How drugs and prostitution will reduce European debt
The information you can read below, can make smile many people even in the current economic situation.
From this September will require to the member countries of the European Union, to submit all illegal activities they can encounter in their territory. These activities shall be included in the economic statistics of the country, along with the other activities. Such as drug trafficking, prostitution and smuggling inflate the GDP of EU member countries.
Since 2012 the European bloc reached agreement to introduce this underground economy in economic statistics. But it won't be until this September when this implementation will be effective. Thus, in September 2014 the application will be formally required.
How can quantify precisely all underground economic activity? For this, each EU member state will provide an overall estimate of the underground activity. The European Commission says, it will not be any detailed sectoral breakdown.
The panel of "Open Europe", include underground activity in these statistics should boost European GDP by up to 0.5%. These results will be beneficial for Greece, Italy, Spain and Portugal ... as Pieter Cleppe representative of "Open Europe" says. These states have a large debt futhermore activities of prostitution and drugs are illegal.
On the other hand, countries where drug sales and prostitution are legalized saw their GDP changed significantly. An example is the Netherlands, where the sale of cannabis is legal.
Participation in the Budget Review
Participation in the EU budget could undergo changes significantly. A state whose shadow economy is important, its GDP will be driven much more than other countries. As the contribution of the European budget depends on the GDP, many states may promote their contribution.
Those countries where prostitution and drugs are legal are in favor of a reform of this type. The Netherlands, expect others to contribute more to the EU budget. Other countries like Greece and the Eastern Europe countries, have driven this reform to benefit favorable deficit figures.
The inclusion of the underground economy, is part of a broad reform to reform the calculation of GDP. The most important change will be the expenditure on research and development. The average European GDP is at 2.4%, but some countries will be more affected than others.
Countries such as Belgium, Denmark, Germany and France will increase its wealth produced annually by 2% to 3%. Finland and Sweden will be hardest hit, seeing a growth between 4% and 5%.
Therefore, seeing this new application which will take effect this September, European debt will be reduced. For many countries will be a great relief, for others it will not be much difference.
The result will be an improved GDP across Europe, thus countries with better conditions may help countries with worse conditions. Perhaps with this new application, some countries arising legalize prostitution and drug sales, because there is a lot of shadow economy. The state could benefit very much this underground economy to legalize it because they could levy taxes on their behalf.
It's a new way, new solutions to the debt in Europe and its member states see improved their debts.