Answer to Greek economist complaining about economic measures taken by the EU.
You answer forces me to sit again to the computer and leave the more interesting activities i was planning to do, yet you have right for a proper answer;
1. I never said the Greeks are solely responsible for the economic grievances of Europe, yet it is the only country out of the P.I.I.G.S. who has got by now 50% discount on its debts and it is still not enough.
2. You are probably not very good at history, if you compare the political situation today to the happenings in 1929. While at 1929 the politicians did all the mistakes they could do to deepen the economic crisis, to mention some; Letting the banking system default, increasing interest rates, creating tax barriers etc. in 2008 the world economy found itself in much deeper problem than in 1929 and the politicians succeeded, until now at least, to prevent disastrous colaps of the economic system. Unfortunately the economic fundamentals are much more disturbing than in 1929 and let me be more specific here;
a. The first main problem of the world economy is not Greece but USA, with its huge imbalance of current account, that is still accumulating, and nobody sees end to it. When the 2007 bank crisis subprime started, it was hardly mentioned, that actually the subprime system of selling balks of credits, wrapped into attractive wrappings, was actually a financial system how to bring back to US economy the US dollars from the exporting countries like Japan and China. Conclusion, all the collapse of the banking system of 2008 is default of US economy. Since then, some measures have been taken, but still the current account ended in 2011 with deficit of 600 billion US dollars up from 470 billion at 2010 figures. Greece?!?, not even rolls for breakfast compared to US dinner.
b. Fortunately Europe doesn’t have the same problem of current account, but it is due to the northern countries, while all the surpluses on current account that they generate is wasted mainly in Greece and some in Portugal, Spain and Italy see the following graph.
You may say all this helped German economy to find markets for its products. But there is a big BUT. As a payment for their products they got Greece governments bonds, that have to be write of now. This not only reduces the credit rating of Germany, (unfortunately credit is not valuated just by cash flow but also by net asset value, that was deeply damaged by the write offs.), but damaged the German pension funds. You may say you don’t care about the German or French banks or other capitalistic institutions, but i hope you can`t say the same about the German workers, who lost their pensions in sake of supporting the Greek waste and consumption society, without to blush.
c. The world economy is changing in front of our eyes, and nothing can be done about it. The highly industrious, highly committed, young enthusiastic Asian people want their share from the world economic cake and the less industrious, less committed, old Europeans have to give up some of their economic privileges achieved in the past. This process is unfortunately painful and politically very hard to implement.
To conclude. Nobody is blaming the Greeks, that they grabbed what others gave them voluntarily in the past. All we want is, please realize, the free party is over, the time come to pay. You want Drachma?, have it, You want out of EU, go, You want to stay, be it, but don’t ask others to pay your lunch.