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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.



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In this time of crisis that we have been dragging, and with the great fall that the tax collection has suffered, which has caused debates on the sustainability of our pension system and its reform, the financing deficit of the autonomous communities and municipalities have derived in an asphyxiating fiscal pressure. Thus, the debate on the legalization of prostitution.

To illustrate the situation better, we will see the numbers that the prostitution sector manages. The estimated amount of this is 3.500 million euros per year, which represents 0.35% of the national GDP. To give you an idea, this supposes a volume similar to the footwear industry in Spain or to the contribution of the city of Malaga.

Have in mind that in Spain there are about 100,000 escorts, although only 20% of these escorts girls are Spanish. It is estimated that 39% of Spaniards have paid for having sex ever, with an average annual expenditure of 1,530 euros. That is, we spend much more on sex than on car insurance, buying fruit or vegetables. The 66% of the escorts girls practice in a brothel, to compare with the remaining 33%, that does it in the street.

To end with this battery of data, only 5% are luxury escorts. Now is when the question arises, should we regulate the sector? This is one of the largest money movements in the country, which could contribute to the desired increase in tax collection.

Why is it legal to sell tobacco if it generates thousands of deaths and illnesses a year, spending millions of euros on campaigns to stop smoking and generates a huge expenditure on public health? The tax reason seems enough to allow it to be legal to smoke. Now we come to see, briefly, the Dutch model, where prostitution was legalized in the year 2000 and already have extensive experience.

In the Netherlands, the sector moves the 2,500 million euros, that is to say to 0.4% of the GDP, surpassing to the mythical Dutch cheese sector. The legalization of prostitution was coming at the same time than laws against sexual abuse and protection of minors. Prostitution has been banned on the streets and can only be done in rooms equipped for this purpose, each escort girl has to pay for private health insurance, like any Dutch worker. As taxes are paid for this activity, the system is controlled through a licensing system, and final regulation is given to the cities. At the sametime than this legalization, any means of sexual exploitation is considered an offense punishable by imprisonment and the legal age for engaging in prostitution was raised from 18 to 21.

Clubs, escorts girls' agencies, X rooms, couples bars, or prostitution in private homes are allowed and regulated by a licensing system, and only in 13 Dutch cities are the famous showcases allowed, such as the famous of the Red Light district of Amsterdam.

Any companion has the right for social and health care and even to participate in a program of social reintegration for those who want to abandon prostitution, and municipalities are obliged to guarantee these rights as issuers of the corresponding licenses.

With all these data and comparing the two models, you can see the similarity of figures between countries, but while in Holland they contribute as another sector and are protected by law, having the right to social benefits and pensions, in Spain, escorts and prostitutes are left in the helplessness and at the mercy of mafias and sexual exploiters.

For all this, it would be useful to reflect deeply on whether the legalization of the sector is more convenient for all. .