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This has nothing to do with being beneficent.  This is, as are all political conflicts, a raw fight over resources, so the question is, on which side are you in this particular conflict?  (And I know you're Greek from past posts, so you might have more ambiguous allegiances than most of us.)

If Greek GDP, tax revenue, etc. were more than enough to sustain Greek pensions without IMF help, then there wouldn't be the crisis at all, would there? The problem is that it when you tie your policy options to a larger group like the EU, which means that you transfer your power to that larger group, you limit your ability to solve domestic conflicts over resources, and that is what has occurred because of Greek adoption of the Euro as its currency.  Because Greeks are unable to increase taxes on the wealthy exclusively, and because so many of the rest of us don't think we should be on the hook for Greek consumption smoothing, the IMF is actually doing its job for its constituents -- the rest of us -- by compelling Greece to lower its consumption so we don't have to lower ours. The question is, should it do its job?

by santiago on Tue May 25th, 2010 at 05:56:49 PM EST
[ Parent ]
Actually, I'm an American of Greek extraction, and also an EU citizen via Italy!!

"If Greek GDP, tax revenue, etc. were more than enough to sustain Greek pensions without IMF help, then there wouldn't be the crisis at all, would there?"

I think this is where we disagree. It's as though you believe that only social spending could get a nation in fiscal trouble.

by Upstate NY on Tue May 25th, 2010 at 06:09:35 PM EST
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No, military spending can also get a nation into fiscal trouble, but that isn't the problem in Greece right now.  

And actually, its not that any type of spending causes the trouble, but rather it is an inability of a country to resolve, internally, its own political disputes over resources that get countries into fiscal trouble. Given that one part of a polity wants more spending or less taxes, if it can't convince/compel another part of the same polity to pay for it it means the spending/tax policy is fiscally unsustainable and will eventually result in a crisis of some kind, either for that particular country, or, if the country is big enough, for others too.

by santiago on Wed May 26th, 2010 at 12:39:55 PM EST
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Economics is political. Nobody could have foreseen...

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 Wed May 26th, 2010 at 12:53:10 PM EST
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It may not be the problem in Greece right now, but I would wonder if it has been the problem all along.

We're talking 5% GDP in purchases and 2.3% GDP in weaponry service.

Over a decade, that's a big chunk of change.

by Upstate NY on Wed May 26th, 2010 at 01:19:41 PM EST
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This has nothing to do with being beneficent.  This is, as are all political conflicts, a raw fight over resources, so the question is, on which side are you in this particular conflict?

Given that a confederation (nevermind a federation) is not sustainable between countries of widely disparate wealth (at least not if it wishes to retain a semblance of democracy), I think I can safely say that I'm on the side of preserving, deepening and widening the European institutions and integration and greater transfers from richer EU members to the median Greek (just as I am on the side of greater EU transfers to the median (North) African resident).

"Old Europe" knew (or should have known) full well what we signed up for when it went for larger and deeper integration over the past two or three decades. Yes, the European Union could jettison the Mediterranean... If we want to have between ten and twenty politically and economically unstable third-world countries right in our back yard. Me, I have a whole slew of reasons to Not Want that, only some of which are humanitarian and altruistic in nature.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue May 25th, 2010 at 06:36:21 PM EST
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