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No answer to that

Greece is having a terrible time. At least one Greek thinks this is because "the people spend their time either devising ways to get government money or scheming to avoid the tax collectors — or, preferably, both". Another reason is that Greece joined the European Union "where countries share a currency but not financial policies" so the euro has become a millstone around her neck.

Unfortunately politicians across the EU preferred to ignore basic economic facts, or perhaps imagined they would face only teething problems as the EU grew up.

Idris Francis writes -

I spoke to UK Schools Secretary Ed Balls once at a fringe meeting, and he confirmed to me that he and Brown did indeed think it would be in our interest to join the euro "when economic conditions are right". Too late for that occasion I dreamed up this response:

"So economic conditions are not right at the moment?"

Answer: "Not at present."

"But they might change and become right in the future, and then we should join?"

Answer: "Yes, that's right."

"But if they can change, from wrong to right, they must also be able to change from right to wrong. So what happens when they become wrong again, but we are unable to leave?"

There is, of course, no answer to that.

In the case of Greece, who has angered the gods of the EU, teeth will be pulled; for Greece's sake it's to be hoped her whole head won't be pulled off.

What will happen to markets terrified by multiple defaults by the PIGS - Portugal, Italy, Greece and Spain - is anybody's guess.

Comments (2)

jlh:

Wonderful interview, during which he at no time hints that--present circumstances notwithstanding--the UK may have had a lucky escape when it declined to be absorbed by the euro. The Germans and Dutch must be feeling like whales swallowed by a gnat. A not very healthy gnat.

Mike Spilligan:

There is, from a British aspect, more than a touch of irony in this.

In order that Greece could become a proud member of the Eurozone by January 1st 1999, the template of the criteria was specially extended and the drachma was pushed into the right shape to fit, but this wasn't primarily for the advantage of "lowly" Greece but more to show "rich" UK that we weren't trying hard enough.

Now all is turned to dust, and the UK may have to help in financially supporting an arrangement that was wrong in principle.

By the way, I'm an Hellenophile and like to record at every opportunity the fact that Greece in WWII, and alone among central European and Balkan nations, stood with Britain and the Commonwealth, in deliberate defiance of the Nazis, until she was overwhelmed by vastly superior forces in April 1941.

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