1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

What's wrong with Italy?

Discussion in 'Speaker's Corner' started by LabR@t, Jan 31, 2019.

  1. GordyR

    Mobster

    Joined: Dec 1, 2003

    Posts: 4,613

    Location: Essex

    While we are indeed one of the ten net contributors, that fact alone is meaningless in isolation as it completely ignores why we do so and how it benefits us.

    Our financial contribution to the EU costs us 0.65% of our GNI.

    This means that we pay the least, as a percentage of our GDP, of all the EU member states.

    [​IMG]

    Even if we forget all of the other economic benefits of full membership (like access to free trade agreements that cover more than 2/3 of the globe), that comparatively tiny financial contribution gives as full membership of the single market, which alone is worth 5-9% of our GDP, depending upon the year.

    So that's 0.65% paid in for a 5-9% return from the single market alone.

    This makes EU membership about the single most consistently profitable investment on the planet.

    Anyway, all of that aside, highly developed economies always get a greater bang for their buck by investing into lesser developed ones. This is done primarily in order to reap the rewards of expanding their accessible market of wealthy consumers, longer term. And that's why it's been so beneficial for countries like ours to put more money into Eastern Europe. Boiling fiscal expenditure down to a simple payment in/payment out calculation is quite simply, naive and disingenuous.

    It's the sort of thing that tabloid newspapers do, not economists.
     
    Last edited: Feb 14, 2019