Christian Rickens: So has Greece been rescued and financial markets been tamed? Is the euro crisis a thing of the past? Unfortunately not. With their successes in the last few days, euro-zone politicians have done little more than bought themselves time. They must use this window to brace themselves for the next wave of the euro crisis which is about to crash down on Europe.
It’s already clear that the Greek economy can’t survive with a government debt to GDP ratio that will — at best — still be at 117 percent in 2020, especially given the record pace at which the country’s GDP is contracting. There is still no coherent strategy for making Greece competitive again inside the euro zone, or for raising the capital for the huge investments needed — let alone for the wholesale revamp of the country’s entire public administration.
And so Greece is likely to report the next set of disappointing budget figures in a few months, and the wrangling over a new debt cut and a new rescue package will start shortly afterwards……
The other euro-zone governments have at most a few more months, perhaps only a few weeks, before the situation in Greece worsens again……That means that Portugal, Spain and Italy, the three other problem countries in the south of the euro zone, must perform the magic trick of stimulating growth while reducing their budget deficits. That can only succeed with a lot of pragmatism — austerity without growth is as pointless as growth without austerity.
The day of coming into the office at 10:00 and leaving at 12:00 and retiring on your last salary indexed for life on money borrowed from international banks is over for the Greeks. It was over years ago but no one wanted to admit let alone the rotten corrupt politicians in the Greek government. The Greeks will not repay their debt and a coup will ensue. Greece will return to its normal profile, a junta-led country just like Argentina but without the resources to ever recover. Not one AUstralian dollar should be spent to prop up the corruption.
I struggle to understand what a “coherent strategy” means to Das Spiegel. Up til now the choice has been between those who argue that Greece should leave the Euro and those who argued it should stay. Staying, clearly required forcing by legislation many of the changes that would have happened by devaluation if Greece had left the Euro. Most of the debate has been on the fiscal side. I have yet to see a “coherent strategy” for growth, from anyone.
I have seen a case against Greece for multiple obstructions to trade, too-strong sectional interests, talk of corruption, and a political impasse. The commonly held belief in “market forces”, will not by itself, solve any of these problems. Does anyone know of a ‘coherent strategy’ on offer?