Comment by hidenotslide | Hacker News Reader

Comment by hidenotslide | Hacker News Reader

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Those "structural changes" are called austerity and they have not worked well where they have been tried. There is a very strong argument that the Euro currency is deflationary and is causing many of the various issues like unemployment, government debt crises, etc. See Stiglitz's book The Euro for an in depth argument.

Or just look at the unemployment statistics. https://www.statista.com/statistics/268830/unemployment-rate... The countries outside of northern Europe that are on the Euro or pegged to it have much higher jobless rates than those with their own currency. Czechia, Romania, Poland, Hungary are not pegged while Bulgaria, Lithuania, Estonia are. Similarly outside the EU, Bosnia is pegged and doing poorly, Iceland is not and doing fine even though they were very hard hit by financial crisis.

It's exactly analogous to the way the fixed gold exchange rate was deflationary during the Great Depression and as soon as countries dropped the gold standard they started recovering.

> Those "structural changes" are called austerity

These terms have wildly different meanings depending on the context. In my use, structural change refers to revenue-neutral economic rule making. Austerity means deficit reduction.

Making it easier to hire and fire employees is a structural change. Making it cheaper to form a new business, or increasing funding to courts, is also structural change. Removing requirements that e.g. hairdressers be licensed [1] is another. Some of these measures may actually increase deficits, at least in the short term.

[1] http://thefederalist.com/2015/07/15/texas-supreme-court-stri...

Finland vs Sweden is the ideal example:

https://i.imgur.com/dooDKYT.jpg

If Finland had controlled their own currency, they could have made adjustments based on their unique circumstances. Instead they were left to suffer through a miserable near decade long rolling recession.

It's not so much that adjustments are made. It's more that when exports fall, the currency falls with it automatically, which helps for exports. In short, a floating currency helps regulate the import/export balance. Not having a floating currency means you need wage renegotiation and a lot of manual processes to achieve the same.

Note that in the time period there's also Nokia mobile dying, which impacts the numbers a bit.

Currency control is good to have, but I think it's also a kind of patch, not a fix.

As a Southerner, I think we do need structural changes; unfortunately, as you write, these are usually a code for austerity and job precariousness, whereas the changes we need are at the top level, not bottom. In government, major companies and even many small ones. We have hard-working and qualified people, who are wasted by the corrupt and incompetent.

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