Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Display:
Not at all. Creating a strong business climate does not necessarily require government subsidies (which might well be counterproductive, especially after the "infant industry" stage) or massive national debts or deficit spending.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Wed Dec 14th, 2011 at 09:05:27 AM EST
[ Parent ]
Running a government surplus and reducing debt (as Spain did) manifests itself as pressure to increase private indebtedness. Indebted business is not really a strong business climate.

Currently, with austerity, the message seems to be that a strong business climate will be fostered by lax labour laws, easier layoffs and longer hours for lower pay. Meantime, skilled workers are getting fed up and emigrating.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Wed Dec 14th, 2011 at 09:07:55 AM EST
[ Parent ]
Also Re: illegal state aid, it is not a coincidence that the weapons and aerospace sector is the one of the few ones that thrive in Spain, because it's the only one that it exempt from EU "illegal state aid" rules. Also not a coincidence that Spain wanted to use its semester presidence of the EU council to get the EU to lift the arms embargo on china. Also not a coincidence that one of the conditions for the "rescue" of Greece was the continuation of arms purchases from the Carolingians.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Wed Dec 14th, 2011 at 09:10:50 AM EST
[ Parent ]
Creating a strong business climate does not necessarily require government subsidies

It requires a protected domestic market. This is the simple, unequivocal fact to come out of the 19th and 20th centuries.

or massive national debts or deficit spending.

Yes it does.

If you are running a foreign surplus, that deficit can be someone else's. But you still need one.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Dec 14th, 2011 at 10:05:10 AM EST
[ Parent ]

Display:

Occasional Series