Readers Question: How sustainable do you think that the austerity measured imposed on European countries are in economic and political terms? This is a good question. Firstly, I feel there is a certain political appeal of austerity. See: Why is austerity politically popular? When austerity was introduced, there was a reluctant support for austerity – …
During the 1990s and first half of 2000, Ireland had one of the longest property booms on record. Between 1996 and 2006, the average price of second homes rose in Ireland rose by over 300%. The average price of new houses rose by 250%, according to the Department of Environment, Heritage and Local Government (DoEHLG). …
In 2012, the EU introduced a new form of its growth and stability pact. The main rules for EU fiscal policy are: Total Government debt must not be more than 60% of gross domestic product; The Government deficit must not be more than 3% of GDP except in particular circumstances. (Source: EU, Current EU rules) …
One of the striking feature of the Eurozone crisis was how countries with relatively low levels of government debt, rushed into severe austerity. And as a consequence of this austerity saw a drop in the rate of economic growth, and an increase in their debt to GDP ratio. One of the main reasons for the …
Iceland’s crisis was brutally severe. With a bloated current account deficit and bad debts, Iceland experienced a severe balance of payments crisis and banking losses. Iceland responded by: Not guaranteeing all banking debt. Many large banks failed and were seized by the government Allowing the currency to devalue by 50%. Imposed capital controls to prevent …
Readers Question: Hello! I was just wondering in the midst of the European crisis when all economically strong countries have been downgraded? Many countries in the Eurozone have seen a downgrading in their credit rating for Government debt. The economic crisis saw a sharp rise in levels of government debt to GDP. In a recession, …
Readers Question: Can you tell what Portugal has done to reduce the Current Account GDP deficit so steeply? The reduction in the Portuguese deficit is quite striking. In researching the answer to this question, I came up with a different post – The Portuguese Economic crisis From what I can gather, essentially, the rapid reduction …
Readers Question I’ve recently been looking up on the Eurozone financial crisis for random reasons and i don’t understand the statement in an FT article about what we must acknowledge in order to overcome the Eurozone problems. The statement goes ‘no country can be expected to generate huge primary surpluses for long periods for the …