Friday, 20 February 2015

Why do masochistic Greeks want to be in the Euro?

As everyone knows, poor downtrodden Greece has suffered horribly as a result of being in the Euro. Greece has been trampled on by wicked bullying Germany and it’s all a crying shame. Unemployment has rocketed in Greece, poverty is widespread, and so on.

But at the same time Greece is absolutely DETERMINED to stay in the Euro and continue to take punishment. Now that’s bizarre behavior isn't it? Why doesn’t Greece quit the Euro if the Euro regime is indeed so awful, and switch to the Drachma? Of course there’d be initial and costly disruption involved in the switch, but that change would pay off in the long run if indeed the Euro is so dreadful.

Indeed, another closely related question, is why was Greece so keen to join the Euro in the first place? After all, several small countries in Europe with populations similar in size to Greece have done very nicely since WWII and continue to do nicely while organising their OWN currencies: Switzerland, Denmark, Sweden, etc.

Well the answer is that organising your own currency requires a fair bit of responsibility, and Greeks, as Greeks themselves know perfectly well just aren’t responsible or honest. To illustrate:

1. Greece has spent 90 of the last 190 years in financial crisis. See here.

2. The amount of income declared by Greek lawyers is (hilariously) equal to their mortgage repayments. I.e. those lawyers claim to spending nothing on food, transport, clothes etc. Now you believe that, don’t you? (Ho ho).

3. There’s more on Greek corruption here.

4. There’s the old saying “Beware of Greeks bearing gifts”.

5. Greece had to fiddle its books in order to get into the Eurozone in the first place.

So the reason why the Greeks don’t want to leave the Euro is that, as they themselves suspect (probably quite rightly) they’d be no better off.

The Eurozone, rightly or wrongly, is a system in which each country has to pay its own way. Indeed almost every country in the world OUTSIDE Europe has to pay its own way. And any country that can’t get its act together and pay its own way is in trouble. Thus Greece’s troubles are not the fault of the Eurozone: if Greece was OUTSIDE the Eurozone, it would almost certainly still be in trouble.

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