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The differences between Greece and Ireland are instructive. Ireland had a tiny debt before 2008. Greece had a large one. The reason is simple: capital flow from the surplus countries was directed into the Greek state, which in turn passed it on to developers--those who built highways, 2004 Olympic …

Heavy industry centres are typified by large, networked, powerful corporations. To cover their overheads these entities must have large outputs and contain their labour costs. This means that local people (mostly wage earners) cannot consume all that the factories are producing. This is why powerhouse economies require a hinterland to generate the necessary demand for their surplus goods. If the exchange rate between the powerhouse economy and the hinterland is fixed, the hinterland will remain in permanent trade deficit

a bold measure in principal which is left permanently in abeyance in practice