Europe's North and South

choi

Austan Goolsbee, Europe's Currency Road to Nowhere; The Euro has punished Southern Europe the way China's currency has hurt the United States. Wall Street Journal, Nov 29, 2011 (op-ed).


Consecutive paragraphs:

"Northern Europeans argue that the crisis comes from too much spending in the South, so they demand cuts. * * * Certainly the countries of Southern Europe must rein in excess. In the long run, however, even the deepest of cuts won't suffice. Southern Europe needs to grow or it will never control its debt levels. But with the euro zone keeping Southern Europe uncompetitive, the regions' growth prospects will remian dismal.

"Northern Europe has fueled its growth through exports. It has run huge trade imbalances, the most extreme of which with these same Southern European countries now in peril. Productivity rose dramatically [in Northern Europe] compared to the South, but the currency did not.

"This explains at least part of the German export and manufacturing miracle of the last 12 years. In 1999, exports were 29% of German gross domestic product. By 2008, they were 47%--an increase vastly larger than in Italy, Spain and Greece, where the ratios increased modestly or even fell. Germany's net export contribution to GDP rose by nearly a factor of eight. Unlike almost every other high-income country, where manufacturing's share of the economy fell significantly, in Germany it actually rose as the price of German goods grew more and more atractive compared to those of other countries. In a key sense, Germany's currency has been to Southern Europe what China's has been to the US.

My comment:
(a) The author is no ordinary economist.
(b) Romantic Road
http://en.wikipedia.org/wiki/Romantic_Road
(is the term for a theme route coined by travel agents in the 1950s to describe the 350 kilometres (220 mi) of highway in southern Germany (in Bavaria and Baden-Württemberg), between Würzburg and Füssen. In medieval times it used to be a trade route)
(c) Würzburg
http://en.wikipedia.org/wiki/W%C3%BCrzburg
(a city which lies in the northern tip of Bavaria; first mentioned as a Frankish settlement called Vurteburch in 704)
(d) Neuschwanstein Castle
http://en.wikipedia.org/wiki/Neuschwanstein_Castle
( a 19th-century Romanesque Revival palace; commissioned by Ludwig II of Bavaria as a retreat and as a homage to Richard Wagner' Contrary to common belief, Ludwig paid for the palace out of his personal fortune and extensive borrowing, not with Bavarian public funds; The palace has appeared prominently in several movies and was the inspiration for Disneyland's Sleeping Beauty Castle; In the Middle Ages, three castles overlooked the village [Schwangau]--one was called Schwanstein Castle)

That castle turned into a ruin. The rebuilt one is called Neuschwanstein (neu in German is new in English).
(e) Füssen
http://en.wikipedia.org/wiki/F%C3%BCssen
(on the banks of the Lech river; The original name of Füssen was "Foetes", or "Foetibus" (inflected), which derives from Latin "Fauces", meaning "gorge", probably referring to the Lech gorge; Füssen is the highest town in Bavaria (808 m above sea level))
(f) Ludwig II of Bavaria
http://en.wikipedia.org/wiki/Ludwig_II_of_Bavaria
(1845-1886; King of Bavaria 1864-1886; deposed on grounds of mental illness without any medical examination and died a day later under mysterious circumstances; House of Wittelsbach)

* Ludwig is German form of Louis.
* House of Wittelsbach
http://en.wikipedia.org/wiki/House_of_Wittelsbach
(Members of the family served as Dukes, Electors and Kings of Bavaria (1180–1918), among others; The Counts of Scheyern [specifically Otto III] left Burg Scheyern ("Scheyern Castle", constructed in about 940) in 1119 for Burg Wittelsbach ("Wittelsbach Castle")
(g) Quotation 2 is a novel thinking, but I can not fathom why nations in Southern Europe has not seceded from euro zone (because they have received too much handouts?), but chosen to protests austerity measures incessantly.
(h) Quotation 3 is the only mention of China in the entire essay.
(i) The first two paragraphs talks about Romantic Road, the German road that leads to Southern Europe, physically, which the author uses as a metaphor. The (economical) essence of of the essay is quoted above, and one need not read the rest.