European Breakfast - Oct. 29 | 57 comments (57 topical, editorial, 0 hidden)

Euro (none / 0)

If you look at the U.S., Texas doesn't control its own monetary policy, nor does Massachusetts. So federal policies that are good for one state or region might not be so good for other states--and there's nothing the states can do about it.

I think the difference between the U.S. and the "federal Europe" setup is that labor in America is completely free to move from place to place. So if a given national monetary policy makes the local economy in Massachusetts bad, then people will easily move to Texas. And they do. People move all over the place, all the time.

This is not the case in Europe, which means that there is no safety valve to provide relief. For example, why don't all those unemployed people in country X (whatever one that might be, not wanting to get into the unemployment statistics argument!) pick up their bags and move somewhere else to find work?

I agree with you that the way the Euro zone is currently structured appears impossible to maintain. It looked for a while like the Constitution would be a step towards a federal Europe, but with that stalled I think the Euro is in for serious, serious trouble.

by asdf on Sat Oct 29th, 2005 at 06:29:15 PM EST
[ Parent ]

Re: Euro (none / 0)

You couldn't be more wrong.

One of the pillars of the EU is the free movement of people (along with goods and services). In fact, any citizen of any European Economic Area (encompassing quite a bit more than the EU) can work in most EU countries, and all EU citizens can work anywhere in the EU. The problem is the language barriers and a cultural disinclination to move away from one's community in search of work.

[I don't want to go into the details of the transitional measures restricting free movement of people, goods and services between the EU-15 and the new 10 countries - it's actually quite complex and the situation will change after 2, 5 and 7 years]

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Carrie (migeru at eurotrib dot com) on Sat Oct 29th, 2005 at 06:33:34 PM EST
[ Parent ]

Re: Euro (none / 0)

We need to find some statistics on this. It sure looks, from the viewpoint of an American Westerner, that there is a lot more worker mobility over here. These western cities (L.A., Denver, Boise, Santa Fe, Phoenix, etc.) are populated almost ENTIRELY by people who have moved here in the past 30 years.

How many people have relocated from Paris or Rome to Geneva or Brussels?

by asdf on Sun Oct 30th, 2005 at 01:55:58 PM EST
[ Parent ]

Re: Euro (none / 0)

I think Europeans have a strong resistance to move away from their community in search of work. This applies even within our own countries or subnational units. It is an important cultural difference with respect to the US.

But I think my generation (I am 30 now) is very different. First of all, we have all watched the old life-employment certainties collapse around us as we grew up, and are less inclined to expect to live our whole productive life in the same place. We have also enjoyed greater mobility both within our own countries and within Europe. Not only was travelling cheap, but there were European mobility programs such as Erasmus, Tempus or Socrates that many, many students took advantage of. Not to speak of summer language schools, and intensive backpacking using Eurail passes.

I don't know what the numbers are, but I expect the trends to be quite fast.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Carrie (migeru at eurotrib dot com) on Sun Oct 30th, 2005 at 03:34:08 PM EST
[ Parent ]

Re: Euro (none / 1)

Well, I'm not so sure there is a European reluctance to move to a different country if people can find (better) jobs. Millions of Europeans emigrated to the US, Canada, Central and South America, Australia and New Zealand. Millions more moved from the South to countries like Benelux, Germany, France, the Alp Republics or just moved from Sicily to Lombardy or Piemont. Then think about the political refugees who left Hungary and came to live in Germany and France. After 1990 another 2.5 million left Russia, Romania, Hungary and Poland and went to live in Germany. They were followed by roughly three million East Germans who found new jobs in West Germany. Don't forget the folks from ex Jugoslavia who moved to the West when the war broke out. There's still a million living outside their countries. The fact is that that we had a far bigger immigration and migration rate than the US during the last fifty years. The difference is that you don't notice it so easily. Being a newcomer doesn't mean that you have to live in a trailer park.

Btw: On the continent we also have a far higher social (upwards) mobility than the US/UK.

"The USA appears destined by fate to plague America with misery in the name of liberty." Simon Bolivar, Caracas, 1819

by Ritter on Sun Oct 30th, 2005 at 03:57:04 PM EST
[ Parent ]

Re: Euro (none / 0)

I looked under some Internet rocks and here are some data points.

This guy http://strategis.ic.gc.ca/epic/internet/ineas-aes.nsf/en/ra01954e.html says that "Europe has much less mobility than does the US."

Here http://europa.eu.int/comm/employment_social/news/2005/jun/eymob_en.html is a report that says that the "percentage of Europeans residing in an EU country other than their country of origin has consistently remained around 1.5% for the last 30 years."

And here http://www.bls.census.gov/cps/pub/1997/mobility.htm is one that 2.5% of Americans move from state to state annually.

I don't know whether these are comparable, but they do seem to reinforce the notion that moving from, say, Sicily to Luxmbourg, or Greece to the Netherlands, is a common thing. I am aware of large Portugese communities in London, and obviously there are lots of guest workers in various places, but how common is it to pick up and move to a different country? Perhaps a poll is worthwhile...

by asdf on Sun Oct 30th, 2005 at 08:08:36 PM EST
[ Parent ]

Re: Euro (4.00 / 2)

asdf writes: I think the difference between the U.S. and the "federal Europe" setup is that labor in America is completely free to move from place to place.

-snip-

Yeah, people can move, but that doesn't necessarily mean that they can get hired to fill a out of state vacancy for the job they are specialized in. A licensed CA nurse is not allowed to work in FL. FL doesn't accept his/her CA certificates. And so forth.

You might not have known it but EU citizens can move and take up a job everywhere in the Union and much impetus has been put in harmonizing and accepting diplomas and other study and work related certificates.

Actually all EU citizens hold the same drivers license. In the US they still differ from state to state. Also, EU citizens can ask for a standard form E111 (could be E101, it's a long time that I last used it) and get free health care in whatever Member State the go to. EU citizens can claim unemployment money in their home town for jobs performed abroad. Another important fact: EU citizens can sit on any beach in the Union and enjoy a beer or glass of wine. They can also put it on the back bench of their car. Everywhere. It is only when it comes to nude sun bathing that you have to respect the regional and national customs. In Scandinavia, Holland, Germany and Austria it is no problem.

"The USA appears destined by fate to plague America with misery in the name of liberty." Simon Bolivar, Caracas, 1819

by Ritter on Sun Oct 30th, 2005 at 02:40:34 PM EST
[ Parent ]

European Breakfast - Oct. 29 | 57 comments (57 topical, 0 editorial, 0 hidden)

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