The Economist discusses how the EU is weathering the global financial storm (the ship is sinking).
The article hints at two theories as to why this is so:
1) Mercanitlism. If you rely on exports, a positive trade balance, then you get the worst of it when the consumer nations cut back to essentials.
2) Rigid labor markets. If a country does not allow employers to fire workers in a downturn, then its companies will just take on huge losses until they go under.
Anyone have an opinion on which cause is more significant?
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