The Return of the Greece dilemna

[FitzFord]

Some time ago we had an interesting discussion on the design of EU, prompted largely by the issues with Greece. The essential issues were assessing if the EU was vulnerary as a consequence of not creating a true central government, and what modifications could result in a more effective and cohesive system. Greece is on the stage again, and others (Spain?) may be in the wings. I am not proposing that we reprise the old discussion, but I think it would be interesting and potentially useful to examine Joseph Stiglitz' (just issued) commentary on Project Syndicate.  It is titled "A Greek Morality Tale". What do you think...?

Fitz.

[John Short]

Fitz, I heard him interviewed on BBC yesterday - do you have the reference to the article?

[Napodano]

http://www.project-syndicate.org/commentary/greece-eurozone-austerity-reform-by-joseph-e--stiglitz-2015-02

[John Short]

Interesting and relatively balanced but does not address the tax administration and compliance issues that besets Greece et al and focuses only on expenditure adjustment.  It was strange to read about borrowing in a currency because, presumably it was cheap (and not earning income in that currency) and being caught by a revaluation - perhaps the advice was not given by the financiers but caveat emptor surely?

[FitzFord]

I interpret what is happening as a political underlain program, rather than technical based. I don't anticipate a one step process, but several fairly careful steps. Any drastic action will hurt both sides.