Thursday, May 17, 2012

Krugman: It's 'Not A Greek Problem' - UPDATED

Paul Krugman refers us to Tim Duy of Fed Watch on Economists' View regarding the European Central Bank's attempt to transform, for public consumption, a Europe-wide problem into a Greek (or Spanish or Irish) problem... which in Krugman and Duy's view, it emphatically is not. Krugman:

The morality play the Germans like to tell about how the crisis countries got into trouble isn’t true, but even aside from that, the question is what you do NOW. And the key point is that there is no way out for the troubled countries if Europe as a whole is marked by low growth and low inflation.

Given that reality, lecturing Greek voters on responsibility, while hinting that maybe we’ll ease the terms a bit — oh, and it’s almost time for summer vacation! — just won’t cut it.

We need a conversion experience here, not in Athens, but in Berlin and Frankfurt. Otherwise, the game is almost over.

And Duy:

I thought the last election was supposed to be a referendum on Greece's commitment to the Euro. European policymakers fail to understand that they have provided the Greek people no way out - they are damned if they do, damned if they don't. Even if the Greeks overwhelming[ly] want to remain in the Euro, the austerity program guarantees ongoing recession, and the Greek people are being asked to commit to a program that is effectively already overtaken by events. ...


The rest of Europe might not think this is fair, but let's be honest - ultimately, it wasn't fair to bring Greece into the Euro in the first place.

UPDATE: Later, Krugman shows us the "responsible" [/snark] plan for Greece and graphs its results. As he puts it, "Pain without end, amen."

1 comment:


• Click here to view existing comments.
• Or enter your new rhyme or reason
in the new comment box here.
• Or click the first Reply link below an existing
comment or reply and type in the
new reply box provided.
• Scrolling manually up and down the page
is also OK.

Static Pages (About, Quotes, etc.)

No Police Like H•lmes