International trade: We can’t export our way out of the crisis
30 October 2012
To come up with the money to pay for its crisis, the eurozone has decided to export at any cost, slashing wages across the union, and courting customers abroad. The problem: that’s exactly what the countries in the Americas and Asia are trying as well.
Brian Hayes glows with quiet pride. Ireland could serve as an example for other states in crisis, the Minister of State at Ireland’s Department of Finance said recently in Berlin. Despite high deficits and debt, rising unemployment and falling wages, Ireland has in fact been getting pats on the back from all sides for months now. It has, after all, something going for it: export surpluses. Ireland is selling its wares around the world and putting its own house in order at the expense of other countries. And gradually, the other members of the eurozone are falling into step with Ireland. In the Americas and Asia, observers are watching this unfold with unease.
Pushing exports is at the very heart of the strategy for tackling the crisis. While eurozone bailouts, bond purchases by the central bank and savings programmes are intended to reassure only the financial market investors, the path to stability starts with economic growth through exports. The eurozone is changing its business model – and the model for that is far less Ireland than it is the export giant Germany.
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Translated from the German by Anton Baer
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