Ending Greece’s Nightmare
by Paul Krugman
JAN. 26, 2015
http://www.nytimes.com/2015/01/26/opinion/paul-krugman-ending-greeces-nightmare.html?comments#permid=13938184
I'm not a fan of IMF and World Bank "rescue packages" and as a "social democrat" myself, I welcome the poll victory of the socialist in Greece.
The conservative establishment in Greece, which was responsible for implementing the restructuring and austerity, where beholden to and indeed part of the moneyed upper classes in Greece. Thus, their programs focused on cutting wages and benefits and social services, while dragging their feet and only paying lip service to the other part of restructuring - getting Greeks, especially the upper crust to pay their "fair share" in taxes, indeed in many areas, getting all Greeks to pay any taxes at all.
I know from personal contacts in Greece that tax avoidance and government benefits fraud is very common, like a national pasttime, in Greece. The kind of "restructuring" that will put and end, or at least significantly curtail those activities, is an absolute necessity, and it will entail "austerity". Hopefully the new socialist government in Greece will shift the focus of austerity to that area and relieve some of the suffering caused by one-sided cuts in benefits for the poor. However, if the new government makes only promises in order to get relief from their debt and still curries favor with the moneyed class, and does not follow through on real reforms, then Europe should write off their Greek debt, remove them from the Euro and let those wonderful market forces, which Mr. Krugman claims to understand, take over.
The conservative establishment in Greece, which was responsible for implementing the restructuring and austerity, where beholden to and indeed part of the moneyed upper classes in Greece. Thus, their programs focused on cutting wages and benefits and social services, while dragging their feet and only paying lip service to the other part of restructuring - getting Greeks, especially the upper crust to pay their "fair share" in taxes, indeed in many areas, getting all Greeks to pay any taxes at all.
I know from personal contacts in Greece that tax avoidance and government benefits fraud is very common, like a national pasttime, in Greece. The kind of "restructuring" that will put and end, or at least significantly curtail those activities, is an absolute necessity, and it will entail "austerity". Hopefully the new socialist government in Greece will shift the focus of austerity to that area and relieve some of the suffering caused by one-sided cuts in benefits for the poor. However, if the new government makes only promises in order to get relief from their debt and still curries favor with the moneyed class, and does not follow through on real reforms, then Europe should write off their Greek debt, remove them from the Euro and let those wonderful market forces, which Mr. Krugman claims to understand, take over.
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