Guest Post: Greeks Want To Stay In The Euro? Why Don’t They Move To Germany?

Tyler Durden's picture

Submitted by John Aziz from Azizonomics

Greeks Want To Stay In The Euro? Why Don’t They Move To Germany?

Above 80% of Greeks want to stay in the Euro:

About 80.9 percent of Greeks believe Greece should struggle to stay within the eurozone “at any cost,” fresh opinion polls showed on Wednesday.

 

Some 45.4 percent of respondents in a survey conducted by GPO firm for local private television Mega channel said that they regarded as most probable a Greek exit from the European common currency. And 48.4 percent of the respondents said that such a prospect was less likely.

But they don’t like the austerity measures that staying in the Euro entails:

About 77.8 percent expect the next government to emerge from the June 17 general elections to renegotiate the harsh austerity terms of the two bailout deals reached since May 2010 with international lenders to avoid a disorderly default

So the question is why don’t they leave Greece and move to the core where companies are hiring and public services aren’t being slashed, and where there is no overhanging threat of being thrown out of the euro?

Greeks claim that that’s exactly what they want to do:

Conducted in January by the Focus Bari company using a sample of 444 people aged between 18 and 24, the study shows 76% of interviewees believing that leaving Greece would be the best response to the effects of the economic crisis.

But they’re not doing it:

However, for most of them, the idea of leaving appears a dream that cannot come true. Half of those interviewed (53%) spoke of having thought about emigrating, while just 17% said that they had resolved to leave the country and that they had already undertaken preparatory actions.

 

A slightly lower percentage (14%) stated that they were forcing themselves quite consciously to stay in Greece, as it is their generation that has to bring about the changes that the country so desperately needs.

And it’s not even like they have to return home should recent immigrants become jobless — after twelve months working in another European state, Europeans are generally entitled to welfare:

Who can claim benefits in the European Economic Area (EEA)?

You may be able to get benefits and other financial support if any of the following apply:

  • you’ve lived, worked or studied (a recognised career qualification) in an EEA country
  • you’re a stateless person or refugee and you live in an EEA country
  • you’re a dependant or the widow or widower of anyone who was covered by the regulations (your nationality doesn’t matter)
  • you’re the widow, widower or child of someone who worked in an EEA country and was not an EEA national or a stateless person or refugee (but you must be a national of that country)
  • you’re not an EEA or Swiss national but legally resident in the UK
  • you’ve lived in the EEA country long enough to qualify

Just twelve months of work separates a jobless young Greek and austerity-free arbeitslosengeld

Yet this isn’t just a Greek issue. Labour mobility is much lower in Europe than the US:

The fact that labour mobility is low in Europe is indicative of a fundamental problem. In any currency union or integrated economy it is necessary that there is enough mobility that people can emigrate from places where there is excess labour (the periphery) to places where labour is in short supply.

Now, there is free movement in Europe, which is an essential prerequisite to a currency union. But the people themselves don’t seem to care for utilising it.

Why? I can theorise a few potential reasons people wouldn’t want to move — displacement from friends and family, moving costs, local attachment.  Yet none of those reasons are inapplicable to the United States. However there are two reasons which do not apply in the United States — language barriers and national loyalty. It is those reasons, I would suggest, that are preventing Europe from really functioning as a single economy with a higher rate of labour mobility.

The people who built the Euro realised that such problems existed, but decided to adopt a cross-that-bridge-when-we-come-to-it approach:

I am sure the Euro will oblige us to introduce a new set of economic policy instruments. It is politically impossible to propose that now. But some day there will be a crisis and new instruments will be created.

 

Romano Prodi, EU Commission President, December 2001

But long-term and deep-seated issues like language barriers and nationalistic sentiment cannot simply be eroded away in a day with an economic policy instrument. No bond-buying bazooka can smooth the underlying reality that Europe — unlike the United States — is not a single country.

Greeks who want to stay in the euro in the long run would do well to move to the core.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
SAT 800's picture

LOL. I had to laugh when I saw the headline. Well, laughter is the best medicine, according to the Readers' Digest.

Silver Bug's picture

They will just become a province of Germany soon enough.

 

http://ericsprott.blogspot.ca/

AldousHuxley's picture

only moving greece is going to do is when they get fed up and put someone like hitler in power and move in to germany with tanks to forceablly cancel their debt.

 

doesn't germany remember how nazis came to power?

sessinpo's picture

Yea, they followed a socialist.

LMAOLORI's picture

 

 

"SAT 800 LOL. I had to laugh when I saw the headline. Well, laughter is the best medicine, according to the Readers' Digest"


I laughed too the thought of Greeks actually working and saving like they do in Germany just cracked me up.

 

That graph is from 2008 with housing the way it is now I suspect the labour mobility in the U.S. is much worse then that graph shows now yet people who really want to work do find a way irregardless of climate N.Dakota is proof of that.

taeonu's picture

North Dakota is also the only state with a state owned bank so they didn't get hit by the financial crisis.

Nachdenken's picture

Let Greece in.  They might learn more there. 

philipat's picture

This article fails to identify the most important reasons for the lack of mobility:

Language, climate and culture.

Nachdenken's picture

despite language, climate and culture, there is one land that might help -


"Give me your tired, your poor,

Your huddled masses yearning to breathe free,

The wretched refuse of your teeming shore,

Send these, the homeless, tempest-tost to me:

I lift my lamp beside the golden door."

though the golden door is now fiat paper.

YesWeKahn's picture

I am sure that Germans want their lazy neighbors.

toady's picture

Hmmmmm...

Live on the coast with beautiful weather or live in a frigid industrial wasteland....

Compare San Diego to Bismarck ND, then let me know!

centerline's picture

I know you are just having fun with this.  Is always fun to poke at say... Berlin (lol).  But, for shits and giggles I do have to say that Bavaria is really nice actually.  Nice people too.

AldousHuxley's picture

that's the whole point....Euro (France and Germany) wants to force labor mobility in order to bring about EU political unity and to cut labor costs internally

 

force greek talents to move to germany and pay inflated prices for homes.

German workers sell home at inflated prices and buy now cheap greek homes to retire.

labor in germany becomes cheaper due to influx of talent, GDP goes up, banks get richer....typical brain drain story.

 

get this...food prices are more expensive in greece than in germany...this I dont' know why.

ersatzteil's picture

By homes you mean actual houses? Because Greek youth will be moving to cities like Berlin, Frankfurt, Hamburg, etc, and they will be renting. Most likely six or seven in a two bedroom apartment, if that. Price you pay per sq meter is ridiculous - which is why IKEA stuff doesn't use a lot of space.

Will Greek youth even move? I'd guess no...too many barriers, such as language, culture, German efficiency, German...German.

Nice climate and coastal towns seem to hamper seeking greater opportunity elsewhere, unless it's another nice climate coastal area.

fajensen's picture

The Greeks generally have more money to spend on food than the Germans have.

Germany is a heavily regulated economy*: First the Germans must pay tax on their salary, then they pay for electricity, heating, transport, garbage disposal, housing, u.s.w. u.s.f. THEN the Germans pay taxes on all of those items.

The Greek economy is not controlled with the same Teutonic precision and attention to detail. This allows the Greeks to avoid having much to do with taxes, mostly they can pay directly in cash or favours. Thus the real economy in Greece is much larger than the official one (This upsets the Germans).

*) Cracks are showing. I meet German people taking work driving busses in Denmark. When asked "Why", they say that they like getting the correct salary on time and the fact that one does not have to pay "a man" to get (and keep) a job. Germany is nice and shiny "on top" but it's pretty nasty in the nether regions, where the Greeks would have to work and live (boxed up in a Turkish ghetto). The large plants have special overalls for "self-employed contractors", a.k.a. minimum-wage staff hired per-the-hour with no insurance or rights. Partly, so they don't sneak around and nick the free coffee provided for the Employees but also sending the message to the regulars: "This could be YOU, be grateful it isn't, protect your privileges from the Alien"!

sessinpo's picture

"that's the whole point....Euro (France and Germany) wants to force labor mobility in order to bring about EU political unity and to cut labor costs internally"

 

Two problems with your ascertions. First, unless I and others here are unaware, Greeks are not well known for the specific skills that Germany would want. It would be like the US trying to import Mexicans to do genetic or nuclear research. Secondly, the point of the Euro or having any single currency over many nations is to bring desparity between nations down such as bills like NAFTA. Bills, laws and currencies used in this manner bring the standard of living down for producer nations and up for nations that don't produce.

 

Tyler recently posted a thread that supports this:

http://www.zerohedge.com/news/tales-unexpected-who-really-benefited-euro...

kito's picture

new poll just in:

 

80 percent of americans want to keep their pensions, medicare, medicaid, social security and safety from terrorism without any austerity............

80 percent of americans think the deficit and debt is too high and something should be done to fix it.......................

classic problem with these polls........everybody wants everything, nobody wants the pricetag.............................

 

centerline's picture

You've been talking to my wife it seems.  (Got to keep a closer eye on you kito).

fonzannoon's picture

What the fk is up with the other 20%?

Nachdenken's picture

fonzannoon . the other 20% is working, innovating, paying taxes.

taeonu's picture

Holy crap, 80% of American's want their taxes to be used on them instead of sent as tribute to the Federal Reserve System and Insurance Companies?  What's that about?

=====

“When our Federal Government, that has the exclusive power to create money, creates that money and then goes into the open market and borrows it and pays interest for the use of its own money, it occurs to me that that is going too far. I have never yet had anyone who could, through the use of logic and reason, justify the Federal Government borrowing the use of its own money... I am saying to you in all sincerity, and with all the earnestness that I possess, it is absolutely wrong for the Government to issue interest-bearing obligations. It is not only wrong: it is extravagant. It is not only extravagant, it is wasteful. It is absolutely unnecessary.

 

“Now, take the Panama Canal bonds. They amounted to a little less than $50,000,000 — $49,800,000. By the time they are paid, the Government will have paid $75,000,000 in interest on bonds of less than $50,000,000. So the Government is paying out $125,000,000 to obtain the use of $49,800,000. That is the way it has worked all along. That is our policy. That is our system. The question is: Should that policy be continued? Is it sane? Is it reasonable? Is it right, or is it wrong? If it is wrong, it should be changed.

 

“Now, I believe the system should be changed. The Constitution of the United States does not give the banks the power to create money. The Constitution says that Congress shall have the power to create money, but now, under our system, we will sell bonds to commercial banks and obtain credit from those banks.

 

“I believe the time will come when people will demand that this be changed. I believe the time will come in this country when they will actually blame you and me and everyone else connected with this Congress for sitting idly by and permitting such an idiotic system to continue. I make that statement after years of study.

 

“We have what is known as the Federal Reserve Bank System. That system is not owned by the Government. Many people think that it is, because it says `Federal Reserve'. It belongs to the private banks, private corporations. So we have farmed out to the Federal Reserve Banking System that is owned exclusively, wholly, 100 percent by the private banks — we have farmed out to them the privilege of issuing the Government's money. If we were to take this privilege back from them, we could save the amount of money that I have indicated in enormous interest charges.”

 

-Wright Patman (D - Texas)

U.S. House of Representatives (1929 -76)

Chairman of the House Banking and Currency Committee (1965–75)

 

potlatch's picture

there's one person who paid the pricetag, and his name is Jesus

rufusbird's picture

Can they default on the loans and stay in the Euro Zone?

fajensen's picture

Of course they can. They probably already DID ... Only it would never be called a "default":

The Basel II agreement made the assumption that government bonds issued by OECD members are equvalent to cash when used as capital for banks. This creates, of course, the incentive to use the shitties of the "OECD bonds" as capital because they will carry the highest interest also, regulation is followed - nobody will ever loose their head over it. Indeed, nobody has!

If Greece defaults in "the traditional way", most of the banks capitalised by Greek bonds would be instantly bankrupt ... unless they somehow managed to unload the bonds to someone, like f.ex. the ECB - but, that would violate Euro Doctrine and possibly have some consequences when found out, so the EFSF is created for "future contingencies": Secret and Accountable to No-one, the EFSF can tax all Erozone members whatever it needs for whatever purpose with no legal oversight at all; TARP on a heady mixture of meth & 'roids.

EFSF is just the place to stick trillions in Greek bonds (and all the leveraged derivatives based on them). The Kabuki goes on.

SoCalBusted's picture

North Africans believe there is mobility.

diogeneslaertius's picture

But long-term and deep-seated issues like language barriers and nationalistic sentiment cannot simply be eroded away in a day"

 

no itll take a decade or two -Empire eUrope

 

come on people

Atomizer's picture

 

 

Let’s mix and match shades of central planning propaganda…. 

Tensions Flare in China-Japan Islands Dispute 

Kimberly-Clark Corporation (KMB) has released latest forecast of Depends product line. Company is expected to reach double digit earnings this year end season. This unexpected ‘better than expected’ growth is largely pegged to Middle East and European Union uncertainty.

 

/sarc

HaroldWang's picture

I'm having trouble keeping up - didn't they have a payment due a couple of days ago to avoid another default? How did I miss that or is it just too messed up to bother to try and follow?

disabledvet's picture

eh, who cares. There are rumors of a "new National Anthem" along these lines however:http://www.youtube.com/watch?v=0d8FTPv955I gotta say that's a damn good song actually. good luck with dat!

TPTB_r_TBTF's picture

Did you read on ZeroHedge that "the World was going to end on Aug. 20?"  No, ... wait, ... or was it just "Europe would end on Aug. 20?"  yaaawwn. :-O

Never One Roach's picture

Another good reason not to buy a house. An American moves on the average every 5 years. Why lock yourself into a 30-year obligation of several hundred thousand?

potlatch's picture

get to know layout, be able to scan any possible sniper locations in a matter of seconds, understamd choke points, etc.  Basic paranoid over-awareness.  30-years are great for people like me.

Lednbrass's picture

The US has a common currency and is under the control of the same central power structure but the population hates each other far more than any different nations in Europe.

TPTB_r_TBTF's picture

How did you measure the hate on these two continents?

Lore's picture

 

 

"Greeks who want to stay in the euro in the long run would do well to move to the core."

They want to stay in the Euro and let others pay for their pensions and welfare and programs -- naturally!  Better to suckle a leaky teat than no teat at all. What they don't understand is that the entire enterprise is a zero sum game. The teat will dry up and leave EVERYBODY in the lurch. Such is always, always, ALWAYS the outcome of SOCIALISM.

We have the same thing in Canada. Our young people throw a conniption over tuition etc., but we have to bring in thousands of people from other countries to pick fruit from our orchards and other harvests because such things are 'beneath' our own children, who nevertheless lecture us on "green" values. We have raised a generation of neurotics.

Greeks who want to do the best thing for their fellow Greeks should be pushing hard for GREXIT, ASAP.

taeonu's picture

Socialism   is an economic system characterised by social ownership and cooperative management of the means of production,[1] and a political philosophy advocating such a system. "Social ownership" may refer to cooperative enterprises, common ownership, direct public ownership or autonomous state enterprises.

If Greece was socialist, there woulnd't be any privately owned banks or government debts to pay to them.

"That word, you keep using it.  I do not think it means what you think it means." - Inigo Montoya

Lore's picture

I use the term loosely in reference to those who want something for nothing. It's a movement that's gone viral.

rwe2late's picture

 Lore

Really?

Accepting work as a migrant farm worker supports "green values"?

Apparently you know nothing about the working conditions of giant agribusiness, factory farms, and feed lots.

You are obviously confused about the  "green" of moneymaking, and the green value of environmentalism.

Lore's picture

 

 

I refer to the snide green "100 Mile Diet" rhetoric spewed by these same smartphone- and credit card-toting unemployed youths who demonstrate zero interest in $10.25-$12.50/hr at the orchards near my locale. We're having to import hundreds of foreigners, mainly from Mexico. You must appreciate the hypocrisy.

David Wooten's picture

"Yet none of those reasons are inapplicable to the United States. However there are two reasons which do not apply in the United States — language barriers and national loyalty. It is those reasons, I would suggest, that are preventing Europe from really functioning as a single economy with a higher rate of labour mobility."

No.  Most of those who come to the United States to begin with did not speak English. They were simply stronger members of the culture from which they came and the US appeared to be a place where those willing to work and stand on their own two feet ('stronger' people) could prosper.

In many countries in Europe, people simply will not move from the local areas where they live.  Most French people, for example, would not move across France despite its small size, even though they would not have to speak a foreign language and there were better opportunities.  It is only the stronger members of these societies, like the 19th century immigrants to the US, who are willing to pick up and go.

 

fajensen's picture

It could be argued that it was the European misfits and the losers who moved to the US, while "the strong" where doing quite well enough for themselves already so they did not need to move. Some, like the Mormons and the Irish, were driven out directly. They did not have a choice.

Now, In most places of Europe "better opportunities" just means "higher costs of living and more commuting" negating any advantage there may be in moving. Most people work in order to live, they do not live to work - this is especially the case in France, Sweden, Spain or Switzerland (countries i have lived and worked in). The UK is slightly different, the English are always either working or going to work; right until their mortgage is paid off. Then they become "consultants".

David Wooten's picture

Obviously, those in Europe who were doing well had no reason to come to the US.  Those included a lot of people who had wealth passed to them.  Those who were not well off fell into two categories - those who were fearful of change that might be worse and those who were confidant enough to risk everything (the 'strong') for a possibly better life in the US.  Those who were persecuted for their religious beliefs could usually convert rather than emigrate.  Those who were principled and refused to convert could be counted among the 'strong'.

Alternative's picture

Aziz nailed it. European labor mobility (or the lack of it) is a strong and essential part of the european economics equation. That said, once that changes, we would just have another US, so it is not necessarily a better deal.

Alternative's picture

Another important difference in Europe (that is implied by Aziz's observations and is otherwise well known, but only locally in Europe) is that, once the governments and the banksters screw everything up, various local support networks, black markets, etc. based on centuries of cultural identity and experience, can kick in. In the US, on the other hand, there is really no society. Once *it hits the fan it is everybody against everybody. Everybody hates WASPs as much as they hate everybody else. The same for Latinos, Blacks etc. They just tolerate each other because *it didn't hit the fan yet.

Joe A's picture

The sun always shines in Greece.

Labor mobility is low in Europe? True. But do we really want a situation in Europe where you have to move jobs and places all the time and have perhaps two weeks of holiday as in the US?

dunce's picture

The eurozone is a socialist attempt at massive social engineering. They are trying to establish one currency, english as a common language, and sovereignty disolved into a union like tha USA. They do not want nature to take its course because socialists like to play God and make new rules that human nature spontaneously rejects. The insistence that all people are just alike and interchangable is one of the basic flaws in their plans.

taeonu's picture

So a bunch of Greeks move to Germany causing the labor market to become flooded and, since there is no minimum wage in Germany, all the now lower paid Germans and their new Greek co-workers now create a strain on the German government's social programs.  

Meanwhile, all the products that they are producing no longer have an export market in the periphery and the now lower paid German/Greek workers can't afford them either.  

Also, with an even slower economy and fewer people to tax back in Greece they are even more unable to pay back their debt to Germany.

Brilliant!