February 21, 2011
A piece about the euro crisis published early in December in the New York Times pointed out that “Portugal shares the high wages and prices of richer northern European neighbors, but not their competitiveness”.
The headline read “Euro Zone Is Imperiled by North-South Divide”, but the article failed to deliver on its promise, apart from failing to fit equally euro-stricken Ireland into the equation. For a start, its arguable whether Atlantic-oriented Portugal really qualifies as part of the European South, even if it shares, with Spain and Greece, “their inefficient labor markets and tax systems and heavy debt.”
The article quotes Oscar Turner, the owner of a film company in Portugal who quite rightly says that “the euro’s great if you’re traveling around, but it’s an absurd idea to have the same currency in a country like Greece or Portugal as in Germany, which has totally different habits and culture.” Habits and culture. There we go! There’s a lot more to it than the NYT article suggests. From our research, we see plenty of evidence of what we choose to call ‘the South-North Incline’, And we’re not just talking here about the Catholic-Protestant divide.
As you move northwards from the Mediterranean littoral, the social constraints experienced largely at an almost subconscious level by southern cultures emerge further north as clearcut, expressly stated and universally held social attitudes.
This has nothing to do with the law. Italy has the European record for lawmaking (it is said that the conduct of the Italian citizen is governed by no less than 800,000 rules and regulations), yet the system is so top-heavy that the man-and-woman-in-the-street has no choice but to circumvent the law with typically Italian ingenuity. The ‘incline’ has to do with values like accountability and transparency, which are much more integral to everyday life in the countries of the North.
This South-North Incline pops up time and time again in research studies. When asked to estimate the percentage of the European Union’s budget spent on ‘bureaucracy’, the member states line up dutifully, with a steady progression from the lowest ratings in the South to the highest in the North. A number of factors may contribute to this, including the fact that the northern countries tend to spend more of their GNP on government than the ones to the south. So much for stories of southern red tape… in fact in these countries it is the family rather than the state that provides the social safety net.
It’s notable that the seven countries giving estimates in excess of the average (33%, wide of the actual mark of 5%) are all Protestant with the exception of Belgium, and the seven countries with estimates below the average are all Catholic with the exception of Orthodox Greece.
The South-North Incline is even evident in statistics of payment delays in business. The slowest payers are the Greeks and the promptest are the Finns (pity the Finnish exporter who depends on a customer base in Greece!). And, in terms of transparency per se, nothing could be more eloquent than the statistics produced by Euro-Bid Watch which show the relative performance of the EU/EEA member states in publishing details of official contract awards.
The Incline is perceptible in many other comparative studies – work opportunities for women for example, attitudes to self-employment, usage of online government, new product take-off times and, of course, the size of shadow economies. Though lines of latitude may really have little to do with this phenomenon of the South-North Incline, they do help to illustrate it!Author : Richard Hill