Debt crisis: Why Greece will bring the euro down with it
14 June 2011
The Irish Times
As Standard & Poor's gives the Greek economy the lowest credit rating in the world, the economics editor of the Irish Times argues that if the country’s long history of political and economic dysfunction is a guide to the future, the eurozone’s 16 other countries are at risk too.
Greece is a borderline failed state. Its society lacks cohesiveness and is deeply divided. Its economy is in shock. If the country’s history is any guide to its future, there is serious trouble ahead.
More than a year ago, when the troika of institutions that now oversees Ireland’s bailout first landed in Athens, there was hope that developed Europe’s most poorly governed country could be put on the right track.
A new government was then in place and its most senior figures seemed serious about radical reform. Many Greeks, particularly the young and the educated who recognise how dysfunctional their country is, backed rupture. There was much talk of opportunity in crisis.
That talk is no longer to be heard. The crisis now presents nothing but threats and risks.
This, in many ways, is unsurprising. The chronic dysfunctionality of the Greek state is long established. Since independence almost two centuries ago, Greece has experienced civil war, uprisings, mass displacement of people, dictatorships and terrorism.
There is no better reflection of its state’s failings than the issue that has drawn the world’s attention to the country over the past 18 months: budgetary chaos. According to a study by economic historians Carmen Reinhart and Kenneth Rogoff, the Greek state has been in default for almost one out of every two years since it was founded in the 1820s. Struggling under the second highest public debt burden in the world, it looks to be heading that way again. Read full article in the Irish Times...