Tallinn professor Rainer Kattel:
Baltic recovery came from outside, not from austerity measures

As the Euro Zone nations sour on austerity, the Baltic States keep taunting them. Professor Rainer Kattel has a different take. He argues that despite harsh austerity measures clocking in at between 8 and 9.5 percent in 2009 alone, the three countries “outsourced” their recovery.

Besides relying heavily on EU structural funds, Kattel explains, they tightly integrated exports with Scandinavia.

“I don’t there is any connection with the recovery,” he says of the austerity programmes.

“The recovery came from outside.”

Read more...
_____________________________

How austerity kills

Early last month, a triple suicide was reported in the seaside town of Civitanova Marche, Italy. A married couple, Anna Maria Sopranzi, 68, and Romeo Dionisi, 62, had been struggling to live on her monthly pension of around 500 euros (about $650), and had fallen behind on rent. Because the Italian government’s austerity budget had raised the retirement age, Mr. Dionisi, a former construction worker, became one of Italy’s esodati (exiled ones) — older workers plunged into poverty without a safety net. On April 5, he and his wife left a note on a neighbor’s car asking for forgiveness, then hanged themselves in a storage closet at home. When Ms. Sopranzi’s brother, Giuseppe Sopranzi, 73, heard the news, he drowned himself in the Adriatic.

Read more...
_____________________________

Europe's leaders have failed miserably, I believe this is inexcusable

There is a substantial risk that the worst is still ahead of us in crisis-hit Europe, says Nobel laureate Joseph Stiglitz. EU tries to give the impression that things are about to improve in the euro zone, but the numbers in the real economies tell a very different story, according to Stiglitz.

- Spain is in depression. 50 percent of adolescents and 25 percent of the population is without work, and they see no light at the end of the tunnel.

He asks how long young people will accept a system that costs their society so harshly, showing that Europe as a whole still is in recession, five years after the crisis started. Recession is defined as a fall in gross domestic product (GDP) for two or more consecutive quarters.

- In many of the countries, GDP is lower than in 2007. It is clear that the European leaders have failed miserably. I believe this is inexcusable, says Stiglitz.

The American professor has no doubt that the austerity measures have not worked. He believes one must now release the grip and see what can be done to promote growth.