tag:blogger.com,1999:blog-27932062.post6384370180512269005..comments2023-10-10T15:39:35.168+00:00Comments on Centre for European Reform: The Baltic states and Ireland are not a model for Italy and SpainCentre for European Reformhttp://www.blogger.com/profile/06815454225955436329noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-27932062.post-65247968079258158622012-02-03T01:39:59.580+00:002012-02-03T01:39:59.580+00:00Somewhere between 30 and 40 percent of Latvia'...Somewhere between 30 and 40 percent of Latvia's labor force has emigrated (some are picking strawberries in Ireland). In some cities in Latvia, like Daugavpils, unemployment approaches 75%. Some miracle! It would be nice to know where Sarkozy thinks he could park 30-40% of Spain's labor force. Or Italy's. In France, maybe? Would Germany like to have them? Think Lagarde will move house to Daugavpils?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-27932062.post-51100746696708184072012-01-27T12:42:23.473+00:002012-01-27T12:42:23.473+00:00@Greorgi
1) Spain and Italy account for 29 billio...@Greorgi<br /><br />1) Spain and Italy account for 29 billion € of Germany's current account surplus. That's 1,2% of Germany's economy, which would mean a recession.<br /><br />2) The author is completely right. In order to achieve a big change in the current account you have to engineer a depression on domestic demand. The drop in demand would be much higher than the current account balance and would push Spain's and Italy's economy into recession/depression.<br /><br />3) 'Structural reforms', that one solution fits all, cannot work without INCOME. Baltic countries did not manage to increase domestic demand, they only changed their external balance. The same cannot happen for the whole world, that's just a fallacy of composition. A big drop in domestic demand in 30% of the Eurozone, coupled with the depression in Greece, Portugal, Ireland would just move the whole of the Eurozone in depression.<br /><br />4) Eurozone's external balance is more or less... balanced. Current account deficits and surpluses of the Eurozone countries are a zero sum game. Moving the PIIGS to surplus means that either Germany and the Netherlands will go to deficit or that there is a sufficient source of demand, outside of the Eurozone.Kostas Kalevrashttps://www.blogger.com/profile/12215782761139619874noreply@blogger.comtag:blogger.com,1999:blog-27932062.post-83488850217912648462012-01-27T10:49:24.461+00:002012-01-27T10:49:24.461+00:00Italy and Spain current account deficit is 100bn e...Italy and Spain current account deficit is 100bn euro in total. Closing that gap will have negligible impact on the 10-trillion Eurozone GDP. Especially if Baltic-type structural reforms are undertaken that lead to high economic growth.Georgi Angelovnoreply@blogger.com