Written by
Paul Krugman
New York
Times - Nobelist
Barry
Eichengreen asks himself why his influential analysis, suggesting that the euro
was irreversible now appears wrong. Surely in a direct, mechanical sense what
we’re seeing is the process I warned about five years ago:
But doesn’t the ultimate cause lie in wild
irresponsibility on the part of the Greek government? I’ve been looking back at
the numbers, readily available from the IMF, and what strikes me is how
relatively mild Greek fiscal problems looked on the eve of crisis.
In 2007, Greece had public debt of slightly
more than 100 percent of GDP - high, but not out of line with levels that many
countries including, for example, the UK have carried for decades and even
generations at a stretch. It had a budget deficit of about 7 percent of GDP. If
we think that normal times involve 2 percent growth and 2 percent inflation, a
deficit of 4 percent of GDP would be consistent with a stable debt/GDP ratio;
so the fiscal gap was around 3 points, not trivial but hardly something that
should have been impossible to close.
Now, the IMF says that the structural
deficit was much larger - but this reflects its estimate that the Greek economy
was operating 10 percent above capacity, which I don’t believe for a minute.
(The problem here is the way standard methods for estimating potential output
cause any large slump to propagate back into a reinterpretation of history,
interpreting the past as an unsustainable boom.)
So yes, Greece was overspending, but not by
all that much. It was over indebted, but again not by all that much. How did
this turn into a catastrophe that among other things saw debt soar to 170
percent of GDP despite savage austerity?
The euro straitjacket, plus inadequately
expansionary monetary policy within the eurozone, are the obvious culprits. But
that, surely, is the deep question here. If Europe as currently organized can
turn medium-sized fiscal failings into this kind of nightmare, the system is
fundamentally unworkable.
Πηγή: krugman.blogs.nytimes.com
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