Quote: Juan Cornetto "There are many respected economist many of whom have differing views. However in this case Mazzucato's overview does not go against the points I made.
I am not taking sides in this as I see the EU being at greater fault while Greece is far from blameless.
EU Failures
1. The EU should never have launched the single currency without fiscal and monetary union for those countries that wanted to join.
2. Had the EU conducted a proper audit it would never have let Greece into the flawed Euro in the first place
3. The EU compounded this error (2) by bailing out Greece instead of assisting it to leave the single currency 5 years ago.
4. The EU then made a second bail out effectively throwing good tax payers money after bad.
5. The EU did not ensure that the necessary reforms that Greece signed up to were in fact carried out so leaving the Greek people with the pain of austerity but with no hope of freeing up the economy and boosting tax revenues.
6. As economies across Europe collapsed, the European Central Bank acted in the interest of rich northern countries like Germany and against the interest of poorer southern countries like Greece, and the Greek people paid the cost.
6. European Central Bank's monetary policy works for the rich norther European countries who are not too concerned that it could be causing a depression in Greece.
7. The EU must realise that Greece can never repay the debit under the current conditions.
Greek failures
1. Greece has been poorly served for decades by a succession of irresponsible governments who to win support have created public sector jobs with unrealistic pay and conditions with way over generous pensions.
2. The financial crisis revealed that the Greek government had been, for years, borrowing more than it reported publicly Greece chose to evade the rules and borrow money under the radar to enable more spending.
3. Tax evasion amounted to half of the 2008 deficit and a third of the 2009 deficit (12.7% of GDP)
True income of the average Greek person is 92% higher than declared to the taxman. (2012 study)
4. A failure to live on its promises has produced a breakdown in trust with its EU partners. Only 5 of the 12 planned IMF reviews under the current programne were completed, and only one has been completed since mid-2013, because of a failure to complete reforms.
5. The Syriza government was elected on a promise it had no chance of keeping.
So this has been a problem brewing up for years on both sides and the economic crash brought out all the fault lines in the EU and the single currency and also in black economy countries like Greece.'"
Why is it everybody blames the financial crisis on banks and governments? It is people who chose to borrow money from the banks that they could not afford to pay back. It is people who voted for governments in the likes of Greece who promised to borrow money to fund the public sector. At the end of the day all that the banks and the governments of Greece, Ireland, Spain, Italy, France, UK etc did was give people what they wanted.
The financial crisis was caused by the greed and irresponsibility of ordinary people. Every single person who defaulted on their mortgage or couldn't pay off their credit card bills or didnt pay off their overdrafts or voted for political parties that promised to spend billions on the public sector through borrowing money should accept responsibility rather than trying to blame others. They should also apologise to the young for it is the young who have suffered the most from the crisis and who will be paying off the debts of their parents and grandparents for the rest of their lives.
