Here is a link to a VOX article on the economics of the Euro, and why it hurt Greece, Italy, and Spain. I want to emphasize that this is an easy to read version of what better economists, whether on the left or on the right have said. https://www.vox.com/2015/6/30/8868973/e ... is-mistake
And they are all wrong. And they don't know much. So Greek people don't go to Germany to find work? Funny, considering that 1 in 10 Greek citizen already has lived and worked in Germany at some point in their lives. There are about 300.000 Greek living and working in Germany, that is 3% of their population. And no, that is not just the best of the best, engineers and such, those are overrepresented, but so are low skilled people. It is obviously possible and many companies don't have problems to hire people that don't speak German, as long as they speak workable English.
There are 700.000 Greece people in Greece that already did live in Germany, that is 2/3 of the Greek unemployed.
Well, in fact plenty of Greek people are moving to Germany, just almost as many are moving back, many of them to retire back home.
How would you rank the following items in their contribution to the current mess?
- having the stable and strong Euro instead of the weak and highly volatile drachma?
- the Greek government taking in more loans than they could carry in any other but the most optimistic scenario?
- Greek employees demanding wage increases beyond productivity increases compared to other EU countries, and getting them, to the point of actually decreasing productivity?
- Banks giving loans to Greece at interest rates not reflecting the risk and beyond Greece's carrying capacity in all but the most optimistic scenario?
- Greece's burocracy's failure to collect taxes effectively to the tune of 20 billion Euro/year? You know, which in sum total since Greece joint the EURO would pay the national debt.
The only advantage you get from the ability to devaluate your currency is that wage reductions across the board are quick and easy, with no politician, boss or banker getting his hands dirty, you know the kind of "we have to show restrains with wage increases" and "cut wages" sort of unpopular talk. And that is what it is, currency devaluation is nothing more or less than wage cuts for everyone without parliament, citizens and Unions having any say in it. They are doing some pretty marvellous scam with the "currency devaluation is good" mantra. It is basically saying "wage cuts are good". It's BS just as much as trickle down economic, that doesn't work, and no economist ever said* it would before it was sold in a huge PR campaign or that high taxes kill the economy, while in fact outside of extremees it is pretty much irrelevant. Or that a good, hence expensive, social security system kills the economy, pretty tough statement in the face of countries having that and their economic success.
Germany is doing good right now because we went through some pretty tough structural and social security reforms and a decade of wage discipline, you know, the unpopular no raise/wage cut sort of thing, 10-15 years ago.
*obviously there would have been a couple of fringe voices.
This Singature is a safe space......