3 responses to “Greece hasn’t got a debt problem. It has a lack of growth problem!

  1. If the solution to Greece’s problem was that simple, a fair number of people would have tumbled to it by now. The problem with “growth” for Greece, if by that you mean a straight rise in demand inside Greece, is that that would suck in imports, driving Greece further into debt. Plus it would reduce or destroy the basic purpose of austerity in Greece, namely cutting costs in Greece and thus making Greece more competitive.

    And before someone points out that the latter “austerity” cure for Greece involves big social costs, yes we’ve all worked that out. That’s an INHERENT problem of common currencies.

    • The solution to the 30’s depression was “simple” in the sense that Governments needed to get off the gold standard and start spending money to stimulate their economies. It took a major war to get them to do that though.
      The solution to the EZ problem is equally simple but politically it is very difficult to make happen what needs to happen. Scrapping the Euro is one way. Greece on its own can’t fix its problems within the Euro unless it has the co-operation of the rest of the EU. That’s unlikely, to say the least, so a quick exit is their best option.

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