A striking feature of the Eurozone has been the emergence of structural current account deficits in the periphery, mirrored by equally structural surpluses in the core, above all, Germany. The cause has been the rise in German competitiveness due to unrelenting pressure on German wages (Germany already starting from a higher level of competitiveness, needless to say). Pressure on wages has been a general feature of Eurozone countries, following the Maastricht Treaty, which has forced "flexibility" onto the labour market thus complementing the imposition of single monetary policy and rigid fiscal policy across the Eurozone. The race to the bottom has been won by Germany, which has squeezed wages far more successfully than peripheral countries during the last decade. The result has been loss of competitiveness in the periphery, producing current account deficits that have been mirrored by current account surpluses in Germany. Figure 4 shows the divergent paths of the German, Spanish, Portuguese and Greek current accounts.
Peripheral current accounts worsened steadily since the mid-1990s on the approach to European Monetary Union, and the deficits became entrenched once the euro was adopted. Germany, meanwhile, has registered regular surpluses since the introduction of the euro. The deficits of the periphery reached extraordinary levels in the second half of the 2000s, nearing 15% in Greece in 2007 and 2008.
Current account balance = balance of trade
Note the dates - this was all before the recession. Germany exported, whilst Ireland (which isn't on the graph but followed an almost identical path), Greece, Portugal and Spain plunged deeper into debt funding the imports. Meanwhile the EU took billions of pounds from us - the UK - France, Germany and other prosperous members and used our money to pay for the construction of infrastructure specifically designed to better facilitate the transportation of goods to the peripheries.
So yes, Germany generated wealth. The only 'wealth' generated by the peripheries was credit, which they magicked out of thin air to buy things from Germany. Great system isn't it? Only problem is that now they've got to pay back the banks, they can't afford it, so the banks are collapsing. British banks Lloyds and RBS, for example, have written off £3 billion worth of mortgage, loan and credit defaults in Ireland alone since the recession began, because people can't afford to pay it back. That's money our economy will never see again - it's gone.
And you talk about this "free flow of goods" - tens of billions of pounds worth of goods flow into the UK from the Far East every year. Do we have a free trade agreement and common currency with them? No. Doesn't stop us exchanging goods and money with them though does it?
Sorry, and I know criticising the EU is normally the pastime of Express readers, but the EU is a total sham.
I saw a fascinating news report (I think it was from RT news, but can't remember exactly) last week which has unfortunately been removed from YouTube. In it, a British MEP - not a UKIP one - told a reporter that the EU is subsiding Greek tobacco farmers. Not that bad you might think, however: At harvest time, a "unit" (that is what he called it) comes along, takes the tobacco away and incinerates it. The EU is doing the equivalent of paying people to dig holes and fill them in again - confirmation that Europe IS sliding down a slippery slope towards communism.
There is hope though, because the markets want the Euro and preferably the whole EU with it to collapse ASAP. We are currently in the midst of an economic standoff - a cold economic war - between capitalism and communist ideologies. The Euro is on the brink, and if it doesn't fall over the edge now then it probably never will. The markets know this and so does the EU. That's why the EU secretly wants to nationalise every major bank in Europe. And when you realise that banks are virtually the modern-day means of production in Europe, it makes perfect sense. Thankfully, many senior analysts predict that the EU will go bust very soon, within the next two years, and it will happen literally overnight - a 'Berlin Wall' type moment. Then people who have known what's been going on all along can finally shed light on the full extent of the failed EU's objectives without fear of suppression.
Dismiss the above as the ramblings of a conspiracy theorist if you must - I'm not bothered. Time will tell.