Wednesday, July 10, 2013

Wrong Prescription for Greece

New York Times
July 9, 2013

Greece and its financial overseers agreed on terms for continued bailout payments on Monday. The agreement is cause for relief — without it Greece would go bankrupt. But, at the same time, it is no cause for celebration — indeed, quite the opposite. Greece must eventually carry out painful reforms. But the precondition for these reforms is not the austerity demanded by the agreement but economic revival.

Greece is already in critical condition and Monday’s agreement will only make things worse. Years of austerity and depression have poisoned Greek politics, idled more than one in four of its workers (and nearly two in three of its young people) and torn holes in its social safety net.

These sacrifices have choked off investment and squandered human resources. Experts say there is little chance that further sacrifices will revive Greece’s economy or make its debt burden more sustainable. Yet that is just what the European Commission, European Central Bank and International Monetary Fund have again insisted on. Greece’s prime minister, Antonis Samaras, felt he had no choice but to accept. He agreed to cut public-sector paychecks and eliminate 15,000 Civil Service jobs — not by attrition, but by dismissing the current jobholders.


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