This Levy Institute
article says that Greece has cut costs in the last few years, but that that has
no dramatically improved its current account balance. The article concludes by
claiming that “Strategies to increase employment and income are urgently
needed.”
Sounds great, but what will those “strategies” actually consist of?
Any increase in “employment and income” will just suck in imports, which
makes Greece’s balance of payments worse, unless I’ve missed something. Plus if
cutting costs under the existing “autsterity for the periphery” isn't working,
then Greece reverting to its own currency and devaluing wouldn’t work
either.
In that situation, there is only one option left for such a country,
mass emigration (as Wynne Godley once pointed out in respect of the UK when the
UK’s balance of payments was in dire straits a few decades ago).
And in fact Greece has exported people on a large scale over the last
century, though I’m not sure how big that “export” has been relative to other
countries. Certainly Ireland, another periphery country, has been exporting
people on a large scale for well over a century.
H/t to Mike
Norman.
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