From one of our readers:
Sir,
Charlemagne’s column (Economist, 16.4.20) was a classic example of your desperate, almost fanatical, support of the EU and the Euro. The plight of Italian and Spanish millennials was sympathetically reported, but with the blinding omission of the overwhelming reason for their suffering: the Euro. Charlemagne even contrasts the 11% millennial unemployment in Germany with the 30- to-50% rates in Southern Europe, but fails to mention that the Euro straightjacket penalises those from Spain, Italy and Greece, while artificially lowering the cost of employing Germans. The solution, of course, is to abandon the Euro, and loosen the EU. But that might take a revolution in John Adams Street…
Yours etc
Peter Lucey
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From: cepStudy
20 Years of the Euro: Winners and Losers
20 years since its introduction and the euro remains controversial. cep has used the synthetic control method to analyse which countries have gained from the euro and which ones have lost out.
► Germany has gained by far the most from the introduction of the euro; almost € 1.9 trillion between 1999 and 2017. This amounts to around € 23,000 per inhabitant. Otherwise, only the Netherlands has gained substantial benefits from the introducing the euro.
► In the first few years after its introduction, Greece gained hugely from the euro but since 2011 has suffered enormous losses. Over the whole period, the balance of € 2 billion or € 190 per inhabitant, is only just positive.
► In all the other countries analysed, the euro has resulted in a drop in prosperity: € 3.6 trillion in France and as much as € 4.3 trillion in Italy. In France, this amounts to € 56,000 per capita and in Italy € 74,000.
Staggering numbers, Leo (not that I doubt them for a moment). Membership of the eurozone costs every Italian household (24 million of them) over €10,000 every year.
The Charlemagne link is at https://www.economist.com/europe/2020/04/16/southern-europes-millennials-suffer-two-huge-crises-by-their-mid-30s
(free for subscribers, might be open to all as the Econ has opened access to Coronavirus-related articles)
It gets worse and the negative effects in the round are much higher than the cepStudy study identifies, which does not, for instance, consider all the impacts of the so called bailout of Greece (with nearly all the money going directly to German and French banks).
Included in the "bailout" was Greece's agreement, as a condition, to the purchase of arms from France and Germany. 15% of all German arms sales and 10% of all France's are bought by Greece, which is now legally committed to continuing these purchases, including German submarines, artillery and tanks and French fighters; the ongoing maintenance contracts being carried out by German and French firms, of course.
The total costs certainly are in excess of 30 billion euros,but perhaps more than twice that ultimately. That is more than 10% and could be as much as 20% of 215 billion bailout and is certainly more than Greece every actually received.
Is it any wonder, in light of the above, that the ECB is situated in Germany and is headed by a convicted French financial criminal?
How can Italy have lost more per head than it had per head? Is this one of those "failed to gain" studies?
The study maintains that Italy has lost € 56,000 (at today's value) over a 20 year period, amounting to € 2,800 per capita per annum.
That's perfectly credible, especially with the state's huge public debt and bearing in mind that 20 years ago Italy had the lowest personal and private mortgage liabilities per capita in western Europe, which is not the case now.
The study isn't a "failed to gain" more a "didn't gain but actually lost" one, although Italy has had negligible economic growth since the Euro was introduced, which is a massive failure to gain.
It's also who does the gaining & who does the losing. I'm willing to bet the professional, managerial, administrative & academic classes have done better in most if not all countries. The burden has almost entirely been on the blue collar workers. Even where workers from the East have benefited from moving West for work, the result has been depressing wages in the countries they've gone to.
I seem to remember the dry, intelligent Economist of yore. Since Brexit they have lost their heads and become pretty unreadable.
I saw something Twitter that editor-in-chief Susan "Zanny*" Minton Beddoes, said she didn't they had any journalists who supported Brexit, which didn't come as a surprise.
When Jeremy Cliffe was the Charlemagne columnist it had to be the worst of a dire read, his Christmas 2018 column was the final straw for me and I let my subscription lapse. He's now peddling his drivel at the New Statesman.
* Zanny just screams privileged middle class SJW.
They went full Green before that and lost my money.
I cancelled my subscription in 2006. The coverage of climate change being the main reason.
Looked through a couple of issues in hospital waiting room a year or so ago. Sad to see how low it has sunk.