EEC economic plan
EEC economic plan
The European Union experiment is a total disaster. It is not only the group's organization model that is a disaster but also the economic model and the economic plan. Eastern European Commonwealth (EEC) has a very detailed economic plan for the next thirty years. In this time, EEC is expected to reach Western Europe's average per capita income.
There are certain key points that will make this possible. One is the eastern euro. It will start with an exchange rate of 1 euro but it is expected to fall to a lower price. This is actually good, as long as it does not fall too much. It will help Eastern Eurozone's products and services become more competitive. Competitiveness is determined mainly by productivity and price level. The second is determined by exchange rate.
Increase in productivity is a crucial factor that will allow EEC to reach WEU (Western European Union), in terms of average per capita income. Per capita income is very closely related to productivity. Productivity can be increased by improving the productivity of existing sectors but mainly by switching to sectors with higher productivity.
Western European countries keep these sectors for them and let Eastern Europe have sectors with lower productivity. The excuse is that Western Europe is more productive in higher productivity sectors. Well, productivity is something that definitely can be improved. If countries are stuck with lower productivity sectors because of damned EU policies, they are doomed to lower per capita income.
If necessary, sectors should be protected, till they improve productivity and become competitive. There will be some specialization and complementation in goods, services, workers and capital. Damned EU has free movement in these. Complementation can be achieved by other means. We will use as an example working force complementation.
One way to achieve complementation is with free movement of workers but it is not the only way. The idea is that if in country A there is a surplus of workers and a shortage in country B, workers will move from country A to country B. Another way is if country B asks specifically for those workers needed, prefers workers from countries in EEC and gives them a working visa for a certain time that can be renewed.
Perhaps this is a better way because A's workers will move to country B knowing that there is a job waiting for them. In the case of free movement of workers, they will move to B, hoping that they will find a job. It is also better for the receiving country B. If there is free movement, along with people country B needs and wants, people that are not needed or wanted will enter.
Barriers to the free movement of goods and services are tariffs, duties, quotas. Suppose one country needs to protect a certain sector while it is trying to improve productivity to become competitive. There could be protection measures for specific sectors in every country. It does not have to be all or nothing. There is a range between 0 and 100.
In damned EU, movement of goods and services is 100% free. It could be 70%, 80% or 90%, meaning that there will be some type of protection in 30%, 20%, 10% of the trade within the group. The movement of capital is almost free globally. Inside EEC, it could be entirely free or have some restrictions. Again, it does not have to be all or nothing, entirely free or not free at all.
Competitiveness is determined by price level. More specifically, the price of the output depends on the price of the inputs. If not produced in the country, inputs have to come from countries with low or average price levels. Otherwise, inputs will be expensive. There is provision in the EEC's economic plan for privileged prices of raw materials and energy resources. If we look at the various global production lists of raw materials and energy resources, countries that generally rank high are Russia, China, USA, Canada.
The latter two have high price levels and high trasportation costs because they are far from Eastern Europe. Russia will be in EEC and has good relations with China. Other countries that rank high, especially in energy resources, are in neighboring groups 5 and 8. EEC plans to have good relations with these groups, among others. That is why Israel's participation is questionable. EEC does not want Israel's participation to damage relations with group 5 and group 8. If there is not a big problem, Israel will participate in EEC.
As mentioned in previous article, EEC will obtain the best systems from around the world and make them available to all countries in the group. This will not only be better organization and more convenience for the citizens but also increase in productivity. Better systems are more productive in various ways. Better transportation systems save time. This is not only convenient but also more productive. Better Internet and better information systems are also more productive. Better education systems make better and more productive workers.
Increase in productivity is a crucial factor and it will be achieved in many ways. Specialization in countries will also increase productivity. This will be done in a way, where all countries will benefit and it will be truly a win-win situation. In damned EU, Western European countries have all the productive sectors while Eastern European countries are left with the less productive ones.
Increases in productivity and competitiveness will lead to much higher growth rates than the ones in Western Europe. The higher growth rates will gradually bring Eastern Europe's average per capita income closer and closer to that of Western Europe, till they reach it in approximately twenty-five to thirty years, as the very detailed economic plan predicts.