Southern Europe needs to deflate to restore competitiveness vis à vis northern Europe.

But all of the options that might restore competitiveness require real currency depreciation.

A return to a national currency and a sharp depreciation would quickly restore competitiveness and growth.

When the bubble bursts, the afflicted country can restore competitiveness only through a painful process of real depreciation.

Only a return to a national currency and a sharp depreciation of that currency can restore competitiveness and growth.

To restore competitiveness and growth in these countries, the euro needs to fall towards parity with the US dollar.

If the PIIGS started that process today, the benefits would be too long in coming to restore competitiveness and growth.

It took Germany ten years to restore its competitiveness this way Greece cannot remain in a depression for a decade.

A simple, effective way to buy time would be to abandon the euro and restore competitiveness through a devalued national currency.

To restore growth, these countries must also regain competitiveness by achieving a real depreciation of their currency, thus turning trade deficits into surpluses.

The last option deflation of wages and prices to reduce costs, achieve a real depreciation, and restore competitiveness is associated with ever deepening recession.

If growth does not recover, the fiscal problems will worsen while making it more politically difficult to enact the painful reforms needed to restore competitiveness.

The gap is simply too large between what is needed to restore competitiveness and what citizens can stomach if they remain part of the monetary union.

Reintroducing the drachma risks exchange rate depreciation in excess of what is necessary to restore competitiveness, which would be inflationary and impose greater losses on drachmatized external debts.

The Fund needs to create programs for Portugal, Ireland, and Greece that restore competitiveness and trim debt, and that offer them realistic hope of a return to economic growth.

Postponing the exit after the June election with a new government committed to a variant of the same failed policies (recessionary austerity and structural reforms) will not restore growth and competitiveness.

The experience of Iceland and many emerging markets over the past 20 years shows that nominal depreciation and orderly restructuring and reduction of foreign debts can restore debt sustainability, competitiveness, and growth.

If none of those three options is feasible, the only path left is to leave the eurozone. A return to a national currency and a sharp depreciation would quickly restore competitiveness and growth.

For mainstream French politicians, renouncing the European project to buy the time required to restore competitiveness is as unthinkable as is the logical alternative an all out push for full European political union.

A rapid reduction in unit labor costs, via acceleration of structural reform and productivity growth relative to wage growth, is also unlikely, as that process took 15 years to restore competitiveness to Germany.

Instead, the advanced economies need a medium term plan to restore competitiveness and jobs via massive new investments in high quality education, job training and human capital improvements, infrastructure, and alternative renewable energy.

Restore

Restore

The burden on the Greek taxpayer will be lightened, which is a prerequisite for reducing wages, pensions, and other costs, and thus is essential to the strategy of internal devaluation needed to restore Greek competitiveness.

Competitiveness Surveys

Restore window

Restore Test

Restore date

Restore folder

Restore Failed

Restore Finished

And, as eurozone banks and public debt markets become increasingly balkanized, establishing a banking union, a fiscal union, and an economic union while pursuing macroeconomic policies that restore growth, external balance, and competitiveness will be extremely difficult.

But a weaker euro would not eliminate the need for structural reforms otherwise, the benefits would go mostly to countries like Germany that undertook painful reforms to restore competitiveness via a reduction in relative unit labor costs.

Select the files you want to restore and click on the Restore button

The reduced deficits would restore confidence, which would restore investment and thus growth.

Climate and Competitiveness

Europe s Competitiveness Obsession

Restore Missing Files

Restore From Where?

Restore From When?

Restore which Files?

Restore deleted files

Restore Tag Filters

Does OFDI increase competitiveness of firms and how could competitiveness from OFDI be measured?

nbsp nbsp nbsp nbsp nbsp nbsp nbsp nbsp A rapid reduction in unit labor costs, via acceleration of structural reform and productivity growth relative to wage growth, is also unlikely, as that process took 15 years to restore competitiveness to Germany.