3 ms·

I see. What is you suggested solution?

• gizmo 11y ago
  I 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.