[mattduke]

Sixteen months after it joined the struggling currency bloc, Estonia is booming. The economy grew 7.6 percent last year, five times the euro-zone average.

Estonia is the only euro-zone country with a budget surplus. National debt is just 6 percent of GDP, compared to 81 percent in virtuous Germany, or 165 percent in Greece.

Shoppers throng Nordic design shops and cool new restaurants in Tallinn, the medieval capital, and cutting-edge tech firms complain they can’t find people to fill their job vacancies.

It all seems a long way from the gloom elsewhere in Europe.

Estonia’s achievement is all the more remarkable when you consider that it was one of the countries hardest hit by the global financial crisis. In 2008-2009, its economy shrank by 18 percent. That’s a bigger contraction than Greece has suffered over the past five years.

How did they bounce back? “I can answer in one word: austerity. Austerity, austerity, austerity,” says Peeter Koppel, investment strategist at the SEB Bank.

After three years of painful government belt-tightening, that’s not exactly the message that Europeans further south want to hear.

http://www.cnbc.com/id/47691090

[dissident]

Population of Estonia: 1.3 million

Population of Greece: 11.3 million
Population of Portugal: 10.6 million
Population of Spain: 47.2 million
Population of Italy: 60.6 million

These monetarist tw*ts can't stop spewing their religion. A tiny country like Estonia can have 8% GDP growth just by virtue of a direct investment surge in some industry. Estonia's GDP was $19 billion in 2010 so it takes $1.5 billion. Recall that Estonia's GDP dropped by about $3.5 billion and that just like in the bigger country neighbouring to east this was mostly a transient spike between 2008 and 2009. But unlike its neighbour Estonia still hasn't rebounded out of the 2008/9 hole. When Estonia starts growing at 8% after it recovers its early 2008 level and keeps growing that this rate, then these monetarists can jump up and down and claim their precious theories are divine revelation. But as of now Estonia is just experiencing a rebound.

It should also be made clear that Estonia did not clear its debt due to austerity, it didn't have a huge debt before the 2008 recession. So this CNBC piece is twisting the facts. Estonia imitates its neighbour to the east by having a 15% flat income tax and never followed the Greek economic model, but it did receive billions in EU transfers just like Ireland, which resulted in rapid economic development. So attribution of its economic "performance" to austerity is BS.

http://www.newropeans-magazine.org/cont ... g,english/



Estonia has been getting about 4% of its GDP in EU transfers during 2008-2010.

[Satori]

that article isn't worth the paper it was printed on

sounds like something put out for propaganda purposes

Estonia's economy is booming because two people
bought large fries at the Mickey D's instead of regular size

[Plantagenet]

Germany also went through austerity and now they have the strongest economy in Europe.


Austerity machit frei!


I'm surprised the other countries in the Euro don't voluntarily follow the German example!

[Satori]

uh
your not listening

numerous other countries have tried the austerity route

ain't workin' out too well

you do have a TV don't you ?????????

[mattduke]

it's amazing to me that anyone could believe the road to prosperity is extravagance and profligacy, not hard work and discipline.

[Lore]

it's amazing to me that anyone could believe the road to prosperity is extravagance and profligacy, not hard work and discipline.

Then again should materialism be the goal. Maybe it's time to stop and think. It would seem that road keeps coming up as a dead end.

[Plantagenet]

No austerity for us---we're French!

France rejects austerity-- cuts retirement age to 60

[gollum]

I think people would be more accepting of "austerity" in the US had they not watched the banksters being bailed out at the costs of the tax payers.

[sparky]

.
The French law on pension at 60 is not so good ,
one need to have worked continuously since 18 years of age to qualifie IE 166 trimester of contribution
tha't hardly the case for most people , only 100.000 can get it ,
mostly working in menial work
four trimester are counted for the military draft ,now terminated
and four trimester for sickness OR having a child , two trimesters will be added for other children

the general case is one has to work until the magic 166 number is reached to a maximum of 67 years
then pension is compulsory , the missing trimesters deduct the pension of a proportional amount
until a minimum of 630 Euros a month

[Sixstrings]

Estonia has the population of Hillsborough County (Tampa).

Can't really extrapolate that to over half a billion people. For one thing, Estonia has made itself attractive as cheap labor. Poland's doing okay too, for the same reason.

So you see it's a race to the bottom.. okay we take our wages down to Estonian levels, well they'll just respond.

[EnergyUnlimited]

Estonia Embraced Austerity and Economy is Now Booming

But *entitlement culture cancer* was there only in initial stages, so with careful treatment it could be eradicated.

Unfortunately in Western democracies this disease is in terminal stages and no viable treatment exists.
So it is best idea to give patient some morphine and wait until he pass out.
Meantime arrange a burial ceremony.

[EnergyUnlimited]

No austerity for us---we're French!

France rejects austerity-- cuts retirement age to 60

"France does not need wise men" - Statement of Reasons regarding death sentence for Lavoisier.

[americandream]

it's amazing to me that anyone could believe the road to prosperity is extravagance and profligacy, not hard work and discipline.

You haven't a clue how capitalism works, have you? Germany, Japan, China, S Korea, Taiwan, etc, etc......all mercantilist exporters ENTIRELY dependent on that profligacy you apparently despise to market their wares via capitalist conduits, London and New York, the heart of that profligacy.

In other words, whilst these mercantilist venues may preach the virtues of abstinence, they well know that they are absolutely dependent on the credit mechanisms conjured up in London and New York to fund the infinite growth logic that propels their factories from one quarter to the next.

So whilst Vrau Merkel may wander the corridors of Brussels preaching restraint, she is well aware that her country's prosperity depends on the wizards in London/NY.

And infinite growth on a global scale (of both producer and consumer) contemplates profligate capitalism.

So these odd instances of optimism in recently mercantilised places such as Estonia does not for an abstinent capitalism make...nor will it ever, for to do so would kill these manufacturers and the intricate links that bind their markets to their wares.

[dissident]

it's amazing to me that anyone could believe the road to prosperity is extravagance and profligacy, not hard work and discipline.

You haven't a clue how capitalism works, have you? Germany, Japan, China, S Korea, Taiwan, etc, etc......all mercantilist exporters ENTIRELY dependent on that profligacy you apparently despise to market their wares via capitalist conduits, London and New York, the heart of that profligacy.

In other words, whilst these mercantilist venues may preach the virtues of abstinence, they well know that they are absolutely dependent on the credit mechanisms conjured up in London and New York to fund the infinite growth logic that propels their factories from one quarter to the next.

So whilst Vrau Merkel may wander the corridors of Brussels preaching restraint, she is well aware that her country's prosperity depends on the wizards in London/NY.

And infinite growth on a global scale (of both producer and consumer) contemplates profligate capitalism.

So these odd instances of optimism in recently mercantilised places such as Estonia does not for an abstinent capitalism make...nor will it ever, for to do so would kill these manufacturers and the intricate links that bind their markets to their wares.

If you think about it the current western economic system has a "closure" problem. It is not possible for the income of every consumer to percolate back to the consumer after spending as that would imply that all that happened was money being passed from one economic exchange to the next without any money being extracted as profit. It does not matter how complex the pathway is for the consumer money. The consumer can be companies and not just individuals. This is why there cannot be a steady state regime to the current economic system. It is at its root a Ponzi scheme.

[americandream]

it's amazing to me that anyone could believe the road to prosperity is extravagance and profligacy, not hard work and discipline.

You haven't a clue how capitalism works, have you? Germany, Japan, China, S Korea, Taiwan, etc, etc......all mercantilist exporters ENTIRELY dependent on that profligacy you apparently despise to market their wares via capitalist conduits, London and New York, the heart of that profligacy.

In other words, whilst these mercantilist venues may preach the virtues of abstinence, they well know that they are absolutely dependent on the credit mechanisms conjured up in London and New York to fund the infinite growth logic that propels their factories from one quarter to the next.

So whilst Vrau Merkel may wander the corridors of Brussels preaching restraint, she is well aware that her country's prosperity depends on the wizards in London/NY.

And infinite growth on a global scale (of both producer and consumer) contemplates profligate capitalism.

So these odd instances of optimism in recently mercantilised places such as Estonia does not for an abstinent capitalism make...nor will it ever, for to do so would kill these manufacturers and the intricate links that bind their markets to their wares.

If you think about it the current western economic system has a "closure" problem. It is not possible for the income of every consumer to percolate back to the consumer after spending as that would imply that all that happened was money being passed from one economic exchange to the next without any money being extracted as profit. It does not matter how complex the pathway is for the consumer money. The consumer can be companies and not just individuals. This is why there cannot be a steady state regime to the current economic system. It is at its root a Ponzi scheme.

Exactly. This is the crisis of globalisation that Marx contemplated where:

on the one hand, the expansion of competition would at once offer more complete transformation of labour surplus value to accumulative application;

yet on the other reduce the per unit worth of that pool:

thus creating the very conditions for even more elaborate consolidation of that value in the hands of a few......conditions such as securitisation and the monopolisation of that value in large bundles of net worth.

This leakage of course is what lies behind the collapse of credit, the forlorn reliance on China to come to the rescue and of course, the attacks on European workers in a bid to add to the remittances from the Chinese worker.

The mercantilists don't quite realise the risks that austerity poses to their factories and of course, are even less cogniscent of their place in these capitalist mechanisms.

[Plantagenet]

This is the crisis of globalisation that Marx contemplated

No its not.

Marx didn't have a clue about peak oil and its silly to pretend he did.

[Lore]

Estonia also has better math scores then most other Western nations. Maybe this has something to do with it.

[SeaGypsy]

I have been reading that Estonia is in a mode of racism, that 'new migrants' are treated poorly and made to feel unwelcome. Does this have anything to do with the numbers? It doesn't take much to change circumstances for 1.5 million.

[Sixstrings]

I have been reading that Estonia is in a mode of racism, that 'new migrants' are treated poorly and made to feel unwelcome. Does this have anything to do with the numbers? It doesn't take much to change circumstances for 1.5 million.

Indeed. I don't know about racism, but nothing can be extrapolated from a nation of 1.5 million.