An often overlooked point is that euro is not just an economic tool but also a social one, as being able to travel and pay freely in the whole continent is an important unifying point.
Not intended to be entirely contrafactual, but can't we think of lots of alternative solutions to the same problem? Being able to travel across europe and pay freely everywhere.
For example, unifying card or other cashless payments to a bigger extent, so that coins and bills become less important.
Those are 21st century solutions for a 1990s problem. And now the Euro exists it would be very difficult to revert to separate currencies (even though that may be preferable)
I can pay freely with my own currency in the EU as long as I use a credit or debit card, thank you. I won't trade sovereignity for convenience, regardless of social engineering coming from Bruxelles or Merkel. I don't want my country to become the next Greece.
Greece problems ran deeper than just entering the Euro, massive corruption and tax avoidance played a major role creating that crisis. Its estimated that ~25% of the Greece GDP where not subject taxed, effectively a shadow economy.
How about Italy and Portugal then? The truth is that the Euro was a political decision with disregard of ecomics. That's why Margaret Tacher refused to adopt the Euro for the UK and warned that it would end democracy in Europe.
It's worth noting that when a country has control of its own currency, its issues are more self-contained. It doesn't get easy money based on the performance of other countries within the EU. It also can devalue its own currency if it can't pay back its own bonds.
You consider a 2-3% (or up to 7% with AMEX) fee on everything you buy (even though it’s paid by the merchant, and so you only pay it indirectly) "free"?
And would you be equally calm if you’d have to pay 2-3% more sales tax?
Rather than trading away my country's sovereignity? Yes! It's actually quite a great deal compared to getting screwed over by the ECB/creditors and having to pay increased taxes on everything.
Just out of curiosity, what is your country? There are many countries at the moment that this could apply to, but most are already in the Euro which so far is a one-way trip.
> I won't trade sovereignity for convenience, regardless of social engineering coming from Bruxelles or Merkel.
This sounds a lot like Brexit leave campaign rhetoric and I suspect is the reason you're being downvoted. Regardless of how you feel about the EU and Brexit, sovereignty has to be one of the weaker aspects. Disliking the EU is fine, but let's be honest about why.
Consider the origin of most nation states. Smaller autonomous regions were invaded or bribed into some form of union. In many of these unions rules were harmonized to varying extents and sovereignty was ceded. Common currencies were also adopted in some of the unions.
Consider the nation state that you hold the sovereignty of so high. Imagine tomorrow it was split into two. Both of these regions have the same currency and many common rules and regulations. Given that it's highly probable that your country has fully embraced capitalism and derives much of its wealth through trade, it has a choice: change things or not. If you don't change anything you haven't really regained sovereignty. If you change things you're imposing barriers to trade. Given you had a common currency and rules before, there's a good chance that they were your preferred trading partner if the infrastructure was good enough. Interestingly, there are regions where intra-state infrastructure is better than inter-state infrastructure, usually due to geography.
But we can go deeper than that. We can keep subdividing from regions into cities into towns into households into individual people. Every time you go to the ballot box you acknowledge that you have ceded individual sovereignty.
All the evidence I've seen points to the sovereignty argument in Brexit wasn't about sovereignty being ceded, but who it was perceived as being ceded to. Because if the vision of the Brexit-supporting International Trade and Development Secretary is to be taken as the post-brexit plan, then Brexit will be all about ceding more sovereignty for less trade.
All the evidence I've seen points to the sovereignty argument in Brexit wasn't about sovereignty being ceded, but who it was perceived as being ceded to
They're impossible to disentangle.
Voters in the UK had for years been telling politicians, here's our priorities, here's what is upsetting us. Mostly, massive immigration that overloaded public services. In response they were told, sorry, we can't do anything about that, France and Germany won't let us. It's out of the question, even trying to talk about it is pointless. Oh yeah, and you're probably a racist for even asking.
Voters don't like being told to shut up because some foreign politician disagrees. Is that dislike a desire for "more sovereignty" or is it a problem with who power has been delegated to? Arguably if the UK had entered an EU-like arrangement with the USA instead, and become the 51st state, voters would have faced very similar concerns over things like gun control instead of immigration.
Ultimately technological progress does allow us to satisfactorily decentralise power in new ways. Some people want society to go in the opposite direction and centralise it as much as possible. This is a bad idea, and the Eurozone predicament is an interesting example of why.
Well, it's made easier when you get people naming names of who the sovereignty is being ceded to. It's one thing to say "loss of sovereignty" and another to then go on to talk about who it's being ceded to. It's often not even correct.
> Mostly, massive immigration that overloaded public services.
Except it was per-capita underfunding that caused public services to be underfunded. Almost every study done on this found that EU migrants were on above-average wages and hence paying more tax. And if there weren't, there were measures that could have been implemented such as asking people under free movement rules to demonstrate their ability to support themselves and not be a burden to the state. Other EU states do this.
Most public services should decrease in cost per person as it scales up. If it's super-linear there's something seriously wrong with the way you deliver public services. So it was the underfunding per-capita of public services that was the problem. Instead of expanding public services, the coalition government cut them drastically whilst outsourcing everything they could.
> In response they were told, sorry, we can't do anything about that, France and Germany won't let us. It's out of the question, even trying to talk about it is pointless. Oh yeah, and you're probably a racist for even asking.
We heard a lot that it "was not racist to be concerned about immigration." And a good proportion of people who agreed with that were in fact racist. Let's be honest, a lot of people in this country are prejudiced against people based on their ethnicity, which is pretty much textbook racist. I've even heard on the doorstep that "it's alright to hate polish people because they're white." Attitudes like "they shouldn't be here" are quite common and seem to be more openly voiced after the referendum. It's certainly ignorant of history if you believe that immigration is a recent thing as many who espouse these attitudes seem to do. Go back a few of hundred years and you wouldn't have known if somebody was from the North or France. Both would be just as incomprehensible.
> Ultimately technological progress does allow us to satisfactorily decentralise power in new ways. Some people want society to go in the opposite direction and centralise it as much as possible. This is a bad idea, and the Eurozone predicament is an interesting example of why.
The Eurozone predicament is complicated. There are merits and demerits to centralisation. We should all be wary of extrapolating problems with one large system to all large systems.
The Eurozone predicament is complicated. There are merits and demerits to centralisation. We should all be wary of extrapolating problems with one large system to all large systems.
This is a convoluted way of refusing to answer my final point, perhaps you have no answer. But it nicely serves to prove my other points, so I can't be too annoyed about it.
Viz. the entire EU project is based on a totalitarian ideology that runs like this:
"Most people are stupid, base and racist. Giving them a choice about what happens is therefore very bad. The best social outcomes arise from massive centralisation of power in unchecked bureaucracies."
You are a prime example of this - you just asserted that most people in the UK are racist because they were concerned about the volume of immigration, although the UK is in fact the most ethnically diverse nation in Europe. You have no evidence to support such an astounding generalisation, and race-driven crime is actually very rare there. I mean you'd get a lot further arguing that most Americans are racist, even though that would be an absurd statement too. Polish isn't even a race, Polish people are white!
The reason it's impossible to disentangle loss of sovereignty from the question of who you're losing it to, is because centralisation of power inevitably corrupts people, and therefore who exactly benefits from such a loss is in many ways irrelevant. They'll do things that are at best a good fit for only one section of the population they control, and at worst are just a bad idea for everyone, but the nature of centralised power is that people can do a lot of damage in a short amount of time, and they're less willing to let go of it at the end.
Notice how even the EU's own institutions and biggest supporters are currently up in arms about the Selmayr affair. But who could be surprised, really? It's exactly the behaviour you'd expect to see.
Decentralization of power is not always better. It is one of the reasons that China could improve its economy faster than India, for example. Projects like Galileo are impossible without centralization. If the EU did not exist Trump could bully his way in Europe. And so on.
> You are a prime example of this - you just asserted that most people in the UK are racist because they were concerned about the volume of immigration, although the UK is in fact the most ethnically diverse nation in Europe. [...] Polish isn't even a race, Polish people are white!
Ethnicity is much more than looking alike. Not in Europe, nor in Asia, nor in Africa, nor in America (N or S). And a good % of people with Polish ancestry can be easily recognized in UK. They are not that similar.
And by the way, UK is not the most ethnically diverse country in Europe, the EU, or Western Europe:
That table lists Russia and the Congo as more ethnically diverse than the UK. OK, if you define ethnicity in such a way that it has no correlation with skin colour or any of the traditional aspects of racism, then sure. Maybe there are more ethnic tribes or something in the Congo than the UK.
Now go define it in the way people actually mean when they talk about racism, and see what happens.
Projects like Galileo are impossible without centralization
That's clearly nonsense. The International Space Station is not the product of a giant centralised power structure. It's the result of an international collaboration amongst governments, none of them able to control the others. And the ISS is much more complex an endeavour than Galileo.
Look, (ethnic) Russian, (ethnic) Caucasians and Tatars do not look alike. Same in Congo with the Bantu, Pygmy and Nilotic. You are not even choosing good examples for your arguments. Most ethnics conflicts in the world might not even skin colour related because they occur between neighbors. Pakistan/India, the Balkans, Azerbaijan/Armenia etc.
People from the north and south of England can often be told apart by how they look and sound, and north/south bias is a thing - does that make them different "ethnicities"?
I mean, the whole idea that the UK is a massively racist country is so silly nobody has tried to defend it, have they? As defined in a normal way - people of very different skin colours and origins getting along next to each other - the UK does very well.
A definition of 'racism' that includes "lots of people who look identical to me have turned up and now it takes ages to get a doctors appointment" is useless and deserves to be ignored - which it was, as evidenced by the population voting to leave despite being told it was "racist" to leave a union made up almost entirely of white people.
Most people didn't vote for Brexit. Only about 29% of the population did
Exclude the people who can't vote because they're children or not actually citizens, and you get a 72% turnout, the largest in history. Your claim is worded in such a way that it's technically correct whilst simultaneously being wildly misleading (who knows what 5 year olds think of the EU, and there are plenty of stories of naturalised Polish immigrants voting to leave...)
Voters in the UK had for years been telling politicians...
This is a very misleading account of the situation leading up to the EU referendum in the UK.
When David Cameron (former leader of the Conservative party) called the EU referendum, he did it principally to quell dissent within his own party. The Conservatives have long had a vocal contingent of MPs and members who wanted the UK to leave the EU and this was a chance to finally put the matter to rest within the party.
When voters chose Leave over Remain by a slim majority in the EU referendum (51.9% leave, 48.1% remain), the Conservatives were unprepared and had no plan in place for a Leave result.
Stop and think about that for a moment. The Conservatives called a referendum where the consequences of a leave vote would have a far-reaching and profound impact on the country's future, possibly for decades to come. And yet, astonishingly, they had no plan in place for such an eventuality. Now they ask us to trust them to negotiate Britain's exit from the EU. The Conservatives care more about their party than the country.
Re: Freedom of Movement - the rules state that EU citizens are free to live in other EU countries for at least 3 months. After 3 months, Governments are entitled to ask those EU citizens to prove they are working, registered students or have sufficient money to support themselves. The UK government chose not to implement any such checks. Theresa May (current Prime Minister) was the the minister responsible for immigration (Home Secretary) for 6 years and yet did nothing to adopt these measures.
When David Cameron (former leader of the Conservative party) called the EU referendum, he did it principally to quell dissent within his own party
That's the current narrative of EU loyalists but it's not at all correct.
There had been a eurosceptic wing of the Conservative party for decades. The referendum was put into the Conservative manifesto in 2015 because of the rise of UKIP which was making a similar promise - that's what changed. Putting this policy into the official policies of the party converted UKIP support into Conservative support and allowed Cameron to win a majority. Having promised to do it and won an election partly on the back of that promise, they then proceeded to organise it.
With respect to Cameron having no plan, I agree that was quite stupid of him. Refusal to contemplate the possibility of ever leaving is one of the big problems EU ideology creates in people. Convince yourself it's unthinkable and you won't think about it.
But it's not true that "the Conservatives" had no plan. The pro-Leavers certainly did and still do have a plan: leave the EU whilst negotiating a reasonable future relationship that involves compromises on both sides. So the idea that there's "no plan" is another nonsensical bit of narrative. What people mean is the "plan", such that it is, heavily relies on the EU being willing to negotiate and they aren't.
As for your last point, the top reason cited by voters for why uncontrolled immigration is a problem is pressure on public services. Being able to limit the numbers of unemployed and poor workers doesn't help with that, therefore, I'm not sure why you bring it up.
And it also makes a difference for a company, as you can set a € price, and it can work for more or less the entire EU.
E.g. in Denmark (although not part of €, but pegged to 100€ ~ 745kr.) you can with full support, do all your bookkeeping/accounting denominated in Euro if you so please, as the danish state allows for bookkeeping denominated in DKK and EUR.
And it also makes a difference for a company, as you can set a € price, and it can work for more or less the entire EU.
Unfortunately, that isn't really what happens in practice. Although many states share the same currency, they do not share the same wealth or cost of living. You can't just pick one price for your product or service in Euro and then expect that everyone from France and Germany to Greece and the Eastern European states will be able to afford it.
The EU might like to present itself as a single market, and it tries very hard to force people to set one price that applies throughout. However, the illusion is shattered when it comes into contact with the more diverse reality, and there's always a risk when you artificially distort markets for political reasons that you'll do more harm than good.
This is basically the same in the US or any other major country/economic block with a single currency.
Setting a price in the US will mean you also exclude people from poorer regions where cost of living and wages are lower. This is not exclusive in the eurozone.
Also, your last argument makes little sense in my opinion. The EU's predecessors itself massively distorted both steel and coal markets to "force" peace and cooperation through the contintent and deal with the age old problem of nationalism and revenge over old wars...
Could that be considered a bad thing because it distorted the markets? I highly doubt many would agree?
Setting a price in the US will mean you also exclude people from poorer regions where cost of living and wages are lower. This is not exclusive in the eurozone.
I'm not an expert on the relevant policies in the US. Are there laws that prevent charging a different price to customers in one state compared to another, if spending power is much higher in one than the other?
Could that be considered a bad thing because it distorted the markets? I highly doubt many would agree?
I said there was always a risk, not that it was inevitable that any distortion in the markets would be a bad thing. All regulatory actions distort free markets as well, but that doesn't mean all regulation is bad.
In this case, however, we're talking about an EU that typically tries quite hard to prevent businesses from offering something at one price in say Germany and at another price in say Greece. It's quite possible that this prevents some products or services from being financially viable if they are offered at a price the Greeks could afford, while offering the same products or services at a financially viable price the Germans can afford excludes the Greeks entirely, meaning the supplier and/or the Greek consumers lose out either way.
Goods sold online will need to be sold at the same price to each region, sans a sales tax. But goods sold locally can differ greatly in the US. If goods sold locally, such as food, need to be prices similarly in the EU that is bizarre to me. Seems great for the more affluent areas.
Well not quite, we have euros but prices are different in every country. For example look at the prices of electronic products, for example Apple, in every country there is a different price because of different taxations and other reasons, this is also a problem because you can buy from Europe countries where the prices are lower and thus pay less taxes legally.
I don't think this is a strong argument. Physical cash is on the way out. You can do payments through mastercard/visa lines, and wired transfers are straightforward. FX conversions are straightforward when everyone has a phone. In 2007 I had a situation where I was being paid in Australia, but living in London. I used the lines on my cards for that year, and don't remember it being inconvenient.
My bank makes me use a terrible rate and then adds a £1.50 charge on top, every time I use my card in the rest of Europe. So I'm still looking for good deals on Euros and carrying large amounts of cash when I go.
And online banks like N26 complain in turn that Germany has the most expensive ATM fees in Europe. It sounds like a bullshit argument given that operational costs for an ATM are mostly fixed.
> the EU could simply force banks to let you withdraw at market rates at any ATM
Even for liquid assets with centralized trading reporting, e.g. stocks listed on the NYSE, determining the "market" price is an academic pursuit. (The last traded price for any size? A similar size? The bid or ask? Immediate-execution price or sliced-up execution price? Et cetera.)
For foreign exchange, where trades aren't necessarily reported and occur, de-centralised, at a myriad of international venues and where infrequently-traded currency pairs have a habit of jerking around, such a regulation would be quite tedious to comply with.
I traded forex for many years, and there would absolutely be no problem with this. There are plenty of web-sites where you can see real-time rates.
Of course, I know where to look (big retail forex trading sites are a good choice). General public would probably find something like Yahoo Finance which is not good for this.
There'd still be a mental overhead though, and it's notwithstanding the fact that the euro is more than twenty years old, at a time where paying by credit card often meant someone was physically copying your card number and details so it's unsurprising that they didn't account for that fact.
People have been saying that for a long time, but one catastrophe after another with the alternatives reminds us that sometimes having a simple, reliable, anonymous means of paying for things isn't such a bad idea after all.
I'm in the UK. A major bank here has just spectacularly screwed up a migration to a new IT system, and for several weeks many people and businesses have been unable to use the most basic and essential facilities. Just this past week, Visa had a major outage and people were unable to buy food in shops or fill up their vehicles. While those were particularly bad instances of things going wrong, it's not as if we couldn't find many more examples going further back as well.
Obviously cash has its own downsides, particularly around counterfeit currency and the costs of handling and securing it. There is no perfect solution to making payments. But I suspect predictions of an entirely cashless society are still a long way from becoming reality for most of us.
You can do payments through mastercard/visa lines, and wired transfers are straightforward.
That very much depends on where you are and where the business or person you want to pay is. In some places, electronic transfers are quick and easy. In some parts of the world, they are expensive, slow, and rely on technology that feels like it came from another era.
The major card networks are the single biggest blight on the payment landscape, because they suck in almost every conceivable way except for being so widely established, but that last point means disrupting them is a very tall order.
FX conversions are straightforward when everyone has a phone.
But many people won't bother to do that conversion. If you're advertising prices in your native currency and your customer has a different currency, that can be a huge barrier to conversion. Most people don't know or care even roughly how much of their local currency equals the advertised price in yours. This effect is at least moderated if you're advertising in a very big currency that some people have encountered before, which basically means the US dollar or Euro if you're in the West.
In Germany, in most places you can't pay with anything but cash, or a card called EC for "Electronic Cash". No credit card. At all. Even for large amounts. They're still healing the wounds for 1922/23 hyper-inflation.
The Germans clearly have a very peculiar relationship with money. Giving them control of the Euro was therefore a very dangerous idea.
Not really. There was a pretty good chance of the state of Jefferson happening, then WWII happened and screwed up that plan. Secession would be really tricky given California's dependence on the states around it for power, water, etc.
It's a danger. It used to be unthinkable. Now it's just very very unlikely. The recent Republican tax cut for the first time really explicitly targets blue states. If the urban areas get upset and act like Germany towards Greece/Kansas/Alabama, you could see great divisions in the US.
It's the reason James Clapper[1], who measured other countries' instability, is now worried because he's seeing it in the US.
https://www.wired.com/story/how-a-former-us-spy-chief-became...“The United States had begun to show many of the same characteristics of instability we used to assess other nation-states,” he writes, including rising income equality, an increasingly restive population of young people who couldn’t find work, a rural-urban divide, and declining political discourse.
[1] Leave his signals intel role aside for now; he ran agencies whose role was to predict which other countries would be unstable, and rural-urban divides are a big predictor. Gulp.
The different monetary needs of different parts of the U.S. are a real issue but they can be papered over by taxing wealth in California and giving aid to Appalachia. That is, one country can coordinate its own monetary and fiscal policy, but countries in the E.U. can't, particularly because of the "Growth and Stability" pact.
Sorry could you elaborate? I voted for an MEP. I voted for my national government, whose leader sits on the Council. Commissioners are appointed by the same people, much like the UK civil service
taxing wealth in California and giving aid to Appalachia
That used to be taken for granted. But going forward I am worried. California is very pissed off by being targeted by this recent Republican tax cut. Let's hope it doesn't lead to retaliation against GOP base areas.
Most federal spending is not for welfare but for social security - and retirees tend to congregate in certain places. CA has less retirees than the national average. Many retirees have moved from other places, as they seek to escape high tax states. The issue seems very nuanced, not so location dependent.
There used to be, but now some EEU countries already surpassed some older members like Greece and Portugal, and soon catching up with Italy and Spain (Czechia, Slovenia, Slovakia, Lithuania, Estonia). Non-EU/EEU members (Albania, Moldavia, FYROM, Montenegro, Ukraine etc.) are in a much worse shape, even at the level of the richest African countries.
Krugman, who's also talked about how the Euro is a mistake, has talked about this. The difference between the EU and the US is, pensions and social security are federally managed, so even if Appalachia is bankrupt, the pensioners still get their pensions, and state legislative bodies would not have to agree to bail out other states. Meanwhile in the EU, German politicians were fighting each other asking why they should bail out Greece yet again.
I would imagine if the US had a similar union like the EU, the blue states would've long told the red states to go to hell. Although interestingly states with money would have the influence (like Germany in the EU) and would've probably pushed the smaller states around and gotten more liberal politics.
> The difference between the EU and the US is, pensions and social security are federally managed
No, they aren't, as two separate things. “Social Security” per se is federally managed, most pensions (except for federal and railroad employees) are not, neither are the bulk of social safety net programs (other than Social Security and Medicare, most of the rest are either fully state run or state adninistered within federal guidelines with partial federal reimbursement.)
> if Appalachia is bankrupt, the pensioners still get their pensions
“Appalachia” isn't an entity that can be bankrupt. But, no, in the case of a municipal bankruptcy, pensioners of that municipality lose out just like any other creditors (for states or territories, there are no general bankruptcy provisions and those would be handled ad hoc by Congress—as in Puerto Rico—but, again, pensioners would be at risk.)
Get ready for a huge upheaval, however. Urban areas in the US have typically been ok subsidizing rural areas (via healthcare and the social safety net more generally.) But since US Republicans, with their recent tax cut bill, have directly targeted urban areas with higher taxes, I'm detecting a rising current of dislike for the urban-to-rural subsidy.
We could easily end up, in the US, with the urban areas fed up with the rural areas, and once we move back to a Democratic government, the urban areas trying to punish the rural areas.
That would be really, really, really bad for the US. Really bad. (It could end up with a Greece-Germany situation happening with say Oklahoma and Kansas vs. New York and California, with crushing economic effects in red states while the blue states continue to prosper. I don't want to be alarmist but that could possibly even lead to a fracturing of the US or its currency. So yes. Really bad.)
>> The reality, as the author describes, is that Syriza’s call for debt relief
should have been granted.
But that is 100% the failure of Syriza, not the Europeans. Syriza took this
perfectly sensible, perfectly legitimate demand and turned it into a circus
act, backed by a farcical Referendum [1] and fronted by the clownish antics of
Yanis Varoufakis.
A unique opportunity to reason with our European partners was squandered, just
so that Varoufakis could burnish his personna of the maverick economics
professor. And because Tsipras, who was in way over his head, an inexperienced
young prime minister trying to negotiate with the heavy-weights of European
politics, did not have the courage or the honesty to accept reality for what
it was: that no, we didn't hold all the aces, no, the EU would not shed a tear
if we jumped off the Grexit cliff no matter how loudly Varoufakis proclaimed
it to be the divine truth; that, no, you cannot play chicken with frau Merkel,
you silly little boy.
And that the Europeans were not even out to get us. They needed something they
could present to their own citizens as a viable option. We gave them an
Aristophanean comedy instead, a shadow play of Karagiozis with all the bells
and whistles. And we paid the price, for the populism of our leaders, their
lack of seriousness and their incompetence.
And we still do.
_________
[1] The referendum question regarded an offer by the EU that had already been
withdrawn before the referendum was called. The text of the question itself
was so vague and complex that on the one hand it immediately became a running
joke with various memes, and on the other, allowed all sides in the debate to
claim victory and only served to muddle the waters even further on what "The
Will of the People" really was.
I got a different reading of the whole situation in 2015 from the book by Mr. Varoufakis himself, "Adults in the Room". TL;DR: the EU was never going to budge. They knew what he wanted was right, but they couldn't give Greece any political wins. And the Eurocrats were expert in shaping the story in the media, that you (yes you) got the impression the Greeks were stupid clowns.
Look at Brexit, I now get the impression the Brits are clowns, but if someone wrote an inside story book, it's probably deliberate run-around and media manipulation. Not that I'm saying the Brits aren't clowns...
Varoufakis would write that. He failed to negotiate anything for Greece. My reading of the situation was European politicians wanted to help Greece, but had to accommodate their own citizens. Varoufakis’ hardball strategy assumed Europe would (a) see his threats as credible and (b) feel more pain from Grexit than capitulaing on all points. He was wrong on both counts, most significantly (b). His strategy thus failed before he took his first breath.
He should have taken a conciliatory approach. Let French and German politicians sell good-natured Greeks in need of help, not a people mindlessly throwing a tantrum. The former would have allowed for ridiculously extending maturities (such that inflation pays for much of it) and delaying interest payments for a few years, along with lenience on budget deficits.
>> He should have taken a conciliatory approach. Let French and German politicians sell good-natured Greeks in need of help, not a people mindlessly throwing a tantrum.
Yes, absolutely that. There always was -and still there is- a lot of goodwill towards the Greeks in Europe, for historical reasons, some nostalgia, some guilt, some genuine Philhellenism; this was the primary reason we were allowed to join in the first place, much more so than Simitis' bare-faced fraud.
And so even at the height of the crisis, the EU did not push for a Grexit, even though that was the constant adage in the media- Greece must now exit the Euro, Greece is about to exit the Euro, it's going to happen in two weeks now, they're exiting tomorrow etc etc. Merkel and Sarkozy and most everyone else kept saying "we don't want the Greeks to leave, but, of course, if they insist... ".
I'd contrast this with the Europeans' reaction to the Brexit: most member states have reacted with something very close to relief; there is a general sense of "good riddance" to the problem child of Europe. With Greeks, instead, I got the feeling they just didn't want us to hurt ourselves any further.
>Varoufakis would write that. He failed to negotiate anything for Greece. My reading of the situation was European politicians wanted to help Greece
They absolutely did not. They were not planning on granting any kind of debt relief or letting Greece escape from the Eurozone and they still don't.
>He should have taken a conciliatory approach.
That's called Pasok. It's what Pasok did. If the voters wanted Pasok again they would have elected Pasok again. Pasok was defeated in a landslide because the approach you just advocated was an unmitigated failure. Syriza won because Syriza promised not to be Pasok.
Syriza's approach didn't work either of course, because realistically nothing is going to help them short of the dissolution of the Eurozone or something equally unlikely like a communist takeover of the European Commission.
Pretending that conciliation was going to get them anywhere given that 7 years of it had done nothing of the sort is disingenuous in the extreme.
>> That's called Pasok. It's what Pasok did. If the voters wanted Pasok again they would have elected Pasok again. Pasok was defeated in a landslide because the approach you just advocated was an unmitigated failure. Syriza won because Syriza promised not to be Pasok.
Actually, it's obvious that a large part of Syriza's majority in the 2015 elections came from former PASOK voters, still in complete denial about the realities of the financial crisis, latching on to Tsipras as the champion of the status quo, with his promises of debt relief and protection of pensions and public sector jobs; promises that were, of course, empty.
In a sense, voters very much did elect PASOK again.
As to PASOK's conciliatory approach- both the two "big parties" (PASOK before the fall and New Democracy) are middle-of-the-road moderates with the political courage of a wet noodle. Giorgaki's Papandreou PASOK and Antonis Samaras' ND both simply bent over and accepted the Troica's memorandum without so much as a squeak. Syriza simply made a lot more noise- but then followed the same route and all the thrashing and flailing only helped to make the situation worse.
You say Syriza had no chance. Sure- because they are incompetent. A skilled negotiator would have at the very least stood a chance to minimise the damage. The Europeans were at the table- they weren't there to fool around. They crushed us because we were fooling around.
In 2015, Greece was already deep in the shit, then Syriza came along and they managed to fuck up the fuckup even worse.
>You say Syriza had no chance. Sure- because they are incompetent. A skilled negotiator would have at the very least stood a chance to minimise the damage.
With what leverage??? A skilled negotiator with no cards to play is no better than an unskilled negotiator with no cards to play.
The ECB had the capability and willingness to turn off the Greek economy at will (and actually did, for a few days, as a shot across the bows by cutting ELA). They simply had nothing to counter that trump card so they folded. You can't run a country which has no functioning payments system.
I've heard every idea for any approach they could have taken to deal with the debt crisis and they're all either illegal under EU law or would require the consent of an intransigent EU. Leaving the Eurozone wasn't an option. Default wasn't an option. The only choice was "economic cataclysm" or "bend to the whims of the Troika".
>they managed to fuck up the fuckup even worse.
It's hard to argue that they fucked up when their hands were so tightly bound and there was a gun to their heads.
It is important to understand that a negotiation is not the same as a trade. You don't always have to give something tangible to get something back. Very often, negotiations proceed on points of emotion, or morality, alone. An appeal to justice, mercy, friendship etc, is often just as effective as a promise of a big material reward.
For example, the EU did not want to be seen as ruthlessly crushing the Greeks for no reason at all and would have probably taken any reasonable demand seriously. Unfortunately, Varoufakis' grandstanding gave them a jolly good reason to antagonise us without guilt, or at the very least removed any possibility that any demands of ours could be presented to the other member states' electorates as reasoned, or just.
In any case, one does not go to the negotiating table after having systematically disparaged the other side as villains, like Syriza did, and expect a positive result. See where Brexit negotiations are now, after years of British politicians blaming the EU for everything.
Like I say above, there was (and is) goodwill in the EU about Greece. Many people have expressed their dismay at the treatment of the country by the Troika. What's more important, as others have said, the IMF was very strongly for debt relief. And like you say yourself, we had already suffered under austerity for a few years and it was clear it was not doing anything for growth or our prospects to repay our debt. There was a case to be made in our favour.
For sure, there was not a whole lot to go on. But that's why I say "a skilled negotiator" was needed. Tsipras and Varoufakis were nothing of the sort.
>It is important to understand that a negotiation is not the same as a trade. You don't always have to give something tangible to get something back. Very often, negotiations proceed on points of emotion, or morality, alone. An appeal to justice, mercy, friendship etc, is often just as effective.
No. It was not effective in the past and it would not be effective in the future. In fact the last 7 years of Greece's relationship to the Troika served as ample example of just how ineffective it was.
>In any case, one does not go to the negotiating table after having systematically disparaged the other side as villains
Well, when 7 years of treating them as friends achieves nothing... why not try something new, right? PASOK got annihilated in the polls for a reason and that reason is that they tried it your way and failed.
>> It's hard to argue that they fucked up when their hands were so tightly bound and there was a gun to their heads.
Tsipras and Varoufakis line was that they had "all the cards", remember? Remember how, if they saw us getting ready to jump, our European partners would lose their nerve and come begging us not to leave the Eurozone and the Union?
At least that was Varoufakis position- even after the whole thing imploded. He kept saying, long after, that Greece should just give the EU the finger, default on its debts and let the EU sort out the ensuing mess.
Consider the incompetence of those people, for a second. They went into an extremely delicate situation like bulls in a china store, pretending -and maybe even believing- that they were on top of things. They certainly didn't act as if they accepted that "their hands were bound", or "there was a gun to their heads".
David Cameron also tried to negotiate with the EU and failed. The, after barely winning the elections, he called for brexit referendum, thinking UK voters would vote to stay with the votes being split at around 50/50. He would then have used this result for a new round of negotiations. But things worked out quite a bit differently. How is this any different than what Varoufakis tried to pull off?
This is intruiging to me. From where I am sitting in the beautiful English sunshine, the media seems very bullish and pro-brexit!
The Daily Mail, Express and Telegrapgh are openly pro-brexit, branding those trying to stop it as 'traitors'.
The Murdoch press (Times and Sun) is less overt, but Murdoch is well known to be pro-brexit.
This leaves The Guardian, which is well read on the internet because it is free but less so on paper. Also the Mirror is apparently more balanced, but lightweight. The BBC seem very sheepish after open threats from Ian Duncan Smith.
I think the domestic press have been very, very easy on the government and the official opposition who are not opposing Brexit. I wonder if the international press are behaving differently?
Disclosure: I do believe the Brexit team are clowns. I believe that most people in Britain had no interest in the EU either way until the popular press handed them an opinion. Remember the Google.co.uk trending searches for the day after the referendum included 'what is the EU'
This is exactly my read of the UK press. Without the BBC playing a strong independent role (after the tory campaign to affect it), there is very little independent press able to drive a fair discussion. The Guardian has only a small impact on the overall public debate.
(ps does the Economist have much influence in your view?)
Certainly a fine read, and very popular amongst us finance folks. It's national impact is lost in the roundings compared to the Daily Mail with their 'crush the saboteurs' theme IMHO.
Exploitation of media (and thus public opinion) by the wealthy is going to be the major issue we in the West have to deal with in the next decade, I believe. (for-profit news, and social media, and the Piketty wealthy-desire-to-influence politics have led us to a unique and dangerous place in 2018.)
Honest question (I have concerns along the same lines you do): why is this uniquely problematic now? My understanding is that journalism with a point of view has historically been more the rule than the exception.
In the 50-70s we all grew to believe media had no agenda. Then in the US conservative billionaires figured out they could advocate for cutting their own taxes by building propaganda media (Fox, right wing radio, etc)
Our media and society have not yet caught up. Media doesn’t know how to deal with open lies. And there is no left wing response to propaganda from Fox and Limbaugh.
I think we’ll get there. But it will take some time.
Openly anti-Brexit: the Guardian, the Financial Times, the Economist, Sky News, BBC News (e.g. their famous "despite brexit" spin on every good news story).
The UK is really the only country in Europe that has a press that's willing to attack the EU and (uselessly) try to hold it to account. I've always been surprised when reading German news how flimsy so much of their broadsheet press really is. Die Zeit's "interview" with Farage being a good example of the low quality that passes for highbrow media there.
Remember the Google.co.uk trending searches for the day after the referendum included 'what is the EU'
You're doing what so many EU fans do, you're repeating myths whilst believing you're above believing myths.
The Google graphs that people cited at that time didn't show any volume, but volume data was available via their ad planner tool. What that showed is that volume for that query is absolutely minimal, even a huge spike would still amount to virtually nobody typing in such a query. Almost certainly, given the wordy phrasing, those queries were coming from children via speech recognition.
Researchers at Loughborough University analysed Brexit coverage on TV and in the press in the lead up to the referendum. They found that coverage, when weighted by circulation, was 80% in favour of Brexit and 20% against.
I wasn't making any claims about weighting by circulation, only refuting the point that the media is very pro Brexit. In reality it's split about 50/50.
But again, trying to go from "what the media supports" to "what people voted for" is a correlation/causation fallacy. There are plenty of anti-Brexit papers to read. If people largely choose not to, that probably implies they don't think those papers are very good.
> If people largely choose not to, that probably implies they don't think those papers are very good
Another way to interpret that is that people read the Sun and the Mail for reasons entirely unrelated to Brexit, such as celebrity gossip (The Economist and FT are pretty lacking in those areas). However, perhaps the constant drip feed of anti-EU/Anti-immigration stories in there have given them a certain impression of the EU, alongside their daily non-political entertainment.
Perhaps people would care to Google why the current UK foreign secretary was sacked by The Times, or the 'Bendy Bannanas' debacle?
But that cuts both ways. The pro-EU press gives a misleading impression as well, usually by refusing to report on any story that makes the EU look bad, or by putting a spin on events that blames member states instead of the institutions.
After all, by your argument influential people go read the Financial Times because they think it suits their station in life, or because they want financial news, and end up being exposed to a constant litany of pro-EU stories, resulting in them voting that way in the referendum (and not only voting but being quoted by other campaigners and news outlets as 'experts', a perk accorded to the sorts of people who read the Economist but not the Daily Mail).
After all, the FT literally flies the EU flag above its headquarters. Not exactly a neutral source, is it.
>Openly anti-Brexit: the Guardian, the Financial Times, the Economist, Sky News, BBC
I completely disagree with you about the BBC as a whole. BBC Question Time, for instance have had Nigel Farage as a guest more times than anyone else! John Humphrys on radio 4s Today programme is so biased it is embarrassing. James O'Brian claims he had to leave Newsnight over the editorial policy.
On the others your 50/50 claim is to ignore completely the circulation. It seems like a very strange approach to count minority publications as having the same impact as The Daily Mail/Sun/Telegraph/Times/Express[0]. I don't recall seeing 'the man on the street' reading the FT or Economist recently?
The Guardian is also split on Brexit because there are so many pro-Corbyn writers who are defending his policy on Brexit (which is broadly speaking to not-oppose the government).
> You're doing what so many EU fans do, you're repeating myths whilst believing you're above believing myths.
That is rather a slur on a large group of people. A group I certainly did not belong to before the referendum, however I was rather guided towards them by my instinctive dislike for the far-right and their anti-immigration demagoguery. My instinctive dislike for people who make statements like, "we have all had enough of experts", and people who paint lies on the side of buses and tour the country with them. People who break the spending rules at elections for instance[1]. I'm not going to argue this any further, this is HN not a political forum, but your comment stinks.
Honestly? Around here both Brexit and the British government+parliament is mostly viewed as a plain joke at this point. Heck, even people who I never heard utter a single peep regarding politics are making "Brexit Logic" jokes now.
Australia has about 25 million people and about five economic centres of more than a million people. The reserve bank has to set one rate. At times, it gives compromise rates that are a tradeoff between a mining boom on one side of the country, and a downturn on the other.
The European central bank has a much larger version of the same problem. Iceland was able to use rates to help it out of its economic collapse. Greece can't do this.
The quality of consumer FX has steadily improved over the decades. Access to technology has given tighter spreads and convenience. If the Euro goes, I hope there is some consideration given to running regional currencies rather than national. Imagine if a "Bank of Italy" maintained independent northern, central, and southern notes.
There are similar issues in every large currency area with different economies. However, US and Australia are countries where people are mostly fine with the idea that having a single currency and interest rate also means big transfers have to take place within the country. This isn’t the case in the EU. Although Greece (And others) receive EU support, there just isn’t popular support for the kind of transfers required to keep a single (German) interest rate. Taxing people in one country to transfer to another isn’t possible on that scale in the EU.
What needs to happen for the Euro to survive is that Germans have to accept a pretty substantial and long term inflation in order to keep growth elsewhere. But they had some bad luck with inflation in the past when it led to “economic anxiety” so it’s a bit of a red flag for them...
The other solution is to kill (or split) the Euro to save the EU. It seems more and more sensible.
I always read German attitudes to the Eurozone with some disbelief. They always seem to insist the burden of changing policy to make the Euro work fall on other countries and not there own.
I think that's in large part because Germany had the Agenda 2010 which heavily cut welfare and hit many people super hard. The common narrative is that it's because of those sacrifices the German economy is in a better position than most other European countries. On top of that in the very least the perception is that the lower classes didn't benefit from that at all. So I understand that there is a lot of "I did my part and sucked it up while others didn't and now I am supposed to suffer again to help people who failed to do the right thing in the first place."
Not saying that that's the correct attitude, just offering a explanation.
I'm not an expert on this, but my understanding is that there are big transfers taking place from Germany to the rest. They can be seen in Target 2 balances. Technically they are supposed to be more like loans, but in practice economists accept that they will not be paid back (as Greece proved):
> Imagine if a "Bank of Italy" maintained independent northern, central, and southern notes.
How would this work? I still remember before Slovenia was in the EU we had our own currency that was okay but not so hot.
All big transactions between people like buying a home were done in deutsche marks. Or at least everyone talked about them using DEM and later EUR as the currency.
Point being people will absolutely use the most stable currency easily available regardless of what their local currency is.
The US has a single currency that serves vastly different economies. The dollar prevents poor economies in Alabama and Mississippi from devaluing their currencies just like Italy and Greece can't devalue their currencies.
But the US also has fiscal tools like taxation and direct transfers that subsidize Alabama and Mississippi.
Fiscal policy requires political union to force wealthy economies to transfer their wealth to poor economies.
The EU doesn't have political union, and they're actually headed in the opposite direction due to discord about migration leading to stronger nationalist/populist/authoritarian leaders.
So if political union is the solution and the EU is going the other way, then it's hard to see how the Euro and by extension the EU can survive.
What I find strange about it there was almost a universal consensus among economists that the Euro couldn't work. The UK was fortunate enough to drop out of the Euro as the Pound/Euro was mispriced in the transition phase.
Unlike many ideas in economics, the "impossible trinity" has proven itself again and again. It's not one of the usual right wing tropes like "raising the minimum wage will tank the economy".
Different monetary zones allow price levels to adjust. For instance I was in Montreal and looking at the price of package tours to different parts of Europe and Greece turned out to be the most expensive place to go. If it wasn't for the Euro, price levels would drop in Greece as denominated in USD, it would be more attractive to go on vacation there, manufacturing would become more profitable there, and the Greek economy will recover.
It is true that the Eurozone and the E.U. are different but I am not sure that Brexit voters really know that. What they have seen is Eurocracy has a "democratic deficit" and and inability to handle problems (for better or worse government legitimacy is more impacted by effectiveness than by process or ideology.)
What I find strange about it there was almost a universal consensus among economists that the Euro couldn't work.
Yes, exactly. It's strange because of the near "universal consensus" you cite on the effect of currency union without fiscal policy union. And it's possible to have a real economics debate about this topic now because this topic hasn't been politicized - it's almost purely an academic debate without the (primarily right-wing) agenda-driven media sources weighing in.
I also find it strange that what happened was what economists were predicting-- but I have a guess as to why currency union happened anyway. The architects of the euro thought a single currency would draw the EU together and would, a few years later, end up with coordinated fiscal policy. But that didn't happen, and a currency crisis hit, damaging the euro, before fiscal policies became coordinated. (Given political situations, it seems almost impossible that fiscal policy will be unified now.) The linked post (and book) are good because they use the Greece-Germany situation as an example to highlight the bigger issues of fiscal policy and it crashing into domestic policies and politics. Pretty fascinating, really.
I can't find any earlier information online (well, not with a quick look anyway) but the following shows an upward trend, year-on-year, in tourist and revenue from 2000 to 2018, and arrivals from 2008.
Intuitively also, I don't get the feeling that tourism has been hurt by the Euro and by higher prices. And, anecdotally, business owners are supposed to prefer higher-earners as visitors, to backpackers and students etc (regardless of whether that makes business sense or not).
According to which 2018 is an exceptionally good year, so good in fact we might have trouble accommodating all the extra people:
Greece is braced for another bumper year. The tourists will not stop coming. For every one of its citizens, three foreign visitors – 32 million in total – will arrive in 2018, more than at any other time since records began.
Tourist numbers have increased by an additional 2 million every year for the past three years. Arrivals from China alone have doubled since 2017. But with forecasts predicting record numbers over the next decade, a growing number of Greeks are asking: can Greece really cope?
It has been pointed out (I forget where) that part of the reason the US works as a monetary union is that people are not very attached to where they live. When one area of the country becomes much more successful than another, many people are often willing to move, which acts as a countervailing force to regional productivity differences.
One of the problems with the EU is that Germans like to live in Germany and Greeks like to live in Greece.
> part of the reason the US works as a monetary union is that people are not very attached to where they live
More significant is our fiscal union. My taxes in New York and California support Mississippi and Iowa. (Politically, this requires the citizens of a country to see themselves as one.) The EU missed, in the last crisis, an opportunity to form a banking and preliminary fiscal union.
America has a large population of Spanish speakers and go to many cities and you'll find official signage and documents written in Chinese and other languages.
Single culture, well, compare people living in the deep south and Manhattan, what they value and enjoy. Beyond sports do they have a lot in common?
Also, europeans usually have a far stronger heritage to the places they where born and raised. Mainly because of historical reasons.
in some countries, local variations in culture is incredibly dense. for instance, Dutch dialect is different between villages which are only around 10 kilometer apart.
They speak the same language, they go to the same shops, they watch the same tv shows and tv channels, they have a common healthcare and education system, they are governed by the same president, they share a similar history that they learn in the same schools.
I hope that we will see a different and more rational handling in italy's case. In fact we should allow countries to leave the EU if their economy is not strong enough. It just doesn't make sense for anyone to have the same currency. Right now, everyone treats the "dropping out of the EU zone" as a failure and a stepping stone into a complete EU collapse, but the EU shouldn't be a prison. Having the same currency and no option to devalue for a country leaves you strangled and tied to the big guys (Germany, France,...). Let italy, portugal, spain and finnland drop out if they want, let them devalue their currency and let them get back on their feet, otherwise we stumble deeper and deeper into uncharted dark territory.
Ofc it's not as easy as I'm stating it here, if they drop out of the EU, Germany and others would be in deep trouble due to the massive credits they gave everyone to make them stay and dependent
Drop out of the EU, or drop out of the euro? Half of the macro arguments are about the problems of currency union without fiscal policy union. Perhaps the pre-2015 UK position is a good intermediate drop-back step: no currency union, still many ties to EU and Brussels.
(that said, the German wage deflation discussed in the post is an EU issue, not a euro issue.)
I remember back 20 years ago that macroeconomists were talking about how the lack of fiscal coordination was going to break the euro. And so it has come to pass, it seems.
Edit: or what PaulHoule says with more detail in another reply.
I don't see it as a tragedy for Germany. You would have to feel the euro has a lower value than the duetchmark would have today? That rather helps Germany in their position as one of the worlds top exporters. Germany ous growing and has a budget surplus.
I think as others have noted the idea of a single currency is always going to be partly political. What kind of state makes all of its decisions based on economic theory?
The euro zone as a whole right now is out-growing the UK, and according to my fx dealer are deliberately playing down their growth to keep the euro weak.
I think criticising the idea of the euro as 'political' is a bit rich from someone whose opposition to it seems too also be ideological.
Personally I like the easy trade it facilitates. FX risk is dreary to manage. Only having to hedge GBPEUR makes it much simpler than the old days. Maybe the mistake, if there was one, was letting Greece et al join before they were ready
Seems to me its doesn't make sense to have a gov sell bonds in a currency that it doesn't have control of. This includes countries outside of the EU that use the Euro. When buying bonds of a country, there should mean the investor believes in the direction of the country / the governance there / believes it is low risk that the bonds would lose value or the strength of the economy would collapse. That's the risk that gets taken by the investor. It doesn't make sense to peg it to an external countries' performance. Of course it sweetens the deal but makes things confusing too.
It's scary and terrible how people think of this. That this was somehow Greece's fault, or even Greece's doing. Or worse yet: Syriza's fault.
Politicians are experts at this. This morning there was a discussion on ozzie radio with the secretary of the treasury on radio. There, the government decried the lack of innovation in the Australian business community. Specifically why there aren't any Australian businesses that operate online 2-sided marketplaces like Amazon or Ebay. Similar discussions have been happening in Europe.
Now of course, when you analyze the argument (and I assure you these government people at that level aren't morons, they know this) it turns out these government people are psychopaths.
You see, the reason there is no Australian 2-sided online marketplace is ... tax. The Australian government has chosen not to impose either import tax, rules or GST/VAT on imported goods with a value < $1000.
So after years of imposing a ~18% cost disadvantage on Australian businesses compared to international businesses, a senior government representative comes on public radio, and eloquently decries the fact that it must be Australian's inadequacy that has prevented them from competing with international companies WHILE IMPOSING AN 18% PRICE HANDICAP ON THEM. Therefore, it is only fair that customers punish them. They called up a few of them that were clearly preselected for their utter lack of rhetorical abilities to make them completely ridiculous (they were cut off halfway through the argument too).
In other words, this guy has been pursuing a policy of openly sabotaging Australian businesses for at least half a decade, blames them, wide open in public for not performing well, and then picks the worst of them to "say a few words".
Now this sort of thing happens a LOT in discussions. For instance, when it comes to immigrants, ... I must say it makes it VERY clear why these people want to censor (sorry, I mean "eliminate fake news for the good of the people").
For the record, I am a socialist and I hate the business practices of these businessmen, but hearing that radio discussion I must say, I got a newfound respect for them and a deep hatred of the Australian treasury/government. I mean I would respect someone who just stood there and said "I'm screwing you and there's nothing you can do" more than this lying asshole.
Thing is, I'm absolutely sure 90% of people listening (at least) fell for it.
You should learn to look at European governments actions as very similar to this. You will understand far more about the situation by assuming any government spokesman/woman (including of course such papers as Der Spiegel) are at best leaving out viewpoints, usually outright lying, and sometimes directly falsifying their argument.
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[ 3.8 ms ] story [ 177 ms ] threadFor example, unifying card or other cashless payments to a bigger extent, so that coins and bills become less important.
https://m.youtube.com/watch?v=5TPpuIslzG4
And would you be equally calm if you’d have to pay 2-3% more sales tax?
> I won't trade sovereignity for convenience, regardless of social engineering coming from Bruxelles or Merkel.
This sounds a lot like Brexit leave campaign rhetoric and I suspect is the reason you're being downvoted. Regardless of how you feel about the EU and Brexit, sovereignty has to be one of the weaker aspects. Disliking the EU is fine, but let's be honest about why.
Consider the origin of most nation states. Smaller autonomous regions were invaded or bribed into some form of union. In many of these unions rules were harmonized to varying extents and sovereignty was ceded. Common currencies were also adopted in some of the unions.
Consider the nation state that you hold the sovereignty of so high. Imagine tomorrow it was split into two. Both of these regions have the same currency and many common rules and regulations. Given that it's highly probable that your country has fully embraced capitalism and derives much of its wealth through trade, it has a choice: change things or not. If you don't change anything you haven't really regained sovereignty. If you change things you're imposing barriers to trade. Given you had a common currency and rules before, there's a good chance that they were your preferred trading partner if the infrastructure was good enough. Interestingly, there are regions where intra-state infrastructure is better than inter-state infrastructure, usually due to geography.
But we can go deeper than that. We can keep subdividing from regions into cities into towns into households into individual people. Every time you go to the ballot box you acknowledge that you have ceded individual sovereignty.
All the evidence I've seen points to the sovereignty argument in Brexit wasn't about sovereignty being ceded, but who it was perceived as being ceded to. Because if the vision of the Brexit-supporting International Trade and Development Secretary is to be taken as the post-brexit plan, then Brexit will be all about ceding more sovereignty for less trade.
They're impossible to disentangle.
Voters in the UK had for years been telling politicians, here's our priorities, here's what is upsetting us. Mostly, massive immigration that overloaded public services. In response they were told, sorry, we can't do anything about that, France and Germany won't let us. It's out of the question, even trying to talk about it is pointless. Oh yeah, and you're probably a racist for even asking.
Voters don't like being told to shut up because some foreign politician disagrees. Is that dislike a desire for "more sovereignty" or is it a problem with who power has been delegated to? Arguably if the UK had entered an EU-like arrangement with the USA instead, and become the 51st state, voters would have faced very similar concerns over things like gun control instead of immigration.
Ultimately technological progress does allow us to satisfactorily decentralise power in new ways. Some people want society to go in the opposite direction and centralise it as much as possible. This is a bad idea, and the Eurozone predicament is an interesting example of why.
Well, it's made easier when you get people naming names of who the sovereignty is being ceded to. It's one thing to say "loss of sovereignty" and another to then go on to talk about who it's being ceded to. It's often not even correct.
> Mostly, massive immigration that overloaded public services.
Except it was per-capita underfunding that caused public services to be underfunded. Almost every study done on this found that EU migrants were on above-average wages and hence paying more tax. And if there weren't, there were measures that could have been implemented such as asking people under free movement rules to demonstrate their ability to support themselves and not be a burden to the state. Other EU states do this.
Most public services should decrease in cost per person as it scales up. If it's super-linear there's something seriously wrong with the way you deliver public services. So it was the underfunding per-capita of public services that was the problem. Instead of expanding public services, the coalition government cut them drastically whilst outsourcing everything they could.
> In response they were told, sorry, we can't do anything about that, France and Germany won't let us. It's out of the question, even trying to talk about it is pointless. Oh yeah, and you're probably a racist for even asking.
We heard a lot that it "was not racist to be concerned about immigration." And a good proportion of people who agreed with that were in fact racist. Let's be honest, a lot of people in this country are prejudiced against people based on their ethnicity, which is pretty much textbook racist. I've even heard on the doorstep that "it's alright to hate polish people because they're white." Attitudes like "they shouldn't be here" are quite common and seem to be more openly voiced after the referendum. It's certainly ignorant of history if you believe that immigration is a recent thing as many who espouse these attitudes seem to do. Go back a few of hundred years and you wouldn't have known if somebody was from the North or France. Both would be just as incomprehensible.
> Ultimately technological progress does allow us to satisfactorily decentralise power in new ways. Some people want society to go in the opposite direction and centralise it as much as possible. This is a bad idea, and the Eurozone predicament is an interesting example of why.
The Eurozone predicament is complicated. There are merits and demerits to centralisation. We should all be wary of extrapolating problems with one large system to all large systems.
This is a convoluted way of refusing to answer my final point, perhaps you have no answer. But it nicely serves to prove my other points, so I can't be too annoyed about it.
Viz. the entire EU project is based on a totalitarian ideology that runs like this:
"Most people are stupid, base and racist. Giving them a choice about what happens is therefore very bad. The best social outcomes arise from massive centralisation of power in unchecked bureaucracies."
You are a prime example of this - you just asserted that most people in the UK are racist because they were concerned about the volume of immigration, although the UK is in fact the most ethnically diverse nation in Europe. You have no evidence to support such an astounding generalisation, and race-driven crime is actually very rare there. I mean you'd get a lot further arguing that most Americans are racist, even though that would be an absurd statement too. Polish isn't even a race, Polish people are white!
The reason it's impossible to disentangle loss of sovereignty from the question of who you're losing it to, is because centralisation of power inevitably corrupts people, and therefore who exactly benefits from such a loss is in many ways irrelevant. They'll do things that are at best a good fit for only one section of the population they control, and at worst are just a bad idea for everyone, but the nature of centralised power is that people can do a lot of damage in a short amount of time, and they're less willing to let go of it at the end.
Notice how even the EU's own institutions and biggest supporters are currently up in arms about the Selmayr affair. But who could be surprised, really? It's exactly the behaviour you'd expect to see.
> You are a prime example of this - you just asserted that most people in the UK are racist because they were concerned about the volume of immigration, although the UK is in fact the most ethnically diverse nation in Europe. [...] Polish isn't even a race, Polish people are white!
Ethnicity is much more than looking alike. Not in Europe, nor in Asia, nor in Africa, nor in America (N or S). And a good % of people with Polish ancestry can be easily recognized in UK. They are not that similar.
And by the way, UK is not the most ethnically diverse country in Europe, the EU, or Western Europe:
https://en.wikipedia.org/wiki/List_of_countries_ranked_by_et...
Now go define it in the way people actually mean when they talk about racism, and see what happens.
Projects like Galileo are impossible without centralization
That's clearly nonsense. The International Space Station is not the product of a giant centralised power structure. It's the result of an international collaboration amongst governments, none of them able to control the others. And the ISS is much more complex an endeavour than Galileo.
But hey, whatever fits your narrative.
I mean, the whole idea that the UK is a massively racist country is so silly nobody has tried to defend it, have they? As defined in a normal way - people of very different skin colours and origins getting along next to each other - the UK does very well.
Polish is an ethnicity. Discrimination against somebody because of their ethnicity is racial discrimination at least according to the UN definition.
> most people in the UK are racist because they were concerned about the volume of immigration.
Most people didn't vote for Brexit. Only about 29% of the population did. I'm sure some of them are neither racist nor stupid.
Most people didn't vote for Brexit. Only about 29% of the population did
Exclude the people who can't vote because they're children or not actually citizens, and you get a 72% turnout, the largest in history. Your claim is worded in such a way that it's technically correct whilst simultaneously being wildly misleading (who knows what 5 year olds think of the EU, and there are plenty of stories of naturalised Polish immigrants voting to leave...)
This is a very misleading account of the situation leading up to the EU referendum in the UK.
When David Cameron (former leader of the Conservative party) called the EU referendum, he did it principally to quell dissent within his own party. The Conservatives have long had a vocal contingent of MPs and members who wanted the UK to leave the EU and this was a chance to finally put the matter to rest within the party.
When voters chose Leave over Remain by a slim majority in the EU referendum (51.9% leave, 48.1% remain), the Conservatives were unprepared and had no plan in place for a Leave result.
Stop and think about that for a moment. The Conservatives called a referendum where the consequences of a leave vote would have a far-reaching and profound impact on the country's future, possibly for decades to come. And yet, astonishingly, they had no plan in place for such an eventuality. Now they ask us to trust them to negotiate Britain's exit from the EU. The Conservatives care more about their party than the country.
Re: Freedom of Movement - the rules state that EU citizens are free to live in other EU countries for at least 3 months. After 3 months, Governments are entitled to ask those EU citizens to prove they are working, registered students or have sufficient money to support themselves. The UK government chose not to implement any such checks. Theresa May (current Prime Minister) was the the minister responsible for immigration (Home Secretary) for 6 years and yet did nothing to adopt these measures.
That's the current narrative of EU loyalists but it's not at all correct.
There had been a eurosceptic wing of the Conservative party for decades. The referendum was put into the Conservative manifesto in 2015 because of the rise of UKIP which was making a similar promise - that's what changed. Putting this policy into the official policies of the party converted UKIP support into Conservative support and allowed Cameron to win a majority. Having promised to do it and won an election partly on the back of that promise, they then proceeded to organise it.
With respect to Cameron having no plan, I agree that was quite stupid of him. Refusal to contemplate the possibility of ever leaving is one of the big problems EU ideology creates in people. Convince yourself it's unthinkable and you won't think about it.
But it's not true that "the Conservatives" had no plan. The pro-Leavers certainly did and still do have a plan: leave the EU whilst negotiating a reasonable future relationship that involves compromises on both sides. So the idea that there's "no plan" is another nonsensical bit of narrative. What people mean is the "plan", such that it is, heavily relies on the EU being willing to negotiate and they aren't.
As for your last point, the top reason cited by voters for why uncontrolled immigration is a problem is pressure on public services. Being able to limit the numbers of unemployed and poor workers doesn't help with that, therefore, I'm not sure why you bring it up.
And it also makes a difference for a company, as you can set a € price, and it can work for more or less the entire EU.
E.g. in Denmark (although not part of €, but pegged to 100€ ~ 745kr.) you can with full support, do all your bookkeeping/accounting denominated in Euro if you so please, as the danish state allows for bookkeeping denominated in DKK and EUR.
Unfortunately, that isn't really what happens in practice. Although many states share the same currency, they do not share the same wealth or cost of living. You can't just pick one price for your product or service in Euro and then expect that everyone from France and Germany to Greece and the Eastern European states will be able to afford it.
The EU might like to present itself as a single market, and it tries very hard to force people to set one price that applies throughout. However, the illusion is shattered when it comes into contact with the more diverse reality, and there's always a risk when you artificially distort markets for political reasons that you'll do more harm than good.
Setting a price in the US will mean you also exclude people from poorer regions where cost of living and wages are lower. This is not exclusive in the eurozone.
Also, your last argument makes little sense in my opinion. The EU's predecessors itself massively distorted both steel and coal markets to "force" peace and cooperation through the contintent and deal with the age old problem of nationalism and revenge over old wars...
Could that be considered a bad thing because it distorted the markets? I highly doubt many would agree?
I'm not an expert on the relevant policies in the US. Are there laws that prevent charging a different price to customers in one state compared to another, if spending power is much higher in one than the other?
Could that be considered a bad thing because it distorted the markets? I highly doubt many would agree?
I said there was always a risk, not that it was inevitable that any distortion in the markets would be a bad thing. All regulatory actions distort free markets as well, but that doesn't mean all regulation is bad.
In this case, however, we're talking about an EU that typically tries quite hard to prevent businesses from offering something at one price in say Germany and at another price in say Greece. It's quite possible that this prevents some products or services from being financially viable if they are offered at a price the Greeks could afford, while offering the same products or services at a financially viable price the Germans can afford excludes the Greeks entirely, meaning the supplier and/or the Greek consumers lose out either way.
The argument from banks is that there are a lot of online-only banks that rely on the ATMs of banks with physical branches in a parasitic manner.
Which seems like a far saner way to do it imo.
Even for liquid assets with centralized trading reporting, e.g. stocks listed on the NYSE, determining the "market" price is an academic pursuit. (The last traded price for any size? A similar size? The bid or ask? Immediate-execution price or sliced-up execution price? Et cetera.)
For foreign exchange, where trades aren't necessarily reported and occur, de-centralised, at a myriad of international venues and where infrequently-traded currency pairs have a habit of jerking around, such a regulation would be quite tedious to comply with.
I traded forex for many years, and there would absolutely be no problem with this. There are plenty of web-sites where you can see real-time rates.
Of course, I know where to look (big retail forex trading sites are a good choice). General public would probably find something like Yahoo Finance which is not good for this.
People have been saying that for a long time, but one catastrophe after another with the alternatives reminds us that sometimes having a simple, reliable, anonymous means of paying for things isn't such a bad idea after all.
I'm in the UK. A major bank here has just spectacularly screwed up a migration to a new IT system, and for several weeks many people and businesses have been unable to use the most basic and essential facilities. Just this past week, Visa had a major outage and people were unable to buy food in shops or fill up their vehicles. While those were particularly bad instances of things going wrong, it's not as if we couldn't find many more examples going further back as well.
Obviously cash has its own downsides, particularly around counterfeit currency and the costs of handling and securing it. There is no perfect solution to making payments. But I suspect predictions of an entirely cashless society are still a long way from becoming reality for most of us.
You can do payments through mastercard/visa lines, and wired transfers are straightforward.
That very much depends on where you are and where the business or person you want to pay is. In some places, electronic transfers are quick and easy. In some parts of the world, they are expensive, slow, and rely on technology that feels like it came from another era.
The major card networks are the single biggest blight on the payment landscape, because they suck in almost every conceivable way except for being so widely established, but that last point means disrupting them is a very tall order.
FX conversions are straightforward when everyone has a phone.
But many people won't bother to do that conversion. If you're advertising prices in your native currency and your customer has a different currency, that can be a huge barrier to conversion. Most people don't know or care even roughly how much of their local currency equals the advertised price in yours. This effect is at least moderated if you're advertising in a very big currency that some people have encountered before, which basically means the US dollar or Euro if you're in the West.
The Germans clearly have a very peculiar relationship with money. Giving them control of the Euro was therefore a very dangerous idea.
It's the reason James Clapper[1], who measured other countries' instability, is now worried because he's seeing it in the US. https://www.wired.com/story/how-a-former-us-spy-chief-became... “The United States had begun to show many of the same characteristics of instability we used to assess other nation-states,” he writes, including rising income equality, an increasingly restive population of young people who couldn’t find work, a rural-urban divide, and declining political discourse.
[1] Leave his signals intel role aside for now; he ran agencies whose role was to predict which other countries would be unstable, and rural-urban divides are a big predictor. Gulp.
Do you mean countries in the euro?
I'm not sure that voters know the difference, but they do know there is a "democratic deficit".
Sorry could you elaborate? I voted for an MEP. I voted for my national government, whose leader sits on the Council. Commissioners are appointed by the same people, much like the UK civil service
That used to be taken for granted. But going forward I am worried. California is very pissed off by being targeted by this recent Republican tax cut. Let's hope it doesn't lead to retaliation against GOP base areas.
I would imagine if the US had a similar union like the EU, the blue states would've long told the red states to go to hell. Although interestingly states with money would have the influence (like Germany in the EU) and would've probably pushed the smaller states around and gotten more liberal politics.
No, they aren't, as two separate things. “Social Security” per se is federally managed, most pensions (except for federal and railroad employees) are not, neither are the bulk of social safety net programs (other than Social Security and Medicare, most of the rest are either fully state run or state adninistered within federal guidelines with partial federal reimbursement.)
> if Appalachia is bankrupt, the pensioners still get their pensions
“Appalachia” isn't an entity that can be bankrupt. But, no, in the case of a municipal bankruptcy, pensioners of that municipality lose out just like any other creditors (for states or territories, there are no general bankruptcy provisions and those would be handled ad hoc by Congress—as in Puerto Rico—but, again, pensioners would be at risk.)
We could easily end up, in the US, with the urban areas fed up with the rural areas, and once we move back to a Democratic government, the urban areas trying to punish the rural areas.
That would be really, really, really bad for the US. Really bad. (It could end up with a Greece-Germany situation happening with say Oklahoma and Kansas vs. New York and California, with crushing economic effects in red states while the blue states continue to prosper. I don't want to be alarmist but that could possibly even lead to a fracturing of the US or its currency. So yes. Really bad.)
But that is 100% the failure of Syriza, not the Europeans. Syriza took this perfectly sensible, perfectly legitimate demand and turned it into a circus act, backed by a farcical Referendum [1] and fronted by the clownish antics of Yanis Varoufakis.
A unique opportunity to reason with our European partners was squandered, just so that Varoufakis could burnish his personna of the maverick economics professor. And because Tsipras, who was in way over his head, an inexperienced young prime minister trying to negotiate with the heavy-weights of European politics, did not have the courage or the honesty to accept reality for what it was: that no, we didn't hold all the aces, no, the EU would not shed a tear if we jumped off the Grexit cliff no matter how loudly Varoufakis proclaimed it to be the divine truth; that, no, you cannot play chicken with frau Merkel, you silly little boy.
And that the Europeans were not even out to get us. They needed something they could present to their own citizens as a viable option. We gave them an Aristophanean comedy instead, a shadow play of Karagiozis with all the bells and whistles. And we paid the price, for the populism of our leaders, their lack of seriousness and their incompetence.
And we still do.
_________
[1] The referendum question regarded an offer by the EU that had already been withdrawn before the referendum was called. The text of the question itself was so vague and complex that on the one hand it immediately became a running joke with various memes, and on the other, allowed all sides in the debate to claim victory and only served to muddle the waters even further on what "The Will of the People" really was.
Look at Brexit, I now get the impression the Brits are clowns, but if someone wrote an inside story book, it's probably deliberate run-around and media manipulation. Not that I'm saying the Brits aren't clowns...
Varoufakis would write that. He failed to negotiate anything for Greece. My reading of the situation was European politicians wanted to help Greece, but had to accommodate their own citizens. Varoufakis’ hardball strategy assumed Europe would (a) see his threats as credible and (b) feel more pain from Grexit than capitulaing on all points. He was wrong on both counts, most significantly (b). His strategy thus failed before he took his first breath.
He should have taken a conciliatory approach. Let French and German politicians sell good-natured Greeks in need of help, not a people mindlessly throwing a tantrum. The former would have allowed for ridiculously extending maturities (such that inflation pays for much of it) and delaying interest payments for a few years, along with lenience on budget deficits.
Yes, absolutely that. There always was -and still there is- a lot of goodwill towards the Greeks in Europe, for historical reasons, some nostalgia, some guilt, some genuine Philhellenism; this was the primary reason we were allowed to join in the first place, much more so than Simitis' bare-faced fraud.
And so even at the height of the crisis, the EU did not push for a Grexit, even though that was the constant adage in the media- Greece must now exit the Euro, Greece is about to exit the Euro, it's going to happen in two weeks now, they're exiting tomorrow etc etc. Merkel and Sarkozy and most everyone else kept saying "we don't want the Greeks to leave, but, of course, if they insist... ".
I'd contrast this with the Europeans' reaction to the Brexit: most member states have reacted with something very close to relief; there is a general sense of "good riddance" to the problem child of Europe. With Greeks, instead, I got the feeling they just didn't want us to hurt ourselves any further.
Ah, oops, sorry- Simitis cooking the books was when we joined the Eurozone. My bad.
They absolutely did not. They were not planning on granting any kind of debt relief or letting Greece escape from the Eurozone and they still don't.
>He should have taken a conciliatory approach.
That's called Pasok. It's what Pasok did. If the voters wanted Pasok again they would have elected Pasok again. Pasok was defeated in a landslide because the approach you just advocated was an unmitigated failure. Syriza won because Syriza promised not to be Pasok.
Syriza's approach didn't work either of course, because realistically nothing is going to help them short of the dissolution of the Eurozone or something equally unlikely like a communist takeover of the European Commission.
Pretending that conciliation was going to get them anywhere given that 7 years of it had done nothing of the sort is disingenuous in the extreme.
Actually, it's obvious that a large part of Syriza's majority in the 2015 elections came from former PASOK voters, still in complete denial about the realities of the financial crisis, latching on to Tsipras as the champion of the status quo, with his promises of debt relief and protection of pensions and public sector jobs; promises that were, of course, empty.
In a sense, voters very much did elect PASOK again.
As to PASOK's conciliatory approach- both the two "big parties" (PASOK before the fall and New Democracy) are middle-of-the-road moderates with the political courage of a wet noodle. Giorgaki's Papandreou PASOK and Antonis Samaras' ND both simply bent over and accepted the Troica's memorandum without so much as a squeak. Syriza simply made a lot more noise- but then followed the same route and all the thrashing and flailing only helped to make the situation worse.
You say Syriza had no chance. Sure- because they are incompetent. A skilled negotiator would have at the very least stood a chance to minimise the damage. The Europeans were at the table- they weren't there to fool around. They crushed us because we were fooling around.
In 2015, Greece was already deep in the shit, then Syriza came along and they managed to fuck up the fuckup even worse.
With what leverage??? A skilled negotiator with no cards to play is no better than an unskilled negotiator with no cards to play.
The ECB had the capability and willingness to turn off the Greek economy at will (and actually did, for a few days, as a shot across the bows by cutting ELA). They simply had nothing to counter that trump card so they folded. You can't run a country which has no functioning payments system.
I've heard every idea for any approach they could have taken to deal with the debt crisis and they're all either illegal under EU law or would require the consent of an intransigent EU. Leaving the Eurozone wasn't an option. Default wasn't an option. The only choice was "economic cataclysm" or "bend to the whims of the Troika".
>they managed to fuck up the fuckup even worse.
It's hard to argue that they fucked up when their hands were so tightly bound and there was a gun to their heads.
For example, the EU did not want to be seen as ruthlessly crushing the Greeks for no reason at all and would have probably taken any reasonable demand seriously. Unfortunately, Varoufakis' grandstanding gave them a jolly good reason to antagonise us without guilt, or at the very least removed any possibility that any demands of ours could be presented to the other member states' electorates as reasoned, or just.
In any case, one does not go to the negotiating table after having systematically disparaged the other side as villains, like Syriza did, and expect a positive result. See where Brexit negotiations are now, after years of British politicians blaming the EU for everything.
Like I say above, there was (and is) goodwill in the EU about Greece. Many people have expressed their dismay at the treatment of the country by the Troika. What's more important, as others have said, the IMF was very strongly for debt relief. And like you say yourself, we had already suffered under austerity for a few years and it was clear it was not doing anything for growth or our prospects to repay our debt. There was a case to be made in our favour.
For sure, there was not a whole lot to go on. But that's why I say "a skilled negotiator" was needed. Tsipras and Varoufakis were nothing of the sort.
No. It was not effective in the past and it would not be effective in the future. In fact the last 7 years of Greece's relationship to the Troika served as ample example of just how ineffective it was.
>In any case, one does not go to the negotiating table after having systematically disparaged the other side as villains
Well, when 7 years of treating them as friends achieves nothing... why not try something new, right? PASOK got annihilated in the polls for a reason and that reason is that they tried it your way and failed.
Tsipras and Varoufakis line was that they had "all the cards", remember? Remember how, if they saw us getting ready to jump, our European partners would lose their nerve and come begging us not to leave the Eurozone and the Union?
At least that was Varoufakis position- even after the whole thing imploded. He kept saying, long after, that Greece should just give the EU the finger, default on its debts and let the EU sort out the ensuing mess.
Consider the incompetence of those people, for a second. They went into an extremely delicate situation like bulls in a china store, pretending -and maybe even believing- that they were on top of things. They certainly didn't act as if they accepted that "their hands were bound", or "there was a gun to their heads".
Nope. Very much do not remember this nor do I think they ever said it.
They did act as if they would achieve more than they did, but I think that was just putting a brave face on, tbh.
This is intruiging to me. From where I am sitting in the beautiful English sunshine, the media seems very bullish and pro-brexit!
The Daily Mail, Express and Telegrapgh are openly pro-brexit, branding those trying to stop it as 'traitors'.
The Murdoch press (Times and Sun) is less overt, but Murdoch is well known to be pro-brexit.
This leaves The Guardian, which is well read on the internet because it is free but less so on paper. Also the Mirror is apparently more balanced, but lightweight. The BBC seem very sheepish after open threats from Ian Duncan Smith.
I think the domestic press have been very, very easy on the government and the official opposition who are not opposing Brexit. I wonder if the international press are behaving differently? Disclosure: I do believe the Brexit team are clowns. I believe that most people in Britain had no interest in the EU either way until the popular press handed them an opinion. Remember the Google.co.uk trending searches for the day after the referendum included 'what is the EU'
(ps does the Economist have much influence in your view?)
Certainly a fine read, and very popular amongst us finance folks. It's national impact is lost in the roundings compared to the Daily Mail with their 'crush the saboteurs' theme IMHO.
In the 50-70s we all grew to believe media had no agenda. Then in the US conservative billionaires figured out they could advocate for cutting their own taxes by building propaganda media (Fox, right wing radio, etc)
Our media and society have not yet caught up. Media doesn’t know how to deal with open lies. And there is no left wing response to propaganda from Fox and Limbaugh.
I think we’ll get there. But it will take some time.
Openly anti-Brexit: the Guardian, the Financial Times, the Economist, Sky News, BBC News (e.g. their famous "despite brexit" spin on every good news story).
The UK is really the only country in Europe that has a press that's willing to attack the EU and (uselessly) try to hold it to account. I've always been surprised when reading German news how flimsy so much of their broadsheet press really is. Die Zeit's "interview" with Farage being a good example of the low quality that passes for highbrow media there.
Remember the Google.co.uk trending searches for the day after the referendum included 'what is the EU'
You're doing what so many EU fans do, you're repeating myths whilst believing you're above believing myths.
The Google graphs that people cited at that time didn't show any volume, but volume data was available via their ad planner tool. What that showed is that volume for that query is absolutely minimal, even a huge spike would still amount to virtually nobody typing in such a query. Almost certainly, given the wordy phrasing, those queries were coming from children via speech recognition.
https://www.forbes.com/sites/eliseackerman/2016/06/28/brexit...
But sure, you go on and tell yourself that most people were simply repeating things they read in the press.
Neither are you.
Researchers at Loughborough University analysed Brexit coverage on TV and in the press in the lead up to the referendum. They found that coverage, when weighted by circulation, was 80% in favour of Brexit and 20% against.
Source: https://blog.lboro.ac.uk/crcc/eu-referendum/uk-news-coverage...
But again, trying to go from "what the media supports" to "what people voted for" is a correlation/causation fallacy. There are plenty of anti-Brexit papers to read. If people largely choose not to, that probably implies they don't think those papers are very good.
Another way to interpret that is that people read the Sun and the Mail for reasons entirely unrelated to Brexit, such as celebrity gossip (The Economist and FT are pretty lacking in those areas). However, perhaps the constant drip feed of anti-EU/Anti-immigration stories in there have given them a certain impression of the EU, alongside their daily non-political entertainment.
Perhaps people would care to Google why the current UK foreign secretary was sacked by The Times, or the 'Bendy Bannanas' debacle?
After all, by your argument influential people go read the Financial Times because they think it suits their station in life, or because they want financial news, and end up being exposed to a constant litany of pro-EU stories, resulting in them voting that way in the referendum (and not only voting but being quoted by other campaigners and news outlets as 'experts', a perk accorded to the sorts of people who read the Economist but not the Daily Mail).
After all, the FT literally flies the EU flag above its headquarters. Not exactly a neutral source, is it.
That's a pretty low-brow comment.
>Openly anti-Brexit: the Guardian, the Financial Times, the Economist, Sky News, BBC
I completely disagree with you about the BBC as a whole. BBC Question Time, for instance have had Nigel Farage as a guest more times than anyone else! John Humphrys on radio 4s Today programme is so biased it is embarrassing. James O'Brian claims he had to leave Newsnight over the editorial policy.
On the others your 50/50 claim is to ignore completely the circulation. It seems like a very strange approach to count minority publications as having the same impact as The Daily Mail/Sun/Telegraph/Times/Express[0]. I don't recall seeing 'the man on the street' reading the FT or Economist recently?
The Guardian is also split on Brexit because there are so many pro-Corbyn writers who are defending his policy on Brexit (which is broadly speaking to not-oppose the government).
[0]:https://en.m.wikipedia.org/wiki/List_of_newspapers_in_the_Un...
edit:
> You're doing what so many EU fans do, you're repeating myths whilst believing you're above believing myths.
That is rather a slur on a large group of people. A group I certainly did not belong to before the referendum, however I was rather guided towards them by my instinctive dislike for the far-right and their anti-immigration demagoguery. My instinctive dislike for people who make statements like, "we have all had enough of experts", and people who paint lies on the side of buses and tour the country with them. People who break the spending rules at elections for instance[1]. I'm not going to argue this any further, this is HN not a political forum, but your comment stinks.
[1]:https://www.theguardian.com/politics/2018/may/11/leaveeu-fin...
Well, he would say (all) that, wouldn't he?
The European central bank has a much larger version of the same problem. Iceland was able to use rates to help it out of its economic collapse. Greece can't do this.
The quality of consumer FX has steadily improved over the decades. Access to technology has given tighter spreads and convenience. If the Euro goes, I hope there is some consideration given to running regional currencies rather than national. Imagine if a "Bank of Italy" maintained independent northern, central, and southern notes.
What needs to happen for the Euro to survive is that Germans have to accept a pretty substantial and long term inflation in order to keep growth elsewhere. But they had some bad luck with inflation in the past when it led to “economic anxiety” so it’s a bit of a red flag for them...
The other solution is to kill (or split) the Euro to save the EU. It seems more and more sensible.
Not saying that that's the correct attitude, just offering a explanation.
https://upload.wikimedia.org/wikipedia/commons/d/da/TARGET2_...
How would this work? I still remember before Slovenia was in the EU we had our own currency that was okay but not so hot.
All big transactions between people like buying a home were done in deutsche marks. Or at least everyone talked about them using DEM and later EUR as the currency.
Point being people will absolutely use the most stable currency easily available regardless of what their local currency is.
The US has a single currency that serves vastly different economies. The dollar prevents poor economies in Alabama and Mississippi from devaluing their currencies just like Italy and Greece can't devalue their currencies.
But the US also has fiscal tools like taxation and direct transfers that subsidize Alabama and Mississippi.
Fiscal policy requires political union to force wealthy economies to transfer their wealth to poor economies.
The EU doesn't have political union, and they're actually headed in the opposite direction due to discord about migration leading to stronger nationalist/populist/authoritarian leaders.
So if political union is the solution and the EU is going the other way, then it's hard to see how the Euro and by extension the EU can survive.
https://en.wikipedia.org/wiki/Impossible_trinity
Unlike many ideas in economics, the "impossible trinity" has proven itself again and again. It's not one of the usual right wing tropes like "raising the minimum wage will tank the economy".
Different monetary zones allow price levels to adjust. For instance I was in Montreal and looking at the price of package tours to different parts of Europe and Greece turned out to be the most expensive place to go. If it wasn't for the Euro, price levels would drop in Greece as denominated in USD, it would be more attractive to go on vacation there, manufacturing would become more profitable there, and the Greek economy will recover.
It is true that the Eurozone and the E.U. are different but I am not sure that Brexit voters really know that. What they have seen is Eurocracy has a "democratic deficit" and and inability to handle problems (for better or worse government legitimacy is more impacted by effectiveness than by process or ideology.)
Yes, exactly. It's strange because of the near "universal consensus" you cite on the effect of currency union without fiscal policy union. And it's possible to have a real economics debate about this topic now because this topic hasn't been politicized - it's almost purely an academic debate without the (primarily right-wing) agenda-driven media sources weighing in.
I also find it strange that what happened was what economists were predicting-- but I have a guess as to why currency union happened anyway. The architects of the euro thought a single currency would draw the EU together and would, a few years later, end up with coordinated fiscal policy. But that didn't happen, and a currency crisis hit, damaging the euro, before fiscal policies became coordinated. (Given political situations, it seems almost impossible that fiscal policy will be unified now.) The linked post (and book) are good because they use the Greece-Germany situation as an example to highlight the bigger issues of fiscal policy and it crashing into domestic policies and politics. Pretty fascinating, really.
https://tradingeconomics.com/greece/tourism-revenues https://tradingeconomics.com/greece/tourist-arrivals
Intuitively also, I don't get the feeling that tourism has been hurt by the Euro and by higher prices. And, anecdotally, business owners are supposed to prefer higher-earners as visitors, to backpackers and students etc (regardless of whether that makes business sense or not).
(hi Paul :)
https://www.theguardian.com/world/2018/jun/03/greece-tourism...
According to which 2018 is an exceptionally good year, so good in fact we might have trouble accommodating all the extra people:
Greece is braced for another bumper year. The tourists will not stop coming. For every one of its citizens, three foreign visitors – 32 million in total – will arrive in 2018, more than at any other time since records began.
Tourist numbers have increased by an additional 2 million every year for the past three years. Arrivals from China alone have doubled since 2017. But with forecasts predicting record numbers over the next decade, a growing number of Greeks are asking: can Greece really cope?
One of the problems with the EU is that Germans like to live in Germany and Greeks like to live in Greece.
More significant is our fiscal union. My taxes in New York and California support Mississippi and Iowa. (Politically, this requires the citizens of a country to see themselves as one.) The EU missed, in the last crisis, an opportunity to form a banking and preliminary fiscal union.
Edit: formatting
America has a large population of Spanish speakers and go to many cities and you'll find official signage and documents written in Chinese and other languages.
Single culture, well, compare people living in the deep south and Manhattan, what they value and enjoy. Beyond sports do they have a lot in common?
That said I agree Europe is much less homogenous.
They speak the same language, they go to the same shops, they watch the same tv shows and tv channels, they have a common healthcare and education system, they are governed by the same president, they share a similar history that they learn in the same schools.
Ofc it's not as easy as I'm stating it here, if they drop out of the EU, Germany and others would be in deep trouble due to the massive credits they gave everyone to make them stay and dependent
(that said, the German wage deflation discussed in the post is an EU issue, not a euro issue.)
The topic of the euro's effects on Greece, and the influence of Germany, appears to be at a wide consensus amongst academic economists. Stiglitz, Krugman, and even people like Navarro agree. https://krugman.blogs.nytimes.com/2017/02/01/germany-the-eur... https://www.forbes.com/sites/timworstall/2016/09/11/the-euro...
I remember back 20 years ago that macroeconomists were talking about how the lack of fiscal coordination was going to break the euro. And so it has come to pass, it seems.
Edit: or what PaulHoule says with more detail in another reply.
I think as others have noted the idea of a single currency is always going to be partly political. What kind of state makes all of its decisions based on economic theory?
The euro zone as a whole right now is out-growing the UK, and according to my fx dealer are deliberately playing down their growth to keep the euro weak.
I think criticising the idea of the euro as 'political' is a bit rich from someone whose opposition to it seems too also be ideological.
Personally I like the easy trade it facilitates. FX risk is dreary to manage. Only having to hedge GBPEUR makes it much simpler than the old days. Maybe the mistake, if there was one, was letting Greece et al join before they were ready
Politicians are experts at this. This morning there was a discussion on ozzie radio with the secretary of the treasury on radio. There, the government decried the lack of innovation in the Australian business community. Specifically why there aren't any Australian businesses that operate online 2-sided marketplaces like Amazon or Ebay. Similar discussions have been happening in Europe.
Now of course, when you analyze the argument (and I assure you these government people at that level aren't morons, they know this) it turns out these government people are psychopaths.
You see, the reason there is no Australian 2-sided online marketplace is ... tax. The Australian government has chosen not to impose either import tax, rules or GST/VAT on imported goods with a value < $1000.
So after years of imposing a ~18% cost disadvantage on Australian businesses compared to international businesses, a senior government representative comes on public radio, and eloquently decries the fact that it must be Australian's inadequacy that has prevented them from competing with international companies WHILE IMPOSING AN 18% PRICE HANDICAP ON THEM. Therefore, it is only fair that customers punish them. They called up a few of them that were clearly preselected for their utter lack of rhetorical abilities to make them completely ridiculous (they were cut off halfway through the argument too).
In other words, this guy has been pursuing a policy of openly sabotaging Australian businesses for at least half a decade, blames them, wide open in public for not performing well, and then picks the worst of them to "say a few words".
Now this sort of thing happens a LOT in discussions. For instance, when it comes to immigrants, ... I must say it makes it VERY clear why these people want to censor (sorry, I mean "eliminate fake news for the good of the people").
For the record, I am a socialist and I hate the business practices of these businessmen, but hearing that radio discussion I must say, I got a newfound respect for them and a deep hatred of the Australian treasury/government. I mean I would respect someone who just stood there and said "I'm screwing you and there's nothing you can do" more than this lying asshole.
Thing is, I'm absolutely sure 90% of people listening (at least) fell for it.
You should learn to look at European governments actions as very similar to this. You will understand far more about the situation by assuming any government spokesman/woman (including of course such papers as Der Spiegel) are at best leaving out viewpoints, usually outright lying, and sometimes directly falsifying their argument.