View Full Version : How to improve Europe's economy ?

12-10-02, 07:25
I've just read an article inThe Economist (Borrowed Time (http://www.economist.com/agenda/displayStory.cfm?story_id=1388486) ) that treat of the problem that European banks are facing. This prompted me to start this thread and ask my European fellows what they think should be done to revamp the economy as a whole.

I think most problems stem from a lack of internationalisation inside the EU. We are now one country (with a European nationality, parliament, gov., central bank, currency, common foreign policy, etc.), but remnants of nationalism seem to block the institution to turn really European.

Banks, for instance, are still mainly British, French, German, Italian, Dutch, but there aren't any true European bank so far. New holdings have joined banks from 2 or 3 countries (ex. French-Belgian Dexia Bank), or smaller banks have been eaten up by larger ones from other EU countries (ex. the Dutch Fortis Bank has absorbed 2 main Belgian banks and the Deutsche Bank has open new branches in several countries). I'd like to see European bank accounts, and a few big banks present everywhere inside the EU. It's ironical to see international banks such as HSBC having branches in the UK, China, Malaysia, Singapore, India and other Asian countries, but remain absent inside the rest of the EU.

The same Europeanisation must come for telecoms (comin slowly with Orange, Vodaphone...), railways and long-distance buses (there is already Eurolines, but can't move inside a same country because it harms local companies. That's unacceptable to protect non-competitive companies like this !), the postal services (why isn't there a European Post when all stamps are in euro ?), and other sectors.

What about creating European 24h/24, 7d/7 combini's ?

Then the market must absolutely be made more flexible. Unemployement is due to the rigidity of a market. People don't change job, so there is less recycling and opportunities in the employment market. What's more people doing the same job all their life get bored more easily and are less happy in life, thus less productive and professional (look at civil servants !). The time of life employment is over. The market must open and become more competitive. How do you know your vocation when you start working in your early twenties? People need change. Society change and make people evolved. I feel that some European refions haven't understood this yet and that's what is causing high unemployement (around 10% in France, Italy, Germany, Belgium, Spain, etc.).

Other ideas ?

12-10-02, 09:43
How about a revolt?
Overthrow all the individual governments and install one Euro-government.

Seriously, Europe is not one. Nor will it ever be in the near future.
The Euro-currency is just an economic decision to lower costs for the banks.

When there's one set of laws and one tax-system i'll start believing in one Europe.
Compare the prices of consumergoods on a European scale and it will become painfully clear how the European countries stand apart.

12-10-02, 11:09
True, Europe isn't one, and it won't be so soon. The United States of Europe are a common goal, but at the moment it's still utopia. On the other hand, look at European history since the days of Robert Schumann: the pace of integration is definitely increasing: Maastricht, Schengen, Nice and now ten East and South European candidates who will join in 2004. The EU will comprise of 25 nations that couldn't be more diverse, from Poland to Portugal, from Ireland to Greece and Cyprus (and don't forget Turkey knocking at the door since ages).

The diversity in mentality, history and cultural background does not exactly facilitate economic unification and the creation of common standards. Introducing 24/7 Euro-combinis is peanuts compared to making countries like Poland or Slovakia toe the economic line of Western European countries.

@ europeanisation

It is obvious that some countries such as the Benelux have less problems in throwing 'nationalisms' over board than others (cough, cough, take the UK for example). In the long run even EU-sceptics such as Denmark and Britain will join Euroland, and I'm sure we'll see the day when even Norway and Switzerland will sign the treaty.

@ economic flexibility

Excellent idea, but who's flexibility is it in fact? The employer's, to hire and fire at will? The good thing about most European countries is that employees' rights are still protected, even in times of recession. Flexibility and liberalisation take place at the expense of someone, usually employees and consumers.

Ergo: patience, Rome wasn't built in a day!

12-10-02, 15:38
Originally posted by Twisted
Seriously, Europe is not one. Nor will it ever be in the near future.
The Euro-currency is just an economic decision to lower costs for the banks.

When there's one set of laws and one tax-system i'll start believing in one Europe.
Compare the prices of consumergoods on a European scale and it will become painfully clear how the European countries stand apart.

I think banks are actually losing money because of the euro. They won't be able to make profit on money exchange inside the EU.

Why should tax harmonisation be a standard of recogniton as a nation ? Each US state has different tax level, as most federal countries (even Belgium as small as it is has 3 taxes regions). What's more, there is already a European Tax that finances the Common Agricultural Policy, help poorer regions, etc.

@Consumer goods prices
That's the same in every countries. Life is much more expensive in Tokyo than in smaller Japanese towns, NY is more expensive than, let's say Mineapolis, which is also more expensive than the countryside. Inside present countries, there are big disparities between cities or regions. Take Italy, the average salary in Lombardia (Milano) is 3 times higher than in the South (and so are prices).

In conlusion, it's impossible and unnecessary to have prices and tax harmony in a country the size of Europe or in any fereral country.

@economic or political union ?
The EEC was a economic union. Since the Maastricht Treaty in 1992, Europe is politically unified, in the sense that it has a government, laws, no borders inside the regions, European passports and nationality, a common immigration policy with common visas (Schengen Area at least) and common defence forces. Since 1999 it has a common currency, a common economic and foreign policy, a central bank fixing the interest rates everywhere, and a constitution is being written (what the UK doesn't even have).

I really don't see why people keep saying the EU is not a country. Because there isn't a single head of state but 15 with a rotating president ? Because there isn't one official language ? India has 18 official languages among more than 800 + dialects, but it is a country. If it's because of the education, Belgium has 3 different independant systems (one for each language group) that have absolutely nothing to do with each others. I guess German Laender have a similar autonomy.

@one set of laws
Europe already is a federal state - it just has more levels of goverment than any other country (well every place in Belgium has national, regional, communitarian, provincial and communal governments, which all have different attributes, so it has more level of gov. without the EU than France or the Netherlands with the EU). I am almost certain that there is less difference between the law in the Netherlands and Belgium, or France and Italy than between 2 US States like Texas and California, or NY and Kansas.