Abstract
Despite being one of the world's major internationally traded services, tourism remains neglected within debates on European integration and growth models. We highlight the rise of tourism-led growth in southern Europe and argue that the process of European integration has been a double-edged sword, simultaneously incentivizing and forcing southern European economies to reap their comparative advantage in tourism. While European integration has created the preconditions for the expansion of intra-European tourism, monetary integration pre-empts macroeconomic management. Since the eurozone crisis, internal devaluation and fiscal austerity have suppressed the domestic growth drivers, inducing these governments towards an export-led growth strategy. We document the emergence of unprecedented tourism-related current account surpluses in southern Europe, driven strongly by tourism imports from the EMU core countries and the UK. Thus, while different export-led growth strategies now coexist in the EMU, southern Europe's excessive reliance on international tourism for growth comes with severe pitfalls.
Bürgisser, Reto