North vs. South: The Future of the Eurozone
by Alexander Hurst
Italian economic journalist Federico Fubini used the panel discussion on the future of the eurozone to explain the roots of Italian populism today, and to push back at the narrative that Germany has been the financial savior of Europe.
“Populism is like an air bubble under a carpet,” Febrini said. “You push it down in one area, and it just moves to another.” For Fubini, deputy editor-in-chief for Italy’s Corriere della Sera, efforts to deflate anti-establishment movements in northern and southern Europe have just fed each other.
In Germany, political attempts to calm popular anger at “bailing out” southern nations meant a hardline push for austerity in Greece, Italy, and elsewhere. But those same austerity policies, and a sense of loss of sovereignty vis-à-vis the demands from Brussels and northern European countries gave rise to anti-EU, anti-euro parties in both of those nations.
The only way through this vicious circle, Fubini argued, is to shift the narrative on each respective side. Just as Italy needs to take a look at how its own internal politics have made the southern half of the country economically uncompetitive, Germany needs to re-examine the narrative it has told itself as well, starting with a closer look at demographics.
In 1973, Germany’s population growth rate went negative—the country had more deaths than births, and was set to lose population. And without intra-European immigration since then (some 1.7 million people), it would have 2% fewer people today than it did in 1973. Two thirds of those nearly 2 million European immigrants have come from eastern Europe, and one third from southern Europe.
“You have to take into account the educational investment all those people meant,” Fubini said. According to the Italian journalist, the grand total amount spent by eastern and southern Europe to educate those émigrés who would later spend their lives working and contributing to the German economy represents somewhere around €200 billion. An unnoticed flow of funds from east and south to north, rather than the other way around.