Internal Devaluation and its Outcomes in Southern Europe

Good afternoon AltAusterity Readers! This week we bring you a presentation paper titled, "Internal Devaluation and its Outcomes in Southern Europe", co-authored by Drs. Sophia Perez (Boston University) and Manos Matsaganis (Polytechnic University of Milan). Sophia presented this paper at our last conference that took place in Berlin and discussed with us how "the combination of fiscal austerity and labour market deregulation during the financial crisis aggravated recessions" in Greece, Italy, Spain, and Portugal (1). Their paper urges us to think beyond this widely recognized position and consider, from a political economy perspective, that this approach also involves "serious questions about the type of recovery (or "growth model") that Southern Eurozone states will be able to pursue within the currency union" (1).

As such, this paper examines the four aforementioned countries' attempts at fiscal consolidation and labour market reforms and observes a paradox: that "internal devaluation in the absence of more aggressive macro-economic promotion of growth in the Eurozone cannot provide a viable growth strategy to the Eurozone's South" (2).

Read their compelling study on our 'Research Page', under 'Case Studies'.

If you would like to see more from Sophia and Manos, please see the below links:

https://www.bu.edu/polisci/people/faculty/perez/

https://ces.fas.harvard.edu/people/001989-manos-matsaganis

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