Greece may still leave the euro

Matt Ridley

If it won't reform, then it should devalue

For an expert on game theory, Yanis Varoufakis, the Essex University-trained economics professor turned Greek finance minister, does not seem very good at negotiating. His style reminds me of the old joke about playing chess with a pigeon: it knocks over the pieces, craps on the board and struts about claiming it won.

Mr Varoufakis and his prime ministerial colleague, Alexis Tsipras, have annoyed the Germans, accepted a new four-month bailout and agreed, as they said they would not, to supervision of economic reforms by the same old Troika of the European Union, European Central Bank and International Monetary Fund. And yet Mr Tsipras claims that they have won “a battle, not the war”.

It is still just possible that today’s deadline for the Greek government to come up with a fresh list of reforms may vindicate Syriza, because they have at least won a single big concession: that the Greeks get to propose a different set of reforms this time. Syriza’s case is that it can come up with a restructuring of the Greek economy that would work better than the disastrous austerity-to-no-purpose that has happened so far…….Ireland, for instance, cut civil servants’ pay by 5 per cent for the low-paid and 20 per cent for the high paid, slashed spending and is now growing so strongly its economy will soon be larger than it was in 2008......To Read More....... 

 

My Take -There're three things that are "always" inevitable in these situations if they are to attain economic success. First – recognition that socialism is a failure, always has been a failure, is always rife with corruption and has to be abandoned forever. Second - capitalism based on the rule of law - with all its flaws - is the only thing that has worked to end poverty, misery, squalor, suffering, disease and early death. Third - public service unions have to be eliminated before any of the first two can be implemented.

Since none of that will ever really happen willingly in Europe –the riots in Greece and France demonstrates the dire lack understanding of economic reality by Europeans. They’re socialists by virtue of culture. They will never adopt American style capitalism because they had kings as their central planners, and now they have socialists to think for them. Socialism isn’t culturally natural for Americans, although America has fallen deep into this abyss over the last few decades, but we can thank Obama for showing America the light – that central planners always end up corrupt to the core and must be blithering idiots because everything they do, and everything they promote eventually leads to economic disaster. And when you add multiculturalism to the mix there’s only one conclusion - Europe is doomed!  If the EU was a stock – fund managers would be selling it short.