First I've heard of this, but I haven't been following it. It sounds quite far-fetched though. I must be missing something.
- The Euro hid huge debts in the same way securitised debt did in US. People would lend (via bonds) to risky countries (Greece and Spain) at the same EuroBond rate they lent to less risky countries (Germany, and well just Germany).
And Greece took this and spent - at first on good infrastructure but slowly on low performing roads to nowhere and a lot on non capital spending (social welfare) And particular Greek social Problems made it far worse (a political class removed from the populace, etc)
As the crisis hit Greece could not repay these huge debts and could not devalue their currency (the Euro was not theirs). And they got loans from Germany (cos a lot of German banks owned the A rated bonds) and paid interest with the loans thus doing nothing to solve the problem. After a few years of this the Greek people voted in a whole new radical party. The goal was to cancel the impossible to pay debt and follow sensible Keynesian rebuilding. The cancelling of the debt (spearheaded by charismatic economist Yanis Varoufakis) was not insane but it would mean all other countries in similar problems would also follow suit. So the Big players in Euro (Schable being the biggest) opposed it everyway they could. The Greeks took it to the brink but the PM could not plunge Greece into leaving the Euro and not being able to keep hospitals open backed down
No solution - and we end up here
The EU was sort of a beta version of a United Europe. They weren't as luck as the U.S., where a highly educated but small group of people tried to come up with the simplest thing they could that wouldn't fail. Instead it looks like quite a bit of architecture astronaut syndrome going on. If I'm right, and I'm just a passerby, the sooner they start down the road to refactoring the better it will be for everybody.
pretty much
> architecture astronaut syndrome
Not really. It started well. The Euro currency was the great achilles heel, as it meant there MUST be fiscal harmonisation between countries that were arguing over the amount of meat in a sausage. That said the more I learn about USA and the states, especially the southern states, the more I realise we need things like TIPP and TPP and the WTO. The states generally hate being in a federal system.
I would try and listen to Yanis Varoufakis stuff online. (https://yanisvaroufakis.eu/ is his blog but there is a lot there with little organisation)
Is in favour of defeating Pikkety with UBI:
https://www.project-syndicate.org/commentary/basic-income-fu...
> First I've heard of this
I suggest listening[1] to Yanis Varoufakis talk about his negotiations with the rest of the EU's finance ministers. He talks about the rigged process, and the ultimatum they gave him when he pushed for a saner refinancing plan. Schäuble's response, according to Mr. Varoufakis, was "Elections cannot be allowed to change the economic policies applied to Greece!"
For background on how this situation was created, see Mark Blyth's very nice discussion[2] of the Greek situation and how it fits in with the larger Euro problem.
At the end of the day, it's the banks' job to assess risk, they lent money to Greece, and they're only getting paid because of this bailout. What's greece paying in interest, again? Some kind of huge risk premium, probably?
The current measures are beyond stupid. They've crippled the country's economy, shut down a large majority of businesses, made the climate hostile to new businesses, and generally ensured that the country doesn't recover.
I don't think we've still seen the worst of it, because the economy has shut down almost completely, and it's still getting worse. The effect of this much deterioration on such a large system will take years to show, and what we're seeing now are the results of policies five years ago.
I'm pretty confident it will get even worse in the next half-decade. Very much to blame for this is the leftist mindset of the average Greek, who thinks "bosses are the devil" and that making the country friendlier to entrepreneurship and investments is anathema.