Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Briefly : 30 billion euros of deficit reduction, which is alleged to bring the deficit back to 3% in 2013 (based on the absurd premise of 0.8% economic growth).

The Eurozone's giant sucking sound (28.08.2012)

If Eurozone countries (except Germany) have a persistent current account deficit averaging close to 3% (and, on current trends, soon to exceed it), and at the same time the government deficit must remain below 3%, it becomes mathematically impossible for the Eurozone private sector (outside Germany) to net-save. This is unsustainable, because if the private sector is dissaving eventually it will become insolvent.

Take, for example, France:

If France were to bring its Government deficit below 3%, it would destroy the ability of the French private sector to net-save, assuming the current account deficit stays on trend (and it should: Germany's 6% current account surplus is as stable as if it were a successful policy target, and the Eurozone's neutral current account balance is consistent with the ECB pursuing a non-interventionistic foreign reserve policy).

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Fri Sep 28th, 2012 at 06:32:59 AM EST
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