Crisis in Greece
If you want an alternative to the German fairy tale about Greece, Krugman is your go-to guy:
Basically, the current situation may be summarized with the following dialogue:
Germany to Greece: Nice banking system you got there. Be a shame if something were to happen to it.
Greece to Germany: Oh, yeah? Well, we’d hate to see your nice, shiny European Union get all banged up.
Like all too many crises, the new Greek crisis stems, ultimately, from political pandering. It’s the kind of thing that happens when politicians tell voters what they want to hear, make promises that can’t be fulfilled, and then can’t bring themselves to face reality and make the hard choices they’ve been pretending can be avoided.
I am, of course, talking about Angela Merkel, the German chancellor, and her colleagues.
It’s true that Greece got itself into trouble through irresponsible borrowing (although this irresponsible borrowing wouldn’t have been possible without equally irresponsible lending). And Greece has paid a terrible price for that irresponsibility. Looking forward, however, how much more can Greece take? Clearly, it can’t pay the debt in full; that’s obvious to anyone who has done the math.