Citizens in "non-exporting" euro-zone countries should be told the truth

- "In the euro zone, a number of countries (Finland, Netherlands, Ireland, Austria, Belgium, Germany) have a substantial capacity to export to high-growth countries, thanks to their innovation drive, improvement in the product range and cost control in the case of Germany. But other countries (France, Italy, Spain, Portugal, Greece) have a low exposure to countries enjoying rapid growth (emerging countries, oil exporters). We call them "non-exporting" countries."
- "The leaders of these countries should have the courage to tell public opinion that:
• growth in these countries will be subdued: shortfall in the innovation drive and therefore in productivity gains; inability to use indebtedness to boost growth in the wake of the crisis, lack of stimulation of the economy by foreign trade;• the standard of living will decline due to deindustrialisation, offshoring and the need to improve competitiveness and profitability;• the reduction in fiscal deficits will be difficult and painful due to the sluggishness of growth, and it will be necessary to adjust the generosity of welfare systems because of the modest long-term growth and more stringent European budgetary rules;• this improvement will take a long time: the time needed to create new jobs in potentially growing sectors;• inequalities will inevitably widen between employees in companies that are adapted to globalisation and the others."

Natixis Flash Economics 438 20100906

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