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Old 09-26-2011   #5
Surferbeetle
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Originally Posted by Fuchs View Post
a) EU is not a part of EUCOM. EUCOM is merely concerned with an area in which the EU member states are.
Thank you for this observation, you are right; I incorrectly give this impression in several places within this document. I will rework it.

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Originally Posted by Fuchs View Post
b) I disagree on the fiscal policy thing.
Italy has the exact same macroeconomic problems between its north and its south as the Euro currency region has between its member states. Legal harmonisation and unification do not change the actual economic properties.

There are theories of optimal currency area, and one of them postulates that you need a high input factor mobility (capital, labour) inside a currency area in order to get a self-balancing effect.
An increase in Greek emigration hints that there is some labour mobility, but the past decade shows that it wasn't sufficient.
Furthermore, there is some theoretical work missing (or unknown to me) to reflect the fact that regions have fixed costs (pensions, government upkeep) and just draining them of input factors is an imperfect substitute for transfers in the case of imbalances.
Studies by the northern league in Italy, and on some of the poorer US states immediately spring to mind…I’ll have to do some further reading and get back to you.

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Originally Posted by Fuchs View Post
There are proponents of further EU integration who continually sow the idea that problems are founded in imperfect integration into the world, but that are mere talking points. The actual macroeconomic analysis looks at different variables and finds different key problems.
I incompletely visualize the many, many possible permutations of EU integration as a binary tree, and as an American I think about the possibilities of a ‘United States of Europe’ or of Germany going it alone and becoming a sort of counterfactual German version of the Republic of Texas (1836 to 1846 - but with a *lot* more ordnung and way better infrastructure? Perhaps it was simply too many Lucky Luke comics when I was younger )

I also think about traveling around Europe in pre-Schengen days, noting the differences in customs, dialects, languages, dress, and architecture. Back in the day German’s never wore tennis shoes outside of sporthalle , that was just for tacky Ami’s. Today when I visit I consider the cost of the barriers and delays to the free flow of capital (human and otherwise) of the pre-Schengen zone days and wonder about the effects of cultural homogenization.

Short answer is that I am unable to cut the Gordon knot on this one…

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Originally Posted by Fuchs View Post
Actually, more. Some EU members have a federalist structure. Germany has 17 financial ministries alone.
Solid point, thanks. I’ll edit…

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Originally Posted by Fuchs View Post
I disagree. At most 15 met the requirements. Greece lied its way into the club (and even after admitting it, continued to lie in the following years!) and Portugal was admitted despite failing to meet the requirements. It was deemed small enough to not hurt the other members significantly.
I went with the word ostensibly to be polite. From a purely technical standpoint it appears to me from this armchair that the accessions criteria were not met in some instances. Political successes are not strictly linked to technical successes however, which of course results in future costs or benefits depending upon how the dice fall....complicating this gamble is the observation that world's ratio of statesmen/women to politicians is not what it should be

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Originally Posted by Fuchs View Post
The German federal constitutional court has pretty much written in stone by now that further integration would violate the constitution and be repealed by this court's rulings. There is not going to be a major step towards EU fiscal integration without replacing the German constitution.
Afaik amending or changing it won't suffice, for the articles in question are among the 20 first, definite ones that cannot be changed in their meaning.
Will have to review the Grundgesetz again, it’s been a while.

Speaking of laws I note that timeline wise:

September 27th ,the Greek Parliament is scheduled to vote on property taxes
September 28th, the Finnish Parliament is scheduled to vote on the European Financial Stability Facility (EFSF)
September 29th, the German Parliament might ratify the EFSF
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