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Broadband expansion: a funding model

First, it was “regulatory holiday”, then the broadband AG and now enters the renowned Institute for Infrastructure and Communication Services in Bonn with a funding model for the expansion of broadband to the public. Every cell phone and landline customer should according to the proposal, shell out 1 euro more, as a sort of special levy broadband“broadband deployment.”

So shall the highly politically ambitious goals of universal coverage with fast 50-Megabitt connections are achieved. The reasons for the lack of private investment in broadband expansion are simple. It simply lack the willingness to pay of consumers, especially outside the major population centres. After the simple multiplication of the economy needed to be given for political intervention reasons for market failure.

This may be based on economically relevant positive externalities, i.e. benefits of telecommunications structure, beyond the private benefit. There are robust evidence for this it is not implemented.With the privatization of the telecommunications sector, we have adopted from the state pension plan for good reasons. Just as the market quickly became clear that the user desires more than four colours for his phone is now clear that (yet), there is no demand for a broadband Internet coverage.

Before flowing scarce tax dollars in a big way in the realization of “Turbo Dreams”, the citizens should be asked for self-initiative.Here is another post on this issue.broadband The demand anyway. However, the offer price is too high. That is the problem. Satellite as an alternative? Surely not. Probably the state must intervene; otherwise, the rural exodus is encouraged.

This applies to local companies, self-employed and of course for the attractiveness of a community in construction areas, etc. The market will not regulate itself here because there are too few players! The cost of basic research were enormous and were supported by States. Perhaps creating a state intervention is not the optimal allocation of resources. This creates a market.

Therefore, in the end the question is whether it is beneficial to the company, or not. The quality of these links is a bit questionable. However, by introducing many new markets can talk about opportunities increase.

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Stability in the euro area as a whole

At 24-25. March were agreed at the EU summit profound changes the architecture of the monetary union. Stable should be the euro. It begins with the assertion that it needed joint efforts to overcome the “euro crisis”. There is no euro crisis. On the contrary, the euro against the U.S. dollar are even overvalued.

What pollutes the euromonetary union a debt crisis and growth in individual Member States? This difference is not semantic, but fundamental. He does state clearly that the problems are homemade and, consequently, to treat the affected countries themselves must be operated. With the establishment of the now permanent crisis mechanism (ESM), the EU is entering on fragile terrain. Anyone who believes that the ESM is an adequate regulatory framework for crisis prevention and management must unfortunately be disappointed.

euroBecause there are significant weaknesses:

The fundamental condition for an auxiliary grant is the indispensability for maintaining stability in the euro area as a whole. It comes to the solid states, which are government blackmailed by the governments with unsound budgetary policies. They only have to extend the debt so that they to be relevant to the system. For the award of grants is needed a “unanimous” decision.

The guiding principle would be to automate the decision-making process for the activation of the ESM, i.e. award to an independent institution so. The problem is also used to determine the loan interest rate to be generous by the ESM. The desired steering function of interest rate spreads in the capital market is undermined.

Interest subsidies for governments to create disincentives to borrow yet again excessively, while private investors / banks will have to miss it again to a rigorous risk assessment, the purchase of government debt. The question remains open for a reasonable insolvency code for countries within the euro zone. In addition, the usefulness of monitoring of the so-called current account imbalances in the member countries is not economically comprehensible.

The European Council has failed in their duty to ensure the primacy of economic self-reliance. Instead, he follows the mistaken belief that interventionism and Community liability give a solid foundation for the desired stability within the euro zone.

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Modern growth strategy for Europe

The past decade was a period, in which the periphery of Europe caught up strongly compared to the centre. Nevertheless, part of the catching-up process has proved to be unsustainable as a “bubble.” The pattern was the same everywhere: There was a boom in the national market, the local digitally_drivenservices and real estate prices rose sharply and wages increased faster than labour productivity.

The result is that drastically deteriorated competitiveness in relation to the centre of Europe. This went well but the market bubble finally burst – in the wake of the world financial crisis. After that, the macroeconomic imbalances was mercilessly are exposed. It comes to huge deficits in the state budget and the current account, unsafe banking systems, loss of confidence in the capital markets, debt crisis. Greece, Ireland, Portugal and Spain have lived beyond their means, because they believed that there would be virtually an automatism in the convergence in labour productivity in Europe between periphery and centre.

Nevertheless, image_growth1convergence will not come so quickly. The biggest reason is the lack of innovation of the industry in the peripheral countries. The same applies in a similar form for the Central European countries and even East Germany. These are still suffering the long-term by crop damage of socialism. It is the destruction of capitalist structures through many years of political imprisonment in a planned economy with extremely innovative hostile division of labour.

For the strengthening of industrial innovation in each country is primarily the responsibility of each national economic policy. In the second place to assist where the European Union is needed. EU funding, however, requires a shift in focus away from consumer-related funding programs towards regional, science and education policy initiatives. Brief, to overcome the economic division shall require a modern growth-oriented industrial policy.

The same applies in a similar form for the Central European countries and even East Germany. These are still suffering the long-term crop damage of socialism, i.e., the destruction of capitalist structures through many years of political imprisonment in a planned economy with extremely innovative hostile division of labour.