The problems of Greece is not new, long before the financial crisis hits the global economy in 2008-09, Greece was in trouble. The combination of structural economic weakness and high structural deficits were compounded by a culture where tax evasion and corruption are both widespread and, to a large extent, acceptable and Euro became the scapegoat. The Euro is a scapegoat. Hard currency is not inherently bad. The real problems are: 1) The unstoppable urge of European governments to spend beyond their means, piling up deficits and debt to the moon. 2) The belief propagated by dimwit politicians and their pet economists that a Eurozone European government could (during good times, way back when) borrow 3% of GDP forever, because they would grow at 3% per year forever, because hard currency and fiscal stimulus would guarantee 3% growth forever. European (especially southern European) countries have always been prone to crisis because of their overspending, chronic inflation, and lack of political cohesion and will to arrive at a set of policies for living within their means. Remember how many zeros on a lira note? It’s true that the Euro has turned those endless series of small episodic national crises into one big, permanent, continental crisis. But still it’s unfair to blame the Euro itself. It’s like saying cars are evil because four-year-olds are not capable of driving them safely. The solution is to get hard-assed about the hard currency. Message: if you are by nature a confetti-money country and culture, get out of the Euro. Hard currency has benefits, but requires discipline. If that’s not for you, don’t join the Euro. Hard currency, like sobriety, has benefits but does not work magic.
Is Greece a failed state now