21. Economist Maria-Carmen Guisan in New York Times. Room for Debate: Austerity Policies are not working in Europe, 12th November of 2012.

Economist Maria-Carmen Guisan in NY Times: Room for Debate, 2012

Should Germany abandon the Euro?. Room for Debate NY Times 12th November 2012

 An interesting debate about Euro and EU economic policies appears at the NY Times Foro "Room for Debate".

Contributions by

Charles Dumas, Lombard Street Research

Aristides N. Hatzis, University of Athens

Stefan Homburg, University of Hannover

John Cotter, University College Dublin

Maria-Carmen Guisan, University of Santiago de Compostela, Spain

Veronique de Rugy, George Mason University

 Contribution by Maria-Carmen Guisan to NY Times Foro 2012:

http://www.nytimes.com/roomfordebate/2012/11/12/should-germany-leave-the-euro-zone/germany-should-focus-less-on-austerity-in-the-eu

Austerity Measures Are Not Working

Maria-Carmen Guisan, University of Santiago de Compostela, Spain

Loans from countries with a trade surplus, like Germany, to countries with trade deficits, like Spain, are necessary to keep the E.U. functioning.

E.U. policies should address increasing development throughout the entire E.U. instead of pushing excessive austerity, which only results in stagnation and recession. The E.U. should foster industrial development particularly in countries with low levels of industrial value-added per capita, and avoid the industrial stagnation that the E.U. has experienced over the last seven years (2005-2012). Such policies would improve the quality of life in every country and increase German sales.

LINKS TO Maria-Carmen Guisan contributions to OTHER INTERESTING DEBATES ON EUROPEAN ECONOMY

Year 2012: Friends of Europe.

The Future of Europe - European Policy Summit, Roundtable  11/10/2012

The State of Europe: Escaping thedoldrums

 There was also direct input from Europe's citizens through Debating Europe, our online platform that enables citizens to talk directly to decisionmakers. Please find below questions from EU citizens that were put to the roundtable during the debates.

Session I - Questions from Christos and Remi via Debating Europe:	Session I - Questions from Lluis and Rui via Debating Europe:
Session II - Questions from Maria Carmen and Pedro via Debating Europe:	Session III - Questions from Karsten and Martin via Debating Europe:

Video of Maria-Carmen Guisan in the Debate of FRIENDS OF EUROPE

The Video of que questions to that Session of Debating Europe  in year 2012 were  at: http://vimeo.com/51444369 but in the update of year 2020 we have found a "broken link".

Year 2013: Maria Carmen Guisan about Chipre: Voice of Galicia/Voz de Galicia 22nd March of 2013. Article in Spanish at the journal Website
Article in English here:
Europe must solve the Cyprus problem without taxing bank deposits
It is not good news that the European Union, with the banking crisis in a small country like Cyprus, revealed an overreaction of immediate discipline that induces fear for the confiscation of part of bank deposits in the country, since apart from the damage to Cyprus citizens therefore causes concern in other countries may fear similar measures.
The alarmist language (rescue, insolvency, sequestration, etc.) With which EU currently deal with the financial problems of the European Union, is absurd and exaggerated. Much of the EU countries, including Cyprus and Spain which have a very similar per capita production, are well above world average income and therefore have a reasonable ability to deal with their problems without resorting to such language or excessive austerity measures. Almost 5 billion people in the world have a per capita income that is less than 1/3 of which are Cyprus and Spain, and do not reach the 1 billion those developed countries with  an income per capita above these two countries, therefore adopt standard measures that can solve the problems effectively and without twitching.
Retrieves the confidence of depositors in savings banks is very important to overcome this economic crisis, so taxing savings is a totally undesirable measure that generate uncertainty about the integrity of bank deposits.
Solving the problem of Cyprus banking, which accounts for less than 0.2 per cent of the European economy, does not seem to be a task too complicated, so the EU bodies should be able to adopt normal measures, postponed reasonable periods, without aggressive interventions which generate fears for citizens. If the cause of the banking problems of Cyprus comes from its exposure to Greek bonds devalued, it is clear that is not the fault of its citizens but of poor design of European regulations concerning the safety of bonds of its member countries.
The costs of resolving a problem of insufficient financial capacity must be allocated appropriately, and in reasonable time, among the actors that have generated this lack of capacity. The part that has to be assumed by all the citizens of a country should be integrated into the general tax policy principles of equity and  moderation, and not applied in an arbitrary and unfair way to savings depositors.
The dream of a united Europe to cooperate amicably for the economic development of their countries appears, every day, more broken. It seems advisable that the policies of the European Union should be more prudent and effective measures to overcome the crisis, instead of causing concern and distrust of citizens.
Source: Maria-Carmen Guisan. Professor of Economics. Voz de Galicia 22nd March 2013.

Other selected articles on criticisms to EU excessive austerity policies:

The Guardian:

Europe's austerity: big worries, small thinking

Plan A is now acknowledged to be a failure; yet it remains the default option, just extended far into the future

• Editorial
• The Guardian, Wednesday 29 May 2013 21.20 BST

http://www.guardian.co.uk/commentisfree/2013/may/29/europes-austerity-big-worries-editorial

NY times Paul Krugman on 15h April of 2012:

Europe’s Economic Suicide

http://www.nytimes.com/2012/04/16/opinion/krugman-europes-economic-suicide.html?_r=0

 

13. Comments on Krugman´s views of Spanish economy: Salaries are not to blame and should not diminish. Productivity should increase.

Source: Elaboration by Guisan(2009), from OECD National Accounts,  in EEDI Report Vol. 9-2.

Entry 13 by Maria-Carmen Guisan, Professor of Econometrics, Spain

This graph shows the evolution of labor costs in Spain, and show hat they are not the cause of the Spanish economic mess. The ratio labor cost/average productivity of labor  has increased in Spain in the last years, but not as a consequence of increases in labor cost but due to the diminution of productivity.

Krugman´s views: We do not agree with the Krugman´s recommendation of diminution of wages in Spain, although we agree with him that the Spanish economy is in a mess. This is a kind of mess related with lack of support to industry. In spite of that Spain economy could have a good evolution in the next years if the country gets a good economic policy. I 

Some links to Krugman articles and comments by readers are the following ones:

New York Times 10-02-09

New York Times 10-02-06

New York Times 09-01-19

An interesting analysis of the higher levels of productiviy and rates of employment in the United States, in comparison with European Union, is presented in the article by Guisan and Cancelo(2006) in the journal AEID, which is free downloadable. The conclusion, in section 5 of the article, are the following ones:

"5. European labour policies: suggestions and conclusionsThe lower rates of employment and wages in EU in comparison with the USA are due to  lower levels of industrial and non-industrial real value-added per inhabitant. Wages are not to be blamed as the cause of unemployment in EU countries, but the lack of policies to foster industrial development, research, education and other variables which explain the higher levels of the USA in comparison in Europe. It is clear that economic policies in the USA are more focused, than in the whole of the European Union, to the increase of real Gdp per inhabitant and employment. The successful development of those policies in Europe should imply more dialogue between policy makers and the European society, including economics researchers. Unfortunately thee Euro-sclerosis in the bureaucracies of some EU institutions have led to increase the distance between political parties and society... More industrial and regional development, less taxes on labour, and more support to education and scientific research in all the EU countries are convenient to diminish unemployment and stagnation and to reach real convergence with the USA regarding the increase of real wages and rates of employment at the same time."

These recommendations are of particular interest for Spain because industrial development and investment per capita is lower than in more adavanced European countries. It should be desirable more opportunities for economics researchers, who have something to say related with these questions, to present their opinions in the newspapers and other communication media.

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