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Greece needs to leave the Eurozone to conduct economic planning within its jurisdiction ONLY IF it feels the need to conduct a local expansionary monetary policy. There are plenty of U.S. states (almost all) that operate under balanced budget rules, and Greece could do the same...
by asdf on Tue Feb 14th, 2012 at 05:47:47 PM EST
[ Parent ]
Greece requires its own money for expansionary fiscal policy more than for less contractionary monetary policy.

The economic planning expected of US states does not include employer of last resort functions. That is a federal obligation. Since the federal level in the EU does not want to assume this function, and since Greece has no means by which it can force the EU to do so, Greece needs its own money.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 05:54:33 PM EST
[ Parent ]
I really wonder what they are going to do.

The gov't never provided any services.

There is something to be said about tourism in euros. They are making more money than ever before. The product is being upgraded slowly.

But of course manufacturing suffers.

I simply wonder if Greece will become a neoliberal wasteland within the eurozone. In terms of gov't services, they are already threadbare. They may simply decide to continue on in this fashion.

by Upstate NY on Tue Feb 14th, 2012 at 06:30:22 PM EST
[ Parent ]
One of the big lies in this sorry mess is that of the lazy Southerners with their lavish welfare states. Italy, Spain, Portugal and Greece were, for the better part of the 20th century, right-wing regimes. They did not partake of the "social democratic" advances of post-war Europe like their northern neighbours did. As a result there is a dearth of capital accumulation, and a skimpy social safety net.

Daniel Cohn Bendit said it best and early (may 2010): one doesn't legislate into existence the level of social cohesion that Northern Europe enjoys



tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Tue Feb 14th, 2012 at 06:36:54 PM EST
[ Parent ]
But does it need to leave the Euro? Any reason a country sized Wörgl wouldn't work? Except for ECB interference of course.
by generic on Tue Feb 14th, 2012 at 07:08:04 PM EST
[ Parent ]
A country-sized Wörgl is leaving the Euro. De facto if not de jure.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 07:18:14 PM EST
[ Parent ]
But there is a big political difference between de facto and de jure in this case, no?

The road of excess leads to the palace of wisdom - William Blake
by talos (mihalis at gmail dot com) on Tue Feb 14th, 2012 at 07:23:16 PM EST
[ Parent ]
At this point? I don't think so.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 07:26:56 PM EST
[ Parent ]
Greece doing Wörgl would probably get Greece kicked out. From a political framing point that might be an advantage to leaving, but it is doubtful considering where media powers sits.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Wed Feb 15th, 2012 at 05:00:11 AM EST
[ Parent ]
De jure, Greece can't be kicked out. And it can't leave, unless it also leaves the EU. But this is just lawyer talk. Too bad Brussels/Frankfurt is legalist heaven.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Feb 16th, 2012 at 08:02:05 PM EST
[ Parent ]
Too bad that, 'in legalist heaven', the lawyers can't figure out how to deal with anyone who seriously breaks the system, or even that it has been broken. Completely comparable to the bought and paid for US Congress.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Feb 17th, 2012 at 02:20:42 PM EST
[ Parent ]
If the circulation of Schillings stopped completely I never heard of it. Why should this time be different?
by generic on Tue Feb 14th, 2012 at 07:53:49 PM EST
[ Parent ]
But the Central Bank banned it and the Supreme Court of Austria declared it a criminal offense to issue more.

So says this book: The making of national money: territorial currencies in historical perspective - Eric Helleiner - Google Books

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Wed Feb 15th, 2012 at 05:08:37 AM EST
[ Parent ]
Thanks for the link. Bookmarked!

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Feb 15th, 2012 at 12:28:06 PM EST
[ Parent ]
If by "employer of last resort" you are talking about unemployment insurance, the states do indeed carry that responsibility. Well, it is a joint project strongly encouraged and partially funded by the federal government, but mostly it's a state function...
by asdf on Tue Feb 14th, 2012 at 09:52:39 PM EST
[ Parent ]
No, I'm talking about overall macroeconomic stabilisation. Or, to put it another way: Who prints and spends during a recession.

The federal government does.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Feb 15th, 2012 at 03:15:45 AM EST
[ Parent ]

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