FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.

posted on 30 January 2016

Massive Fiscal Transfers, The Only Chance For Survival Of The European Union

Written by

Germany and other richer European states oppose massive fiscal transfers inside the European Union. They wrongly think that poorer EU member states may reduce the gap between them and the richer side of Europe through 'reforms'.

It is just wishful thinking. Germany itself managed to keep its Eastern side (the former GDR) afloat only through enormous fiscal transfers, maybe the biggest ones in the history of mankind. West Germany flooded East Germany with trillions of Deutsche Marks, then Euros: pensions, benefits, procurements, everything was financed in East Germany on a par with West Germany, using West's money.

The German narative for Eastern Europe proves wrong again and again. They wrongly supposed that granting only the freedom of movement and some meager founding would be a panacea for Eastern Europe. They imagined that poor people from the East would work in the West only for a while, saving money and then returning in their native countries to invest their savings into new businesses. That assumption was completely wrong.

Those who left the East to live in the West have no intention to return in their native countries because of the big differences between social systems: healthcare, pensions, benefits, education. While in the West those systems work very well, in the East they are almost bankrupted. The exodus of the best educated and fitted for work people from East to West maintain and even increase the gap between the quality of social services in East and West.

As a result, who is now so stupid to give up the British healthcare for a Romanian one, the Dutch schools for Bulgarian ones, a French pension for a Hungarian one?

Without common European pensions, social systems, public services, financed by a common European coffer, the EU is nothing but a kind of colonial empire. Freedom of movement for workers and some imperial investments in agriculture and infrastructure were a feature of most colonial empires. The Indian railroads were built by the British and Indians had the right to work in England. Even today the citizens of the British Commonwealth are allowed to join the British Army, while the EU citizens aren't.

Unless richer EU states accept to finance common pensions, healthcare, education, social benefits, public procurement and same wages for public servants, the European Union will destroy itself. And its end will come sooner than some expected.

By far, the most amazing fact regarding the current lack of real fiscal transfers inside the EU is that the poorer EU member states don't ask for such fiscal transfers. Yet.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical Opinion Post Listing

Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.

You can also comment using Facebook directly using he comment block below.

Econintersect Opinion


Print this page or create a PDF file of this page
Print Friendly and PDF

The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.

Take a look at what is going on inside of
Main Home
Analysis Blog
Comments on Feyerabend’s ‘Against Method’, Part II
Comments on Feyerabend’s ‘Against Method’, Part III
News Blog
Mom Breaks Down In Tears When Son With Autism Meets Service Dog
Rail Week Ending 15 October 2016 Paints A Negative Economic View
What Is The New Normal For U.S. Growth?
Affordable Care Act And Its Effect On Part-Time Employment
The Speed Of Filling Jobs Is Declining
First Working Eggs Made From Stem Cells Points To Fertility Breakthrough
Infographic Of The Day: Mega Machines
Online Platforms Double Down On TV Programming
A History Of Mars Missions
How Tesla Out Innovates Traditional Carmakers
Schiaparelli's Descent To Mars In Real Time
September 2016 Existing Home Sales Still Not Excellent
September 2016 Leading Economic Index Improves Indicating Moderate Growth Ahead.
Investing Blog
Options Early Assignment - Should You Worry?
The 401k Plan Manager 17 October 2016
Opinion Blog
Prop. 51 Versus A State-Owned Bank: How California Can Save $10 Billion On A $9 Billion Loan
Obama's Middle East Policy Has Been A Complete Failure - Or Has It?
Precious Metals Blog
How Will The Election Outcome Impact Precious Metals?
Live Markets
21Oct2016 Market Close: Major US Indexes Close Flat On Low Volume, Crude Prices Resume Climb, US Dollar Stabilizes In Mid 98 Handle, Yes, Most Investors Are Worried Which Way This Market Will Go
Amazon Books & More

.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Middle East / Africa
USA Government

Crowdfunding ....



Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved