The consequences of Merkel’s mismanagement of the Greek problem will be with the Greeks for years. They will eventually cost the Germans dearly and they have set a bad precedent for Europe’s other crisis countries. […]
For a committed market liberal it was a strange experience. There I was hoping for an election victory of the radical Syriza party in Greece’s general election. Yes, the very party that rejects austerity and claims that unreformed socialism provides the answer to the country’s problems. […]
To escape from its current mess, Greece does not need more Sisyphus work. It needs someone to tackle the Herculean task of cutting the country loose from Europe’s monetary union. […]
If there was one word to sum up the whole body of economic theory, it would have to be ‘incentives.’ People act on incentives. As William Stanley Jevons (1835–82), one of the founding fathers of neoclassical economics, put it, the whole economy is ‘a calculus of pleasure and pain.’ Greece is playing out a most macabre application of incentives. […]
The choice left to Europe’s economically illiterate politicians is this: will they finally admit the euro cannot work for Greece (and other periphery countries)? Or will they realise it only after burning another few hundred billion? […]
After the turbulent monetary history of Greece, it was surprising (to say the least) how easily Greece managed to become part of the eurozone. Either Greece had fundamentally changed its whole economic system as grown over two centuries overnight or Greece’s European partners had not learned their lessons from history. […]
The social unrest in the streets of Athens palpably demonstrates the dangers of letting public debt problems come to the boil. The developed world should watch them carefully and wonder what it can do to avoid a replay of such scenes in New York, London or Tokyo. Though there are no pain free solutions to the world’s public debt problems, this should not stop us from creatively exploring the options. […]
Having spent the last few weeks in Germany, I returned to Australia more puzzled than ever about the country in which I grew up. Germany has never been a nation that was easy to understand. Nor has it ever been a nation at ease with itself. But in its present state it has become a country overflowing with contradictions. […]
If international markets or European politicians want to know the future of the euro, they better not ask Germany’s constitutional court. Especially on Greek affairs, the Oracle of Delphi may give a much clearer answer. […]
Ironically, the Greek rescue package may have increased the chance of a future sovereign default in Europe – other nations struggling under massive debt burdens are likely to find there is nobody left willing to bail them out. […]
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