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Old 30.08.2019, 22:16
rainer_d rainer_d is offline
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Re: The Brexit referendum thread: potential consequences for GB, EU and the Brits in

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Iceland.

Good Euro trouble example is Greece that can't devaluate or go bankrupt. I wonder when that country will recover.

Edit: or what about Italy? I wonder which other EU country is looking forward to help them out.

Iceland is a very special case. It has only 390k inhabitants. That's less than the city of Zurich alone.

They also made some very interesting choices during the 2008 financial crisis, which lead to them being basically cut off from the influx of foreign capital.


That said, Greece is a good example of what you have to do if you can't devaluate: wage repression. Ireland had to do this, too, IIRC.

The problem with the Euro is not the Euro, but everything else.
No fiscal union, no military union, no social union and a specific no-bailout clause in the Maastricht treaty. So, if a country gets in trouble, the only way out is wage repression and austerity.
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