300 to 800 factories yearly closed their doors in France since the introduction of the Euro. Italy faces a lesser but still steep industrial decline. In the meanwhile, industrial output boomed in the German hinterland of Eastern Europe.
Apart from the arguable “yearly”, that’s just efficiency in practice. When you look at the US, you see the same thing: there isn’t a large movie industry in each state, but there is one Hollywood (and one Broadway for theatre). Attracting all talent and capital from the entire continent allows for a level of economies of scale and quality refinement that makes it absolutely dominant worldwide. The same process happened for Silicon Valley / Bay Area, or even Detroit back in the day - it’s not like they were only making cars for Illinois and immediate surroundings...
I’m Italian and I can see our country becoming such a centre of attraction in certain fields (fashion and advertising in Milan, for example; food in Emilia; motor-racing in Romagna; tourism in Tuscany...). I’m not terribly worried that our widget-making capabilities have lowered - we are still paying the economic and social price of 60s-style industry in some areas (Taranto, Pozzuoli etc).
In the end it always boils down to this annoying tribalism - in a global world, thinking that French and Germans and Italians and Spanish must be separate and autonomous little tribes, is as silly as thinking that Nice or Lyon should be completely separate and autonomous from Paris and Calais.
That's efficiency from a certain perspective. That's this wonderful efficiency that makes the world extremely sensitive to the current Covid-19 situation. That's the very opposite of antifragility. We need resilience, too.
This has absolutely nothing to do with isolationism or tribalism. Gee, I hate this sort of strawman argument.
Our globalised, ultra-lean, efficient world was built on a humongous influx of fossil fuels and other limited resources that destroyed our climate while being so "efficient". Fossil fuels (and phosphates) that will become scarce at some point or another.
Efficiency and resiliency are different things. If you want resiliency, you plan accordingly - left to its own devices, the capitalist market will always go for ultimate efficiency, that's a primary property of the system. This is not the Soviet Union deciding to do potatoes in one country and cars in another, people take smaller decisions that aggregate up to certain phenomenons. If you don't like those phenomenons, you have to intervene pretty radically.
> This has absolutely nothing to do with isolationism or tribalism.
This has absolutely all to do with tribalism. If industries had closed in France and opened in Belgium, making them operatively indistinguishable from French industries for all intents and purposes (as distance is negligible and half of them basically speak the same language), people would still go on about lacking French industry. Why? Because Belgium is conceptually "not France". Nobody complains (anymore) about a single factory serving an entire country, why should we worry about a single factory serving half a continent? Do you seriously think you should have a widget-making factory in every city or town, for each different type of widget...? "OMG the world might end, we need to be able to make Gucci shoes in every town!"
> fossil fuels and other limited resources that destroyed our climate
I do not disagree, but that's something that effectively started 300 years ago and is not going to end anytime soon, unless you enjoy riding horses and going to bed with the sun. We will find alternatives (in some areas we already have, effectively; they are just not equally distributed yet).
Sorry but no, the problem isn't of industry closing down in France and opening back in Belgium, you're misrepresenting things. There has been a long history of the idea that we Europeans don't really need to "make things", that we could relocate our industry wherever it's more "efficient" (i. e. cheaper, because mostly of lower environmental and social safeguards, and because nobody directly pays for the externalities -- that's good old imperialism, colonialism in new clothes IMO) and keep the know-how, engineering, and power for us while Chinese or others would do the dirty work for us. And this stupid idea began to crumble a few years back already, and is now suddenly proven dead to everyone (hopefully).
There is such a thing as sovereignty, and it doesn't matter at which scale it happens; sovereignty implies having control on whatever things you can't do without. Can Europe or the US be sovereign without steel mills? maybe. Car manufacturing? possibly. Chemistry and pharmaceutical production? not so sure. Oil? see our leaders grovelling at MBS' knees while he's butchering Yemen. Ah.
In the US, some top brass came recently to the realisation that the US can't make a war plane without Chinese input anymore. That may be a problem sooner or later.
Similarly, the impact of the transfer of industries and money across Europe isn't a problem per se, it's only a problem because nothing provides any equilibrium -- no transfers at any significant scales. So far Germany sends cars and machines across Europe, and gets paper in exchange. At times, some important German minister or another goes harping that someday, that TARGET2 balance will have to be cleared. Does this even make sense? Can we have a European money, but not a European industry? I don't think so. Something will have to give at some point or another.
You're mixing together a bunch of different issues. On some of them we don't even disagree. But they are different issues. And the issue of "sovereignty" is precisely the tribalistic attitude I was talking about.
That's pretty obvious. Germany has superior industry, yet thanks to Euro they are able to keep prices reasonably low. If Mark was still used, it would have cost 2 USD and others could compete at least in prices. This hurt even more Italy. Next, Germany managed to build a cheap suppliers chain out of former East Block countries (especially Poland).
