November 09, 2011

Why Germany is richer than Italy


You know what's happening in Greece. Italy, Portugal and Spain will be the next countries to weather the storm. But why is it Europe'ssouthernnations that are struggling the most?

The dense river network in northwestern Europe (not to mention more roads and railways) affords that region much lower transportation costs. Thus, Northern nations have a significant competitive advantage in exporting. The one trick Southern nations had up their sleeves—devaluing their currencies to make their exports cheaper—ended with the adoption of the euro.
The Next 100 Years
The result? A Germany with a trade surplus, and an Italy with a national debt at 120% of GDP and more choppy water on the horizon.

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3 comments:

Anonymous said...

In order to secure your point of view, you changed the map. For example, the biggest river in Iberia is the tagus river, and you deleted it from the map. Try it again, but this time with a real map...

Anonymous said...

Stratfor is CIA disinformation wall to wall, Texas funded and Texas based. No credibility whatsoever should be accorded to Stratfor, it's like Sorcha Faal & Debkafile....despite the razzmatazz in their maps and graphs....

Anonymous said...

Italy has a huge coastline and Italian cities (e.g. Venice) long tradition in trading. Greece is a nation of islands and since its earliest existence it used the ocean(s). I don't see how the mediterranean sea is less a good mean for transportation than German rivers...