Krugman: "Suppose you consider Tsipras an incompetent twerp..."

[Babel_17]

93. The unwillingness of the Greek government to govern is a large part of the problem

The European leaders and bankers are no sentimental softies but imo it's likely they'd have had a much easier time of putting together bailouts if the Greek government would have delivered the absolute minimum of a responsible government that's deeply in debt.

It's often noted that tax avoidance is something of a national sport. Tax collection is a challenge for any government but the Greek government's record has been consistently abysmal. What doesn't get discussed much is that workers in other European Union countries are extremely unamused at their tax dollars going to prop up a government that fails to collect billions of Euros in taxes every year.

These workers vote and are ready to bring down one government (Finland) over the issue. These workers see mostly just what's in front of them and they aren't impressed by the accurate argument that their economies have a built in advantage over nations like Greece.

The bottom line is that it's not only about a group of elites huddled in a room deciding how much of their hoard of gold they'll invest in Greece. It's also about European voters deciding whether or not the Greek government is going to finally get real.

I think Krugman is feeling a bit burnt by how ill prepared the Greek government has shown itself to be in dealing with today's foreseeable circumstances. They look like they wanted to lose the referendum and seemingly have no stomach for leaving the Euro and switching to Drachmas.

That switch would require sweating out the addiction to the Euro and they apparently are unwilling to do that. The Greek government would need to rise above itself to weather that switch (they'd have to resist endless pressure to give in to peoples demands that would quickly result in hyperinflation) and they'd need lots of trust from the populace to navigate through the turbulent, rock strewn, waters of the first years to get to the stability of having a manageable, sovereign, currency.

Frankly, I think Krugman is very disappointed in the Greek government. They are finding it convenient to allow the Germans, et alia, to force their hands to make economies. It would be better if a Greek government would rise up that owned the situation, and dealt with it.

Finally, I want to mention another thing that doesn't get mentioned much. Similar to what's happening here, but to a much greater degree, it's the youth of Greece that is paying the largest price for the fecklessness of past decades. And also worth mentioning are the people who didn't benefit from past excesses. Many people had their relatively modest pensions cut quite a bit.

P.S. https://www.washingtonpost.com/world/greece-agrees-to-a-punishing-ultimatum-from-european-leaders/2015/07/13/4b6c2f2a-28f3-11e5-960f-22c4ba982ed4_story.html?hpid=z1

Well, I do agree with Krugman that the Greek people need more generous terms in order to grow their economy. I can only hope that this deal is mostly about posturing. I hope that if the Greek government shows it's acting faithfully then the European lenders will accordingly send along more cash for investment purposes. Something like, as tax collections improve, so do interest rates decline. As trust gets built, then more discretion is given in how to distribute funds.

This is politics and I hope the European lenders can find a path to quickly ramping up the aid to Greece. The level of austerity I see being proposed doesn't look sustainable. While I'm not a fan of the leadership Greece has been getting I do admire the fortitude of the people, and their great culture. I have no desire to see them punished for the bad acts of the bankers, lenders, and the governments of Greece and the rest of Europe.