MADRID | In Italy, as in other southern eurozone countries, citizens cannot believe there will be light at the end of the austerity tunnel.
Articles by Miguel Navascués
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Is Ireland such a good model to follow as Brussels would like the rest of the euro periphery to believe? The latest financial creative engineering to trim Irish public debt tells us that reality is quite different, and the eurozone still needs to find a long-term programme to solve its problems.
Spain tends to be one of those countries with external deficit as it is in need of capital goods. And this is all right if it’s financed with, say, direct investments.
Our welfare depends on finding more affordable production systems, too, because it frees capital and human workforce that can be used in other fields. This is how an economy improves.
In the current environment of huge indebtedness and low inflation, with sizeable unspent resources, a strong euro adds insult to injury.
Public spending can be cut down particularly when there is growth and economy expands. One has only to look at the US’ GDP to learn a powerful lesson: austerity untimely implemented does more harm than good.
Why has gas prices in Europe escalated up so much more than in the US? Why should taxpayers fill the gap when politicians play with green magic that turns unaffordable? Renewable energy sounds right but costs should be explained.
Austerity is increasingly becoming a danger, not only for the euro peripheral economies, but for the rest of the developed economies, too. Will the European Central Bank take action?
MADRID | This year, the budget cut therapy ordered by Brussels upon the euro area’s weakest economies will have to pass an exam in Dublin. If the Irish economy burdens itself with more public debt while missing growth, the failure could make current European Union policies untenable.
Deficit per GDP reduction in cold blood increases the debt per GDP ratio. We have been there, already. The sensible thing to do is to finance economic growth to shorten the deficit, even if it prolongs for a certain period the increase of debt.