blowfish posted:

But that doesn't personally directly give me a bigger number in the bank account

GaussianCopula posted:

How exactly would you reform it? I guess you could force banks to no longer view sovereign debt as riskless assets, but that would wreck the banking system, especially in the South, at this point.

GaussianCopula posted:

Germany has less power than Malta relative to it's size in the EU, so I would argue that Malta's boost in power through the EU is even larger than the boost Germany gets (btw. this is true for all countries in the EU).

Cat Mattress posted:

Much to the contrary, the solution is to give less power and control to banks, not more. Something like the "circuit du Trésor" that existed in France until the 1970s.

cebrail posted:

Elected or delegated representatives are not the only means of power in the EU, and probably not the most important ones either. Wolfgang Schäuble decides what happens to the greek economy, and that has nothing to do with the number of German seats in the Parliament.

cebrail posted:

Elected or delegated representatives are not the only means of power in the EU, and probably not the most important ones either. Wolfgang Schäuble decides what happens to the greek economy, and that has nothing to do with the number of German seats in the Parliament.

GaussianCopula posted:

What is the rational argument you can make to the German public why they should subsidize other countries even more without having any direct control over their policies?

GaussianCopula posted:

Because Wolfgang Schäuble's vision is shared by a majority of member states, the ECB, the IMF and the ESM.

Just look at the European Commission, if the power each member state wields were proportional to it's size, Germany would be entitled to at least 4 commissioners (out of 28) while a lot of other countries would have to share one position between them.

YF-23 posted:

That a stable, peaceful, and prosperous EU is beneficial to all European countries, including Germany.

YF-23 posted:

That a stable, peaceful, and prosperous EU is beneficial to all European countries, including Germany.

GaussianCopula posted:

Some people would argue that feeding money into the corrupt clientelism of the South does not make the EU more prosperous, stable or peaceful.

GaussianCopula posted:

Some people would argue that feeding money into the corrupt clientelism of the South does not make the EU more prosperous, stable or peaceful.

GaussianCopula posted:

Some people would argue that feeding money into the corrupt clientelism of the South does not make the EU more prosperous, stable or peaceful.

Friendly Humour posted:

I don't think you understand how economies work mate. In any functional country where you have centers of production and export, those areas subsidise less productive areas through the higher tax bases such areas have. What do you think would happen if London or New York came out saying "we don't want our taxes benefitting those lazy Northern twats / redneck hillbillies"?

quote:

Following the UK's vote to leave the EU, Sadiq Khan has said that the capital needs to "take back control" to protect "jobs, wealth and prosperity". Speaking among business leaders to demand more autonomy for London, Khan said that further devolution would be to the benefit of the whole country.

"As much as I might like the idea of a London city state, I'm not seriously talking about independence today. I am not planning to install border points on the M25," Khan said. "But on behalf of all Londoners, I am demanding more autonomy for the capital - right now. More autonomy in order to protect London's economy from the uncertainty ahead, to protect the businesses from around the world who trade here and to protect our jobs, wealth and prosperity."

Khan is seeking devolution over fiscal responsibility including tax raising power, as well as more control over business and skills, housing and planning, transport, health and policing and criminal justice. He said that he wasn’t “asking for London to get a bigger slice of the British pie”, only for Londoners to “get more control over the slice of the pie we already get.”

Pluskut Tukker posted:

I think you'd find that there are limits to their solidarity and willingness to subsidize peripheral regions ad infinitum, no questions asked. This was Sadiq Khan's reaction to the Brexit vote:

Friendly Humour posted:

I don't think you understand how economies work mate. In any functional country where you have centers of production and export, those areas subsidise less productive areas through the higher tax bases such areas have. What do you think would happen if London or New York came out saying "we don't want our taxes benefitting those lazy Northern twats / redneck hillbillies"? What the gently caress did the Germans think they were signing up for with EU?

His Divine Shadow posted:

Perhaps a common currency is not a good idea then. Because that's what it'll take to make the eurozone work. Germany can't have it's cake and eat it too.

quote:

It’s very cynical. But it’s very practical. Imagine you’re a German policymaker. You wake up one morning and there’s been this huge financial crisis and you say to yourself, ‘Well our bankers don’t do this dodgy Anglo-Saxon thing with derivatives.’ Then your policy adviser tells you that in fact Deutsche Bank is the world’s largest derivatives trader.

When you talk to market-makers they will tell you that Deutsche Bank is run entirely by Britons, Americans, Israelis and South Africans. The Germans basically make the coffee, sign the compliance forms, and have no idea what’s going on. But they were in hock for a couple of trillion dollars, constituting 86% of German GDP with an operational leverage of 44 to 1. That means that a 3% return against their assets renders them illiquid, if not insolvent.

Meanwhile, across the rest of Europe you had all these countries whose bonds are denominated in Euros. So they’re treated exactly the same as German bonds, which is why you have this yield compression in 2000 when all the interest rates on all the different bonds converge. So European banks bought as many of them as possible. They stuffed their boots full to make as much profit off of this declining yield. Basically, they became too big to fail as a business model. Because by becoming so big their cost of capital went down and they knew that if they got into trouble they could turn round to the national regulator and say, ‘If you allow us to fail you’ll wreck the whole economy.’ Then the regulator says, ‘Well we’d love to help you but we don’t have a printing press anymore, you need to go to the European Central Bank.’ And the ECB is run by the Germans who turn around and say, ‘Sorry, you want us to bail what!?’ Because the basic problem is that Germany is not big enough to bail the system that the Euro allowed the banks to build. The total assets and liabilities of the European banking system is about three times the size and twice the leverage of the American system.

So go back to that German policymaker. It wouldn’t be cynical at all for him to turn round and say, ‘Hang on a second, never mind Deutsche Bank, what’s the total assets and liabilities position of the collateralised European banking system? Holy crap! That big? Right, there’s no way we can bail this. If we try to take on all that debt what would happen? We would end up killing ourselves. Right, so what are we going to do then? We going to blame it on lazy southerners, we’re going to allow the ECB to add as much liquidity as possible, and we’re going to squeeze the crap out of these Southern economies until bond yields stabilise and in the pray that the whole thing goes away.’

Okay. But that doesn’t seem very feasible. If Germany can’t pay for the banking crisis, then how could Greece and Spain pay for it?

They can’t. That’s the dirty little secret. In Austerity at the end of chapter three I have written a kind of speech that will never be given from a Eurozone leader to the population of a country telling them what’s actually behind the Euro crisis. It has nothing to do with states spending too much, because for states to spend too much you have to have someone who is willing to lend them too much. So let’s look at the lending side. Well the lending side is the north European economies who were exporting like demons and earning all this money but not spending. So they take those savings and they buy southern debt. And what do the southern economies do with this credit (the reciprocal of the debt)? They go off and they buy German and Dutch products. The whole thing works as long as the credit cycle is going. But once it pops, the whole thing falls apart and that’s where we are.

Ligur posted:

An American New Yorker probably has less qualms about some of his tax money going to upstate rednecks vs some guy in country X being told hey, bitch, we need to fund some other guys halfway around the contient who just happened to prop their system with cheap loans, who have a completely different political system, don't speak the same language and have their own national anthem, and who also think you are an uptight foreigner gently caress. Also LOL the bailouts you have to fund don't even go to poor peasasants but actually private international bankers!

So yes a common currency was a bad idea, I guess, if that is the only way to do it.

YF-23 posted:

So you're saying fiscal transfers won't work because the wealthy northerners are racists who can only see the people of southern Europe as stereotypical lazy thieves? I would like to think the rest of your countrymen would be better than that.

YF-23 posted:

So you're saying fiscal transfers won't work because the wealthy northerners are racists who can only see the people of southern Europe as stereotypical lazy thieves? I would like to think the rest of your countrymen would be better than that.

His Divine Shadow posted:

http://www.newleftproject.org/index.php/site/article_comments/power_prejudice_the_politics_of_austerity_part_1

GaussianCopula posted:

The Euro was introduced specifically with the stipulation that there would be no risk-sharing or fiscal transfers.

Ligur posted:

What the gently caress?

That was the last response I expected. How on earth did you come up with this

Seriously.

doverhog posted:

Relative size, who cares, Germany still has the most.

YF-23 posted:

You told me the gut reaction of a typical northerner being told of fiscal transfers is to interpret it as being called a "bitch" that will be funding some corrupt "other guys halfway across the continent", who have a "different political system" (spooky!), speak a different language and dare to have a national anthem (unlike the northerner in question).

If you meant that your media puts out that image? Then sure, your media is very racist. But if you also just accept all the stereotypes presented to you as real then I have some bad news for you.

YF-23 posted:

You told me the gut reaction of a typical northerner being told of fiscal transfers is to interpret it as being called a "bitch" that will be funding some corrupt "other guys halfway across the continent", who have a "different political system" (spooky!), speak a different language and dare to have a national anthem (unlike the northerner in question).

GaussianCopula posted:

That's how nations not economies work and in such a setup you would have a democratic government for the whole nation where one man has one vote which is (approximately) equal. This is not the case in the EU. Additionally you can see that such a setup, especially if there are clear flows of money from one region to another, only works if there is a strong national identity, otherwise you get a lot of problems.

quote:

If you meant that your media puts out that image? Then sure, your media is very racist. But if you also just accept all the stereotypes presented to you as real then I have some bad news for you.

El Perkele posted:

The media's portrayal of the Greece crisis was essentially "lol lazy southeners wasting their money on 50 public positions whereas we can do with 0".

quote:

Turns out current Euro structure is horrid!

GaussianCopula posted:

That's how nations not economies work and in such a setup you would have a democratic government for the whole nation where one man has one vote which is (approximately) equal. This is not the case in the EU. Additionally you can see that such a setup, especially if there are clear flows of money from one region to another, only works if there is a strong national identity, otherwise you get a lot of problems.

El Perkele posted:

An EU-wide suggestion for wealth transfers would simply not fly in the current political athmosphere of his country. You can say that "lol your media is racist" and wouldn't be wrong, but that doesn't make it any more politically viable for foreseeable future.

Ligur posted:

That was a good read.

quote:

Well part of it is that too many people’s careers, incomes, and prestige are at stake, people who have built their entire careers during 30 years of neoliberal growth. What we had prior to 2008 was basically a global asset bubble in equities, real estate, and commodities, which finally popped in 2008. The resulting bust was bailed out, which is basically reinsuring the global investor class with the taxpayer’s money. They privatised the profits and socialised the losses. Given this, it’s very difficult for these folks to admit that all the stuff they were talking about, you know, the great moderation, inflation targeting, all those growth models, were basically all crap. The folks in charge are not going to turn around and say, ‘Gee guys, I guess everything we thought since about 1970 turned out to be really dodgy, let’s put the brakes on and dust off a copy of Keynes’s General Theory and implement that.’ It’s just not going to happen. So there’s a lots of bureaucratic political reasons for austerity to continue because no one has any interest in explaining what actually happened: the greatest bait and switch in human history.

Friendly Humour posted:

Right, so then you agree that your (German) intransigence and self-serving pursuit of national interest means that the EU is a doomed project? You cannot have a common economy without wealth transfers from productive areas to less productive areas. Whatever reasons you have for rejecting the idea that Germany has a responsibility for its fellow members of the Union doesn't matter, rejecting those responsibilities means that the European project is over bar the singing. Which is exactly what is happening right this moment. So good loving job, ya dumb gently caress. We'll see how many BMW you'll sell when the tariff barries come back up.

His Divine Shadow posted:

I really liked this earlier part from the article

His Divine Shadow posted:

We? So you say you belong to the group of private banks that got europe into this debt mess?

His Divine Shadow posted:

I always figured Finland would be on the receiving end given our economy is also being assfucked by the euro in addition to our own efforts.

Ligur posted:

A Buttery Pastry posted:

Here's a hypothetical: How would you feel about a federal wealth transfer system run entirely by the EU, on top of the national institutions, which would help prevent the worst miseries in countries like Greece without simply "funneling money into a corrupt system"? Basically, an EU-wide benefits system which was run and designed according to Northern European specifications. Perhaps even designed in such a way that the only countries with any say over how it was run are the ones who are net contributors to the EU budget. The whole point being to support the economy and welfare in poorer states, without supporting corrupt state apparatuses, building up a healthier relationship between state and citizen than currently exists in some places. (The state being the EU in this case, rather than nation states.)

Obviously meant for GC, but I'll take all replies.

A Buttery Pastry posted:

Perhaps even designed in such a way that the only countries with any say over how it was run are the ones who are net contributors to the EU budget. The whole point being to support the economy and welfare in poorer states, without supporting corrupt state apparatuses, building up a healthier relationship between state and citizen than currently exists in some places. (The state being the EU in this case, rather than nation states.)

Obviously meant for GC, but I'll take all replies.

GaussianCopula posted:

Some people would argue that feeding money into the corrupt clientelism of the South does not make the EU more prosperous, stable or peaceful.