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Well, the Greek system is confusing if you're comparing it to other systems since the bureaucracy is so large. What is a pension? What is social security? I think social security in Greece is pretty meager, but the pensions aren't. I don't want to knock the bureaucracy too badly but if I had to make an analogy so that it could be better understood, consider the pensions to be social security, and consider some of the bureaucracy to be a form of workfare.

As for the rest, I think I made the case that there was no avoiding this fate even if Greece had not fudged statistics. For one, the Independent article argues that the new government deliberately overstated the deficit as a form of shock therapy for a recalcitrant public sector (if that's the case, then they should be as vilified as the previous government that fudged the statistics in the first place). Second, what is known as corruption in Greece is known as campaign finance in America. In Greece, bribes are illegal. In the USA, Mr. Corporation (he's an actual person you know, with human rights) can brazenly bribe an official in public. Regardless, there are a lot of problems. Part of the tax problem is that the rich in Greece move money overseas. Good luck solving that, Greece, and when you found the solution, please let the rest of us know. So, yes, Greece can cut the bureaucracy, and yes the tax system can be improved, and yes things could be done more transparently, BUT it's not going to help all that much. These problems are endemic to a country that is undiversified. The lack of diversity produces vertical economies that one negotiates with difficulty and trepidation. So, it would have happened anyway.

In one article, Mr. Almunia of Spain analyzes that Greece's situation is not all that atypical for some European nations that adopted the Euro. He says: "In these countries we have seen a constant loss of competitiveness ever since they joined the eurozone. The external financing needs are quite big."

You write:

Your construal of the EU reminds me of leftwing construals of the IMF and the Washington Consensus.  And I'm left a bit confused about who is imposing these hardships on Greece, the bankers & pseudo-investors with their speculative attacks, or the EU with its dictates and demands for more "austerity".  And then your thesis sentence suggests a conflation if not identification of both bankers and the EU with "global markets."

Yes.

I don't mean to be glib, but I can't not be. In the USA, Mr. Paulson was making policy less than a year ago. Today he's attacking Greece. When global markets are quite naturally dictating a convergence between third world labor and European labor, then what are the consequences? Is anyone recommending slowing the growth of free trade? When you have these convergences between let's say second world countries (Greece) and third world countries, how does a country like Greece maintain a safety net? I'll say this again: Mr. Paulson was making the key decisions about world finance less than a year ago. Today he is a raider.

by Upstate NY on Fri Feb 12th, 2010 at 09:49:58 AM EST
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