Just a few thoughts that I have about the Greek debt crisis which is a crisis of the euro currency and the Eurozone itself.
Greek mismanagement of its state finances was a problem. But the main problem is the notion of the single currency itself. The euro was a bad idea whose time had come. The economic disparities between the member states of the eurozone were great, not to mention lack of a common tax system, pension system, state budget, labor laws, etc etc, plus Greece's special defense needs vis-a-vis Turkey, etc.
What happened to Greece was inevitable and could have happened to other eurozone states. After the Greek debt crisis became known in 2010 it was handled all wrong by the Eurozone which insisted on reforms --due to German domination--- rather than debt relief which at that time could have taken the form of eurobonds at a low interest rate which Greece could have paid at that time. Instead Greece was left to borrow for regular needs --as many countries, including the USA, do-- on the open market where interest rates on Greek debt inevitably shot up, and that should have been foreseen. So the Greek debt is much higher today than 5 years ago. And that is the fault of the eurozone, especially Germany/Schaeuble/Merkel etc.
Reforms yes, but not without an easy credit facility plus funds for investment in growth. Lebowitz is right but does not go far enough. Greece has offshore energy resources which Europe needs and could have invested in in order to help both Greece and the EU as a whole. But instead of funds for growth there was excessive austerity which destroyed rather than creating conditions for growth and getting out of the debt straitjacket
Labels: debt crisis, EU, European Union, Eurozone, Greece