Old Europe meets

[GePap]

The Germans should also change thier immigration policies and let more foreigners in, to get them moving. too much self-pity in germany. They have a past of going oevrboard, but still, get off your asses.

[Boris Godunov]

Much of Germany's problems stem from the upgrading of the East. Here's their economic outlook from the CIA world fact book:

"Germany's affluent and technologically powerful economy turned in a relatively weak performance throughout much of the 1990s. The modernization and integration of the eastern German economy continues to be a costly long-term problem, with annual transfers from west to east amounting to roughly $70 billion. Germany's ageing population, combined with high unemployment, has pushed social security outlays to a level exceeding contributions from workers. Structural rigidities in the labor market - including strict regulations on laying off workers and the setting of wages on a national basis - have made unemployment a chronic problem. Business and income tax cuts introduced in 2001 did not spare Germany from the impact of the downturn in international trade, and domestic demand faltered as unemployment began to rise. Growth in 2002 again fell short of 1%. Corporate restructuring and growing capital markets are setting the foundations that could allow Germany to meet the long-term challenges of European economic integration and globalization, particularly if labor market rigidities are addressed. In the short run, however, the fall in government revenues and the rise in expenditures has brought the deficit close to the EU's 3% debt limit."

As for Spain:

"Spain's mixed capitalist economy supports a GDP that on a per capita basis is 80% that of the four leading West European economies. Its center-right government successfully worked to gain admission to the first group of countries launching the European single currency on 1 January 1999. The AZNAR administration has continued to advocate liberalization, privatization, and deregulation of the economy and has introduced some tax reforms to that end. Unemployment has been steadily falling under the AZNAR administration but remains high at 11.3%. The government intends to make further progress in changing labor laws and reforming pension schemes, which are key to the sustainability of both Spain's internal economic advances and its competitiveness in a single currency area. A general strike in mid-2002 reduced cooperation between labor and government. Adjusting to the monetary and other economic policies of an integrated Europe - and further reducing unemployment - will pose challenges to Spain over the next few years."

Doesn't look quite as rosy as Fez portrays, though certainly not dismal. But Spain's numbers in terms of GDP are waaaaay below Germany, and they don't have near the industrial base or labor pool that Germany has. Germany also has a significantly larger abundance of resources.

[Giancarlo]

I didn't paint it rosy, Boris. We got problems that we are going to overcome. I never brought up comparsions of the GDP, our population is smaller too... but Germany is in more trouble than we are.

Oh and you actually proved a point I was trying to make, from you quoting:

Germany:

Structural rigidities in the labor market - including strict regulations on laying off workers and the setting of wages on a national basis - have made unemployment a chronic problem.

Exactly what I was saying.

[Spiffor]

There are 2 dynamics at hand in the EU :

Former bad economies have a quite high growth rate (Spain, Portugal, Ireland) whereas former "good" economies suffer from low growth rates, especially Germany. It has to do with European harmonization of the economy within the one market.

However, there is a real beef that partly explain's EU discrepancies too : the monetary policy is common, and decided in Frankfurt's ECB, while the budget policy is still decided by individual states. It leads the EU in an absolute economic aberration, because States can only use the budget tool without deciding on the monetary tool.

The UK's monetary policy is independent, which gives the UK much more leeway when adjusting inflation or changing the pound's value. It leads to cohesive economic policies. IMHO, that's a main reason why the UK has a much faster growth than the other economies.

The only solution to that for the EU is either to scratch the Euro and come back to the previous fruitless and unfair competition, or to have a common budget at last.

[TCO]

Originally posted by Big Crunch


They are rather pre-occupied with Poland at the moment.

What? No opportunities at home?

[Boris Godunov]

Originally posted by Fez
I didn't paint it rosy, Boris. We got problems that we are going to overcome. I never brought up comparsions of the GDP, our population is smaller too... but Germany is in more trouble than we are.

Oh and you actually proved a point I was trying to make, from you quoting:

Germany:



Exactly what I was saying.

That Germany is "in more trouble" is a dubious claim, as Germany clearly has much more of the means of economic growth, considering its huge industrial base, large population and the current global status of its major corporations. As the CIA points out, German companies are indeed laying a sound foundation for future prosperity. You seem to want to believe the most pessimistic outcome for Germany and the most optimistic for Spain--this simply doesn't wash in reality.

The labor problem is there, but surmountable. It isn't the absolute roadblock you painted it to be.

[Giancarlo]

You may claim that. But it is in more trouble. I was pointing out with the labor requirements. If they change that, I will quickly change my views to optimistic about Germany. For now with a leftist government I will retain my negative outlook. That is my opinion and you cannot change that. I understand that your points are all good and valid, but so are mine.

[Az]

Fez, there is something to understand here: More working hours don't equal more productivity. I too feel that this MAY be a weakening factor in their economy, but I am not completely sure.

[Boris Godunov]

In other words, stick your fingers in your ears and sing "Mary Had a Little Lamb."

Yup, good ol' Fez is back!

[Giancarlo]

Originally posted by Azazel
Fez, there is something to understand here: More working hours don't equal more productivity. I too feel that this MAY be a weakening factor in their economy, but I am not completely sure.

Yes but labor restrictions and labor union control does not help or benefit the economy. But you are a communist so your economic views would be different then mine. The labor restrictions are exactly what is causing Germany's economy to falter.

[BeBro]

Ironically our "leftist government" is under fire these days because of planning changes in the labor market that would help to solve our problems. There are also signals from the conservative opposition to support many of those changes.

[Spiffor]

Azazel :
About this issue, I remember how many people in France gloated that the 35 workhours week had us tank : it had become offcial that our GNP per capita was among the lowest of the EU, only higher than Spain and Greece IIRC.

It turned out the average productivity per worked hour was way superior to more liberal countries like the UK. It also turned out that the productivity per working person was higher than the UK. The real reason of the lower GNP per capita was explained by the amount of people that didn't work (students, retirees, homewives...).

Our 35 hours workers were actually more productive than the 48 hours Brits

[Giancarlo]

Originally posted by BeBro
Ironically our "leftist government" is under fire these days because of planning changes in the labor market that would help to solve our problems. There are also signals from the conservative opposition to support many of those changes.

Well perhaps this is a start of a change in the general incompetence of Schroeder.

[Spiffor]

BeBro : will Schröder apply the conclusions of the thinktank that designed "solutions" in spring 2002 ? I keep forgetting their names.

[TCO]

Originally posted by Spiffor
There are 2 dynamics at hand in the EU :

Former bad economies have a quite high growth rate (Spain, Portugal, Ireland) whereas former "good" economies suffer from low growth rates, especially Germany. It has to do with European harmonization of the economy within the one market.

However, there is a real beef that partly explain's EU discrepancies too : the monetary policy is common, and decided in Frankfurt's ECB, while the budget policy is still decided by individual states. It leads the EU in an absolute economic aberration, because States can only use the budget tool without deciding on the monetary tool.

The UK's monetary policy is independent, which gives the UK much more leeway when adjusting inflation or changing the pound's value. It leads to cohesive economic policies. IMHO, that's a main reason why the UK has a much faster growth than the other economies.

The only solution to that for the EU is either to scratch the Euro and come back to the previous fruitless and unfair competition, or to have a common budget at last.

That is part of the dynamic. But also spain, port, ireland, are all moving towards more capitalist systems. UK moved there a while ago and is still there. Germany/France remained trapped in 70's social democracy.

[TCO]

Originally posted by Azazel
Fez, there is something to understand here: More working hours don't equal more productivity. I too feel that this MAY be a weakening factor in their economy, but I am not completely sure.

On a per-hour basis they don't. But on a per capita basis they do. I would also add that high unemployment means even less hours may be worked...gotta factor that in also. People can't even get the hours that they want...

[TCO]

Originally posted by Spiffor
Azazel :
About this issue, I remember how many people in France gloated that the 35 workhours week had us tank : it had become offcial that our GNP per capita was among the lowest of the EU, only higher than Spain and Greece IIRC.

It turned out the average productivity per worked hour was way superior to more liberal countries like the UK. It also turned out that the productivity per working person was higher than the UK. The real reason of the lower GNP per capita was explained by the amount of people that didn't work (students, retirees, homewives...).

Our 35 hours workers were actually more productive than the 48 hours Brits

I bet you will have very high productivity per working person with a 20% unemployment rate also.

[DinoDoc]

Originally posted by Spiffor
Our 35 hours workers were actually more productive than the 48 hours Brits

Is that why more of them seem to be employed at the moment?

[Spiffor]

During the period of time where the 35 hours week has been in use, unemployment has reduced, and growth was about 3%.
Since our right-wing government took over and effectively killed the 35 hours (one of the swiftest moves ever), unemployment is on the rise and growth tanks to the point of being negative at Q4 2002.

Not that it's related, since the French economy was highly dependant on its exports and hence on the international conjuncture.
But drawing a cause between the 35 hours and unemployment / stagnation is completely wrong. Edit : this misconception is commonly found among the right-wingers. But any informed person will understand both have not much to do with each other.

[Giancarlo]

Lets just say because of the decreasing demand for French products in the US, the French economy will be in trouble.

[Spiffor]

Except on a few specialized sectors, the boycott of French products by American consumers will have a near nil impact on the French economy. France mostly exports to other EU countries, most notably Germany, and the US is far from being our most important commercial partner.

Besides, we mostly sell non-consumer products in the US, and the big business really doesn't want boycotts to happen in any of both countries.

[Giancarlo]

What about the loss of French investments in Iraq? I heard it is in the tens of billions...

[DinoDoc]

Originally posted by Spiffor
But drawing a cause between the 35 hours and unemployment / stagnation is completely wrong.

We also have to factor in the French tendency to strike at the drop of a hat.

[BeBro]

Originally posted by Spiffor
BeBro : will Schröder apply the conclusions of the thinktank that designed "solutions" in spring 2002 ? I keep forgetting their names.

If you mean the "Hartz-Konzept" for more employment, these were implemented, but they had only small changes

Currently the so-called "Agenda 2010" is discussed, which contains a variety of de-regulations, as well as cut-downs in spending money for social purposes (hmm, hope it is expressed somehow clearly ). There are also plans underway to reform the entire social system.

All these things are not easy to do, because they´ll mean financial losses for many. However, I think it is accepted by all that changes have to be made in order to fix our economy. In the long run, we will benefit from those changes, but currently the public discussion is about the details. The government plans to decide about those changes within the next months (June, IIRC)

[Giancarlo]

To fix the German economy, you will have to pour salt water on the wounds. The salt water being the "Agenda 2010" plan you brought up. Deregulation and social cut backs must occur or progress will not be made.

[Pekka]

This whole thing is the biggest BS I have EVER heard from EU plans. This sucks so big time I feel like beating some sense into those anglo-saxon ego freaks.

I'm glad to say that Finland opposes this with everything we got. There is no way Europe will back this up. Our foreign minister said that if they plan to do it outside EU.. our response is 'so what'. We don't CARE about their little power tripping. It is VERY clear what this is about. Is it just a coincidence, that these four countries are together with this? I DON'T THINK SO! They try to play us like fools. Yeah, like we're gonna trust our defense to bunch of biggest pussies in Europe. Ha! That's the biggest joke we've ever heard, and we let them know what we think about it. So France, Germany, Belgium and Luxemburg.. You can stick it in your butt!
Over our dead bodies will we EVER let our security things to the hands of others where we will not be the inner circle too.
YOU STINK!

[Ned]

I wonder if Pekka's attitude is typical of the New Europe?

Regardless, I have no problem with a united European military and foreign policy, so long as it remains linked and cooperative with the US. We must remain allies and friends. The alternative makes no sense whatsoever, since we should be on the same page concerning the importance of advancing democracy and human rights in the world.

We should be partners for progress. We should air our differences privately, but have a common front when addressing the likes of Saddam Hussein. The public division we recently experience helped no one except Saddam.

Blair is incredibly right on this issue. Bush and people are so far holding their fire on Chirac and company. Bush has continued to say that France and its cabal are our friends and allies. Hopefully, Chirac will stop this foolishness about needing to set Europe up in opposition to the US.

I note that Bush and Blair cooperated extensively on everything on Iraq. Blair greatly influenced every decison and the basic strategy. His is the example that he urges on the other leaders of Europe. Chirac, Schroeder et al., need to follow this example, IMHO. If they act in the same manner as Blair, they can help shape US policy and US actions.

This is what they really want, I believe.

[Giancarlo]

Anyways, I see way too many ideological differences in the EU and am starting to see a major split.

[Pekka]

The problem is that they want to have their little play, and don't let us play too. This is definitely anti-US alliance and nothing else. And how will this strengthen NATO? All I see is Chewbacca-defense. We need to have mutual interest to be able to create working inner circle, and as we know how it is, it will never happen.

Maybe we should send telefax to them and say 'we have decided to be your defense'.

I don't know what other countries think of this, but this will never work this way! And excluding UK from inner circle? YEAH, BLOODY GOOD IDEA MATE!

We ALL know that the French and Germans are trying to be the only voice of Europe, pushing their agendas in the name of EU. I mean everyone knows it, doesn't matter if you say 'it is not against NATO' when it clearly is. This is attempt to be independent from US military power, but with what cost? And who runs the show? The opposite of them? NEVER!

They must be out of their bloody minds to think that we will ever allow our own defense and security be based on their little game. We want to have good alliance and defense, but we want to be in it too. They can't just decide themselves to be the leaders of this. Luckily they can't make us part of their dirty circle of anti-US, anti-NATO. I don't care if Chriac still has some investments in God knows where, but he is stupid to make a mistake to believe that we actually would be thrilled of this. I am glad that even once in your lives our hippie foreign minister is 100% against this.

Someone should tell these guys clearly and it seems like loudly enough too, that they can get the hell out of the EU if they think EU is there for them to play with. EU is our thing, all members are equal. We are not their toys so they can feel powerful.

In here, people don't want to join NATO that much. Why? Because it would cost lots of money, and it would mean 'going to someone elses wars'. But we like the idea of being in the same table where decisions are made. THat's what we like. Why in earth would we EVER go for this, where we can't even be in the same table?
No one can makes do anything we don't want, least these sissies. If they want to do something about it, I suggest getting ready to surrender.

[Pekka]

THis is not good comparison, but why don't these guys ask Israel if they want to become under their safety net and swear alliance with blood? I didn't think so! It would be an insult. So why should they think that other countries would ever want that?

I take this personally as a grave insult from these leaders. I find even suggesting anything like this sickening and wonder how much they have consumed Columbias finest to come to this conclusion. It would be nice for every single EU country who aren't part of this disgusting masturbation ritual, would start talking about dismantling NATO and establishing a new alliance with the US and few other countries.