Thursday, February 25, 2010

Wouldn't This Solve Everything?

Reading about the crisis in Greece and Spain at the moment I can't help thinking there is a simple solution to the mess, and one which would simultaneously help with a lot of other problems as well.

I'm very much a believer in the line "for every complex problem there is a simple solution - and it's usually wrong'. But I keep wondering if this is not the exception.

With the exception of Ireland, the Eurozone countries in the biggest trouble are those around the Mediterranean, blessed with lots of sunlight (and in Spain's case wind). According to Paul Krugman, who I tend to believe on such matters, the way out of the Global economic crisis is for creditor countries like Germany and China to start spending more.

So isn't the answer to have the Germans invest big time in solar-thermal and wind projects in Spain, Portugal, Italy and Greece, as well as upgrading the European Grid to bring that power to other parts of Europe.

Results: Lots of jobs for the countries that most need it; tax revenues for Greece and others who might otherwise be in danger of defaulting; German investors get assets that will be worth a lot as the energy crisis hits; Europe becomes to a large extent energy independent removing the danger of being held hostage by Russia and cutting the flow of funds to oil rich enemies; a major dent is put into global warming.

And the downside is?