There is plenty of blame to distribute in the Greek drama that is unfolding. Let’s start with the basics. First, the entire concept of a European Union, much less a common currency, is flawed from the outset. How do you bring together 28 nation-states with centuries of conflict in their history, with very little commonality in culture, language, religion, political philosophy, governance, monetary and tax policy, and ethics and make sense of a common bond? Answer: You don’t very successfully. Second, the addition of Greece to the Eurozone 14 years ago was misguided. It was in no way prepared for the discipline of the Euro that was to be necessary for the union to work, a fact that is clearly obvious in hindsight.
Plenty of people want to blame Germany for its arrogance as the “enforcer” and to congratulate Greece for its NO vote on the referendum on their creditors’ proposals as some kind of declaration of independence from the Angela Merkel-dominated terms of “austerity”. Included in this group are such luminaries as leftist economists Paul Krugman and Joseph Stiglitz, the latter of whom has been a champion of the policies of the failed Kirchner government in Argentina. How is that working? If there is blame for Germany, it should be placed in their decision to allow Greek membership in the Euro in the first place, and as for Greece’s NO vote on the referendum, it cut them off from the only source of help to get out of this mess.
No, most of the blame must lie at the feet of the Greek regime itself. Put simply, there is no way to sustain the spending of 18% of GDP on pension costs, 10% of GDP on its bloated military, labor costs that are 25% higher than Germany, unemployment of 25%, and the centralization of large, over-regulated sectors of the economy in uncompetitive state-owned institutions with any expectation that there will be continuing bailouts by German taxpayers and the European Central Bank. And yet to adopt policies that would significantly change any of this is considered by over 60% of the voting public as draconian austerity. This is totally out of touch with reality and this kind of pride, not to mention stupidity, “goes before a fall”. This won’t end well.
Completely agree.
A precision analysis.
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