The North South Divide
Fundamentally currency unions without fiscal union are flawed. Shoehorning the northern and southern countries of Europe into one (with our without fiscal union) made no sense at all (The Economist)
The economies of southern and northern Europe make strange bedfellows
SINCE bond investors began to discriminate between the euro-zone economies, pushing yields on Spanish, Irish, Greek, Italian and Portuguese government debt soaring, much of the talk in northern Europe has been of profligate governments in the south. As these indicators show, the euro zone’s problems go rather deeper than that. A large chunk of the single-currency area has a chronic competitiveness problem, with a horrible mixture of high unemployment, low productivity and low investment. One unsolved mystery is why all this ought to have some correlation with latitude. Answers to the Bundesbank, please.
I would like to see an in depth survey of just why there are these persistent differences between northern and southern Europe. They have been evident since at least the seventeenth century. It was once described as “protestant work ethic” But there is a whole lot more to it than that.
@kyle8, the weather. The lack of winter particularly. Winter helps keep people inside and easier to keep people in factories which is better for industry. It also creates a bigger sense of urgency for growing in the North unlike the South where food can be pulled directly from the field a larger part of the year.
Pingback: The North South Divide | Liberal Whoppers