Tuesday, June 30, 2015

Greecehog Day

Am I the only one sick of hearing about crisis after crisis between Greece and the rest of the Eurozone? Of a desperate struggle to pay the debts and get support? Of fears Greece is going to crash out of the Euro?

The single currency was always a political project first and an economic one second. The convergence criteria were fudged to allow in as many countries as possible and the expectation was that the separate economies would quickly learn to converge. A period of economic growth also encouraged optimism and complacency - the UK may not have joined then or since but it was a period when our government smugly talked of having ended boom and bust.

And then came the not quite global crisis. Each country has different circumstances and needs to take different measures to get itself out of the mess. Democracy also demands the people decide just where the country will escape to. But the Eurozone doesn't allow for that. Instead it severely restricts the options available to the Greek government and demands cuts on a scale like nothing we've endured here.

And so we get this endless cycle as Greece and other European countries face off with seemingly no end in sight.

Somewhere I can hear my old Economics teacher saying "I told you so".

Maybe it's time to admit the inevitable. To say that Grexit is not a question of if but when. To stop pretending Greece can do enough to meet both its obligations and its voters' demands. To say that ever closer European integration is not an irreversible process. It will be an immense upheaval - but there's no shortage of those at the moment. It will bring immediate economic hardship - but that's already there. What it will do is allow Greece to find its own way forward and follow an economic policy that's the best for Greece rather than continuing the pretence that what's good for Germany is always good for Greece.

It's time to let Greece leave the Euro.


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