The European Tribune is a forum for thoughtful dialogue of European and international issues. You are invited to post comments and your own articles.
Please REGISTER to post.
Imports would also had to be cut, and the competitivness of export companies increased, as we have discussed in other places.
But it is not immediately obvious how this has any simple, mechanical relation to the sovereign balance.
A great idea is to avoid massive wage inflation that is completely disconnected to productivity increases...
Has this actually happened? Do we have time series for Greek wages and productivity around here somewhere, or are we talking out of our posteriors here?
Furthermore, nothing requires that foreign balance deficits must be balanced through the issuance of debt, private or public. It can just as well be financed by foreign entities aquiring equity in domestic companies.
Ah, the foreign direct investment pony. I was wondering when that one would show up.
Thing is, when all traditional avenues of (neo-)mercantilist policy have been choked off, Greece is left with precious few policy options to encourage FDI. And most of them are bad for both the Union and, in the medium term, for Greece.
Speculative real estate bubbles can be reined in with regulation,
But, again, it is not immediately apparent how this will repair the foreign balance.
Certainly, you can repair the foreign balance by gutting demand so far that your economy stops importing food and fuel. Please refer to Suharto's Indonesia for the results of that and get back to me if you still think that's a good idea.
Austerity can only be implemented in the shadow of a concentration camp.
by afew - Jan 28 28 comments
by melo - Jan 23 4 comments
by gmoke - Jan 15 5 comments
by DoDo - Jan 20 4 comments
by Frank Schnittger - Jan 16 111 comments
by ChrisCook - Jan 1 66 comments
by afew - Jan 5 48 comments
by DoDo - Jan 2 5 comments
by afew - Jan 2828 comments
by melo - Jan 234 comments
by DoDo - Jan 204 comments
by Frank Schnittger - Jan 16111 comments
by gmoke - Jan 155 comments
by afew - Jan 548 comments
by rifek - Jan 59 comments
by DoDo - Jan 25 comments
by ChrisCook - Jan 166 comments
by melo - Dec 316 comments
by Metatone - Dec 3129 comments