The Greek Crisis Shows the Stupidity of the Euro Currency Itself
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
posted by Eliyahu m'Tsiyon at
4:58 PM
3 Comments:
Greece does not have enough Economy to pay their debts or even to survive in the Eurozone as a stable country.
Greece and others shouldn't have joined the Euro currency. Those economies where simply not prepared. Still aren't.
And the structural funds, lots of money given to the poor members of EU to help economic growth, most of it was lost in fraudulent business with politics and the private sector, corruption among other.
In the end, theres is only debt.
Greece will leave the Euroze (Currency) others may follow otherwise it will be impossible for the country to maintain social cohesion.
By
Anonymous, at 11:39 PM
Just adding.
People of those countries should find and send to justice those who have stolen so much in behalf of doing the "good for the people" with their politics.
But at the same time, people are guilty too, because they have elected them through the years.
There are also, those who have lend the money(banks) knowing that those countries have gone above their potential threshold of debt paying.
Personally, i have mixed feelings about this. It's not a black and white situation.
All are guilty! But with different weights.
By
Anonymous, at 12:15 AM
You agree with me at least on the point that the idea of the eurozone was not a good one. Now as to letting Greece, the proponents of the single currency in the EU wanted as many EU member states to join as would agree to do so. So Greece was encouraged to join by officials who did not want to see Greece's structural and other problems. There was typically stupid euphoria, a Euroeuphoria, when the single currency zone was being set up. They were almost messianic. But the idea was bad and stupid and the way they officials of the eurozone have carried out the single currency zone was mistaken time and again. And there was also Germany's domineering callousness over Greek suffering. As if the Germans had paid back Marshall Plan billions, had made war reparations [to Greece and other countries] etc etc
By
Eliyahu m'Tsiyon, at 4:38 PM
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