EU technocrats bleed Greece dry
Paul Krugman, The New York Times: “Europe’s selfstyled technocrats are like medieval doctors who insisted on bleeding their patients — and when their treatment made the patients sicker, demanded even more bleeding. A ‘yes’ vote in Greece would have condemned the country to years more of suffering under policies that haven’t worked and in fact, given the arithmetic, can’t work. ... The landslide victory of the ‘no’ side offers at least a chance for an escape from this trap.”
Megan McArdle, Bloomberg View: “I’m of the school that says that Greece never should have joined the euro in the first place. But undoing a mistake is rarely as easy as not making it in the first place. The path out of the euro is going to be a lot harder than the path that would have led away from it 20 years ago. Nonetheless, that seems to be the path that Greek voters have chosen.”
Edward Luce, Financial Times: “The U.S. has long urged Europe to write off some of Greece’s debts in exchange for restructuring — but to no avail. On Europe, the U.S. has been ... weak and right. Can it bring more of its leverage to bear? The answer ought to be yes. The U.S. has ... vital (economic and geopolitical) interests in preventing a Grexit.”
James Downie, The Washington Post: “Banks throughout Europe lent Greece billions of dollars despite the obvious risks. But instead of forcing investors to face the consequences of their terrible decisions, European governments lent Greece the money to pay back the banks, effectively saving them from their screw-ups. As long as the risk of lending to wasteful countries is socialized, banks will continue to do it even when the loans make no financial sense, which means that the Europe Union has effectively condemned itself to repeating this situation.”
Holman W. Jenkins Jr., The Wall Street Journal: “Many Greeks, thanks to the European Central Bank’s generosity, have been able to liberate their euros from the Greek banking system and would overnight become ‘drachma-rich,’ able to buy up domestic businesses and properties on the cheap. If Greece can govern itself (a tall order), leaving the euro could spark a boom that, in five years, countries stuck in the stagnant eurozone might envy. This has to be Europe’s secret fear.”