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Internal austerity measures, including salary cuts and redundancies, proved unequal to the task of saving the bank, as the value of its assets continued to fall.
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On the one hand, the debtor countries resent the deeper E.U. interference into internal affairs that austerity has wrought.
Most recently, Charles Doxbury advocated Latvia's internal devaluation and austerity strategy as the model for Europe's crisis nations to follow.
Across most of the periphery, both sides of the usual political divide have been roped into the policies of austerity and internal devaluation — sometimes in governments of national unity, sometimes with normal party rule but with both parties following much the same line.
They keep declaring success for austerity and internal devaluation, using any excuse at hand: a spurious surge in measured Irish productivity becomes evidence that internal devaluation is working, the decline in bond yields following ECB intervention is proclaimed as a vindication of austerity.
Spain now faces several years more of austerity and internal devaluation.
But it's certainly within the realm of possibility, especially as the pain of austerity and internal devaluation drags on.
The euro area's economic strategy, such as it is, rests on two pillars: confidence through austerity, and "internal devaluation".
Perhaps it would be fair to say that his contribution was to get the force up and running in the face of both internal doubts, and fiscal austerity.
Here's his speech in Riga earlier this week, asserting that the Baltic experience shows that austerity and internal devaluation actually do work.
Meanwhile, senior officials are asserting that austerity and internal devaluation really would work if only people truly believed in their necessity.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com