The Greek Economy: Which Way Forward?

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  1. econ1 commented on Jan 28

    We should take a lesson from Greece. High public expenditures, restrictive labor practices, public pensions, debt for current consumption, taxes that encourage evasion, are very pleasant but eventually crush ones’ economy.

  2. Herman Frank commented on Jan 28

    However correct the report may be in its “striving for better”, in the last couple of days a number of events have transpired which make Greece an “all bets off”-country.

    Capital flight has reduced liquidity substantially, the government is flirting with President Putin and calls for an end of the embargo of Russia, has decided to re-hire government staff, has called off 2 major privatizations projects, interest levels on Greek debt have gone to 17%, the first official act of the new PM was a visit to a World War 2-site in memory of Greek resistance fighters killed by the Nazis (in which he touted the virtues of “standing up to the Germans”), the PM and Minister of Economic Affairs continue saying “austerity has ended” ….. but no one can come up with a proposal where the money will come from to pay for all this.

    Greece represents 4% of the European GDP, is antagonizing its major European sponsors, and throws a mutiny-tantrum. A surgical removal from the Club is at hand. Have pity on the population for the folly of its leaders! Contagion? No, the Portuguese, Spanish and Italians will see how the Greek GDP will shrink another 25% and will want to take the ECB carrot of QE.

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