Greek Crisis: Krugman on why the Euro is the problem

Patched up Euro


– Extract from article by Paul Krugman, NYT, 3 July 2015

It’s depressing thinking about Greece these days, so let’s talk about something else, O.K.? Let’s talk, for starters, about Finland, which couldn’t be more different from that corrupt, irresponsible country to the south. Finland is a model European citizen; it has honest government, sound finances and a solid credit rating, which lets it borrow money at incredibly low interest rates.

It’s also in the eighth year of a slump that has cut real gross domestic product per capita by 10 percent and shows no sign of ending. In fact, if it weren’t for the nightmare in southern Europe, the troubles facing the Finnish economy might well be seen as an epic disaster.

And Finland isn’t alone.

It’s part of an arc of economic decline that extends across northern Europe through Denmark — which isn’t on the euro, but is managing its money as if it were — to the Netherlands. All of these countries are, by the way, doing much worse than France, whose economy gets terrible press from journalists who hate its strong social safety net, but it has actually held up better than almost every other European nation except Germany.

And what about southern Europe outside Greece? . . .

Go to for full text and extensive and  lively reader commentary.

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For more on the Greek Crisis:

Thinking about Economy and Democracyhere.

* From Network Dispatches on the Greek Crisishere.

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About the editor:

Eric Britton
13, rue Pasteur. Courbevoie 92400 France

Bio: Founding editor of World Streets (1988), Eric Britton is an American political scientist, teacher, occasional consultant, and sustainability activist who has observed, learned, taught and worked on missions and advisory assignments on all continents. In the autumn of 2019, he committed his remaining life work to the challenges of aggressively countering climate change and specifically greenhouse gas emissions emanating from the mobility sector. He is not worried about running out of work. Further background and updates: @ericbritton | | #fekbritton | | and | Contact: | +336 508 80787 (Also WhatApp) | Skype: newmobility.)

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2 thoughts on “Greek Crisis: Krugman on why the Euro is the problem

  1. while these are all important points, they aren’t so much related to sustainable mobility, other than how the 2008 crash affected the ability to build or extend transit in certain cities and the cutting of regional railroad services to the Balkans. (Political reasons limit surface rail connections to Turkey.)

    FWIW, I do agree with multiple authors that (1) the Greek (and European) economy has been damaged by the anti-Keynesian austerity program, which has many negative elements as Paul Krugman has written about in many many many columns (2) but Greece still needs to reform elements of its government operations and improve its tax collection and revenues rec’d. Especially “clientelism” in how the government shapes much of the seemingly “for profit” economy through regulations and laws and the centralization of the economy around Athens, at the expense of other areas of the country.

    Note that the point made by Krugman concerning the inability of countries to do devaluation is a justification for European institutions in favor of the euro to provide “extranormal” supports including loan forgiveness, as a mitigation of the loss of access to certain types of policy responses to countries as a result of joining the euro.

    PLUS, it happens last year when writing a series of articles on European revitalization for an EU project here in the US, I wrote about Thessaloniki (

    In researching the city, I discovered how the economic integration of Eastern European countries post-fall of the Soviet Union, came in part at the expense of Greece, because their manufacturing industries became underpriced by former Eastern nations, and they lost a lot of their participation in that sector.

    While it’s true that Greece has benefited greatly from structural adjustment programs for regional economic development, at the European policy scale, this needs to be acknowledged as one of the EU effects on Greece that should continue to mitigated. It didn’t result from “poor leadership” by Greece officials, but from global and European-scale trends.

  2. Pingback: Greek Crisis Endgame: The abyss stares back | Sustainable Development, Economy & Democracy

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