Price reduction in Spain

[fighter]

kowenicki said:

fighter said:

kowenicki said:
Unemployment in Spain is expected to reach 25% plus by year end...

Unreal.

But hey... the Euro and EU common fiscal policy works.... doesn't it? My arse!!

 

 

 

It works if you respect the common sense rules the way Germany did. Also, it was when adapting itself to the standards of the euro-zone that the unemployment rate dropped to 8%. It was already at 20% beginning of the 90's.

 

The european countries that got really hurt by the crisis are the stupid ones. Their policy was growth through consumption (debt) instead of production. That only works on a short term if the import-export balance is favourable, but in the end it reduces any economy's efficiency

If you throw money (EU subsidies) at a developing economy (Portugal Spain, Greece, Ireland) then provide the illusion of a steady single currency and (worse) a steady single interest rate then of course they are going to invest and spend like crazy on infra structure...

All it takes is an economic down turn to mess things up

And so it has panned out.

The EU has re-enforced the illusion (as does the UK government now) that government = the ecomony... the public sector is NEVER the economy.

 

 

Euro's exchange rate and ECB's interest rates are fluctuant btw. But i get what you mean.

On the other hand, the euro-zone is now the biggest market in the world and by internalizing competition within its' frontiers it won't suffer as much from foreign aleas. Just look at Japan. That country is going nowhere without a trans-national partnership. They work their asses off but don't have enough land to be self-sufficient. China could soon crush them just by increasng its' tax rates and/or prices.

The european natural framework is now to develop industry in the east while the west consolidates excellence in both services and finance (there is no way western europeans will go back to the factory, not at the current prices) Our only weak point are oil and gas.

That framework is similar to how a nation integrates its' different regions in a complementary way. There will always be waste here and there but in the end it's pure win.