Gustaf
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Posts: 29,782
Political Matrix
E: 0.39, S: -0.70
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« on: February 09, 2015, 06:39:49 AM » |
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Austerity or not does not matter in the sense that Greece was and is never getting out of its debt without defaulting in some sense of the word. This is just basic math.
Thus it should have been allowed to default and leave the euro from the get-go to avoid this nonsense. The debate gets confused because it tends to be between two equally dumb options - either force Greece through pointless austerity that completely unravels their entire society and can't get them out of debt anyway. Or reward their extreme mismanagement of their economy with a constant flow of subsidies that is a) never going to address the fundamental problems (and in fact will add to them through poor incentives) and b) is completely politically unsustainable anyway.
To put this in perspective, in the US, which has a functioning internal labour market, little welfare, much more homogeneity economically AND a common language and culture, the richer states still pay roughly the equivalent of the largest Greek bailout from Germany. Every year. As a constant state of affairs, more or less. That's what monetary union is. Once people realize this they might also realize how ridiculous it is to try and sustain this nonsense.
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