It’s Time for Greece to Leave the Euro
nytimes.com
nytimes.com
Not really, they know she is lying. She had promised the German taxpayer that there would be no costs bailing out Greece. She falsely claimed the debt was sustainable. She promoted a bail out program that virtually destroyed the Greek economy and refuses to take responsibility for it. Talks about Greek claims and democratic vote and how it is against European peoples pretty much ignoring the humanitarian crisis. She sheds crocodile tears for elderly waiting for 60€ daily at the ATMs while monthly assistance for 400euro pensions was erased with a red pen. Knows exactly what austerity measures she wants and when she was presented with any program that does not include those measures "it is not clear enough bring another one". And when Greeks can't there is a "breach of trust" The journalist from Die Zeit simply promotes the usual rhetoric.
But politically she is right. I have noticed a constant attack against her in German recently but for all the wrong reasons.
This is wildly untruthful. The last set of Syriza proposals included things like a one-off tax of 12% on business incomes over €500,000 (not unreasonable in either amount or in the context of a culture of corrupt tax evasion), as well as a small rise in corporate tax from 26 to 29%. Creditors rejected these proposals as being 'anti growth'. Now I don't think one can ta one's way to prosperity, but the last 5 years of austerity in Greece strongly suggest that you can't cut your way there either, and it's facile to pretend that taxes should only be considered for their pure macroeconomic effects considering the lamentable history of tax evasion in Greece (which has deep cultural roots in centuries under the Ottoman Empire.
Greece still has to undertake massive reforms, and Syriza's governance has been marked by brinksmanship and overheated rhetoric - but that's what happens when you put people's backs against the wall. It's a generational-scale problem that calls for a long-term rather than the nonsensical series of bandaids that have been thrown at it. I certainly felt that some austerity and fiscal adjustment was warranted, and indeed applying that approach has allowed countries like Ireland to to re-balance the books and regain access to capital markets. But this approach has plainly ceased to work in the case of Greece.
More detail on the specifics of said proposals here: http://www.economist.com/blogs/freeexchange/2015/06/greek-ba...
Neither the eurozone nor Europe is best served by holding on to Greece. Instead, the European Union needs to come up with a smooth way out of its dilemma, namely an orderly exit by Greece from the euro.
This is about as sensible as adopting a continental currency called the Mark and then trying to kick Germany out of it, or seeking to cure the pain of bad hangover by amputating one's own head. The very word Europe is of Hellenic origin, along with the concepts of democracy, a republic, and the bulk of our philosophical worldview. A Euro without Greece may make short-term fiscal sense but it makes absolutely zero political sense.
My question is, HOW did they get INTO the euro in the first place? Obviously that's the insane part, and once the fraud that was perpetrated on Brussels became clear, why weren't they kicked out immediately?
Most people are shocked to hear it when these shenanigans were revealed in 2010. But the fact of the matter is that everybody knew what was happening, when it was happening, and Europe as a whole turned a bind eye for not only Greece, but other member states that used these deals to get into the euro zone and are in trouble today as well.
[0]: http://www.risk.net/risk-magazine/feature/1498135/revealed-g...
It was clear from before the Euro ever started. Everyone (by which I mean, the elites, analysts, the press, politicians, et al) knew that countries like Greece and Portugal had no business joining the Euro, and were lying through their teeth to get in. Then again, everyone knew that the entire project was founded on lies, cooked books, and ignored rules, sacrificed towards the overriding goal of ever closer union.
After letting Greece in with a wink and a nod, why in the world would they have then kicked them out? The fraud, if you want to call it that, was on the voters and taxpayers, not on the people running the EU. And if they kicked them out, how could they justify not kicking out all the other countries who had engaged in blatant trickery, which would be, well, all of them?
France engaged in some elaborate budget trickery to get their deficit under the line (swapping future pension obligations for one off payments to make their deficit look low enough)[1], Germany waffled a bit but the moves were accepted. How could they not be? France at least lied to make their deficit pass muster; Germany was in blatant violation from the start (which was meant to preclude their entry, or at least trigger massive fines. Naturally it did neither.)
Or in short: It's the old glass houses rule. France, Germany, Italy, etc, were in NO place to demand a strict adherence to the rules in the case of Greece, since by a strict reading of the rules they shouldn't have been in the Euro zone either. The Euro project was inherently political from the start, and politically it needed as many countries to join as possible. Even if that was economic disaster.
Edit: A better link[2] about how by the terms of the governing treaties, most Eurozone members did not qualify for entry, including (hilariously) Germany which had too much debt.
[1]: http://www.nytimes.com/1996/09/20/news/20iht-euro.t.html
[2]: http://www.voxeu.org/article/politics-maastricht-convergence...
The Achilles heel of the EMU was always that monetary policy is controlled in Brussels and each country has its own fiscal policy. While the individual countries are supposed follow certain fiscal rules there's no real enforcement mechanism.
In the long run that can't work. Either we're going to see a United States of Europe with both fiscal and monetary policy being set in Brussels, or the EMU is going to fall apart.