Well you can, but the problem is, and it has been the problem in europe since before the Euro, its why the euro/eu was destined to collapse... you have wildly differing levels of output and production per capita across Europe... that’s not a problem in and of itself, we have vastly different levels of GDP per state in the US as well, and debt and everything else...
The problem in Europe is each of these states has embraced socialist constructs, guaranteeing their workers annual raises and benefit increases without any demand for production increases or improvements...
This isn’t a big problem when each country is minting its own money... if Spain for example guarantees its people 5% more in benefit per year.. when there is no increase in production the central bank just prints 5% more notes... no fuss no muss... they get the 5% increase by simply devaluing their currency 5%.... and this is how it went across europe for decades.. the problem comes when the state can no longer print its own currency, but still tries to deliver on promised socialist increases every year in benefits... they won’t stop giving the benefit because the people would revolt, so the only option they have is to borrow an extra 5% per year, with no increase in productivity.... and sooner or later, this falls apart... ala Greece... and austerity is forced upon a nation because it can no longer borrow money without it.
The Euro didn’t require any ending of the nonsense games by these lesser nations... so they for 20 years just kept borrowing to keep up with their promised benefits... some have already economically collapsed because of it.. Greece for example, but others will fall as well.
That’s just the pragmatic economic folly of the Euro zone... That doesn’t even get into the centralized bureaucracy that has popped up trying to centralize political power.. which will be abjectly rejected by states as they and their populations anger that the loss of autonomy to unelected bureaucrats who make their daily lives illegal for some idiotic leftist political goal or another.
“the problem comes when the state can no longer print its own currency, but still tries to deliver on promised socialist increases every year in benefits... they won’t stop giving the benefit because the people would revolt, so the only option they have is to borrow an extra 5% per year, with no increase in productivity.... and sooner or later, this falls apart... ala Greece... and austerity is forced upon a nation because it can no longer borrow money without it”
Yes, well said. More precisely, my original question would have been stated better had I qualified it by saying that the different budgets among different states are not a problem, so long as all of the budgets are realistic and are similar in scope and scale.
The old school correction for this would be a devaluing of the currency.....until the devaluation attracts capital from without (which will only come when it sees that it will be productively invested). But with one currency, Greece can’t devalue without pulling down Germany.
So, as you rightly note, the only “solution” is for Germany to take over the budget of Greece and force austerity, etc.
And interestingly....even then...they haven’t been able to stop the euro from reaching parity with the dollar, have they?
Helpful discussion. Thank you.