Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
You are assuming that a transfer will be used to increase productivity. I argue that "it depends" and actually has decreased productivity in some cases. One example:

In Portugal, the massive transfer that was made when joining the EU was used to build a motorway network and destroy the train network. This on the view that trains are for poor people ("and we are not poor anymore, we are European(tm)") and that cars are more efficient than trains.

I think most people in this discussion are thinking in "economese" terms, whereas the local culture makes a massive difference.

Yes, a transfer can be used (should be used) to increase productivity, but that is not always the case.

Actually the neo-lib argument of the need for "structural reform" makes sense. Of course, the needed reforms have little to do with what neo-libs defend. Example, what the periphery needs is a dose of colectivism (e.g. more efficient public transport, more respect for public spaces), not more individualism (more cars...)

by cagatacos on Thu Aug 30th, 2012 at 10:25:28 AM EST
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