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Old 31.08.2019, 10:24
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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That is a very technicist and binary solution, strictly from an accounting perspective. You cut off from here so your debts cannot go more than x amount.

My country adopted heavy salaries cuts in the public sector in 2010 and the result was that there was a doctors/professors/other professionals hemorrhage from the public sector and not only to other countries. How can you develop a country if there is a massive brain drain? I think Greece has experienced this kind of crisis too, albeit on a much smaller level, just ask a normal person how long does it take to get an appointment with a specialist or to get a proper treatment without paying the white envelope. Or if they are happy with the quality of the education system lately.
Anyways, Greece is strategically more important than my country so there are still a lot of investments in infrastructure there, things are still moving.
But no, I don't believe IMF has the right solutions. Austerity kills, literally kills. It's like instead of treating a bacterial infection with antibiotics, we decide to amputate body parts first. Easy to talk from a German's perspective.

I didn't say austerity and wage repression were necessarily a good thing.
It's just the only thing you can realistically do in a monetary union if you can't devaluate.

Germany did exactly that. But there's a price for it, and Germany will find out soon enough.
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