most fascinating graph. Where the other graphs in GDP and government debt showed no divergence, there is certainly one there if you look at trade balances! Where countries like Portugal and Greece used to be able to live on devaluation of their currency to be internationally competitive again, they have that option no longer and you will see that since 1999 these two regions in that area completely grown apart. The two lines appear to move opposite so perfectly, it's probably for a very large part be explained by trade between northern and southern Europe. Probably the trade within the EU also increased dramatically since the introduction of the euro, but it is one directional. Bright spot is that southern Europe are finally forced into changing something fundamental into its economy instead of always be able to lean on a currency that depreciates a while without really changing or improving anything. Conclusions: 1. No divergence in terms of real GDP. 2. No divergence in terms of public debt. Well you see that the debt in southern Europe is much higher. 3. However, big divergence in terms of trade. Edit: pictures/link
nice work, but I had to change one of your conclusions
1. No divergence in GDP growth rates
Also try to avoid double scales in one graph, maybe that is just personal preference but whatever. For what class did you do this?
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On July 05 2012 03:38 DeepElemBlues wrote:Show nested quote +The thing is, no other new taxes have been announced or applied (except a sort of Tobin tax, which is a neglectable european measure). It is therefore nonsensical to say that capital is already fleeing the country - if it was (and it isn't), it would be for other reasons. I agree completely, it isn't happening at the moment, people never actually change until things start having an effect on them. California and New York didn't start having serious capital flight until after several years of too onerous policies and it wasn't until several years after that the lack of serious response to this caused the budgetary and economic problems they are facing now to start severely impacting the general population. New York has done much better than California has because their policies first off weren't so stifling and they haven't totally just bulled ahead without thought to the consequences already suffered the way California has. I just don't think France can escape bad consequences from tax rates and regulatory policies that seem more punitive in intent than anything else - rich people and capitalists/corporations are bad, so we have to punish their finances and ability to create more wealth, we have to impose penance on them.
Actually it was announced today that there will be a 7,2 billion tax increase, lying at 53% on households.
Along with government budget cuts, this means that we're trying to save money everywhere.
While I do appreciate the fairness of this - I am satisfied that everyone has to pay up - it means that the situation is very, very bad. But at least they aknowledged it.
This will, however, not affect the debt at all. In fact, no one talks about it when the debt permanently grows and feeds itself. It feels as if the biggest issue remains hidden.
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On July 05 2012 08:43 Flyingdutchman wrote:+ Show Spoiler +On July 05 2012 07:33 WallieP wrote:Source in dutch: http://forum.fok.nl/topic/1839946I recently did a modest research about the economic divergence within Europe since the introduction of the euro (since this subject is actual), i collected a lot fo data and putted that into some graphics so that data are good and clear and i want to share that with you! The vertical black dash (01/01/2002), is the introduction of the euro, but that is what actually debatable because since 01/01/1999 the countries using the euro would use fixed exchange rates relative to each other and have put in practice the same effect as keeping the single currency. Keep this in mind. I only studied countries that are in the Euro-club since the beginning. Furthermore, all figures for the whole area (North or South) are as if it were one country. Example: if the growth in Germany is 10% and 5% in Belgium, then there is not an average of 7.5%, but the overall growth of the area Germany + Belgium slightly from 9% (for luck) because the German economy is much bigger and heavier so those numbers count. #1 GDP http://i48.tinypic.com/1ptp1v.jpgThis graph is interesting to see. The real GDP of Northern and Southern Europe to grow over time is actually about as hard and they alternate and far down as leader, but there is absolutely no divergence between the two areas can be observed. Also, the introduction of the euro had no effect on growth in both areas ie it has not led to changes. It might be tempting to point at the decrease of> 2000 in the whole euro area to the introduction of the euro-currency allocation, but when we had a global decline as a result of the Internet bubble (as well as the global decline from 2008). Anyway, the conclusion in terms of real GDP, there are no differences in growth can be observed when comparing North and South, nor did the introduction of the euro had really much affect. #2 Goverment dept http://i50.tinypic.com/34heu77.jpgHere you can see quite a difference between Northern and Southern Europe. Debt as a percentage of GNP in Southern Europe since 1995 have a average about 85%, while those in northern Europe is on average only about 45-50%. It is thus clear that the two regions in that area quite different. What is striking is that the debt ratios of the two countries actually quite constant and over time (except, of course, since> 2008) have not changed and the introduction of the euro there is also no change has brought. Also in the period after the introduction of the euro debt in both areas just very constant. It is true that the starting position in which the South has more debt than the North course is no wonder that they first get into trouble when a crisis comes into it, such as is the case since 2008. #3 Current account balance http://i45.tinypic.com/1zm0080.jpgAgain, the two areas again treated as one country. Obviously there is also trade withint such a area (north or south), but you can exact trade-offs which makes it has no effect on the outcome. This is perhaps the most fascinating graph. Where the other graphs in GDP and government debt showed no divergence, there is certainly one there if you look at trade balances! Where countries like Portugal and Greece used to be able to live on devaluation of their currency to be internationally competitive again, they have that option no longer and you will see that since 1999 these two regions in that area completely grown apart. The two lines appear to move opposite so perfectly, it's probably for a very large part be explained by trade between northern and southern Europe. Probably the trade within the EU also increased dramatically since the introduction of the euro, but it is one directional. Bright spot is that southern Europe are finally forced into changing something fundamental into its economy instead of always be able to lean on a currency that depreciates a while without really changing or improving anything. Conclusions: 1. No divergence in terms of real GDP. 2. No divergence in terms of public debt. Well you see that the debt in southern Europe is much higher. 3. However, big divergence in terms of trade. Edit: pictures/link nice work, but I had to change one of your conclusions 1. No divergence in GDP growth rates Also try to avoid double scales in one graph, maybe that is just personal preference but whatever. For what class did you do this?
Writen the source at my post so it was clear i only translated/pasted it. Will add this comments at the original website also the question above about the single-country graphs
edit answers: About the first point (no divergence in GDP growth rates) he reacted that you are right, he did mention that in the text but not in the conclusion. He disagrees on the double scale graph and he doesnt got graphs from single countrys but you can find those on the website of the IMF/Worldbank and in great need also at tradingeconomics.com
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It's pretty amazing how the concept of "living within your means" has now been branded "austerity" and spinned in a negative light.
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On July 05 2012 07:33 WallieP wrote:#3 Current account balance http://i45.tinypic.com/1zm0080.jpgAgain, the two areas again treated as one country. Obviously there is also trade withint such a area (north or south), but you can exact trade-offs which makes it has no effect on the outcome. This is perhaps the most fascinating graph. Where the other graphs in GDP and government debt showed no divergence, there is certainly one there if you look at trade balances! Where countries like Portugal and Greece used to be able to live on devaluation of their currency to be internationally competitive again, they have that option no longer and you will see that since 1999 these two regions in that area completely grown apart. The two lines appear to move opposite so perfectly, it's probably for a very large part be explained by trade between northern and southern Europe. Probably the trade within the EU also increased dramatically since the introduction of the euro, but it is one directional. Bright spot is that southern Europe are finally forced into changing something fundamental into its economy instead of always be able to lean on a currency that depreciates a while without really changing or improving anything. Conclusions: 1. No divergence in terms of real GDP. 2. No divergence in terms of public debt. Well you see that the debt in southern Europe is much higher. 3. However, big divergence in terms of trade. Edit: pictures/link
the last graph is where all the meat lies ... Northern Europe did not consume enough while Southern Europe overconsumed. All made possible by the Euro.
An Exportsurplus of a nation is only possible when you consume less than you produce. The same thing with Export deficits just reversed. Those deficits have to be financed by someone ... and guess who is only able to do it ? ofc the countries that consumed less and such saved money. This lead to the situation today... The euro made it impossible to balance this out through devaluating your currency ... like it was done many times before in southern countries. Just to make the economics clear before i read that bullshit about educating myself again.
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Ireland is with the good guys now ? funny
User was warned for this post
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On July 05 2012 22:52 tekos44 wrote:
Ireland is with the good guys now ? funny
The graphs say north/south, not good/bad
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On July 05 2012 20:31 Jago wrote:
It's pretty amazing how the concept of "living within your means" has now been branded "austerity" and spinned in a negative light.
The comparison isn't valid. Gains dropped, and changes need to be done, true, much like when you get fired and need to move to a cheaper, shittier place.
However, austerity has a direct impact on citizens, who are in turn directly linked to the country's GDP, productivity and tax raise. Many believe that by enforcing austerity measures, you are in truth declassifying the national economy for good, when people should keep consuming to boost exchanges. It also poses an ethical problem to which the population doesn't respond very well ('why should we pay to bailout banks?', Occupy and Indignados movements).
In short, the situation right now is a bit of a gamble, as two sides try to apply their visions : those for which corporations are the pillars of the economy, advocating cuts in government budgets and and a helping hand to small and bigger businesses, and those who believe that the economy lies on the contrary on the people, and that more money should be injected to boost consumption.
Who's right, who's wrong, only time will (maybe) tell, but neither of those movements deal with the debt problem. Even if budgetary balance is achieved, the debt remains and will keep on growing.
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On July 05 2012 23:23 Kukaracha wrote:Show nested quote +On July 05 2012 20:31 Jago wrote:
It's pretty amazing how the concept of "living within your means" has now been branded "austerity" and spinned in a negative light. The comparison isn't valid. Gains dropped, and changes need to be done, true, much like when you get fired and need to move to a cheaper, shittier place. However, austerity has a direct impact on citizens, who are in turn directly linked to the country's GDP, productivity and tax raise. Many believe that by enforcing austerity measures, you are in truth declassifying the national economy for good, when people should keep consuming to boost exchanges. It also poses an ethical problem to which the population doesn't respond very well ('why should we pay to bailout banks?', Occupy and Indignados movements). In short, the situation right now is a bit of a gamble, as two sides try to apply their visions : those for which corporations are the pillars of the economy, advocating cuts in government budgets and and a helping hand to small and bigger businesses, and those who believe that the economy lies on the contrary on the people, and that more money should be injected to boost consumption. Who's right, who's wrong, only time will (maybe) tell, but neither of those movements deal with the debt problem. Even if budgetary balance is achieved, the debt remains and will keep on growing.
Its exactly the opposite. Those who want to throw money at the problem and bail out the people doing bad investments or those that want the government to cut down on their spending and the inefficient subsidies to businesses. The citizens will suffer in either case.
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On July 05 2012 21:19 Gaga wrote:Show nested quote +On July 05 2012 07:33 WallieP wrote:#3 Current account balance http://i45.tinypic.com/1zm0080.jpgAgain, the two areas again treated as one country. Obviously there is also trade withint such a area (north or south), but you can exact trade-offs which makes it has no effect on the outcome. This is perhaps the most fascinating graph. Where the other graphs in GDP and government debt showed no divergence, there is certainly one there if you look at trade balances! Where countries like Portugal and Greece used to be able to live on devaluation of their currency to be internationally competitive again, they have that option no longer and you will see that since 1999 these two regions in that area completely grown apart. The two lines appear to move opposite so perfectly, it's probably for a very large part be explained by trade between northern and southern Europe. Probably the trade within the EU also increased dramatically since the introduction of the euro, but it is one directional. Bright spot is that southern Europe are finally forced into changing something fundamental into its economy instead of always be able to lean on a currency that depreciates a while without really changing or improving anything. Conclusions: 1. No divergence in terms of real GDP. 2. No divergence in terms of public debt. Well you see that the debt in southern Europe is much higher. 3. However, big divergence in terms of trade. Edit: pictures/link the last graph is where all the meat lies ... Northern Europe did not consume enough while Southern Europe overconsumed. All made possible by the Euro. An Exportsurplus of a nation is only possible when you consume less than you produce. The same thing with Export deficits just reversed. Those deficits have to be financed by someone ... and guess who is only able to do it ? ofc the countries that consumed less and such saved money. This lead to the situation today... The euro made it impossible to balance this out through devaluating your currency ... like it was done many times before in southern countries. Just to make the economics clear before i read that bullshit about educating myself again.
yup, this is how economics works. and it's not like we couldn't forsee this with our big trade surplus for over a decade now. germanys trade surplus is just an accumulation of debt in other (mostly european) countries. Normally they would devalue their currency so it will balance out but since we have same currency this option no longer exists.
Other countries are also complaining for years that germany should buff their domestic market so the southern countries can actually compete with germany, you just don't read about this here.
and it's totally contradicting the posters opinion that "germany did everything right"
+ Show Spoiler +On July 05 2012 06:44 WallieP wrote:
Yes Germany did everything right yes.. they are allready on this for 10 years, 10 years of strict rules to get their economics right, while most countrys just started that in the past year.
Also, thinking that the stable european countrys are the problem cause they grab money from the weaker ones is just strange, then your really got no clue... read post below
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Germany is doing everything right.
Ar you sugesting that part of the problem is that germany does not spend enough domestically?
I find that hard to believe somehow, at first sight it looks like germany spends quiet a bit domestically, at least if you look at the assets and the quality of them.
All the cars driving in germany are all high quality expensive cars, you barely see small cars or cheap cars,
also all the houses in germany are verry well build and maintained and build of expensive materials, the roads are great and verry well build and maintained
germany spends more then enough in the domestic market, i realy cant believe that that is a part of the problem.
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On July 05 2012 23:50 Yuljan wrote:Show nested quote +On July 05 2012 23:23 Kukaracha wrote:On July 05 2012 20:31 Jago wrote:
It's pretty amazing how the concept of "living within your means" has now been branded "austerity" and spinned in a negative light. The comparison isn't valid. Gains dropped, and changes need to be done, true, much like when you get fired and need to move to a cheaper, shittier place. However, austerity has a direct impact on citizens, who are in turn directly linked to the country's GDP, productivity and tax raise. Many believe that by enforcing austerity measures, you are in truth declassifying the national economy for good, when people should keep consuming to boost exchanges. It also poses an ethical problem to which the population doesn't respond very well ('why should we pay to bailout banks?', Occupy and Indignados movements). In short, the situation right now is a bit of a gamble, as two sides try to apply their visions : those for which corporations are the pillars of the economy, advocating cuts in government budgets and and a helping hand to small and bigger businesses, and those who believe that the economy lies on the contrary on the people, and that more money should be injected to boost consumption. Who's right, who's wrong, only time will (maybe) tell, but neither of those movements deal with the debt problem. Even if budgetary balance is achieved, the debt remains and will keep on growing. Its exactly the opposite. Those who want to throw money at the problem and bail out the people doing bad investments or those that want the government to cut down on their spending and the inefficient subsidies to businesses. The citizens will suffer in either case.
I didn't say the opposite, read again.
My analysis was, however, a more neutral one, while you seem to have picked your side already.
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On July 06 2012 00:30 Rassy wrote:
Germany is doing everything right.
You realy sugesting that part of the problem is that germany does not spend enough domestically?
You are german so you must have noticed that the cars driving in germany are all high quality expensive cars, you barely see small cars or cheap cars,
also all the houses in germany are verry well build and maintained and build of expensive materials, the roads are great and verry well build and maintained
germany spends more then enough in the domestic market, i realy cant believe that that is a part of the problem.
Anecdotal experience with German spending habits aside, are there any credible sources that support your claim? I am merely curious, as a concrete number would do wonders to make Germany's true economic situation clear.
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Well we can look up the german domestic spending i guess and compare that with their gdp and then look at the ratios other countrys have
Since y=c+i+o+e-m lol(gdp =consumption+investments+government spending+export-import) and germany has a surplus on their export-import, you will most likely see a smaller percentage figure for germany in the consumption and government spending then other countrys
This might lead to the conclusion that germany does not spend enough domestically but this is realy a wrong conclusion imo.
If you look objectivly at germany, then you cant say that they dont spend enough
Just compare all the cars and roads in germany with all the cars in greece, or the houses and building materials.
Everyone who comes into germany from even france must see the stunning difference.
I just cant believe this is the core of the problem, nor a possible solution.
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On July 06 2012 00:30 Rassy wrote:
Germany is doing everything right.
You realy sugesting that part of the problem is that germany does not spend enough domestically?
You are german so you must have noticed that the cars driving in germany are all high quality expensive cars, you barely see small cars or cheap cars,
also all the houses in germany are verry well build and maintained and build of expensive materials, the roads are great and verry well build and maintained
germany spends more then enough in the domestic market, i realy cant believe that that is a part of the problem.
well, yeah. I'm saying germany is not spending enough domestically.
since over a decade now we're reducing our social security, labor wages are not only stagnating but declining if you figure in inflation. that is not how a healthy economy works. our streets are getting worse and worse, too compared to '80s or '90s. you're car example is just plain wrong btw. if you didn't know: germany actually supports it's automobile companys BIG time via subsidies know as "Abwrackprämie", "Umweltplakete", etc so people HAVE to buy new cars (since they are no longer aloud to use their old ones or would have to pay a lot more if they still use it).
On July 06 2012 00:42 Rassy wrote:
Well we can look up the german domestic spending i guess and compare that with their gdp and then look at the ratios other countrys have
Since y=c+i+o+e-m lol(gdp =consumption+investments+government spending+export-import) and germany has a surplus on their export-import, you will most likely see a smaller percentage figure for germany in the consumption and government spending then other countrys
This might lead to the conclusion that germany does not spend enough domestically but this is realy a wrong conclusion imo.
If you look objectivly at germany, then you cant say that they dont spend enough
Just compare all the cars in germany with all the cars in greece, or the houses and building materials.
Everyone who comes into germany from even france must see the stunning difference.
trade surplus combined with the deficit in southern european countries is the right figure to look at.
9% trade surpus = WAY too high
According to Erhard's social market economy for germany it should be aiming for an EVEN TRADE BALANCE.
and the easiest thing to do this is to buff your domestic market (or export less thus produce less).
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EPT
