This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

If Greece Quits The Euro, What Does Europe Need? Growth And Cash

Past that, Europe should consider replacing austerity policies with growth measures. In a separate note today, Goldman Sachs economist Lasse Nolboell W. Nielsen  lay out a (convincing!) case for expanding an economy, not paring its parts.

Greater consolidation leads to greater overall economic deterioration, Nielsen says. A fixed exchange rate complicates the situation, removing the cushion on exports from a depreciating exchange rate. In general, a country should not look to cut any more than 3% to 4% of gross domestic product in the short term, Nielsen estimates. Spain expects to cut some 4.5% of GDP; Italy sees cuts amounting to 3.5% of GDP.

But longer term consolidation and cut backs, such as improving governance and constraining politicians' discretionary power, makes sense.

"Our research suggests that the challenge of achieving external and fiscal balance is very large in the Euro area," Nielsen says.

And, yes, that's understating the situation.

Reach Abram Brown at Or follow him @abebrown716.


Since 1917, Forbes has stood, unwavering, for one overriding principle: the unshakable belief in the power of free enterprise. Our mission has also been clear and unchanging: to provide insights and information that ensure the success of those who tap into Forbes.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free


DOW 18,285.74 +0.34 0.00%
S&P 500 2,130.82 +4.97 0.23%
NASDAQ 5,090.7940 +19.0510 0.38%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs