European Union
Strategist Says Wage Cuts are in Order
Paul Lambert is the current director of currency and macro
strategies at Polar Capital and he feels that the only way that
the European countries are going to be able to come back from
this economic crisis is for some of these areas to start by
cutting wages. He says that the financial stability package is
only going to be successful if some of these euro zone nations
enact wage cuts, otherwise they are never going to accomplish
what they set out to do.
There are many that are wondering if the financial package is
big enough to help them all, and the answer is not necessarily.
They say that there is going to need to be debt consolidation
done in these areas that really need it, and if they do not do a
debt consolidation everywhere that needs it they will fail. He
said that debt consolidation and cutting wages are the two
things that will help the package succeed.
There are some places like Greece that have been criticized for
having very high public sector wages, and Spain has been under
fire as well. However, Spain has already announced that they
will be cutting their wages 5% this year and freezing them for
next year. Lambert says that if these countries do what is
needed of them then they will come through with flying colors –
otherwise they are setting themselves up for failure. He said
that these are not easy things that they are being asked to do,
but they are necessary.
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