Iceland Gets it right~ Why No media coverage?

[girl gone mad]

32. Greece's actual problem is that traded away its currency sovereignty.

And for such a punishing rate of exchange, at that, in order to be a part of the doomed Euro project.

Before the financial crisis hit, Greece was doing okay, even with the tax avoidance problems and an uncompetitive fiscal environment. I've studied the data from that period. There's no evidence that Greece was on an unsustainable course compared with other Eurozone countries. Their public sector debt to gdp and tax collections rate were comfortably in line with the rest of the non-German Eurozone. Greece's social safety net was quite modest compared to the rest of Europe. There simply were no huge red flags in the economic data which could lead one to reasonably conclude Greece was on a perilous collision course.

The financial crisis is what really wiped out Greece's GDP. With non-sovereign debts and no way to control money flows, Greece was helpless to enact the types of policies which sovereign currency nations such as the USA were able to implement to prevent deeper recession. The automatic stabilizers that kick in to replace huge quantities of money disappearing from the economy due to debt deleveraging fell victim to the neoliberals' demand for austerity, a rigid ideological plan which could not be more wrong. Many economists warned of precisely this outcome for weaker Euro countries in the inevitable face of a financial crisis. This is precisely why fixed exchange rate regimes like the Euro are such a bad idea. Doubly so for the Euro itself, since the ECB does not act as a true Central Bank, but instead moves mostly to protect the interests of the stronger Eurozone countries at the expense of the weaker ones.