To all those who claim that the EU should become a transfer union, the graph below shows that a lot of transferring/redistributing is going on already. The figures represent per capita Euros (2015). Net receivers are on the left side (gray) and net payers are on the right side (red).
The net contributions to EU budget fluctuate a lot from one year to the next.
ReplyDeleteIt would be much better to look at the net contributions over a decade or a full MFF periode in my opinion
If you have those numbers, it would be great if you could present them.
DeleteI look at EU expenditure and revenue provided by the commission here (per country):
Deletehttp://ec.europa.eu/budget/figures/interactive/index_en.cfm
As I understand it, Net benefit per country = Operating budgetary balance - Traditional own resources TOR (80%)
But you can already play with the Operating Budgetary Balance to see how it fluctuates from one year to the other (esp for the countries most impacted by UK rebate: UK, FR, IT and ES)
Rationale for the formula above:
They describe their budgetary operating balance on page 88 http://ec.europa.eu/budget/library/biblio/publications/2017/financial-report_en.pdf
The operating budgetary balance is quite close from the net contribution but not quite
It is clear they don't include the custom duties collected by the member states on behalf of EU as part of the national contributions in the computation of the balance
(they have a point, it is supposed to be EU own resources and the custom union means that duties collected in a country may be put on the market in another)
By the way, if you play with the numbers over the years, you'll see how annoying that all UK referendum campaign was done with 2015 numbers.
Delete(I wonder why your newspaper did the same when 2016 numbers have been published for months)
Ich wusste, dass es einen einfachen Grund gibt, warum Griechenland für immer Mitglied der EU sein wird. Bringen Sie uns bitte Geschenke, wir sind Griechen und wir lieben Geschenke.
ReplyDeleteEine Beobachtung aus Amerika, wo das Sehen 20/20 ist.
Dean
What an incredibly narrow minded comment...
DeleteV
No humor then allowed in this blog.
DeleteMONEY-GO-ROUND.EU will give you the figures for any year you wish, it will even give you the consolidated for the lifetime of EU. It will calculate the figures in EUR per capita, million EUR or % of GDP.
ReplyDeleteRead their methodology if you compare them with other sources.
Lennard.
This is interesting. Where at the EU does one get such information? For example if I wanted to know the sum of all Greek subsidies history-to-date? I had obtained this information a few years ago but I had to through the Austrian EU representation and they really very not very much supportive. And it took them a long time, too.
DeleteOut of curiosity, what is the significance of this?
DeleteSay Greece gets a lot of money from the EU based on a formula which every EU member abides by. Yet the money Greece receives are misdirected due to the sclerotic EU buraucracies. Almost all of the money end up in roads on the basis that Germany needs easier access to a free trade zone which is set up for the benefit of Germany (due to its overproduction) and not Greece.
It's not like Greece gets EU money and then Greece could decide the sector of the economy to best apply such funds to. EU bureaucracies guarantee that the money theoretically available to Greece will be misallocated and misapplied.
Greece, at EU's encouragement, has now misapplied vast amounts to its road network (which is so expensive that it excludes most internal contact and use by the Greeks) for the sole purpose that some Bulgarian, Turkish or Romanian trucks could sell their imports to the Greek market faster. That's a fool's game, don't you think?
Dean Plassaras
Dean,
DeleteOn the point of road networks.
Would you have preferred the previous government road networks which were hazardous to all our health?
V
V:
DeleteI prefer new roads to old ones but the fact remains that infrastructure spending in Greece is not the best use for your money. It's not the optimum use. It's a use that is below the median line of where a country should spend its money for better returns.
D.
D.
DeleteYes but roads are basic. We needed them we have them. Now we can go onto bigger things.
On my island there was a scrapped or frozen energy project which we all support. 78 wind turbines. Scrapped because we have no roads.
This could be a way of decentralizing energy and maintaining small economies on islands.
V.
V:
DeleteWhich island are we talking about?
D.
Andros
DeleteV
There is a section on their page called sources, where they link to all the sources they use. I have not gone through them all, it was too much leg work for me, it looks quite credible. Since I don't look at it as absolute figures but only relative, my scrutiny of their methodology and sources only had the purpose of ensuring their figures were comparative between the countries.
ReplyDeleteI would have preferred it as a spreadsheet but even in its present form it is rather good. If you are willing to scroll forth and back a few times you can find the trends, and some curious things. In one of her early years (I think 83) she received 9% of her GDP as net subsidy from EU.
I'm not sure you can read the accumulated subsidies directly, you will have to add the annual subsidies in million EUR's or GDP, and they will be net subsidies after deduction of membership "fee". Have fun.
Lennard
I have now played around a bit with this data base. This is really quite something!
DeleteWrong again Lennard, if you scroll to By Year and choose All, the you get each of the countries net for their membership period. And the winner is-----Greece with BEUR 118, ahead of Spain with a shorter membership and larger population.
ReplyDeleteLennard.
Lovely! I told you the Greeks are the smartest people on this planet after the Jews.
DeleteSo why oh why do the smart Greeks shoot themselves in the foot time after time? Maybe they should try intelligence for a change. Their smartness didn’t got them very far.
DeleteUrs
Urs:
DeleteTrue. It's so obvious that my feeble attempt to protect my countrymen is futile. Give me some points for trying though.
Dean.
No sweat Dean. Have a nice day.
DeleteUrs
Speaking of transfer union, has anyone heard of the new European Infrastructure Policy (TEN-T) which allocates more than 26 bn € will be invested in European infrastructure, including railway, road, port, airport and multimodal infrastructure projects in Greece? What is this all about and over what period of time?
ReplyDeletehttps://www.enterprisegreece.gov.gr/en/invest-in-greece/sectors-for-growth/logistics
Dean.
My apologies for this "bits and pieces" approach of presenting parts of the Greek economic plan but not a comprehensive whole(I admit that's a Greek weakness - in other words a certain inability to articulate a cohesive plan of action). But here is an excerpt on the role of Private-Public partnerships and how they have become the dominant approach towards future growth (sorry again for the Google translation which is not perfect):
ReplyDelete"In full sovereignty, infrastructure projects are driven by PPPs. The phenomenon of "Public and Private Partnership" projects, which began in our country timidly towards the end of the last decade, is becoming the protagonist of the developments for dozens of projects that would otherwise be left in the drawers of the Implementing Bodies.
One of the most important projects that have been carried out with PPPs is that of the electronic ticket and of the OASA telematics that goes light years ahead of the public transport services in Athens. Equally important is the penetration of PPPs into the Waste Treatment Unit projects, as the Unit in Kozani has been operating for almost a year, the Units in Epirus and Serres are under construction and the Units in Ileia and the Peloponnese .
The solution offered by PPPs is that they cease to "demonize" the relationship between Public Implementing Bodies and private funds, and collaborators can create projects useful to society but, more importantly, sustainable over time. They also give us a fresh perspective of seeing classic public works, having another logic.
In this context, we saw the construction of 24 public schools in Attica, which resemble more luxurious private elementary schools, and since 2017 they have become the center of attention and are being bombarded by students' requests even from other areas as they operate under strict rules, almost exemplary one would say. This practically leads to an upgrading with a fresh look at how it can be the public school of the future, offering much more than one would expect.
However, PPPs are not limited, they develop the same as they do for years. Now we see two very large PPPs being in the queue of preparation. The first PPP concerns the famous Thriasio 2 for the creation of a giga-Logistics Park in the area of Aspropyrgos with OSE Implementation Agency, a project that has already started the interest of foreign companies operating in Greece.
The second is the construction and operation of the new Terminal KTEL in Eleonas in Athens, a PPP which is of a very commercial nature and with Attiko Metro Implementing Body, KTEL Attica participant and the expected capital from private individuals has secured success.
However, the implementation of PPPs can be widened even more in our country mainly in building projects, with the operation and maintenance of hospitals that are not currently taking their best days, public buildings that many of them are currently in collapse but also fanciful PPPs, such as procurement of buses for transportation, purchase and maintenance of equipment in various branches, etc.
What is obvious is that the PPP method that has proven their success is, especially at this time, an ideal choice for Greece to promote and implement projects that can not raise capital for a variety of reasons.
The participation of banks essentially ensures the movement of capital within these projects and their repayment period may vary, depending on the PPP, the shape and purpose they have."
Dean
I should hope that the PPP article is a very bad translation.
ReplyDeleteSince you are a complainer:
Deletehttp://www.ypodomes.com/index.php/special-editions/news-in-english/item/45593-ppps-to-dominate-the-scenery-of-greece-s-large-scale-infrastructure-projects
The last bank I worked for in my career had pioneered PPPs (private public partnerships) in Austria and had completed several large deals. I used to be a fan of PPPs: the private operators showed that they could get a project completed much faster than bureaucrats and at a lower cost; the public could get projects completed which - due to Maastricht - could not have been financed out of the budget; and everyone - except for the bureaucrats who had lost work and influence - was very happy.
DeleteAs time went on, I began having second thoughts about PPPs. The issue is really how much risk the private party is carrying. As it turned out, on several large PPPs which we did, the private party was carrying only the completion risk. Once the project was completed, the public had to pay the leasing tranches until full repayment. Had the public itself financed the project, it would have paid interest at only slightly over interbank. Since it was a PPP, the financing cost was a "market rate" which was 2-3% over interbank. That financing expense then went through the budget.
For us as the structuring bank, this was gravy. We did have the project competency, i. e. the completion risk was very acceptable to the bank. And after completion, the bank had a 20-year financing with public risk and private margins. Not bad, not bad at all.
The argument, of course, was not whether private or public financing was cheaper. Instead, the point was that without private financing, there would not have been a project. Correct. But there was a very expensive project and at some point even PPPs become a scarce resource because the sum of all the leasing tranches can also explode the budget.
A true PPP where the private party truly carries risk and absolves the public of that risk is defensible but I am not sure how many true such projects there are.
Kleingut:
DeleteWhen I was with Kajima, a large international construction and engineering firm, the firm executed a number of PPPs following the same formula you just explained.
My firm (Kajima) would provide a construction completion guarantee which for a large firm with a sizeable balance sheet was really easy to do and at little real cost. Some of the exotic projects Kajima's PPP participation achieved, included the San Francisco Giants baseball park in San Francisco and the LA Aquarium in Long Beach CA. There might have been a few other projects over the years for the specialized unit called Kajima Urban Development (KUD). I was part of KDC (Kajima Development Corporation) which was tasked with pure development (commercial and residential type projects).
Of course that was in the US and this is Greece and there is always a possibility that there is an ocean of differences involved. The article just caught my eye and I thought it worthy of the blog title (if in fact there is a trend worthy of observation).
Dean.
Also, not discounting your criticism towards Greece (which is mostly correct, most of the time) please be reminded of the following:
ReplyDeleteIn 2017 it was the first year that not only the Greek economy showed four quarters of growth, but at the same time approached the € 4 billion mark in foreign direct investment - such numbers performance the Greek economy has not seen since 2006, that is, from the time of absolute normality.
Dean.
Dean,
Deletejust 2 remarks: 1. 2006 was not a time of absolute normality. It was the time when Greece piled up her massive debt. 2. Unfortunately 2018 again is not a time of normality. When 10yr US treasury notes gets you a higher yield than comparable Greek debt... Would you call this "normal"?
Urs
Urs:
DeleteI hear you, but so that we can spice up the conversation a bit here are 2 rebuttal points:
1. The US is a sovereign country with its own currency. Greece is neither sovereign nor a holder of its own currency.
2. The graph below shows that 2006 was a period of normality for Greece if you want to look back all the way to 1995 (actually 2006 was a slight improvement over previous years). What killed Greece was what happened after 2006 and the train wreck which is still here with us and getting worse it seems.
https://www.google.com/publicdata/explore?ds=ds22a34krhq5p_&met_y=gd_pc_gdp&hl=en&dl=en#!ctype=l&strail=false&bcs=d&nselm=h&met_y=gd_pc_gdp&scale_y=lin&ind_y=false&rdim=country_group&idim=country_group:eu&idim=country:el&ifdim=country_group&hl=en_US&dl=en&ind=false
Dean.
Dean, that’s not a rebuttal but rather an explanation and a misreading of a graph.
Delete1. You are right, the low yield of Greece debt is due to Mr. Draghi and not a sign of trust in the current Greek government.
2. To say that in 2006 everything was fine and dandy is like the drinker who denies having a problem with alcohol. "Quite the contrary", he says, "my problems start when I am sober."
Urs
Urs:
DeleteRegarding your #2. Obviously you can take such position but in my opinion, Greece in 2006 was about the same as when Greece was admitted to the eurozone (minus the Olympic Games overhang, of course). So the real question is why was Greece admitted into the eurozone in the first place since it was clearly a consumption based economy, furthermore, why German exports to Greeve following its admittance in the eurozone lost any pretense of civility and simply went berserk. Because if we want to have an honest discussion about Greece and not be hypocrites about it is this: You can't deliver untold quantities of opium(aka German trade) to Greece and then complain that the patient can't take the opium anymore and that's his fault.
I have a serious proposition for you. Let's cut German trade to zero vis-a-vis Greece and then see how many of Greece's ills go away overnight. We can then reconvene as sober people and put a limit on the German trade saying that it can never exceed, let's say, 1 Billion euro trade surplus in favor of Germany. I promise you that if you give me this tool which is to regulate German trade for the Greek state, then I can deliver to you a viable Greek economy. The other way to achieve this is outside the eurozone, which I am guessing no German wants due to its implications on the common currency.
Absent this approach, the question still remains what is Greece doing in the eurozone whose only purpose is a free trade platform which by definition is a form of assault against Greece and for which Greece will never develop credible defenses.
Also, we are all adults to admit that Greece today is not about efficiency or true corrective action on the part of Europe. Greece is some sort of a useful idiot whose part is to serve as an example of what happens when you lose the favor of European elites and do not tow the Brussels line.
If you disagree then let's find the next Martin Bormann or Albert Speer for Greece and let's declare total war against the useless Greek bureaucrats and for crying out loud let's conquer Greece once and for all and be done with it. It would be much preferable to the current "drip-drip" game which only preserves the bare minimum and leaves no one satisfied.
Dean.
Dean,
DeleteProtectionism? OK, why not? Friedrich List (https://www.britannica.com/biography/Friedrich-List) would be the economist to turn to. But I am not sure if really mean it. Because you can have protective tarifs only outside the EU. And every time someone proposes a Grexit, Greeks here get very angry and tell us that Greece will never leave the EU.
And nobody helds a gun to the Greeks heads and forces them to buy german products. If you think they pose such a big problem to the Greek economy you have to convince the Greeks (not me) not to buy them. Problem solved. See, that’s the problem I have with yout attitude: Greeks and Greece can do whatever they want (like the British): They can leave the EU and the EZ, show their creditors the finger (like Argentina under the Kirchners), protect their industries through import tarifs etc etc. Would this be beneficial for the Greek economy? I doubt that, but that’s not the point. The point is that whatever the Greeks do (or don’t do) it is their decision and their responsibility, not that of their real or imagined oponents. You are not honest to yourself when you ask for tools (tarifs or caps on trade) you very well know can not be handed to you within the EU and at the same time imply Greece would stay within the EZ just because they do not want to cause any trouble. Whatever you want to happen in Greece: At the end of the day it are the Greeks you have to convince and the Greeks are the ones who have to take action - not the elites in Brussels or Berlin.
Urs
Urs:
DeleteYou could be right in what you say. What I am trying to demonstrate to you is the corrosive effect of German trade surpluses in the case of Greece. Let's not talk about tariffs because tariffs are a bit extreme. All I am asking is 2 years free of German imports so that we can detect the extent of the damage which I think is substantial to the Greek economy. After that, we can resume as before but with the added benefit of knowledge because when we raise the subject now, very few could follow - we are talking whole layers of onion peels which need to be exposed.
As for your other suggestion of the Greeks stop buying on a voluntary basis, unfortunately, it can not happen. And the reason is the Greek middlemen who systematically have erected a network of dependence on German imports that goes back 75 years or even more than a 100 years if you are careful in your calculations. This, the domestic network of dependence, is far worse of a problem than Germany at arm's length.
I agree with you that the Greek public is confused and wants contradictory things but then again the EU was always sold in Greece as a "pure benefit" project. This is a propaganda which cannot be erased from people's minds. To them (since only a very small minority understands the real issues) they better hedge their position by staying in the EZ hoping for some undefined future benefit which will never materialize.
So it comes down to a true question of ethics. The Greeks have been told many lies about the true nature of the EU and the EZ and such part is difficult to undo. Would 20 years of austerity change the people's minds? Perhaps. I am not sure.
Klaus had tried to challenge me in the past by suggesting that if I am so sure of what's wrong w/ Greece then why don't I go to Greece and offer my services to fix it. The answer is that I would not last one day in Greece. I would be far more demanding of the Greeks that you are and this certainly would create conflict.
I want you to please understand one thing. Even though I frequently try to defend the motherland out of a sense of duty, unfortunately, I am much deeply aware of our flaws and shortcomings than you are. I am painfully aware of our limitations and what the reasonable expectations might be.
The purpose of having these conversations is for each participant to acquire some knowledge or a different perspective perhaps that might lead to outcomes of significance. If it gives you comfort that I submit to your interpretation then I could easily yield to your satisfaction. But then what would be the purpose of us exchanging ideas?
If as you say you know the ills of Greece with some certainty then all we have to do is find a ruthless administrator to implement it. And thus be done with it.
However, let me point out the following: You (Europeans) certainly have given us an awareness of the corruption and incompetence of the old perennial political parties in Greece which created the whole mess. The reflex of the people was to elect an untested and mostly unfit party which you have found easier to deal with. But this new batch is untested and amateurish as they come and going back to the old parties is totally out of the question.
So think about it for a second. You have weakened us considerably while framing it as actually strengthening us and that the whole thing is for our "own good". So perhaps now you begin to see that this whole mess has a serious credibility issue undertone and that blind compliance might be your objective (for our own good, of course) but many still remain unconvinced.
Dean.
For those interested there is the Delphi Economic Forum and you can watch here or other parts of the same YouTube channel:
ReplyDeletehttps://www.youtube.com/watch?v=T2tjEX-zYlo
D.
@ Dean Plassaras.
ReplyDeleteI had disregarded the TEN-T issue, but as luck would have it, a young Greek friend gave me a long lecture on it yesterday, I checked it and he was right.
It is the Juncker flimflam plan, it is not new money but shuffling around with old EU funds, in my book mental malaka. It is a continuation of the policy of building EU transport infrastructure.
So, once again, Albanian navvies are polishing their shovels and singing McAlpine's fusiliers, and Greek construction oligarchs buying new bulldozers and singing Sweizerpsalm. (No offence Urs).
Lennard.
Sure. EU waste in action, no doubt about it. And yet Greece plans to waste its portion because that's how bureaucracies work. A bureaucrat never asks whether the program is efficient or market driven. A bureaucrat is only concerned with procedures.
DeleteDean.
Lennard:
DeleteSpeaking of "mental malaka" we have a parliamentarian in Greece who happens to be the #2 of the ND party whose first name is Adonis (i.e. the Greek mythology figure who adored himself by looking at his splendid reflection on the water). In other words, a person who wants to have sex with himself. So, rest assured that not only we have the patent on "malakia" but we are also constantly refining the term and slowly improving on its wonderful applications.
Dean.
These transfers concern the EU, not the Eurozone. In any case, the scale of these transfers is very small compared to what they should be if the monetary union was to function properly. Also, they are a small price to pay for the common market and customs union (which primarily benefit the surplus countries). Furthermore, their implementation has been far from ideal, resulting in tragicomic affairs, like Greece paying fines for two decades now due to the continued operation of illegal waste landfills.
ReplyDelete