Double Trouble in Europe

IESE Prof. Alfredo Pastor on achieving market stability


The EU will remain on an economic rollercoaster unless some kind of long-term stability mechanism is introduced, such as eurobonds, explains IESE Prof. Alfredo Pastor. In the meantime, European member states will continue to face two interrelated problems: lack of competitiveness and debt.

Austerity measures in Spain serve to give the impression that the government is doing its homework, but they will take a long time to produce the desired effects, he says. Competitiveness is the key issue, since it is "the basis for everything," says Pastor, who also notes that wages in Spain have not grown in a decade.

Read IESE Economics Weekly