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Even if all goes smoothly in this negotiation and Greece's debt is reduced to say 80% debt to GDP, I don't think it will matter much if there is a pan-European economic policy that keeps those austerity measures in place for the next half century. Isn't that what is implied in all of this? You have to have wage deflation so that the private firms make enough profits to create a surplus that allows you to compete against other austere and devalued Europeans, a surplus that the banks can squander at the casino gambling table?

Even though I would be a bit more optimistic than most about the Greek economy turning around rather soon, I would not be optimistic at ALL if I were a Greek worker. The future of the Greek business world may be brighter if the public goes through with the austerity measures in the next year, but if you stay in the eurozone under the new dictats coming from the Bundesbank, I think it's implied that the austerity measures are more or less permanent for the foreseeable future. And it's not because of Greek debt. It's about the concern shown by many financial heads over the competitiveness of the economy.

And they call this preserving the European social model? Who are we Europeans competing with? Each other in yet another race to the bottom (the story of the past 10 years was not only of a business bubble, but of a tax race to the bottom to attract said business) as we collectively lose out to China by allowing our domestic businesses to outsource employment?

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Fri May 14th, 2010 at 04:20:51 AM EST
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Leave it to the Germans to engineer a more efficient race to the bottom.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Fri May 14th, 2010 at 07:44:49 AM EST
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to be fair, it's a bit more complex than that.  You are correct, especially from a worker's perspective.  But we (i can say we, i suppose, as a german taxpayer), we also do the heavy lifting.

And there is the small beginnings of a move to put risk back onto the bondholders etc.  Please remember that financial institutions control many governments, not just in Germany.

We're all in this together.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin

by Crazy Horse on Fri May 14th, 2010 at 10:05:33 AM EST
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