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Europe

Paul Krugman on the Greek crisis

Fonte/Source, New York Times, I’ve been in correspondence with various people trying to track the current Greece/euro crisis, and everyone seems to have reached the same conclusion I’ve reached — namely, that what’s needed above all right now is some way to stop the clock, call a time-out, whatever. We’re talking about weeks, maybe a month or two — but that pause is desperately needed, because otherwise it will be all too easy to stumble into a preventable disaster.

Why do we need a time-out? Mainly because the new Greek government simply hasn’t had time to do its homework. This is not a criticism: it’s a new government, it’s outside the existing political establishment (because voters feel, with justification, that the establishment has failed), and Syriza doesn’t have a deep technocratic bench. Even with the best will in the world — and from what I hear, we are talking about well-intentioned people here — the Greeks can’t present a detailed proposal, decide exactly what they must do and can’t do, just yet.

In a different phase of history, they might have been able to turn to outside institutions with a lot of technical expertise — but now? The Commission is, in their eyes and pretty much in reality, a bad actor which has had terrible judgment. The IMF are pretty good guys these days, but are part of the troika and certainly can’t be directly involved in drafting the agenda of this government. Ditto the ECB.

Now, maybe after 60 or 90 days it would become clear that there is no possible deal, and Grexit it is. But we don’t know that.

What we do know is that what appears to be the demand of hardliners — that the new Greek government agree in the next few days to abandon everything it campaigned on, that it lock in draconian fiscal targets, privatization, and other things it hasn’t had time to assess — is impossible. I don’t know whether the hard-liners believe that this bum’s rush will work, or are just pushing Greece out the door. But this is not how it should go. Everyone needs some time to think.

Fonte/Source, http://krugman.blogs.nytimes.com/2015/02/20/europe-needs-to-stop-the-clock/?smid=tw-NytimesKrugman&seid=auto&_r=0

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