Greek Crisis: Do German economists think like the German government?

Greek Flag - sattered with broken EuroThe present discussions in the media more often than not give us the sense that within the various countries concerned the thinking and positions are basically uniform and widely shared. (See our posting that looks into this,”Why all the Bitter Accusations from the North” – https://goo.gl/wD6Ct6. ) But the truth is that in country after country there is considerable division of views on these topics, and particularly among economists who are in most cases deeply divided on the issues. Here you have an example of how one German economist reports on “How German Economists Really Think”. (The following article is reprinted here in its entirety. The original was published yesterday by the Institute of New Economic Thinking, and below you will find full references, links and credits.)

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Greek Crisis: Hans Werner-Sinn on Fixing the Eurozone

Hans Werner-Sinn, a noted German economist and Professor of Economics and Public Finance at the University of Munich. He is also President of the Ifo Institute for Economic Research and serves on the German economy ministry’s advisory council. In this interview he talks about a disciplined but also radical and flexible pro-Europe path out of the present impasse, for Greece and for Europe as an idea worth cherishing and taking into the future.

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Greek Crisis: Jean Tirole on Europe’s Future Is Federal

8 July 2015. – http://www.socialeurope.eu/2015/07/europes-future-federal/

jean tirole  FranceNumerous Europeans view Europe as a one-way street: they appreciate its advantages but are little inclined to accept common rules. An increasing number throughout the Union are handing their vote to populist parties – Front National, Syriza, Podemos – that surf on this Eurosceptic wave and rise up against “foreign”- imported constraints.

Embroiled with the Greek crisis, European policymakers will soon have to step back and reflect on the broader issue of the Eurozone’s future. Before envisaging an exit or, on the contrary, more sustained integration, it’s right to reflect upon the consequences of each option.

Oversimplifying, there are three strategies for the Eurozone: (a) a minimalist approach that would see a return to national currencies, while keeping Europe perhaps as a free trade area and retaining a few institutions that have made a real difference such as common competition laws; (b) the current approach based on the Maastricht Treaty of 1992 and its fiscal compact update in 2012; and, finally, the more ambitious version of federalism. My own clear preference is for the federalist version but I’m not at all convinced that Europeans are ready to make it work successfully.

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Wikipedia coverage of Greek bailout referendum

wikipedia logoThere is a remarkable information source on this brand new, fast breaking topic which was first put on line on 26 June by Wikipedia collaborator Dimboukas

Here is how it looked on the morning of the 27th of June when the official announcement was made by Prime Mister Alexis Tsipras calling for the referendum:

And here is how it looks today (with ca.5000+ words, 50 references, 10 external links):

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Greek Crisis Endgame: The Abyss Stares Back

Alexis Tsipras

If you gaze long enough into an abyssthe abyss will gaze back into you.  – F. Nietzsche

On the early morning of 27 June when reading that the leader of the Greek coalition government, Alexis Tsipras, called for a national referendum to get the views of Greece’s population on the bitter on-going disputes with Europe and the IMF, and in particular whether or not  to accept the Troika’s uncompromising  bailout conditions to settle the country’s government-debt crisis, I decided to see if we might do our bit in the context of our collaborative program in which we examine the concept of “sustainable development”, both from the vantage of the workings of the economy and challenges of equity and democracy in different countries. To this end I set out to monitor developments over these critical ten days by providing selective daily summaries and international commentary on this unfolding  the topic – and, more importantly, the uncertain evolving process behind it.

This quickly took the form of a series of daily summaries of a certain number of what I regard as the key points, issues, ideas, attitudes and players shaping this debate.  You will find just below the dozen-plus articles that were posted here since the 27th. They appear here in the order written, and each is hot-linked to facilitate your access.

The core of this story is the huge gap between the level of understanding of leading members of the economics and policy community and that of the troika members. The ever light-handed Paul Krugman put it like this in a 5 July article in the New York Times.

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Greek Crisis: Paul Krugman on Ending Greece’s Bleeding

Greek Crisis - waiting at closed bank

Ending Greece’s Bleeding

 –  By Paul Krugman, NYT JULY 5, 2015. Full text here.

Europe dodged a bullet on Sunday. Confounding many predictions, Greek voters strongly supported their government’s rejection of creditor demands. And even the most ardent supporters of European union should be breathing a sigh of relief.

Of course, that’s not the way the creditors would have you see it. Their story, echoed by many in the business press, is that the failure of their attempt to bully Greece into acquiescence was a triumph of irrationality and irresponsibility over sound technocratic advice.

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