Neither Northerners are willing to invest in a South they perceive as unwilling to undertake necessary structural reforms, nor are Southerners willing to invest in their countries in a climate of austerity and policy uncertainty imposed, in their view, by the North. This results in a vicious...

The fiscal situation of the central government represented by the various deficit indicators had worsened since the mid-eighties. The latter half of the eighties saw fiscal deficits in the range of 7-8 percent of GDP and revenue deficit was also in the range of 2-3 percent of GDP. Fiscal...