tag:blogger.com,1999:blog-19649274.post856532266658547168..comments2024-03-29T12:03:50.891+05:30Comments on The Leap Blog: Guide to the Eurozone crisisAjay Shahhttp://www.blogger.com/profile/03835842741008200034noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-19649274.post-68865654661177050782011-11-19T01:53:05.539+05:302011-11-19T01:53:05.539+05:30I too thought, from repeated reading of Krugman...I too thought, from repeated reading of Krugman's blog, that the Italy problem was more one of low growth than one of fiscal irresponsibility. Italy's been running a relatively constant debt/gdp ratio for many years now, but perhaps too large for the current 'market sentiment' presently. (So much for the market being a good judge of prices, is there a way to quantify sentiment based departure from sense statistically?)<br /><br />Thanks for the article, its a fairly comprehensive summary!tighttps://www.blogger.com/profile/17205088401242782688noreply@blogger.comtag:blogger.com,1999:blog-19649274.post-706091982343184402011-11-18T16:21:58.179+05:302011-11-18T16:21:58.179+05:30This is a flawed analysis of the eurozone crisis t...This is a flawed analysis of the eurozone crisis that contains numerous factual errors. To name but a few:<br /><br />1. Spain and Italy had not "been running up unsustainable fiscal deficits since 2000". The former had a fiscal SURPLUS of as much as 2 per cent of GDP between 2004 and 2007, while Italy had a primary surplus of 1.8 per cent of GDP last year, one of the highest in the eurozone. <br /><br />2. Spain's subsequent budget deficits were not the CAUSE of its problems but, as in Ireland, the RESULT of the bursting of its property bubble and of an unsustainable build-up of private, not public, debt. <br /><br />3. Italy's financial problems are due, not to several fiscal imbalances, but mainly to low growth and stagnant productivity. <br /><br />4. France was not running a current account surplus before the eurozone crisis erupted. It has run current account DEFICITS every year since 2004.<br /><br />And so on. Some of the assertions and comments in the article are correct. But the inclusion of so many careless errors casts serious doubts on its credibility.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19649274.post-51882053704053921412011-11-18T00:12:42.285+05:302011-11-18T00:12:42.285+05:30"These technocratic governments inject new cr..."These technocratic governments inject new credibility but lack political and social legitimacy."<br /><br />Yeah, we've seen how well that works in India. Lol! Crisis of democracy everywhere...Anonymousnoreply@blogger.com