Monthly Archives: October 2013

Inequality and The Demise of the Euro

euro-meltdown

This is not going well.

The coalition negotiations in Germany appear to have stalled on the question of whether Chancellor Merkel will authorize further European capital (read: German capital) for Irish banks.  Further more, the SDP is trying to force Ireland to raise its corporation tax rate, an incentive that has diverted investments away from the rest of Europe in key areas such as the Internet and Biotechnology.  This is not the first time that Germany has taken on the appearance of a reluctant bully in Europe, forcing itself on the weaker nations who are not deserving of its largesse.  It is of course symptom, not cause, and the true reason for the current difficulties – perpetuated now for five years or so – is the structural failure of the European project to manage economic diversity.

There is some great wealth in Europe, concentrated in pockets such as the Ruhr valley, Northern Italy, Southern England, and other places.  Big industries such as auto manufacturing and pharmaceuticals employ hundreds of thousands, while financial services help to facilitate the trade of those products all over the world.  The wealth, however, is poorly distributed if we consider the wider context.

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