When somebody is an alcoholic the first essential step to recovery is to admit to being one, then steps can be taken towards recovery.
This is the stage we are at now with the Euro crisis. European leaders need to admit Greece cannot remain in the Euro. The burden is too high. Greece needs a devaluation. Years of grinding austerity to bring about an internal devaluation by wage cuts, job losses and business failures is simply too much. Yes the consequences of a return to the Drachma are unpredictable but nobody is going to invest in Greece while it has the Euro. The Euro is a wildly overvalued currency for Greece. Money has left the country already and will not flow back in until there is a devaluation. A devaluation would kick start the tourist industry and business in general.
We all know Greece should not have joined, that the books were cooked but everybody in the Euro project knew this so the fault is not that of Greece alone. This is the result of ideology overcoming common sense.
Wolfgang Schauble Germany's finance minister is living in cloud cuckoo land if he thinks the aim of getting Greek debt down to 120% of GDP by 2020 is possible by shrinking the economy year after year. In any case 120% is unsustainable. Yes countries should reduce debt burdens if it is possible but here it is just not possible without a default and the sooner politicians face up to it the better. It is just not possible to go down the present route in a democracy. Ordinary Greeks should not and will not go along with this much longer. The whole misalignment between countries using the Euro needs to be addressed otherwise we could see the very thing the European Union was intended to prevent, That is to say the rise of Fascism in Europe once again.
With apologies to John Keats.
No comments:
Post a Comment
Plesae leave feedback and comments. It would be nice to know you visited. Thank you.