Mario druthers: Draghi’s plan for Europe

[@janlietaer9046]

Can Europe allocate limited resources more effectively than the free market? Will the positive impact of investing billions outweigh the negative effects of raising taxes to fund these investments?

[@oceanwave4502]

If you let the market decide, all of them would leave Europe as there is no real future there. For example, rapidly aging population.

[@omkarbhise380]

I am actually moving to Netherland next year! I am done with US and its visa rules to get H1B. I have got masters from Top US university in computer engineering. However, I am still not getting picked in this BS H1B lottery system.

[@1525boy]

What "Top US university" did you attend? Why don't you just stay in India?

[@caglarsamet]

El-Erian said much the same thing in the only game in town. difference, he said in 2016.

[@JohnCastro-d6y]

Our economy is facing challenges due to uncertainties, housing problems, foreclosures, global fluctuations, and the lingering effects of the pandemic, leading to instability. The rising inflation, slow growth, and trade disruptions require immediate action from all sectors to restore stability and promote economic recovery.

[@DanielleCastro-g4m]

With the US dollar losing value to inflation and other currencies gaining traction, uncertainty looms. Yet, many still trust in the dollar's perceived safety. Worried about my $420,000 retirement savings losing value, I seek alternative security for my money.

[@Danielwroughton-y2c]

With my busy schedule, I struggle to find time for in-depth investment analysis. For the past seven years, I have entrusted a fiduciary to oversee my portfolio, effectively adjusting to market fluctuations and providing valuable insights for strategic decision-making. I highly recommend considering a similar approach for those seeking successful financial navigation and well-informed investment choices

[@Die-y1b]

This is definitely considerable! Do you think you could suggest any professionals or advisors I can get on the phone with? I'm in dire need of proper portfolio allocation.

[@Danielwroughton-y2c]

Just research the name Desiree Ruth Hoffman. You’d find necessary details to work with a correspondence to set up an appointment.

[@Die-y1b]

I appreciate it. After searching her name online and reviewing her credentials, I'm quite impressed. I've contacted her as I could use all the help I can get. A call has been scheduled.

[@glennnielsen8054]

In short, the EU's challenge is its central structure and governance. Decentralized countries are subject to spontaneity and with an incentive structure that is more in harmony between state, local authority and citizen. Therefore, decentralized countries such as the USA and Switzerland are more successful on a wide range of relevant parameters.

[@primzahler8377]

Apart from the fac that the whole centralized vs decentralized is very much too crude. It is clearly not the point of Draghi's report. If you just want to read your beliefs into things consider joining any religion

[@piotrzborowski1101]

I wouldn't say joint borrowing, which Draghi proposes, is decentralization or that the EU is more centralized than the US. Only a part of the EU has the same currency, and that without the fiscal union, which in consequence forces countries to have smaller deficits. EU has virtually no budget except a small one for common agrarian policies and instead each member country has its own - and all of these things, with lack of fiscal union that the US has on top, are structural problems, instead of decentralization advantages.

[@dylanschulz9118]

Id would actually say the opposite. The EU is extremely decentralized, even if some member states are fairly centralized. That means much less room for the EU to do massive stimulus packages like the inflation reduction act or China's industrial subsidies. China in particular is far, far more centralized in its decision making than either the EU or US

[@glennnielsen8054]

@@dylanschulz9118 It is an interesting comment you make, especially in relation to China, as this is the conclusion most people come to based on pure intuition. If you study the role of the individual regions in China in terms of collecting taxes and stimulating the region's economy in competition with the other regions, you will come to a different conclusion, I would suspect. There are central elements to the EU, but a significant limitation to spontaneity is regulation and rules. The competition that Florida and Texas create in relation to the other states in the USA will probably never be allowed in the EU.

[@samirzemmache]

Lets address the elephant in the room…. Germany is the main economic locomotive along with france for EU…. German industry did rely mostly on the cheap energy coming from Russia….. US forced germany to boycott the cheap russian gaz ( even sabotaged the pipeline) now german industries can not compete in the market … the german production is very expensive since the energy they acquire is the most expensive… it is not the case for the US… as US has its own energy ressource…. Poor germans, relying on America and obeying to US geo politics costed them their entire industry….

[@asganawayaway]

Energy costs aren’t that high ATM though, that’s not the main issue

[@JS-kv7mx]

For a while I was trying to find out if the energy purchases of Germany from Russia where really below market and could not find sources confirming this narrative. Can you please help me. Thank you.

[@samirzemmache]

@@JS-kv7mx you don’t need to look it up, a gaz directly from a source over a pipeline is much cheaper than to get it from US shipped in Boats in a liquid form…

[@oceanwave4502]

Germany can subsidy their way out of energy cost, but this is tax money. In addition, it would be great if such money could have been used elsewhere such as R&D in frontier tech or at least subsidy for EV.

[@glennnielsen8054]

Living and yet-to-be-born EU citizens should be rattled when you hear proposals for EU common debt. The EU does not have the skills or the right incentives to allocate capital efficiently.

[@primzahler8377]

I'm sure it would do fine given the need and the importance. After all there are fiscal rules and many countries in the world manage

[@glennnielsen8054]

@@primzahler8377 I agree with you so far that it is often beneficial to be positive and hope for the best. In the specific case, with the rules you refer to called the Growth and Stability Pact, the factual situation is that they have never been enforced. To some extent with Greece, but only when they fell off the cliff. Look at France and Italy, for example, which can be described as the most predictable crises just waiting to materialize when you look at their growth prospects, public deficits compared to their public debt to GDP ratio. The EU is keen to enforce competition law and the like, but when it comes to the political system, the rules are flexible and can be circumvented.

[@primzahler8377]

@@glennnielsen8054 The rules were first broken in the early 2000s by Germany and France. After that enforcement became difficult. The issue with enforcement is not that the EU wouldn't be willing to be strict but that memberstates don't want it to be too strict in regards to themselves or others. Greece is a bad example to pick as someone who didn't pay the price. Greece paid the heaviest price in terms of restructuring... I also don't think that debt levels explain the financial crisis, as you seem to, and that growth and debt levels plague each other. You mention France for instance, but I could also point to Germany which has relatively low debt but is not doing well economically. Many countries have relatively high levels of debt in the EU, but still quite different economic performances.

[@glennnielsen8054]

@@primzahler8377 Thank you for reminding me that Germany broke the rules of the Growth and Stability Pact when East Germany had to be integrated into West Germany. You are right about that, but you can probably argue that Germany has been better or smarter in allocating capital. France has managed to run deficits on public finances for more than 40 years by comparison, where Germany is moderate. Surely it is not an argument that the individual member states do not want to comply with the rules? If you have rules, they must either be enforced or, alternatively, they must be changed through the democratic process. Why don't you see the accelerating public debt as a problem?

[@primzahler8377]

@@glennnielsen8054 I don't think Germany broke the rules due to Unification. The rules were broken in the early 2000s so 10 years after reunification. I know from reading that unification did cost Germany, e.g. in terms of pension contributions for instance, but I don't think Germany broke the fiscal rules due to that. I don't see why you would think that. France has used Public debt more as a tool than Germany has but that is not entirely negative. It depends on what the money has been used for. France has in the laat 10 years more consistently invested in infrastructure than Germany. That's also more broadly why I am not worried about accelerating debt levels as you put it. I think of debt as a tool among others. The important thing is that debt payments can be made (which is very much the case) and that they don't become too high (which depends on how you think about interest rates. Most economists think interest rates are low in the long term). There are other issues like making sure there are enough people who can buy the debt etc. But my point is I don't see why you think a country cannot use debt or should never, why do you think France's use of the debt is so problematic ? If you think the money was badly spend I could get behind that, but if you simply think debt is bad to begin with then I can't really follow. As to why countries break fiscal rules. To some extend they have no choice, tax income is projected for instance and could be lower than expected, but to another extend many EU countries don't want there to be harsh punishments for them but also for others (since that could serve as precedent). It gets to this bigger question of what role member states think the EU should have in fiscal matters. Many don't want the EU to have much power over fiscal matters...