I refer to the letter by Samantha Datwani ("Austerity plan only option for euro zone", August 23).
To conclude her recommendations for the euro zone, your correspondent said that austerity measures "steer economies from running corporatism to an approximation of well-functioning capitalism". Not being familiar with the term, I won't comment on "running corporatism".
Ms Datwani is suggesting that the "no pain, no gain" mantra is the cure for the euro-zone problems and we should give up on "sweetheart deals" (read social spending) to restore, presumably, a healthy form of capitalism.
The only problem is that austerity measures have been unable to repair the US and Greek economies.
Such policies mean deep cuts to fundamental budgets that sustain society and the economy, such as education, health care and social welfare. These deep cuts cause an increase in general poverty, due to unaffordable health care, lower education standards and the erosion of the middle class. As a consequence, unemployment and social discontent peak. As the demand for goods and services falls, bankruptcies of small and medium-sized enterprises increase, resulting in a long depression for the whole economy, as is the case in the United States now.
The Estonian recovery referred to by your correspondent owes less to belt tightening than to the initial low level of national debt. To that we can add a total population of barely 1.3 million, much smaller than Hong Kong's.