We Europeans

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!

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  1. I believe it’s too easy to summarize the “divides” in north/south or catholic/protestant divide or rich/poor or advanced/not-so-much.

    They are mostly based in anedoctal evidence which is good for a short conversation but, usually most of the arguments don’t stand a thorough review.

    For instance, one of the items pointed out. Portugal is right now at the top of the use of e-goverment, is at the top of the list in many iniciatives to reduce red-tape (it takes a couple of days to create a company) and I could go on and on with anedoctal evidence that demonstrate the contrary.

    First, I believe that trying to bundle together several countries and trying to give them a common label like “the south” is doomed to fail. These days and after many years of european integration It’s not so easy to put them togeteher. Spanish, greek, portuguese and italians ..yes they are in the south. But what exactly is that common characteristic? Are they all poor?..no they are not..look at spain and Itally. And what is Ireland doing in the same group, these days?

    Anyway I’ll leave my view on only one of them: Portugal. The one I know well.

    People fail to realise that the output of today (a Flow of value creation) is a result of a stock of resources accumulated in the past. be it Capital, education, rules, laws, institutions, etc. It’s a stock. It takes time to build.
    Unfortunately, Portugal was many years late in xx century to build it’s own stock and so it lacks on the output.

    Now if you go an look at those statistics carefully you will see how much we have progressed and in many cases fast, really fast.

    Have we done mistakes in the way? Yes. Many. But then again. which of those northern and protestant countries that should be “role models” didn’t had their “mistakes” (I’ll not even refer Geramny…) . For instance wasn’t a few years back Finland completely broke?

    One last word for the Euro. I believe that as it stands Portugal can’t stay in the Euro. If you look at the data you will see what happened in 2000 to the growth of Portugal (and look also at germany..). Wether is good or bad I don’t know.
    What I know for sure is that it is completely stupid to agree on competing with countries which are much more advanced and let go all the tools which could helps us compete. Yes I’m talking about monetary policy, exchange rates and all that. We are not ready to leave without them.
    Our growth stalled after 2000. Guess why?

    I’m sorry this answer is already too long…


  2. This was not intended as a criticism, Miguel, least of all of Portugal which, as I said, hardly classifies as ‘South’ in any case. And of course you’re right to challenge any systemisation of attitudes or habits. After all, we’re talking about people, not systems. But there are certain trends which seem to intensify along lines of latitude, just as people in southern Europe seem to be more relationship-oriented than northerners. As for the protestant-catholic divide, I think it was existing underlying values that caused the schism, not the other way round. Cheers, Richard

  3. Dear Richard,

    I would like to thank you for your article and ask you only 2 questions if I may.

    1) Where do you come from?

    2) what unites all the aforementioned countries , and the other European countries.

    I hope these are the right questions, rather than answers, and that they coulb be of help for once in the already vast discussion on issues similar with the one you chose to treat here.


    Because I am sure that I can find a group of persons in the same country with you. With the same history that will say that are COMPLETELY different from you and the person that come from the place you were born. That is to say ‘everyone is different’. Even if you put two brothers/sisters next one to the other they will claim they are different.

    The duffucult is also the most presious as you insinuate from the disciplinary connotation you make. So let us find what unites us rather than what makes us different. I think this is a much safer base to approach ANY question, wheather it is climate change, enlargment, Turkey, Lybia, financial regulation, etc.

    Why is it important now to ask these two questions? Because of globalization and the mere fact that we need to reinforce Democracy in that context. Europe is the only continent that can play a genuine role in that debate because of these DIFFERENCES which anyway have been put APART and have since now PRODUCED a EUROPEAN and GLOBAL POSITIVE OUTCOME.

    Thank you

    Kind regards,

    Evangelos Koumentakos

  4. Let’s hope you’re right, Evangelos. Yet, despite the will to achieve unanimity, Europe still has to get its act together. Ans I can’t help thinking that, if we all happened to share the same culture, values and opinions, the world would be a much duller place. Vive la difference!

    As for me, to answer your questions, in the number of years I have spent anywhere, I would qualify as Belgian (Dutch, French or German-speaking – take your pick). But I have a Britsh passport.

    What unites the countries I wrote about? A tradition of humanism, but interpreted by different countries in different ways. Even our senses of humour differ, as still do our tastes in food and drink – and so much the better!

  5. Hi Richard,

    of course the world would be a duller place but isn’t that hypothesis a bit of non sense? I mean eve twins can tell that we are all different. But what makes the world go round is in fact the dialectic between Heraclitous ‘the father of all is war’ and Lenon’s “imagine” (a bit rough on the edges but a valid example in my opinion)
    You call it humanism but the -ism makes me a bit suspicious. I prefer the term democracy as I think includes the course of evolution of humanism as I understand it.
    Again thank you for your response let’s hope Europe will get its act together.



  6. Please live The UE alone You boring pumped up idiots living in 19 century.
    All you need to be happy is your smelly PUB and football game over the weekend.Please EUROPE with no “Britishness”

  7. My, you must have had a difficult weekend, Greg. As for me, I’ve been living on the Continent for the last forty years and, though this was not the subject of my blog, happen to share your feelings about some of the offshore Europeans (the English, not the Scots or Irish). Read my e-book ‘Great Britain Little England” on http://www.europublications.com.

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