How to Destroy a Country. The Economics and the Politics of the Greek Crisis
28 Pages Posted: 18 Sep 2017
Date Written: September 14, 16
The economic future of Europe, with its obvious implications for the world economy, depends on the combination of many processes, not only strictly economic ones. Currently, the situation is becoming quite complicated, with a number of particularly adverse tendencies overlapping and mutually strengthening one another. Adding to the classical problems involving the economic slowdown, high unemployment rate and insufficient innovation of the European economy, which weakens its global competitiveness, is the immigration crisis, the escalating terrorist threat and Brexit, which is already becoming a fact, as well as the risk of Grexit. The latter is not yet unavoidable, but still possible. The potential overlapping of Brexit and Grexit could be fatal for European integration. Solving the Greek syndrome requires a radical change in the way the European Union, especially Germany, approaches this problem. On the one hand, specific structural reforms and fiscal adjustments are necessary in Greece, but on the other hand there’s a necessity for a conditional reduction of the Greek public debt by half. What is needed in the long run, is to ensure, by systemic changes and supranationally coordinated policy, that some countries’ surpluses are not financed with others’ deficits and debts.
Keywords: European Union, Eurozone, economic policy, crisis, public debt, austerity, Grexit, Brexit, Galbraith
JEL Classification: E02, E61, F45, H12, H63, P20
Suggested Citation: Suggested Citation