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Spain is also suffering and they didn't cook their books. It was also an open secret that Greece's numbers were manipulated, but the ideal of a united Europe wi
by gizmo 11y ago
Spain is also suffering and they didn't cook their books. It was also an open secret that Greece's numbers were manipulated, but the ideal of a united Europe with one currency overruled economic pragmatism.
Even if Greece had no corruption at all they would still be in a nearly indistinguishable position. They still would have been flooded with debt (simply a consequence of interest rates dropping during the boom) and they would still get a crushing depression (because that's what happens when you share a currency with larger and economically stronger countries).
When Greece joined the Euro the outcome was nearly inevitable, so blaming Greece for this makes little sense. The austerity policies the troika imposed on the Greek people were brutal and completely unnecessary, though. So that's the outrageous part.
- mcv 11y agoThe austerity measures weren't just unnecessary, they actively hurt the Greek economy, making it even harder for them to repay the remaining debt. It was totally stupid.
- istvan__ 11y agoI see. What is you suggested solution?
- gizmo 11y agoI don't think there's a solution that's politically palatable to all parties. To fix the humanitarian crisis in Greece they need money in the short term, and the opportunity to do substantial reform in the long term. This ultimately benefits everybody in Europe, but it's not an easy sell. The press coverage of the crisis has been so toxic that most people in Germany, Belgium, France, etc, believe that any money going to Greece will by definition get squandered. On top of that there are prejudicial stereotypes about Greeks being lazy (false: in a country with poor infrastructure you have to work more hours to get even a little work done) or that they've benefited immensely from the Euro (false: Germany is the big beneficiary because they're the biggest exporter. The "opportunity" Greece got to borrow cheaply was a trap, and Greece's economy is wrecked now). So even the politicians who understand the economics don't dare suggest major debt forgiveness and fiscal transfers. This isn't even an outrageous solution, if you remember that states like Mississippi and Alabama net more than 500bln from the federal government, every year. This subsidy is much larger than the entire GDP of Greece. The US is willing to subsidize poorer member states, and the EU should do the same. Otherwise the Euro will fall apart, and the humanitarian catastrophe will worsen.
- deleted 11y ago[deleted]