Article

2004-07-13 Europe

EU court squashes decision to suspend sanctions against France-Germany

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Posted by Aris Katsaris 2004-07-13 09:52|| || Front Page|| [2 views since 2007-05-07] Top

#1 "Four legs good, two legs ~~bad~~ better." Remember animal farm when you hear about the UN and the equality of it's members. In Orwell's book they all started out equal until some wanted to be more equal. France and germany want to be more equal.

Posted by Cyber Sarge 2004-07-13 10:12:47 AM|| 2004-07-13 10:12:47 AM|| Front Page Top

#2 Let me know when they do get sanctioned...

So France and Germany have had a few years setting a bad example to the smaller nations (and dodging rightful fines of n million euros); now the EU machinery has ruefully acknowledged that this state of affairs can't go on forever and symbolically lifts the suspension on sanctions on France and Germany - in order that smaller nations can't get away with the same behaviour in future.

Meanwhile:

There may be some modifications of the pact - something the European Commission has already foreshadowed."

i.e. The rules will flexed to be more accommodating to France and Germany...

Smaller states win a symbolic victory. Bigger states snicker and plough on as before.

Posted by Bulldog 2004-07-13 10:15:21 AM|| 2004-07-13 10:15:21 AM|| Front Page Top

#3 IIRC my int. fin. a common currency makes sense when the volume of trade between countries is relatively high compared to the differences in macroeconomic situation. EU members have lots of trade, but do they yet have a common macroeconomic situation? In particular is movement free enough to equilibrate differences in unemployment? Legally movement is free, but language and cultural barriers may still mean seperate labor markets, in which case the common currency will likely have persistent problems.

Posted by Liberalhawk 2004-07-13 10:21:27 AM|| 2004-07-13 10:21:27 AM|| Front Page Top

#4 Cyber Sarge, France and Germany wouldn't have achieved that (now aborted) suspension of sanction, if there weren't several of countries that thought would soon be in the same situation, and thus would like the same non-sanctioning.

Let me know when they do get sanctioned...

I will.

now the EU machinery has ruefully acknowledged that this state of affairs can't go on forever

What "now" are you talking about Bulldog? The case has been pending all the while, this wasn't a new decision by the "EU machinery", as if they somehow changed their minds for political reasons. It was a dispute between the national ministers and the Commission that was decided in the ECJ on the favour of the Commission.

What other course would you suggest? When there's a disagreement, the courts settle it. That sounds reasonable to me.

And Bulldog, Cyber Sarge, here's an article about *Britain* wanting to be "more equal". :-)

Posted by Aris Katsaris 2004-07-13 11:24:19 AM|| 2004-07-13 11:24:19 AM|| Front Page Top

#5 Aris - Yes, I saw that article. From it:

"...Polish Foreign Minister Wlodzimierz Cimoszewicz said on Monday (12 July): "We would like everybody to pay what is due"."

Fair enough. Britain receives HALF what it contributes to EU coffers, in return. Britain's rebate should be massively increased to reflect that. Do you think we're some sort of cash cow for other nations?!

The EU pushing for a revokation of Britain's rebate will be terrible news for Blair and the other British Europhiles, at the worst possible time. Provided it doesn't happen, I'm happy with that...

Posted by Bulldog 2004-07-13 12:38:32 PM|| 2004-07-13 12:38:32 PM|| Front Page Top

#6 Aris, seriously what's the deal?
This sets a damn poor precedent for enforcing
budgetary consistentency. Will the EU set aside the percentage of GDP rule?

The German Central Bankers (if no longer bank) will eventually freak if this is allowed to continue.

Posted by Shipman 2004-07-13 12:56:27 PM|| 2004-07-13 12:56:27 PM|| Front Page Top

#7 Bulldog> Britain receives HALF what it contributes to EU coffers, in return.

That's because you are a richer country. Germany pays even more than Britain and receives even less, because it's an even richer country.

Do you think we're some sort of cash cow for other nations?!

I think you are a richer country. And I think it's normal for richer citizens to have to pay more money in tax than the poorer citizens.

In the UK, do your homeless pay as many British pounds in taxes as your billionaires? Are your billionaires cash cows for other people?

The "rebate" was part of the agreements between UK and EU, so it's lawful to let it continue -- but you have to concede that this is one more exception made for *UK's* favour.

Ofcourse this whole issue about how much money UK gives and receives could be sidestepped if direct federal taxation on EU citizens was implemented -- in that case *countries* wouldn't have to pay one dime, it would be directly taxed from the citizens throughout the union.

But UK opposes federal taxation.

Shipman> I don't think you understood the article. The court ruled in favour of enforcing sanctions, and in opposition to suspending them.

Posted by Aris Katsaris 2004-07-13 2:53:24 PM|| 2004-07-13 2:53:24 PM|| Front Page Top

#8 Do you think we're some sort of cash cow for other nations?!

I think you are a richer country. And I think it's normal for richer citizens to have to pay more money in tax than the poorer citizens.

And is there a threshhold in paying for poorer countries, i.e., is there a top limit for the amount richer countries pay? Who decides? How deep can other governments go into your governments' pockets in the NEVER ENDING GRAIL to be fair?
When you spend someone else's money, it never runs out; when you spend your own, you understand its value better.

Posted by jules 187 2004-07-13 3:18:29 PM|| 2004-07-13 3:18:29 PM|| Front Page Top

#9 The Maastricht criteria were:

1) Government budget deficit of less than 3% of GDP;
2) Government national debt of less than 60% of GDP;
3) Price stability: an average rate of inflation no more than 1.5 percentage points above that of the three best performing member states;
4) Convergence of the interest rates between countries: an average nominal long-term interest rate not more than 2 percentage points above that of the three best performing member states;
5) Exchange rate stability: participation in the normal bands of the Exchange Rate Mechanism for at least two years without devaluations.

The one in question now is the 3% deficit. When the criteria were established a typical yearly GDP growth of 5% was the norm (The calculation was 5% of 60% debt is 3%).

The problem with the criteria is that they are inflexible. When growth is only 1 or 2 percent, the first criteria is almost impossible to fulfil, yet a violation does NOT encourage inflation. The real important criteria for the stability of the Euro currency is the national debt. Germany and France don't reach 60%, Italy or Belgium largely surpass it (but the "intent of reducing it" avoids the dreaded "blue letter").

Has Maastricht effected the European economy negatively? Yes, and no.

Its restrictive rules have had a negative impact in growth, investment and unemployment, especially for France and Germany, but they have had a positive influence on the convergence process in productivity in the EU.

Sanctions were intended to reign in the spending behavior of infringing nations. In the case of Germany this makes no sense as Germany has actively worked to reduce spending. Those cuts are painfully visible for everyone living in Germany. That said, Germany needs more reforms but those cannot be enforced by Maastricht.

I don't think the rules will be changed but more flexibility allowed. You can't "punish" a country for not having enough growth, only for irresponsible spending. This, in the case of Germany, has not been the case.

Funny enough, the world's strongest economy, the United States, would not meet the criteria either.

Posted by True German Ally 2004-07-13 3:34:14 PM|| 2004-07-13 3:34:14 PM|| Front Page Top

#10 Funny enough, the world's strongest economy, the United States, would not meet the criteria either

But we havent made an agreement with any other states to meet such criteria. Countries other than the US that "dollarize" do so at their own risk.

Posted by Liberalhawk 2004-07-13 3:38:27 PM|| 2004-07-13 3:38:27 PM|| Front Page Top

#11 TGA knows far more about economy than I do (after all, I know little to nothing about it), so I will let him do the speaking on this.

jules> You can do the research you are asking yourself. But one question of yours answered: I've read that the top ceiling on EU budgetary spending has been set at 1.27% of overall GNP.

Posted by Aris Katsaris 2004-07-13 3:42:37 PM|| 2004-07-13 3:42:37 PM|| Front Page Top

#12 LH, when you realize that something doesn't work the way you thought it would... you change it.

Posted by True German Ally 2004-07-13 3:44:05 PM|| 2004-07-13 3:44:05 PM|| Front Page Top

#13 but you change it for all, of course.

Posted by Liberalhawk 2004-07-13 4:06:58 PM|| 2004-07-13 4:06:58 PM|| Front Page Top

#14 It's quite obvious that if Germany doesn't get sanctioned for violating the 3% rule then Italy can't be either.

Posted by True German Ally 2004-07-13 4:19:35 PM|| 2004-07-13 4:19:35 PM|| Front Page Top

#15 Do you think we're some sort of cash cow for other nations?!

I think you are a richer country. And I think it's normal for richer citizens to have to pay more money in tax than the poorer citizens.

And you wonder why there's so little enthusiasm for EU membership in the UK?

Posted by Bulldog 2004-07-13 6:35:15 PM|| 2004-07-13 6:35:15 PM|| Front Page Top

#16 I don't believe I've ever "wondered" about lack of enthusiasm in the UK. The only thing I wonder (and am disgusted) at is the fact that UK chooses to stay within the EU, and nonetheless whines so much about it.

Posted by Aris Katsaris 2004-07-13 6:41:57 PM|| 2004-07-13 6:41:57 PM|| Front Page Top

#17 You believe there's an obligation upon the richer nations in the EU to redistribute their wealth amongst the poorer ones. That's the crux of the EU project, as far as neosocialists like yourself are concerned - Marxist economics / Marxist social aspirations. That's the thinking that's turned the European community from something worthwhile into something insane, and that's the reason why the UK has become disillusioned with it. You should wonder why the UK has lost enthusiasm for it. That's what's going to destroy it.

Posted by Bulldog 2004-07-13 6:51:19 PM|| 2004-07-13 6:51:19 PM|| Front Page Top

#18 This discussion is extremely amusing. I was especially intrigued by the idea that richer countries should pay more. Brilliant. Sheer geniuses those EU'ers.

Posted by virginian 2004-07-13 7:09:35 PM|| 2004-07-13 7:09:35 PM|| Front Page Top

#19 Bulldog, you still didn't tell me whether the UK millionaires pay no more in tax than your poor homeless folk.

You believe there's an obligation upon the richer nations in the EU to redistribute their wealth amongst the poorer ones.

Yes, poorer nations join the EU in a great extent to get the economic support of the richer countries, and in return poorer nations open their economies to be used by the wealthy corporations of the richer nations.

It's called "everyone benefits, that's why everyone stays in"

Except UK which believes it's hurting itself by remaining but nonetheless stays for sheer masochism and altruism, it seems. That's a contradiction *you* have to solve, not I.

"That's the crux of the EU project,"

That the rich tend to be taxed more than the poor, and that a place with more rich people will have more money taxed from it than a place with poor people?

But I thought that Franco-German Domination was the crux of the EU project! And yet France and Germany are two of the net contributors, and they pay *more* money into the EU than UK does.

So, what is it Bulldog? Is the EU benefitting or hurting the wealthy big nations? Pick and choose, please, but stay consistent afterwards.

Posted by Aris Katsaris 2004-07-13 8:04:13 PM|| 2004-07-13 8:04:13 PM|| Front Page Top

#20 The difference between a UK millionaire's disproportionate tax contribution to the UK and an average UK citizen's disproportionate tax contribution to the EU is twofold: 1) the UK millionaire's tax contribution pays for the precisely the same things a poor UK citizen pays for, and 2) the rich and the poor UK taxpayers both know they have an equal say in who spends their money. It's not a perfect system, but it's a damn sight better than the EU system of tax-and-distribute-somewhere-else.

France and Germany, as you well know, have political ambitions in Europe than go beyond the mere economic. And that's part of the reason why the German economy is in such bad shape. It's no reason why the UK should get dragged into the same misguided predicament.

In reference to your holier-than-thou comments about "economic support" for poorer nations: where do you think the UK comes, globally, in terms of investment in other countries? Apparently, this'll surprise you...

Posted by Bulldog 2004-07-13 8:31:50 PM|| 2004-07-13 8:31:50 PM|| Front Page Top

#21 and an average UK citizen's disproportionate tax contribution to the EU

Whoa!! I don't accept that the average UK citizen contributes more to the EU than a person of other nationality with the exact same income. Any evidence towards that?

France and Germany, as you well know, have political ambitions in Europe than go beyond the mere economic.

Good, so do the poor nations. Let Britain ALSO have political ambitions in what is ALSO a political union, as is the proper thing to do, rather than merely keep on living in the past and seeing it as ONLY an economical union or a free trade block.

But I think you delude yourself when you think Britain has no political ambitions in the Union -- I believe *that's* the reason it's staying inside, that it fears being voiceless outside it. I believe that UK's presence in the Union has strengthened its voice, same as all other nations -- even if she has used that voice mainly to thwart everyone else.

It's no reason why the UK should get dragged into the same misguided predicament.

I never asked it to. If you don't have a desire for political union, you shouldn't be part of a political union.

WHY IS UK STAYING IN???? According to you?

where do you think the UK comes, globally, in terms of investment in other countries?

I have no idea. But don't only think about investments, think also of trade and exports.

Posted by Aris Katsaris 2004-07-13 8:47:16 PM|| 2004-07-13 8:47:16 PM|| Front Page Top

#22 Second, Aris. Second only to the USA. We don't need a lecture from you in how to trade, and stimulate foreign economies.

Posted by Bulldog 2004-07-13 8:52:21 PM|| 2004-07-13 8:52:21 PM|| Front Page Top

#23 LOL! I'm hardly making a lecture on how to trade. I'm just telling you that without the EU you might have had to deal with the trade areas of 24 different countries, some of which might have been very protective of their own.

Posted by Aris Katsaris 2004-07-13 9:03:11 PM|| 2004-07-13 9:03:11 PM|| Front Page Top

#24 Bulldog, this is the beginning of the end for the Franco-German led EU economic "juggernaut."
Britain, quite rightly, should resist signing that dreadful EU Constitution (which will strip the UK of its sovereignity) and quit carrying the financial water for the Weasel powers.
France and Germany, who are supposed to "lead" the EU and who used to have the best economies, are now setting the example for the other EU countries by letting themselves off the hook for their poorly declining economies.
And those economies will get worse, not better whereas the UK's is quite robust.
Britain has nothing to gain and a lot to lose by surrendering to full EU membership whereas the Axis of Weasel will now begin to leach more and more money from the other EU countries, chief among them being the strong, expanding wealth and power of Great Britain.

Posted by Jen 2004-07-13 9:03:57 PM|| [http://www.greatestjeneration.com] 2004-07-13 9:03:57 PM|| Front Page Top

#25 Aris threatens trade protectionism to the UK if they don't get with and stay with the EU program.

But my own international finance and econ studies show clearly that it would be the small protectionist economies which would suffer the most. Protectionism, mercantilism, the Corn Laws of the 19th century -- there's a reason they were given up by the really productive countries of *all* sizes: they hurt the perpetrators more the competitors being kept out.

Except, of course, that they hurt the really poor, like the farmers in Africa who cannot sell to Europe because UK taxpayers are busy subsidizing French farmers to live on charming, family farms that are truly inefficient producers.

Have at it, if you like -- but do check out the facts. The UK would lose some economic benefits if it left the EU, but its potential gains could be rather large over time. Meanwhile, I'm still waiting for those awe-inspiring competitive moves that German and French engineers and policymakers have been threatening me, a mere (now semi-retired) American high-tech executive, with for decades now.

Posted by rkb 2004-07-13 9:37:04 PM|| 2004-07-13 9:37:04 PM|| Front Page Top

#26 Aris threatens trade protectionism to the UK if they don't get with and stay with the EU program.

For god's sake!! Since I want UK to leave the EU (until it *willingly*, not *whiningly*, chooses to rejoin us), I certainly didn't threaten trade protectionism if it didn't "stay with the EU Program". I spoke about what would happen if the EU never existed AT ALL. That was the point of my "trade areas of 24 different countries" remark. Now, even if UK leaves, it will only have to deal with one trade area, so that's not an issue.

But my own international finance and econ studies show clearly that it would be the small protectionist economies which would suffer the most.

Yeah, quite possibly. But that doesn't mean there wouldn't be countries that go that way, self-destructive though it may be. History shows us that many countries go that way.

And I'm not sure that UK investors would like to see their properties/investments occasionally nationalised if some of the smaller nations went ultra-protectionist, and said investors had no recourse to the EU court either.

How much UK investment in Belarus?

Posted by Aris Katsaris 2004-07-13 9:50:09 PM|| 2004-07-13 9:50:09 PM|| Front Page Top

#27 slightly OT:
until it *willingly*, not *whiningly*, chooses to rejoin us

I've always been taught the same spelling of whining..lately I see whinging...what up with that? Is that a faux pas on my (and Aris's) part? Or a Brit term/spelling adoption? I'd hate to say the wrong thing while chastising my whining 'hip' teenagers :-)

Posted by Frank G 2004-07-13 9:55:48 PM|| 2004-07-13 9:55:48 PM|| Front Page Top

#28 Frank, 'whinging' is an English (British) expression and whining is more American.

Posted by Jen 2004-07-13 10:05:05 PM|| [http://www.greatestjeneration.com] 2004-07-13 10:05:05 PM|| Front Page Top

#29 Frank, they're two different phrases. Let me help:

I certainly didn't threaten trade protectionism if it didn't "stay with the EU Program". I spoke about what would happen if the EU never existed AT ALL. That was the point of my "trade areas of 24 different countries" remark.

Is an example of whining.

France and Germany are two of the net contributors, and they pay *more* money into the EU than UK does.

Is an example of whinging. I hope this helps you enjoy a more nuanced relationship with your teenagers.

Posted by Bulldog 2004-07-13 10:06:08 PM|| 2004-07-13 10:06:08 PM|| Front Page Top

#30 LOL amigos! It does!

Posted by Frank G 2004-07-13 10:12:37 PM|| 2004-07-13 10:12:37 PM|| Front Page Top

#31 Jeez, my big Langenscheidt dictionary says both words mean the same...lol

Lack of German nuance here?

Posted by True German Ally 2004-07-13 10:15:04 PM|| 2004-07-13 10:15:04 PM|| Front Page Top

#32 Heh. Lack of Greek nuance also -- I had thought I was whining equally throughout. ;-)

Posted by Aris Katsaris 2004-07-13 10:26:45 PM|| 2004-07-13 10:26:45 PM|| Front Page Top

#33 OK, I'm consulting the Chambers English Dictionary:

whine

to utter a plaintive cry, whimper; to complain peevishly; to cry fretfully; to speak in a thin, ingratiating or servile tone...

whinge

to complain peevishly; to whine; to cry peevishly...

I'd distinguish a whine as being a high pitched protestation, whereas a whinge can be expressed in the same manner, but, crucially, features a specific complaint. A whine need not be a complaint - it could, for instance, be a request.

Posted by Bulldog 2004-07-13 10:31:14 PM|| 2004-07-13 10:31:14 PM|| Front Page Top

#34 Hard to say, Aris, it depends on the tonality!

Oh a belated congratulation for the Greek football team (and their "crazy german coach"). Are there plans for a "Rehaklion" next to the Parthenon yet?

I think the Greek did play like the Germans in the 80s... but it looked better and defense was just stunningly good. If you can keep this up you'll go far in two years. Keep the spirit!

Posted by True German Ally 2004-07-13 10:34:10 PM|| 2004-07-13 10:34:10 PM|| Front Page Top

#35 is the g silent? I'd like to know when I ~~do a poor sherlock holmes imitation~~ travel to Britain?

Posted by Frank G 2004-07-13 10:35:38 PM|| 2004-07-13 10:35:38 PM|| Front Page Top

#36 Oh no. Whine is pronounced the same as 'wine'; whinge is pronounced 'winj'. Savour the 'j'.

Posted by Bulldog 2004-07-13 10:40:17 PM|| 2004-07-13 10:40:17 PM|| Front Page Top

#37 Well the Aussies always call the British "whing(e)ing Poms"...lol

Posted by True German Ally 2004-07-13 10:40:35 PM|| 2004-07-13 10:40:35 PM|| Front Page Top

#38 family farms that are truly inefficient producers

Inefficient, maybe. But man can they produce some of the tastiest foods you can find.

Posted by Rafael 2004-07-13 10:41:45 PM|| 2004-07-13 10:41:45 PM|| Front Page Top

#39 Rafael, agree on that. If the EU were only funding those producers. Most of the money goes to the biggest agrarian companies to churn out tasteless stuff (but complying with all the regulations)

Posted by True German Ally 2004-07-13 10:48:24 PM|| 2004-07-13 10:48:24 PM|| Front Page Top

#40 hhhmmmm back on OT: is it called whinging because they squeal like badly oiled hinges? I know my neighbor's kids do that... I hate those kids ....but in a good way :-)

Posted by Frank G 2004-07-13 10:49:01 PM|| 2004-07-13 10:49:01 PM|| Front Page Top

#41 *g* Thanks, TGA.

[singing]
Einai trelos, einai trelos o Germanos!
(He is mad, he is mad the german man!)
[/singing]

This victory was most definitely Otto Rehagel's, and I've actually heard that indeed there was a guy (a private individual) preparing to build a statue for him. *g* Though not infront of the Acropolis, mind you. :-)

Posted by Aris Katsaris 2004-07-13 10:55:17 PM|| 2004-07-13 10:55:17 PM|| Front Page Top

#42 Maybe in two years... lol
It looks like Rehagel prefers to win with the Greek than lose with the Germans in the upcoming World Cup!

Posted by True German Ally 2004-07-13 10:57:54 PM|| 2004-07-13 10:57:54 PM|| Front Page Top

#43 And they say Europe doesn't work..huh?

Posted by True German Ally 2004-07-13 10:59:31 PM|| 2004-07-13 10:59:31 PM|| Front Page Top

#44 Both words stem from the Old English hwinan, meaning 'to whine', which itself derives from the Old Norse hvina - 'to whistle through the air'!

I do like 'whine' and 'whinge'. In argument they can be used like verbal smoke grenades - thrown at your interlocuter to cause momentary doubt and confusion, enabling a tactical withdrawl on your part and a fresh apporoach from another direction. To accuse someone of being a 'whinger' or 'whiner' is quite a powerful insult. Is that also the case in the US?

Posted by Bulldog 2004-07-13 11:01:07 PM|| 2004-07-13 11:01:07 PM|| Front Page Top

#45 Bulldog, in the U.S. they call them "liberals"!

Posted by True German Ally 2004-07-13 11:04:39 PM|| 2004-07-13 11:04:39 PM|| Front Page Top

#46 LOL TGA - in a word!

Posted by Bulldog 2004-07-13 11:07:02 PM|| 2004-07-13 11:07:02 PM|| Front Page Top

#47 "snivelling" is often added for loving effect:-)

Posted by Frank G 2004-07-13 11:13:30 PM|| 2004-07-13 11:13:30 PM|| Front Page Top

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