This INET interview with Jean Pisani-Ferry gives a useful overview of how Greece and Ireland came to have sovereign debt woes and the viability of the remedies proposed for each. Pisani-Ferry argues, as many other economists do, that austerity measures will not succeed in Greece because they will prove to be politically unsustainable.
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He is a nice guy but why not speak the truth: Nothing will work in Greece; any path chosen will fail and will be deemed to have been the wrong one. Nobody admits there is none.
Greek national debt would be containable; there is much of it but it could be restructured with low interest rates and all to blow up later.
The key problem here is the dissolution of the Greek banking system – debts stay in Greece, assets move to safer places backstopped by National Central Banks and the ECB. There is no solution for this other than controlling the Greek banking system in a drastical way or blowing it up before this game gets further out of hand. I do not buy at all the myth of “Solid banks in an unsolid country”. The banks will be shown to be rotten too and European taxpayers will cover the bill for backstopping capital flight and creation/laundering of Euro assets.
btw: Austerity is a harsh sounding word but does not have any meaning in a Greek context where nearly everything is fraudulent.
What do you mean “nothing will work?” What does “everything will fail” even mean in this context? “Work” for whom?
Here’s my prediction:
This too shall pass. There shall be Greek people living in Greek towns for a long time to come and they will grow up, produce things, exchange things and attempt to navigate life just as we all do. Yes, some people will have less wealth and less access to conspicuous consumption. This is the thing, every policy choice has winners and losers. Some policy choices benefit only a few and harm many. I’m generally not in favor those choices. The question is never “will this work?”; rather, it is almost always “Cui bono?”
Bwaaaak
Sell the islands!
Sell the islands!
Bwaak
-Mr. AV Airy
Principal and Master of the Crumbs
Sovereign Wealth Associates
(Somebody shoot that bird) LOL
Seriously Deep Thoughts, Number 76
Bird brain asks the cat: “If Greece is bankrupt, who has their money?”
Cat says: “Greece spent it’s own money and has no one to blame but itself. It lived beyond its means. It borrowed more than it should. It spent foolishly. It wallowed in a welfare state. It retired at 26 and drank ouzo, after working for 2 years. it hung out in cafes and smoked unfiltered cigarettes. And now it’s time to face the music and get it shape.”
Bird brain says: “Look at you fat cat, you’re an obese slob. You couldn’t catch me if you had to. All you do is eat gourmet cat food and get petted by your slaves. You couldn’t catch a mouse unless someone handed it to you. Or you’d have a servant buy one for you, pre-caught. If someone gave you catnip, you’d fall asleep and snore. Who are you to give advice about getting in shape.”
Cat says: “Life’s not fair”
Bwaaaak
I just wonder when the anarchy begins.
It’s just a cartoon. This bird is annoying and has infected a few of my comments recently. I don’t really mean for anyone to shoot it, as I kind of like it. it pretends to be all sorts of things, just to be annoying. It’s not master of the crumbs or anything. It’s just a fake bird. LOL.
Is it just me, or do other people want to see Greece wallowing in austerity for the pure schadenfreude of it?
Hhhm, I never thought of it quite that plainly….but if you buy into a morality tale version of the crisis, then you’d want the supposed bad guys punished.
There has to be pain to all parties involved. Certainly one can’t deny that “Greeks”, be it the government that lied or the people who wanted the party to go on, are somewhat responsible for their own fate.
The country is simply not competitive enough to live at such a high standard and with such a generous welfare state.
Does anyone have examples of how ‘generous’ its welfare state is – e.g. the state pension?
My guess is ‘generous’ would be an over statement? Though I that the wealthiest paid little tax – which might be more pertinent.
p.s. Did this guy flag up the overheat in Ireland BEFORE the collapse, or was he a cheerleader for the Irish model like most mainstream economists?
He actually says NOTHING – other than telling us what we already knew.