The problems of the Eurozone are based on the equal price of money. Usually the price of money is defined by the exchange rates, but inside the currency union, there are no possibilities to distinguish this price of money. The loss of the individual currency has advantages and disadvantages. But we have to handle the disadvantages to use the advantages of this system.
Either we need a system of financial transfer to solve this problem or we need a combined policy of taxes. To lower the base rate of the European Central Bank is no solution for the problem, because all Euro-Members have the same effects. For example the German economy has no need for low base rates.
Zinsniveau = base rate
If you have an enterprise, would you invest in Germany or Spain? As long as the investment in Spain is not cheaper as in Germany, because the price of money is the same, we won’t solve this crisis. Now we have two possibilities. If the stronger countries pay for the weaker countries, we could solve the wrong allocation of money.
Another possibility would be to individualize the taxes for consumption and production. The equal value of money results in a weaker currency for the countries with strong currency before the Euro, as in Germany. On the other hand, the countries with a weak currency before the Euro now have a stronger currency.
Imports got cheaper for Spain, while Exports got more expansive. In Germany the Imports got more expansive, but Exports got cheaper. If we want to develop a consistent system, we need a higher taxation for consumption in Spain than in Germany, but a higher taxation of production in Germany than in Spain.
If we don’t decide for one of these two possibilities, we won’t have a chance to solve the problem of the equal value of money. Either we change taxation in the Eurozone, or we need a system of transfer.
Eine Problembeschreibung in deutscher Sprache habe ich hier veröffentlich:
Das einheitliche Zinsniveau (www.mister-ede.de – 11.04.2012)