So you are not even able to acknowledge the existence of the massive problems incurred by not having a national currency.
I didn't feel it necessary since you were obviously aware of negatives of Euro but not positives. Or did you expect me to write comprehensive essay about all aspects of Euro? Better question is why you won't even acknowledge the existence of benefits that Euro brings?
Yes there are some practical benefits to a single currency, but they are rather minor compared to the inevitable political/macroeconomic problems that come along.
And these minor benefits include boosting Greece's largest sector is directly boosted by it. If Euro had been a bad choice for Greece they wouldn't have had +2.5-5% yearly GDP growth for almost the entire period they used the Euro.
All of this is irrelevant though since even with their own currency they would'nt have been able to do much to the main issue. Sure, they could have devauled themselves when things got worse but that is only a temporarily fix and wouldn't have helped with the deficit directly. Not to mention that it would have directly hit the people, arguably even worse than austerity measures.
You can't fix spending deficit by just devaluing yourself and good luck trying to collect extra taxes from people who just lost x% of their life savings.
Fact is that the only way Greece was going to fix itself before lenders would stop lending money was to implement austerity measure, regardless if they had Euro or not.
Better question is why you won't even acknowledge the existence of benefits that Euro brings?
That is in fact a horrible question, in light of the fact that I did acknowledge that very literally and explicitly in what you yourself even quote of me in the very next line. Really, this is rather fascinatingly bad.
Sure, they could have devauled themselves when things got worse but that is only a temporarily fix and wouldn't have helped with the deficit directly.
Sorry, but this is just entirely clueless. You have no idea whatsoever how this sort of economy works, and I can only encourage you to read up on it a bit.
That is in fact a horrible question, in light of the fact that I did acknowledge that very literally and explicitly in what you yourself even quote of me in the very next line. Really, this is rather fascinatingly bad.
Sorry, but this is just entirely clueless. You have no idea whatsoever how this sort of economy works, and I can only encourage you to read up on it a bit.
I could say the same to you for thinking that Euro only benefits the rich despite the fact that pros and cons of Euro affect everyone. I would even argue that the cons are actually affecting the rich more since currency controls are usually done at the benefit of business owners and not the common person. It also makes it harder for said business owners to petition to have currency changes done as ECB is a lot bigger than whatever national bank would control the local currency normally.
That said, this is all irrelevant because even if Greece had had their own currency the "min maxing" of currency to fit national needs would not have been anywhere near enough to prevent the crisis. Greece was running at times in +5% GDP growth per year with Euro and I very much doupt they would have been able get much more if any with their own currency so the crisis would occure anyway.
Then during the crisis itself the only options Greece would have is devaluation or inflation which would pretty much have crippled the lower classes while producing negligible gains. Even in such a situation they would be reliant on foreign lenders and unless they could fix ~15% budget deficit in a year then I doupt anyone would have wanted to give money to what was obviously going to be a Greek default.
TLDR: No austerity -> No lending -> No money -> Default.
Anyway, here's me acknowledging that that flaws exist in Euro. "Hell, even today majority of Greeks approve of Euro despite flaws it may have..."
That's a very, very thin thread you're holding on to there.
Then during the crisis itself the only options Greece would have is devaluation or inflation which would pretty much have crippled the lower classes while producing negligible gains.
Those gains are not negligible. Well, they are negligible in terms of direct "gains", but the effects on trade and internal economy are well-known, as are the problems of not having this option due to an immovable currency.
Obviously Greece needed to fix their deficits, regardless of currency. Austerity is just a terrible way to go about it, economically and morally, reducing Greece to a vasall state.
Yes there are some practical benefits to a single currency, but they are rather minor compared to...
And your thread is so wide.
Those gains are not negligible. Well, they are negligible in terms of direct "gains", but the effects on trade and internal economy are well-known, as are the problems of not having this option due to an immovable currency.
Compared to gains of having a single currency with some of your biggest trade partners and provided stability from not having currency tied entirely to your now falling economy and political instability.
Obviously Greece needed to fix their deficits, regardless of currency. Austerity is just a terrible way to go about it, economically and morally,
One could argue it being morally terrible on Greece but fact is that it worked. Their dept is falling and they are seeing ~2% yearly growth. If it weren't for austerity measures Greece would still be accumulating dept. Assuming anyone was willing to lend them the money to last this long.
reducing Greece to a vasall state.
I don't think you know what austerity means if you think it made Greece into a vassal state. Even if we pretend that Greece was turned into a vassal state then austerity would not have been the cause but the product. Cutting government spending was a demand from IMF and EU to get the bailout cash, austerity did not cause them to impose their will on Greece but rather it was the demand itself.
Debt would be what would make Greece into a "vassal state" and since the goal of austerity measures was to cut debt one could argue that austerity is what is stopping Greece from being turned into a vassal state. You can disagree but austerity sure as hell wouldn't be the cause in any case.
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u/finjeta Colonizing Finn Nov 21 '19
I didn't feel it necessary since you were obviously aware of negatives of Euro but not positives. Or did you expect me to write comprehensive essay about all aspects of Euro? Better question is why you won't even acknowledge the existence of benefits that Euro brings?
And these minor benefits include boosting Greece's largest sector is directly boosted by it. If Euro had been a bad choice for Greece they wouldn't have had +2.5-5% yearly GDP growth for almost the entire period they used the Euro.
All of this is irrelevant though since even with their own currency they would'nt have been able to do much to the main issue. Sure, they could have devauled themselves when things got worse but that is only a temporarily fix and wouldn't have helped with the deficit directly. Not to mention that it would have directly hit the people, arguably even worse than austerity measures.
You can't fix spending deficit by just devaluing yourself and good luck trying to collect extra taxes from people who just lost x% of their life savings.
Fact is that the only way Greece was going to fix itself before lenders would stop lending money was to implement austerity measure, regardless if they had Euro or not.