EU Politics: I miss Renaults(don't make fun of me)

The Something Awful Forums > Discussion > Debate & Discussion > EU Politics: I miss Renaults(don't make fun of me)

Owling Howl: Jul 17, 2019

jaete posted:

Germany has been weird about the whole austerity and schwarze null thing for about a hundred years, it's not caused by the Euro or anything.

The various debt ceiling laws and directives (which Germans love) have also done stupid amounts of damage in the last decades, I'm not sure how exactly this relates to the Euro though or if it's more of political EU thing.

The US also have debt ceiling laws for the states. It's the only way a single currency can work on a large scale like the US, the EU, China, India or Russia. Otherwise you're going to end up with states, oblasts, regions or whatever occasionally going bankrupt which tends to be both unpopular and harmful. China is currently grappling with unsustainable regional debt loads and it appears the Chinese government has little interest in either bailing them out or allowing them to default.

There is nothing unique about restricting regional debt in a federal system and there is nothing unique about very different regions with very different needs sharing a single currency. West Virginia, Hawaii and New York are very different. Moscow and Ingushetia are different and Beijing and Gansu are different. Frequently this is also true on a regional level - Rome and Sicily are very different and Copenhagen and Bornholm are different.

What is different in the EU is that regional wealth transfers are quite small relative to for instance the US where the feds run medicare, social security schemes and of course the military. The US federal budget is 6 trillion USD while the EU budget is roughly 1 trillion EUR.

The Euro reduces the cost of debt which is good and it eliminates currency exchange costs which is also good. No, you can't take on a lot of debt. This is obvious and it is obvious that regional politicians would do it anyway if not legally prevented from doing it. To balance that EU wealth transfers ought to be much higher.

# ? Jan 5, 2024 16:12

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# ? May 23, 2024 08:00

MiddleOne: Feb 17, 2011

As long as member states control the overwhelming volume of fiscal policy, the eurozone will never ever work as an economic zone.

# ? Jan 7, 2024 09:49

suck my woke dick: Oct 10, 2012; I CANNOT EJACULATE WITHOUT SEEING NATIVE AMERICANS BRUTALISED!

Put this cum-loving slave on ignore immediately!

Dismantle all states, got it

# ? Jan 7, 2024 17:56

Glah: Jun 21, 2005

Fiscal union would stabilize eurozone. But these days it carries a massive risk of igniting intra European political fighting about budgets to totally new level where Covid support packages and euro bailouts will seem like child's play. And frankly I'd be among those bitching and whining because it would most likely mean restructuring/destruction of the vestiges of welfare state we still have in Finland and I'd very much like to see it saved and expanded rather than be "rationalized" into more technocratic mould acceptable to majority neoliberal views in EU.

So in short, we're hosed.

# ? Jan 7, 2024 20:15

V. Illych L.: Apr 11, 2008; ASK ME ABOUT LUMBER

fiscal union would require a complete reworking of how the Commission is put together, which at the present is through a highly intricate series of formal negotiations, balancing performances, gentlemen's agreements and smoke-filled rooms; this is flatly not workable if the Commission's budget and power increases in the way such a union would entail, and reforming the selection procedure would be a major undertaking in itself. i think this could probably be done with enough will behind it, but it would be a highly delicate affair, especially with EPP as a sort of permanently dominant party in the european parliament but far from being able to command an actual majority.

# ? Jan 7, 2024 21:28

golden bubble: Jun 3, 2011; yospos

Owling Howl posted:

The Euro reduces the cost of debt which is good and it eliminates currency exchange costs which is also good. No, you can't take on a lot of debt. This is obvious and it is obvious that regional politicians would do it anyway if not legally prevented from doing it. To balance that EU wealth transfers ought to be much higher.

You don't actually need debt limit laws to prevent that, you just need a more coherent system. After all, not every US state has a debt limit law in either state law or the state constitution. And there are plenty of cities and other smaller units that don't have debt limit laws. The key is that investors did not delude themselves into thinking that county and city debt are the same as state/region/province debt, and assume the state/region/province will always pay out the county/city's obligations in full. Likewise, investors understand that while the federal government won't let any state/region/province implode, that doesn't mean they will cover all of their bad debt. For states it is a very rare occurrence, but it has happened in the past, in the 1933 Arkansas default. For cities and counties, it happens just often enough that capitalists right reports on how often US municipalities default on their debt, like this one from Fidelity (https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/fixed-income/moodys-investors-service-data-report-us-municipal-bond.pdf).

But during the 90s and 00s, everyone deluded themselves into thinking any national debt in the EU is exactly the same as EU debt. That's was always a delusion.

# ? Jan 8, 2024 23:20

V. Illych L.: Apr 11, 2008; ASK ME ABOUT LUMBER

iirc yanis varoufakis' big idea during the standoff with sch�uble (RIP) was that greece default without leaving the euro, which would've made this issue abundantly clear

it would've created Moral Hazard and Higher Interest Rates for Responsible Countries, though, so instead greece just got completely crushed

# ? Jan 8, 2024 23:30

His Divine Shadow: Aug 7, 2000; I'm not a fascist. I'm a priest. Fascists dress up in black and tell people what to do.

Lol, lmao

https://www.ineteconomics.org/perspectives/blog/unhappy-new-year-how-austerity-is-making-a-comeback-in-berlin-and-brussels

quote:

Unhappy New Year: How Austerity is Making a Comeback in Berlin and Brussels

Two separate events in the final weeks of 2023 have reignited the bitter debate over European fiscal rules. The first was the decision, in November, by the German Constitutional Court to deny the constitutional legality of the substantial off-budget spending by the ruling German government. The second event happened in December in Brussels, where the European Union (EU) finance ministers, on December 8, initially failed to reach an agreement on new fiscal rules, set to replace the older rules of the Stability and Growth Pact (SGP) and the EU Fiscal Compact�but then, on December 20, bowed to German pressure for tough debt-reduction rules and clinched a deal. Both events suddenly breathed new life into older arguments over debt brakes and fiscal consolidation that had looked rather dead-in-the-water in recent years. Why so close to Christmas did the ghost of Ebenezer Scrooge decide to reappear in Europe?

The unexpected revival of Germany�s debt brake

On November 15, a bombshell ruling by the German Constitutional Court triggered a month-long political crisis in Berlin that threatened to throw Germany�s ruling coalition government, led by SPD-Bundeskanzler Olaf Scholz, off the rails. According to the German Constitutional Court, the �60 billion extra-budgetary spending earmarked for a climate fund by the Scholz government is illegal�because it violates the so-called Schuldenbremse, i.e., the brake on new government debt that was enshrined in the German constitution in 2009. According to this Constitutional article, Germany�s structural fiscal deficit must be limited to only 0.35% of GDP, thereby capping the debt that either the federal government or the Bundesl�nder (federal states) can issue in any given year.

...

In short, the German government has been bypassing its debt brake and quite likely also the SGP. To a non-German observer, the duplicity is plain: while the current German government has no qualms about running large unchecked (off-budget) deficits outside its regular budget, it has continued to insist that other countries in the European Union follow the fiscal rules of the SGP to the letter.

This hypocrisy has now been exposed by the opposition party CDU, which, seizing the political opportunity, challenged the constitutional legality of rechanneling emergency funds originally intended for COVID for use against climate change. Reminding everyone of Wolfgang Sch�uble�s reputation as the Swabian guardian angel of fiscal responsibility, the CDU argued that the emergency exception clause (which made the suspension of the debt brake possible in the first place) no longer applied and, hence, Germany�s fiscal policy stance should return to the constitutionally prescribed �black zero�.

Germany�s Constitutional Court agreed with this argument�and thus blew a big hole in Germany�s public finances. For the 2024 budget, the Scholtz-led government has had to find an additional �17 billion to fill the hole, and drastic spending cuts, including on social policies, have become unavoidable. This is no accident: it is precisely what a Constitutional debt brake is designed to do: prevent fiscal deficits from swelling for contingent political reasons and instead forcing them to shrink. In attempting to shield public finances from political influences, this mechanism denies the inherently political character of any fiscal policy and depicts austerity as a neutral, good bookkeeping practice. Unable or unwilling to modify the rule, the German government is left with no other choice than to implement a completely unnecessary round of fiscal austerity in an already stagnating German economy.

..

In addition, financial incentives to buy electric cars will be ended sooner than originally planned; subsidies for the expansion of solar power will be cut, while other funding programs, covering everything from energy-efficient homes to the installation of heat pumps and collective citizen energy initiatives for onshore wind are put on hold; while less public money goes to the urgently needed renovation of the country�s crumbling railway network. Taken together, the austerity drive could well jeopardize Germany�s climate and energy transition.

The Scholtz government promised continued support for Ukraine, allocating �8 billion to the war-ravaged country in 2024. Germany�s bigger problem is that it has committed to structurally ramping up its annual military spending to the NATO guideline of 2% of its GDP�some �80 billion per year. As it turns out, the expenditure on war and armaments will not be affected by the budget cuts. The compromise government budget for 2024 includes the highest military spending in the history of the Federal Republic of Germany: �85.5 billion, which is 26 percent more than in 2023. As Scholz said in his government statement, the military spending serves German great power interests. The costs of Germany�s military grandeur are shifted to working and middle-class households, as social spending is cut, the removal of subsidies on electricity grid charges will raise electricity prices and the CO2 levy on fossil fuels will be increased. Next year economic growth in Germany is predicted to be lower�and because the chronic underinvestment in public infrastructure, education, and the green transition continues, Germany�s longer-term growth prospects are also in doubt.

The revival of the debt brake has reignited the political and economic debate in Germany, and abroad, on the usefulness of fiscal rules. While some conservative political leaders in Germany have now openly expressed support for an intelligent reform of the constitutional debt brake, majority opinion in Germany still continues to consider any such reform politically taboo. The result is a paradox: precisely at the moment when more public funding is needed for strategically addressing pressing collective challenges (including adapting to the consequences of global warming, catching up with the global digital economy, and solving a public housing crisis), Germany�s policy-makers are swept up in a renewed frenzy for belt-tightening austerity.

Unfortunately, the key message of the austerity myth�that what is economically rational for an individual household will also be rational for an entire country and for its government�is plain wrong, macroeconomically and also for the climate, as the United Nations economic analysis repeatedly suggested. As argued by Peter B�finger (2023), the only effective remedy against Germany�s economic disease is that �public debt [is] deployed as an engine of growth�not by reducing taxes and accompanying transfers but by increasing public investment to stimulate domestic demand and the emergence and deployment of new technologies.� To make this possible, the Germans have to get rid of their debt brake fetish.

Reforming the fiscal rules of the Eurozone

The second recent event that rekindled the debate on fiscal rules was the summit of European Union finance ministers on December 7-8, 2023, on new fiscal rules, set to replace the older rules of the SGP�which include a maximum budget deficit of 3 percent and a maximum ratio of public debt to GDP of 60 percent. In 2020, the European Union suspended its fiscal rules to accommodate the sharply increased public expenditure occasioned by the COVID-19 pandemic � the same moment when Germany suspended its constitutional debt brake.

There is agreement that a return to an unchanged SGP is undesirable because it would be economically painful for the large number of member states that currently breach the existing fiscal rules. Specifically, average government debt in the Euro Area was 91% at the end of 2023Q2 and six member states (Belgium, France, Greece, Italy, Portugal, and Spain) carry public debt above 100% of their GDP. At the same time, in 2022, the average government deficit was 3.6% for the Eurozone countries, and eight member states (including France, Italy, and Spain) have fiscal deficits well above 3 percent. A return to an unchanged SGP would mean that 14 member states would have to cut spending or raise taxes to the tune of �45 billion in 2024 alone. The outcome can only be higher unemployment, lower wages, and further underfunding of public services. What a gift another�unnecessary�round of austerity would be to the smoke-and-mirrors xenophobic arguments, with the next European elections due in June 2024 (Lynch 2023): When resources appear to be scarce, those arguments suggest they should be reserved for the �deserving� native population (however defined) and taken away from the �undeserving� (the migrants). Far from curbing immigration, the ensuing policies merely intensify the race to the bottom in working conditions, by leaving migrant workers less protected, and further reducing internal demand.

It is said that an intelligent donkey does not trip twice on the same stone�so even the European Commission now recognizes that a return to the unreformed SGP would imply a return to stiff austerity which would risk repeating the traumatic recessionary experiences of the Eurozone crisis (2010-2014). A second reason why a return to the SGP rules is undesirable is that all EU member governments understand that the need for public funding is growing because of the climate, digital, and energy transitions in the next decades.

Accordingly, a number of proposals for reforming the SGP have been put on the table�the European Commission itself proposed tweaking the rules by introducing a four-to-seven-year adjustment period in which countries exceeding the deficit (3% of GDP) or debt (60% of GDP) norms of the SGP would commit to �sustainable� policy reforms meant to force down the deficits and public debts. The Commission�s reform proposals met firm opposition from both the pro-austerity camp led by Germany, the Netherlands, and Austria, and the countries (including France and Italy) arguing for more fiscal clemency. Their disagreements concern the minimum pace of deficit and public debt reductions and the inclusion or exclusion of strategic public expenditures including green and digital investments (Italy) and/or defense-related public spending (France) when calculating an �excessive� fiscal deficit.

On December 20, after marathon negotiations, the 27 EU finance ministers reached an agreement on a reform of fiscal rules that will set out a somewhat laxer pace of debt and deficit reduction than had previously been the case, but�crucially�still within tight spending limits demanded by the pro-austerity camp. Under the agreement, member countries with �excess public debts� will get more time�between 4 and 7 years�than before to put their debts on a declining path and more independence in the design of plans outlining their fiscal targets, while the earlier requirement to cut excess debt by 5 percent per year was ditched.

However, the two key fiscal requirements�a 60 percent debt-to-GDP ratio and a 3 percent annual deficits limit�have remained in place, and, at the behest of the pro-austerity camp, the agreement contains extra safeguards and sanctions to enforce debt reduction. Specifically, to make sure that member states stick to the fiscal rules, the European Commission will draw up national spending plans in which countries with debt ratios above 90 percent of GDP will be required to cut excess debt by one percentage point per year over the duration of their national spending plan. That target is halved for countries with debt ratios above 60 percent but below 90 percent of GDP. Additional budget targets will be placed on countries with deficits above 3 percent and debt-to-GDP ratios above 60 percent. Sanctions are strengthened under the agreement, which stipulates that countries that miss spending plan targets are put into a so-called excessive deficit procedure, which would require them to reduce spending by 0.5 percent of GDP per year. The European Commission is expected to slap eight or nine countries (including France and Italy) with its sanctions mechanism in Spring 2024.

A last-minute concession won by France and Italy ensures that countries subject to such a procedure will be able to discount debt interest costs in the period 2025-2027, effectively reducing the required spending cuts. However, in a key win for Berlin, the recent agreement also requires EU governments to keep their annual (structural) deficits at around 1.5 percent of GDP, arguably to give countries some room to increase spending to cope with an unforeseen crisis without breaching the 3 percent public deficit norm.

It is evident that the reformed SGP does not turn the page on austerity. Rather the opposite is true: the notion of �fiscal rules� has lost none of its appeal to policymakers in Brussels and the new rules have an even stronger austerity bias (as the new rules require member states subject to the debt-reduction procedure to aim to cut their deficits to 1.5% of GDP with annual curbs to spending)�which we think is regrettable.

The �voodoo economics� of the debt brake and fiscal rules

Let us clarify, right away, that from the point of view of economic theory, nothing justifies the sanctimoniousness of Germany�s constitutional debt brake or the EU�s supranational fiscal rules. Already at the onset of the Maastricht Treaty, economists warned against the inclusion and use of budgetary limits, providing an early critique of the fiscal rules of the SGP and their inherent contractionary bias. Based on a crystal-clear analysis, Luigi Pasinetti (1998, p. 112) warned that the SGP �prevents expansionary policies in periods of recession and mass unemployment [�.] and [�], on top of that, it also imposes heavy fines. I cannot see how all this could be a symbol for anything. It simply sounds foolish.� Similarly clear and critical was Alain Parguez, who already in the 1990s argued that the true purpose of the EU fiscal rules was to tie the hands of national states through the imposed inability to engage in deficit spending, thereby forcing them to implement a quasi-permanent austerity.

Many mainstream economists agreed. Buiter, Corsetti, Roubini, Repullo, and Frankel (1993), for instance, concluded that �the fiscal convergence criteria designed to eliminate or prevent �excessive deficits� are badly motivated, poorly designed and apt to lead to unnecessary hardship if pursued mechanically. The debt criterion especially would cause avoidable pain. There is no case for restricting the debt-GDP ratio to lie below any specific numerical value; and � fortiori no case for an identical limit for [many] heterogeneous countries� (Buiter et al. 1993, p. 87). The economic price of fiscal deflation and permanently reduced fiscal flexibility, which are part and parcel of the SGP and are paid for by EU member states, may well be unbearable�which was also the argument of Joseph Stiglitz (2016).

The idea that the relative size of public debt is somehow related to economic growth has long been discredited (see the useful meta-analysis based on 47 primary studies by Philip Heimberger 2022). It is clear that this point is well understood even by Germany�s macroeconomic policymakers who, after all, have been caught red-handed, attempting to fuel Germany�s growth and (climate and energy supply) resilience through public investment, financed by shadowy off-budget financing vehicles. Of course, the more indebted EU member states find themselves in a similar predicament and feel the same need to step up public spending in areas that are critical to the future development, competitiveness, and resilience of their economies.

Austerity and stiff fiscal rules unnecessarily restrict the fiscal room for maneuver, which the state could use to help the economy respond to the demands of the coming digital and zero-carbon age. It is a public secret that (unwarranted) austerity crippled the Eurozone economy�especially hurting the countries of Southern Europe�as is shown by recent papers published on the INET website: Storm (2019) on Italy; Stirati (2020) on Italy and elsewhere; Girardi, Paternesi Meloni and Stirati (2017); Toporowski (2023) on Poland; and Roncaglia (2023). Crucially, austerity has also crippled the countries in the pro-austerity camp, as has been argued by Storm (2023) for the Netherlands; and by Bofinger (2023) who uncovers Germany�s true economic disease.

An equally large literature has clarified that a fiscal expansion, focused on public investment geared toward green technological innovation and employment creation, including in sectors connected with health care and education, is needed to overcome the stagnation of the European economy (Bloomfield 2022; Archibugi 2023). This literature points to a growing inconsistency in EU policy-making. On the one hand, the EU countries need to be more ambitious and bolder on climate action, the energy transition, and the digital economy, but on the other hand, these same countries have to work within an unworkable fiscal straightjacket that is fundamentally biased in favor of austerity. In this context, it must be noted that the deflationary macro policy stance of the EU (and imposed on its member states) has also allowed a historic rise in profit shares. Unsurprisingly, while several EU institutional sources have lamented a crisis of competitiveness, none has pointed to critical evidence that a more equal income distribution, to be attained through employment creation and cheap public services provision, is an essential component of a stable growth path with productivity growth (Storm 2017; Taylor and Omer 2018; Capaldo and Omer 2021).

All in all, it is clear that the fiscal rules, which lack a convincing economic rationale, play a primarily political role, because these rules are used to throw a cloak of spurious statistical precision over any mix of cross-pressures and interests (Costantini 2017; Costantini 2018). The real problem concerning fiscal policy, thus, is political. The resistance of the German electorate to the idea that they will have to be held financially responsible for some other country�s overspending is proverbial. The concern is understandable since German voters and policymakers have no real political control over the use of resources outside their borders. But what gives them the right to prevent other countries� spending, especially if there is no economic logic that should support such limitation? As always, the negotiations in the EU stop short of offering a solution to this impasse.

Ultimately, therefore, the real issue here seems to be one of democratic legitimacy and political representation in the EU, the lack of which impedes a discussion over the economic and social goals to be attained collectively. The democratic deficit drives governments and electorates to embrace economically inefficient and politically unviable positions which have, since the Maastricht Treaty, systematically produced slow growth (except for short-lived spurts of export- or credit-led expansion in some areas), rising inequality, and the deterioration of the health of the people and the environment.

The impact of this reduced political space has dominated the political color of governments regardless of their electoral mandate (Costantini 2015; Storm 2023; Toporowski 2023; Lynch 2023). The seemingly technocratic �rules� have helped to depoliticize policy debates on critical and strategic issues�etching the TINA rule into the DNA of all mainstream political parties. The EU fiscal rules have placed important social and economic issues outside of political contestation, negating the fundamental centrality of politics to achieving our collective goals. The implication is that we, as Europeans, have no effective space to discuss and debate the political, social, and environmental priorities that our public budgets should address with all the unlimited power granted by the strength of our economies. After all, the EU is still one of the largest and richest economies in the world. Instead, European politics has been sadly reduced to petty negotiations and recriminations, with no direct political implications, except that of empowering a complacent and incompetent bureaucracy in Brussels.

Conclusions

Esther Lynch (2023), head of the European Trade Union Confederation (ETUC), is right to warn against the severe social and economic consequences of a failure of a progressive reform of the fiscal rules of the SGP and a return to the traumatizing austerity policies of Christmas Past. The situation is dire and not just for Europeans. Let us not forget that the global consequences of the slowdown in the European Union were estimated earlier this year to be at least twice as large as those of the much-discussed economic slowdown in China, and now they are likely to worsen (UNCTAD 2023).

It will not come as a surprise if the entirely unnecessary round of austerity in an already �sick� German economy (Bofinger 2023) reinforces a �doom loop� of economic stagnation, and heightened mistrust in the political system. Likewise, more austerity in France, which would have to raise around �30 billion annually to meet the fiscal targets of the SGP, will raise political polarization even further.

The debt brake and fiscal rules will make it well neigh impossible for EU countries to fund the investments needed to decarbonize their economies and meet their climate commitments under the Paris Agreement. Worse, it will be impossible to do this in a socially acceptable manner�meaning, in ways that the strongest shoulders carry the largest burden of climate and energy transition, while vulnerable groups are protected from the transition costs. The failure to arrive at a fair and acceptable sharing of these burdens will lower popular support for these environmental policies�while reinforcing narratives that global warming is just a hoax, propagated by the elites, meant to suppress the �vox populi� and to impose an �eco-dictatorship�, another flashpoint in current culture wars.

The only way out of this nightmare scenario is to shift the nature of the economic and political discussion and initiate a process leading to a re-politicization and democratization of fiscal policy in the EU in a permanent way. We are not talking here about the opportunity to slightly change otherwise de-politicized technical rules governing fiscal policy that always are subject to closed-door negotiations and interpretations, and then used to safeguard powerful interests (Costantini 2017; Costantini 2018). What we mean is that it is time to ditch the constitutional debt brake and discard the EU fiscal rules�in order to open up space for meaningful political deliberation and discussion on the short-term and long-term challenges facing all citizens (voters) in the EU. Anything that falls short of this must be considered a failure.

Ebenezer Scrooge, the �squeezing, wrenching, grasping, scraping, clutching, covetous, old sinner�, redeems himself from a life of miserly selfishness by repenting of his past actions after being shown scenes of his younger life, his present life, and his future by the three ghosts that visit him on Christmas Eve. As 2023 turns into 2024, the question is whether Europe can free itself from the grave errors in its economic thinking and policy-making and finally bury the misleading and dangerous ideas concerning fiscal policy and debt brakes.

# ? Jan 12, 2024 08:51

Rappaport: Oct 2, 2013

I for one am super excited about another popularity surge for the populist fascists all over Europe. What could possibly go wrong?

# ? Jan 12, 2024 09:01

GABA ghoul: Oct 29, 2011

So, the German left party recently split off an anti-immigrant "left, but with right-wing characteristics" party under Sahra Wagenknecht(as a poster itt wanted to see). They now have presented some initial basic political positions

https://www.dw.com/en/germany-sahra-wagenknecht-presents-left-wing-conservative-party/a-67923808

Some highlights:

- end of most decarbonization efforts, instead climate change must be solved through new technologies(only example they mention are new types of e-fuels for combustion engines that are "climate compatible")

- higher pensions & unemployment benefits

- end of sanctions against Russia and trying to convince them to restart gas exports to Germany

- immediate end of weapons deliveries to Ukraine, pressure to negotiate and accept Russia's "legitimate interests" in the country and eastern europe

- end of "cancel culture", specifically people shouldn't be "defamed" just for saying what they think about the pandemic(she's an anti-vaxxer) or support for Ukraine

- political purges in public broadcasters and instead hiring people with more "diverse opinions"

Interestingly there is absolutely zero mention of anything related to immigration, despite this being their main dispute with the Left party. They are very, very careful on that one.

Overall, it seems like a huge pile of garbage. Nothing about their social policies is significantly different from the main Left party and all the right-wing crap is damaging to the working class in the mid and long term. What a great benefit for our political landscape.

# ? Jan 12, 2024 13:32

Mano: Jul 11, 2012

you forgot the remigration crap of the right-wing afd (and other) this week; it might explain why they didn't say anything about immigration.

# ? Jan 12, 2024 14:38

suck my woke dick: Oct 10, 2012; I CANNOT EJACULATE WITHOUT SEEING NATIVE AMERICANS BRUTALISED!

Put this cum-loving slave on ignore immediately!

His Divine Shadow posted:

Lol, lmao

https://www.ineteconomics.org/perspectives/blog/unhappy-new-year-how-austerity-is-making-a-comeback-in-berlin-and-brussels

idgi, why the gently caress does anyone even care about state debt, it literally doesn't have direct effect on people's lives (unlike nice things which could be bought by issuing more state debt)

# ? Jan 14, 2024 20:06

mobby_6kl: Aug 9, 2009; by Fluffdaddy

suck my woke dick posted:

idgi, why the gently caress does anyone even care about state debt, it literally doesn't have direct effect on people's lives (unlike nice things which could be bought by issuing more state debt)

Debt costs money that could be spent elsewhere.

It's usually worth it but it's not like it just free money (MMT nerds need not apply)

# ? Jan 14, 2024 20:23

suck my woke dick: Oct 10, 2012; I CANNOT EJACULATE WITHOUT SEEING NATIVE AMERICANS BRUTALISED!

Put this cum-loving slave on ignore immediately!

counterpoint: make mmt a real thing

state should borrow until inflation becomes relevant, then just tax the poo poo out of everything till it's not, goto 1

# ? Jan 14, 2024 20:42

Rappaport: Oct 2, 2013

suck my woke dick posted:

idgi, why the gently caress does anyone even care about state debt, it literally doesn't have direct effect on people's lives (unlike nice things which could be bought by issuing more state debt)

suck my woke dick posted:

counterpoint: make mmt a real thing

state should borrow until inflation becomes relevant, then just tax the poo poo out of everything till it's not, goto 1

I mean, it'd be nice if the EU were less dysfunctional, but it seems difficult to see a pathway for that kind of political project. Only slightly satirically hyperbolizing, the EU is held captive to German brainworms and traumas, and the original function of the EEC was to keep the Germans and French from trying to murder each other every 20 years, dragging the rest of us with them over and over. That part seems to have worked out. It's all the other stuff piled on top that's unfortunate. As the quoted article says, the EU is constructed to obsess over state debt, for ideological reasons (ultimately), and there simply isn't a political will across the continent to change that. Even when it is plainly visible that the emperor has no clothes!

# ? Jan 14, 2024 21:48

mawarannahr: May 21, 2019

suck my woke dick posted:

counterpoint: make mmt a real thing

state should borrow until inflation becomes relevant, then just tax the poo poo out of everything till it's not, goto 1

add low interest rates and you've got Turkey

# ? Jan 14, 2024 23:04

suck my woke dick: Oct 10, 2012; I CANNOT EJACULATE WITHOUT SEEING NATIVE AMERICANS BRUTALISED!

Put this cum-loving slave on ignore immediately!

I mean, it helps if your economy does stuff besides corruption and building presidential palaces in the first place

# ? Jan 14, 2024 23:24

mobby_6kl: Aug 9, 2009; by Fluffdaddy

mawarannahr posted:

add low interest rates and you've got Turkey

We'd need much more kebab for that

# ? Jan 14, 2024 23:25

golden bubble: Jun 3, 2011; yospos

https://www.euractiv.com/section/justice-home-affairs/news/eu-parliament-wants-commission-in-court-hungary-stripped-of-voting-rights/

quote:

Most political groups in the European Parliament want a probe into the European Commission�s decision to unfreeze EU funds for Hungary, followed by a lawsuit in the EU�s top court and a possible motion of censure, while also urging the Council to strip Hungary�s voting rights over its rule of law deficiencies.

# ? Jan 17, 2024 00:13

suck my woke dick: Oct 10, 2012; I CANNOT EJACULATE WITHOUT SEEING NATIVE AMERICANS BRUTALISED!

Put this cum-loving slave on ignore immediately!

golden bubble posted:

https://www.euractiv.com/section/justice-home-affairs/news/eu-parliament-wants-commission-in-court-hungary-stripped-of-voting-rights/

so basically the suspend membership in all but name option, yes please, viktator orban can go eat a dick

# ? Jan 17, 2024 02:15

szary: Mar 12, 2014

Hasn't Slovakia already said that they will block any censure against Hungary?

# ? Jan 17, 2024 02:22

TearsOfPirates: Jun 11, 2016; Stultior stulto fuisti, qui tabellis crederes! - Idiot of idiots, to trust what is written!

szary posted:

Hasn't Slovakia already said that they will block any censure against Hungary?

If it's not going to be them it's definitely going to be someone else.

# ? Jan 17, 2024 08:07

mobby_6kl: Aug 9, 2009; by Fluffdaddy

TearsOfPirates posted:

If it's not going to be them it's definitely going to be someone else.

Orban's only other buddies were in Poland and they're not in power now so I'm cautiously optimistic this might actually go somewhere this time

# ? Jan 17, 2024 11:44

A Buttery Pastry: Sep 4, 2011; Delicious and Informative!

TearsOfPirates posted:

If it's not going to be them it's definitely going to be someone else.

Just do the same to them too.

# ? Jan 17, 2024 12:26

DXH: Dec 8, 2003; Ne Cede Malis

Regarding eurochat: here in Spain the whole switchover to the Euro in 2002 has had some pretty far-reaching consequences, most notably in housing accessibility. Anecdotally, over the holidays I was talking to the in-laws of my in-laws and one bragged that they sold a 3 bedroom apartment in the same neighborhood where my mother-in-law lives to the tune of over 200k Euros. Out of curiosity I asked my mother-in-law how much she paid for her apartment back in 1983 (also a 3 bedroom) and her response was 2 million pesetas.

Now I'm no economist, in fact i hate math, but plugging in the data into an online calculator got me these results: https://www.measuringworth.com/calculators/spaincompare/result.php?year_source=1983&amount=2000000&year_result=2022. However, if I plug in 2 million PTAs into a regular currency convertor, back in 2002 that amount was worth just over 12k Euros. So If I'm reading this right, a real estate investment made in 1983 for the equivalent of 12k Euros in 2002 has paid off for over 200k Euros in 2023. Does that sound right? Because if so, that's quite the payoff for a 40 year investment.

Maybe I'm coming to the wrong conclusion numbers-wise but the vibe felt in Spain for a while now has been that if you bought property in pesetas then congratulations, you can conceivably live off of that until you die, but if you entered the labor market after 2002 (and especially after 2010) then you're pretty much locked out of buying a house for the rest of your life. It seems that the lot in life for many young Spaniards is patiently waiting for a loved one to pass away in order to either sell off remaining property to buy their own house, or just straight up move into the deceased's domicile, because Spanish banks went from giving mortgages to randos off the street in 2007 to asking for two indefinite contracts with salaries above 1.5k Euros minimum each (which the majority of the population doesn't make monthly) and a 20-30% down payment in cash a year later.

Either way, it's a depressing prospect, especially when the Spanish constitution guarantees dignified housing as the right of all Spaniards. More and more it feels like that the pre-Euro generations with 2-3 properties to their name are parasitizing off of younger generations with their rent-seeking behavior. And of course this doesn't consider real estate companies buying up entire blocks and turning them into vacation rentals or whatever. Whenever the subject comes up in my classes I can taste the bitterness in the air and more than once I have heard "How could we have sold off our children's futures to German finance ministers" but that's the thing, seems like everyone assumed that monetary policy was gonna be paired with fiscal policy instead of what we have now.

# ? Jan 17, 2024 13:04

His Divine Shadow: Aug 7, 2000; I'm not a fascist. I'm a priest. Fascists dress up in black and tell people what to do.

Yeah but it wasn't and there were even economists raising warnings about that. Though nobody cared or noticed.

# ? Jan 17, 2024 13:10

mobby_6kl: Aug 9, 2009; by Fluffdaddy

DXH posted:

Regarding eurochat: here in Spain the whole switchover to the Euro in 2002 has had some pretty far-reaching consequences, most notably in housing accessibility. Anecdotally, over the holidays I was talking to the in-laws of my in-laws and one bragged that they sold a 3 bedroom apartment in the same neighborhood where my mother-in-law lives to the tune of over 200k Euros. Out of curiosity I asked my mother-in-law how much she paid for her apartment back in 1983 (also a 3 bedroom) and her response was 2 million pesetas.

Now I'm no economist, in fact i hate math, but plugging in the data into an online calculator got me these results: https://www.measuringworth.com/calculators/spaincompare/result.php?year_source=1983&amount=2000000&year_result=2022. However, if I plug in 2 million PTAs into a regular currency convertor, back in 2002 that amount was worth just over 12k Euros. So If I'm reading this right, a real estate investment made in 1983 for the equivalent of 12k Euros in 2002 has paid off for over 200k Euros in 2023. Does that sound right? Because if so, that's quite the payoff for a 40 year investment.

Maybe I'm coming to the wrong conclusion numbers-wise but the vibe felt in Spain for a while now has been that if you bought property in pesetas then congratulations, you can conceivably live off of that until you die, but if you entered the labor market after 2002 (and especially after 2010) then you're pretty much locked out of buying a house for the rest of your life. It seems that the lot in life for many young Spaniards is patiently waiting for a loved one to pass away in order to either sell off remaining property to buy their own house, or just straight up move into the deceased's domicile, because Spanish banks went from giving mortgages to randos off the street in 2007 to asking for two indefinite contracts with salaries above 1.5k Euros minimum each (which the majority of the population doesn't make monthly) and a 20-30% down payment in cash a year later.

Either way, it's a depressing prospect, especially when the Spanish constitution guarantees dignified housing as the right of all Spaniards. More and more it feels like that the pre-Euro generations with 2-3 properties to their name are parasitizing off of younger generations with their rent-seeking behavior. And of course this doesn't consider real estate companies buying up entire blocks and turning them into vacation rentals or whatever. Whenever the subject comes up in my classes I can taste the bitterness in the air and more than once I have heard "How could we have sold off our children's futures to German finance ministers" but that's the thing, seems like everyone assumed that monetary policy was gonna be paired with fiscal policy instead of what we have now.

Mainly the conclusion that the Euro has anything to do with it. Housing is hosed everywhere.

A Buttery Pastry posted:

Just do the same to them too.

The problem is that the assholes can veto to protect each other. Poland got better but instead we have to deal with Slovakia now

# ? Jan 17, 2024 13:15

His Divine Shadow: Aug 7, 2000; I'm not a fascist. I'm a priest. Fascists dress up in black and tell people what to do.

The euro likely had a hand in cheap loans being so abundant up until 2007, with it's low interest rates. Though not solely responsible.

# ? Jan 17, 2024 13:18

morothar: Dec 21, 2005

His Divine Shadow posted:

The euro likely had a hand in cheap loans being so abundant up until 2007, with it's low interest rates. Though not solely responsible.

It absolutely did; but then also didn�t Spain have an absolutely massive construction boom that was fueled by German savings being funneled into that low interest credit? My employer shifted the order consolidation center for our construction-adjacent product to Spain of all places, because it burned through more units than the rest of Europe combined.

# ? Jan 17, 2024 13:24

Tesseraction: Apr 5, 2009

DXH posted:

Now I'm no economist, in fact i hate math, but plugging in the data into an online calculator got me these results: https://www.measuringworth.com/calculators/spaincompare/result.php?year_source=1983&amount=2000000&year_result=2022. However, if I plug in 2 million PTAs into a regular currency convertor, back in 2002 that amount was worth just over 12k Euros. So If I'm reading this right, a real estate investment made in 1983 for the equivalent of 12k Euros in 2002 has paid off for over 200k Euros in 2023. Does that sound right? Because if so, that's quite the payoff for a 40 year investment.

This is how house prices have gone in the Anglosphere too, particularly the US and UK. People who bought a house in the 20th century are now insanely wealthy based off the real estate bubble and the rest of us can eat poo poo.

# ? Jan 17, 2024 13:33

mobby_6kl: Aug 9, 2009; by Fluffdaddy

Loans were cheap everywhere (in the "west" at least), in europe outside the eurozone, US, UK, etc. Here's CZK for comparison:

# ? Jan 17, 2024 13:36

Dwesa: Jul 19, 2016

szary posted:

Hasn't Slovakia already said that they will block any censure against Hungary?

Fico says a lot of things that he contradicts shortly after.

# ? Jan 17, 2024 13:41

A Buttery Pastry: Sep 4, 2011; Delicious and Informative!

mobby_6kl posted:

The problem is that the assholes can veto to protect each other. Poland got better but instead we have to deal with Slovakia now

Only if you insist on following the rules.

# ? Jan 17, 2024 13:57

DXH: Dec 8, 2003; Ne Cede Malis

His Divine Shadow posted:

Yeah but it wasn't and there were even economists raising warnings about that. Though nobody cared or noticed.

Sometimes if I read the room correctly I do bring up how Julio Anguita (mayor of Cordoba for decades and head of the Spanish Communist party back in the 90s) basically predicted all of the woes of the Eurozone and how its negative consequences would be inordinately felt by the southern European countries, and he was saying so on Spanish TV in 1991.

https://www.youtube.com/watch?v=i38sVjEK9fI

It tends to fall on deaf ears however; at this point it's basically impossible to do anything about it.

Tesseraction posted:

This is how house prices have gone in the Anglosphere too, particularly the US and UK. People who bought a house in the 20th century are now insanely wealthy based off the real estate bubble and the rest of us can eat poo poo.

Oh I'm well aware, as I'm originally from the states and in Orlando what I paid to rent an entire 4 bedroom house in 2010-2011 ($1.2k) is now not enough to cover monthly rent for a studio apartment in the same area.

mobby_6kl posted:

Mainly the conclusion that the Euro has anything to do with it. Housing is hosed everywhere.

Yeah sure, because neoliberalism being the default policy preference in the West at the end of history. My question was that if the change to the Euro exacerbated the general trend, especially in Southern/Eastern European countries with considerably less purchasing power compared to France, Germany, or the UK before the Euro.

# ? Jan 17, 2024 14:30

mobby_6kl: Aug 9, 2009; by Fluffdaddy

DXH posted:

Yeah sure, because neoliberalism being the default policy preference in the West at the end of history. My question was that if the change to the Euro exacerbated the general trend, especially in Southern/Eastern European countries with considerably less purchasing power compared to France, Germany, or the UK before the Euro.

That seems like an assertion that the adoption of Euro did make it worse:

quote:

in Spain the whole switchover to the Euro in 2002 has had some pretty far-reaching consequences, most notably in housing accessibility. Anecdotally, over the holidays I was talking to the in-laws of my in-laws and one bragged that they sold a 3 bedroom apartment in the same neighborhood where my mother-in-law lives to the tune of over 200k Euros. Out of curiosity I asked my mother-in-law how much she paid for her apartment back in 1983 (also a 3 bedroom) and her response was 2 million pesetas.

That's not really a question that I think can be definitely answered without doing some actual research and serious stats but on the surface I'm not seeing anything to suggest that it did.

You can see that some of the least affordable places are outside the Eurozone: Poland, Czech Republic, Croata are all some of the worst in Europe and less affordable than Spain, for example.

None of those countries are in the Eurozone (other than Croatia and they only joined in 2023). Hungary isn't super cheap either.
vvvv

mobby_6kl fucked around with this message at 16:06 on Jan 17, 2024

# ? Jan 17, 2024 15:20

morothar: Dec 21, 2005

mobby_6kl posted:

That seems like an assertion that the adoption of Euro did make it worse:

That's not really a question that I think can be definitely answered without doing some actual research and serious stats but on the surface I'm not seeing anything to suggest that it did.

You can see that some of the least affordable places are outside the Eurozone: Poland, Czech Republic, Croata are all some of the worst in Europe and less affordable than Spain, for example.

Notably, e.g. PL also not even part of the Eurozone.

Ireland is the main place I can think of that has joined the Euro and has incredibly unaffordable housing (where people want to live, housing in the rural parts is dirt cheap), despite having a massive boom in the early 2000s.

But Ireland�s population is also almost 40% higher than in 2000, so it�s hard to see how that wouldn�t put pressure on housing.

# ? Jan 17, 2024 15:54

Tesseraction: Apr 5, 2009

Ireland's population may be growing but it's still down over a million from what it was before the Great Famine. The unaffordability is primarily driven by location and speculation, rather than raw number of butts needing beds.

# ? Jan 17, 2024 16:16

mobby_6kl: Aug 9, 2009; by Fluffdaddy

The famine was like 180 years ago I kind of doubt there's just usable surplus housing still standing around from back then. Especially in places where people want to be, i.e., Dublin.

# ? Jan 17, 2024 16:22

A Buttery Pastry: Sep 4, 2011; Delicious and Informative!

mobby_6kl posted:

That seems like an assertion that the adoption of Euro did make it worse:

That's not really a question that I think can be definitely answered without doing some actual research and serious stats but on the surface I'm not seeing anything to suggest that it did.

You can see that some of the least affordable places are outside the Eurozone: Poland, Czech Republic, Croata are all some of the worst in Europe and less affordable than Spain, for example.

I don't think it makes sense to compare to those countries, given that they're pretty recent members of the EU, whose housing prices shot up upon ascension. Residential property prices in Poland appear to have increased by nearly 50% per year 2006-2008, while real wages only increased by 20% total, which would destroy any price to income ratio. That ascension in Poland appears to have had a similar but even more pronounced effect does not really indicate that the intra-Eurozone situation isn't as portrayed.

Assuming this graph is correct, Spain does seem to have been hit hard by the Euro:

Average wages meanwhile are basically flat 2000-2022.

That said, I would echo your assumption that you need a lot more stats to try to tease out what has happened in Spain, and whether the cause is the Euro or something more complex. Greater European integration also means more competition for apartments, which means comparatively wealthy Northern Europeans are now potential buyers for Spanish property. At which point you'd be kind of an idiot to sell to another Spaniard, if some Danish pensioner is willing to pay twice as much. Looking up apartment prices in Spain, they seem insanely affordable to my Danish eyes.

Tesseraction posted:

Ireland's population may be growing but it's still down over a million from what it was before the Great Famine. The unaffordability is primarily driven by location and speculation, rather than raw number of butts needing beds.

I'm not sure 1845 housing would be that relevant today, even if I agree with your point, though I suppose we are talking about the British Isles and their primitive housing.

# ? Jan 17, 2024 16:23

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# ? May 23, 2024 08:00

Tesseraction: Apr 5, 2009

Absolutely, my point was more that it's where you want a roof that's driving the price not how many heads need a roof.

# ? Jan 17, 2024 16:25

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