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Greek burdens ensure some Pigs won't fly. CEPS Commentaries, 1 February 2010

Gros, Daniel. (2010) Greek burdens ensure some Pigs won't fly. CEPS Commentaries, 1 February 2010. [Policy Paper]

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    Abstract

    This Commentary by Daniel Gros looks at the acronym recently coined by financial markets to sum up troubled eurozone states – 'Pigs', for Portugal, Ireland, Greece and Spain – and finds it misleading, given its preoccupation with fiscal policy. In determining the sustainability of public debt, he argues that one should not look only, perhaps not even mainly, at today's fiscal accounts, but at the resource balance for the entire country. It is one thing to provide financing to a country that is generating strong internal cash flows and got into trouble only because of excessive investment (the case of Ireland and Spain). But it is quite a different proposition to prop up one whose equity is being eroded because internal cash flow is not even sufficient to maintain the capital stock (the case of Greece and Portugal).

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    Item Type: Policy Paper
    Subjects for non-EU documents: Countries > Portugal
    Countries > Ireland
    EU policies and themes > Policies & related activities > economic and financial affairs > Single Market > capital, goods, services, workers
    EU policies and themes > Policies & related activities > economic and financial affairs > financial crisis 2008-on/reforms/economic governance
    Countries > Spain
    Countries > Greece
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Centre for European Policy Studies (Brussels) > CEPS Commentaries
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 10 Aug 2010
    Page Range: p. 2
    Last Modified: 15 Feb 2011 18:34
    URI: http://aei.pitt.edu/id/eprint/14517

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