Monday, May 28, 2012

Food for thought

With or without euro, Europe must raise its game

The opening last week in northeastern Spain of a 37-million-euro stretch of motorway to nowhere is an irresistible metaphor for the euro, an ambitious project conceived in better times that is now seemingly running out of road.

Posted by mr g @ 11:32 AM (1306 views)
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3 thoughts on “Food for thought

  • Two points for discussion here:

    1. Andy Xie, an independent economist in China, said “European countries without a competitive advantage must simply work harder or spend less. Alternatively, if they want to keep living it up, they will have to accept wrenching labour reforms and deregulation.”

    Either way that could impact on house prices.

    2. Perhaps not strictly HPC material but as several HPC’ers do comment on youth unemployment perhaps they would care to comment on the following:

    “We don’t yet have this culture of investing in people through their life cycle,” said Andreas Schleicher, the coordinator of the OECD’s skills strategy.

    Take Britain, which, like the United States, has stubbornly high unemployment with youth jobless rates above 20 percent.
    Paul Sissons with the Work Foundation, a think tank in London, said only 8 percent of Britons aged 16-24 worked in manufacturing in 2011, down from 24 percent in 1981. Services had taken up the slack, but youngsters were not being equipped with the requisite skills such as communications and team working.

    “For young people without the soft skills needed to access work in these growing sectors, finding employment has become increasingly difficult,” Sissons said.

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  • Spain builds a road to nowhere whilst Germany pays for it. How else could it possibly work without fiscal union?

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  • Khards – absolutely. For a union with a single currency to work you need. One level of benefits, one level of tax, one monetary policy, etc.

    Since you havent then you cant expect different economies with different cultures at different points in their business cycle to converge. Add to that the straight-jacked madness of the Masstricht treaty, eh voila nous sommes ici!

    This is where what we (the UK) did was a very good idea, although it was more by luck than judgement. That is dont join a single currency join a free trading block with your own currency own fiscal policy (not saying its good or bad) own monetary policy, benefit system etc.

    There is actually a fair bit of good stuff coming from Europe, but the Euro aint one of em!

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