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Greece Debt
It's time for an enormous dose of tough love, so we can finally turn the most beautiful country in the world into a viable, democratic, modern society.
At the IMF and World Bank Group annual meetings in Tokyo, the European economic crisis was never off the agenda and often took centre stage in panel discussions. In the streets of Athens, Madrid, and in cities of other fiscal adjusting European states, there is a real belief that this new economic reality will result in a lost generation.
The idea of a united Europe was always a fable of course, as some of us warned, and it was compounded by a policy of not hearing, seeing, or speaking any evil about the European ideal that was bound to lead to tears.
This comparison should give the Greeks some hope -- after all, Argentine 10-year government bonds today are comparable to other emerging market economies and investors flocked back to Argentina. What did Argentina do and what can Greece learn from its experience?
Let 'em go. Let 'em make their own way until they change their minds and rejoin the club and adhere to existing rules. If that means another recession, or even a depression, better now than at some time in the future when damage will be even greater.
What Europe must do to save the euro is very similar to what Alexander Hamilton did in the United States in the 1790s to create the dollar. But the new American super-government was elected. The new European supergovernment won't be.
There is no rescuing Greece. If the country will not submit to regulations that people like Mark Carney would probably endorse, better that it not be propped up. Let it abandon the euro and revert to the drachma, until it comes to terms with itself.
It wasn't just a domestic credit crisis that brought that country to its knees -- it was a much more serious case of social corruption and mistrust, an ailment so deeply entrenched in their national psyche that it could only be wiped out with the help of a deep and painful crisis.
The popular discontent of the last few months is certainly understandable. What is less understandable is what seems to be a widespread belief among Greeks that the citizens are neither responsible nor have any obligation to bear the consequences for their government's overspending.
