We’ve endured five years of hearing about Greece, whose population is about the same as the Chicago metropolitan area. Self-appointed experts have said that the exit of Greece would show the failure of the euro concept. Wikipedia, however, shows that there are 19 countries in the monetary union. One failure out of 19 over a 16-year period could also be characterized as “success,” no?
3 thoughts on “Does Greek exit from the Eurozone show the strength of the euro idea?”
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If the beast (or blob) isn’t growing, it’s dying?
The euro is a success. Americans often underestimate the political will behind the monetary unification of the EU. The expression “European elites” can be found in many opinion pieces in American media concerning the euro (suggesting that the new currency has been imposed on the people by those “elites”). The reality is that the euro is popular and it has worked.
Greece is a sad case. So are Puerto Rico and Detroit. The Greek people are going to suffer. However, Greece is a democracy, they elected the governments that created the conditions for the current disaster. Sadly for the Greeks, the EU is not a transfer union (Spain and Italy have very—comparatively—poor regions that live off the transfers from richer ones). The Greeks would love it if the rest of the EU would simply pay for the “social” programs that the Greek government wants to maintain.
The best proof that the euro is very strong is that its exchange rate versus the dollar has not moved much during these very turbulent times.
First of all, Greece has not exited from the Eurozone just yet. 2nd, the Euro is a success – it’s Greece that’s a failure. An economic and political failure.
Greece had a long history as an occupied country (I’m talking about the Turks, not the Germans). This had a long term impact on the national character. Not paying taxes and cheating the government (indeed everyone except your immediate family) was seen as “resistance” and a good thing. Stealing and lying was OK if it was for a good cause. If the Palestinians ever get their own country, they are going to have the same problem.
This was all fine (not really) when the Greeks had their own currency and ran their own economy. The cab driver would cheat you on the ride from the airport but the currency was so low that the ride was still cheap. But putting them inside the EU and its currency would be like moving a dysfunctional ghetto family into your home and giving them access to your credit cards and bank account. The ghetto family might enjoy it, but you would lose patience after a while.