The biggest point that is rarely raised in this whole debate is that Germany has benefited for the last decade from the low Euro; which has been courtesy of the Greeks. In the last decade the Germans have had their main stock index gain some €40T (much more if you take from 2003). The increased tax income to the German state over this period would handily pay off Greece's debts. So Germany has benefited from Greece over all these years and now they refuse to pay for that benefit.
This is a case of ideological holier than thou treatment, a bureaucratic banality of evil. Meanwhile people sleep on the streets in Greece, from children to pensioners.
Both the past Greek governments shouldn't have borrowed the money, and the past European governments shouldn't have lent them the money; now both sides will suffer. And I'm starting to get the feeling that only one side will learn from this (and it isn't the EU bureaucrats, calling them technocrats is too generous; they follow the rules and ideologies even when they are wrong).
> past European governments shouldn't have lent them the money
It wasn't really European governments lending Greece money, at least not until the bailouts. It was European banks. Incidentally, that's why France and Germany broke the EU's rules and bailed out "Greece": they were protecting the European banking system by offloading bad Greek debt from European banks to European taxpayers.
The only workable solution I can see at this point is implicit restructuring through extending loan terms tied to the implementation of reforms and saddled with snap-back provisions. Raise the retirement age? Some portion of the debt is extended 5 years and inflation takes care of reducing it. Ditto tax collection, etc. Then every reform would be politically manageable in Greece because each one would carry with it some measure of debt forgiveness.
The low Euro has not been courtesy of the Greeks. They are a tiny fraction of the Eurozone, with the population of Georgia and the GDP of Louisiana.
And yes, it is ideological. Multiple Greek governments cheated their way into the Euro and their population had a super high income for years [1]. Now they want to keep their entitlement state, with early retirements, higher pensions that other comparable EU countries, and huge amounts of bureaucracy and corruption. Why should the other countries continue to finance them?
I'm sure if Germans could go back in time and realized that the no-bailout clause of Maastritch would have been ignored so much, they would have rejected the Euro altogether (at least that was the opinion of the German economists I spoke to).
Why don't just let Greece default and leave the Euro? With their lax govt and rigid markets, they are not able to deal with a single currency. Let them default, like many countries have in the past, and then they will regain competitiveness at the cost of austerity by proxy, but that seems to be the only way.
Add Italy, Spain & Portugal, and your "tiny fraction" theory goes out the window. Had Germany just stayed with the Deutsche Mark the euro would be fine today and the Germans wouldn't have exported so much to the PIGS + Rest of the eurozone. Their GDP would be at most 10% less than it is today.
What do you mean fail? You mean decrease in value? That would have been perfect, but it would have bankrupted German industry with it's sky high Deutsche Mark and noone to buy their goods in the countries with "no credibility"
>>Meanwhile people sleep on the streets in Greece, from children to pensioners.
People sleep on the streets in a lot of countries, I come from one such country(India). And I can tell you getting a home to stay is really your responsibility, its not the governments job to pay for it. Let alone expecting another country to pay for it. Nobody is entitled to a home, education, or in some cases even food. Every where else in the world, people slog their whole lives for these very basic necessities.
Europe needs to see its face in the mirror and contemplate that same things that apply to every other country in the world apply to them as well.
And Greece is no poor african nation. Its not like war lords are tearing apart a civil war ridden country, with a history of European powers colonizing it. These are pretty much self created problems. Early retirement, free education, free healthcare, insane standards of living which are unaffordable to even begin with.
This all feels like a kid born into a rich family making a virtue out of its own sins of spending away all their money. And now wants their neighbor to continue fund their party, and calling them evil if they don't.
So, if Greece has a higher relative cost of living, if the distribution of wealth is relatively more unequal and if they have a relatively worse social welfare system then, yes, they'll face hardship.
A key news story for me from a few years back was how an elderly man lit himself on fire (or hung himself? committed suicide in public anyhow) in a central square in Athens as a direct result of the hardship brought about by austerity measures. And this, in an as you say demonstratively wealthy country. Sickening.
It's the price of housing, not one's income, that determines whether people are sleeping on the streets. (Assuming that they actually are in Greece.) Plus, GDP/no_of_people is an average. Some make more, some make a lot less. Especially those 25% unemployed.
> Wikipedia gives $16,138 vs $18,863 and $29,209 vs $26,773 PPP estimated for 2015, so Slovakia is actually a bit better off.
...on average, and Slovakia also has (as far as the most recent numbers I can find) a lower Gini coefficient, so should have smaller numbers far above and far below that average.
The most important point that is rarely raised is actually the fact that Greece agreed to all of the terms that have now causes its demise. It agreed to them when it entered the Euro and at every bailout starting in 2010. It agreed to the terms that are now imposed. So it begs the question: if the terms are suddenly so unreasonable now, why did Greece agree to them?
This is a case of ideological holier than thou treatment, a bureaucratic banality of evil. Meanwhile people sleep on the streets in Greece, from children to pensioners.
Both the past Greek governments shouldn't have borrowed the money, and the past European governments shouldn't have lent them the money; now both sides will suffer. And I'm starting to get the feeling that only one side will learn from this (and it isn't the EU bureaucrats, calling them technocrats is too generous; they follow the rules and ideologies even when they are wrong).