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Comment by jpcx01 | Hacker News Reader

Things need to get worse before it gets better. Seems like the best idea is to ditch the Euro, deflate the currency, and wait for companies to come back when prices are cheap enough where its worth doing work there.

It'd be painful, but at least it'll be over eventually and things will start to grow again.

Right now it looks like they are on the path to perpetual stagnation.

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I think you mean inflate the currency. Deflation would make their debt burdens worse. But I agree, they are going to stagnate. The country owes its success over the last few decades to generous transfer payments from the EU. Now those transfer payments are going to the poorer former Soviet Bloc countries like Romania and Bulgaria. Greece is going to have to learn to rely more on itself, which means stripping down government expenses. Considering the strength the public unions have there, I think that's unlikely to happen.

Trade unions are devastating to the people they're supposedly working for. I know here in Ontario, in the middle of a recession the Teacher's Union was fighting like hell to get a strike going in the midst of the government funding reeducation programs for the recently laid off. It was stupid, most of the teachers were worried about supporting themselves because the college and university association wasn't budging.

Unions make themselves relevant by always pushing for a strike. If a union doesn't strike, people stop caring about going union in trades where it isn't mandatory. The careers where unionization is essentially mandatory should be seriously be overhauled (IIRC crane operators is one here where unionization is mandatory).

> Greece is going to have to learn to rely more on itself, which means stripping down government expenses.

I never understand this logic. I'll agree that building an economy on payments from the EU is bad. But now that that damage has been done, how exactly do you then make the jump to the concept that government expenses are an instance of not relying on yourself?

You're right, inflating the currency would help (if they weren't on the euro) but if you have high nationwide unemployment, the private sector isn't employing people, and they need to be employed to have health insurance, then the government should start paying these people to dig holes and fill them in again.

Oops, yeah. Thats what I meant.

Haha.. actually, maybe you don't want to take my economic advise.

They won't ditch the euro, it's what saved them. The drachme would have worthed nothing if it were still Greece's currency. The healthier EU countries created a fund in order to save their own currency, the euro, and had to save Greece in the process. The common currency has created a necessary solidarity between the states.

The only long term solution is to deal with corruption.

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