No, its the other way around: we have to give up trade deficits.

The sum of all foreign trade must be zero. Ergo, to give up deficits, you must give up surpluses.

That is the purpose of structural reforms,

No, if that were the purpose of structural reforms, then the structural reforms would include confiscatory taxation of extreme wealth, sharp discounting of overvalued currencies, picking strategic industry winners for aggressive state investment, and imposing restrictive joint venture and local sourcing requirements for high-tech imports.

This is not what is being done, therefore the purpose of structural reform is not to do away with trade imbalances (unless you wish to postulate that those who peddle structural reform are all idiots who do not understand elementary import substitution strategies).

which are necessary irrespective of whether we have the Euro or not.

Why?

It has nothing to do with the Euro. The problem is one of adapting traditional societies to the competitive environment of the modern world.

If adapting to the competitive environment of the modern world leaves a large fraction of the population substantially worse off, then why should we not simply throw up protectionist barriers against foreign competition?

Competition is, after all, a policy, not an objective. If we can protect the interests of the bottom three quarters of the income distribution at the "cost" of wiping out the accumulated wealth of the top quarter, then that's a feature, not a bug.

- Jake

Friends come and go. Enemies accumulate.