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Thursday, December 1, 2011

When will the penny finally drop?

There is a view being spread by Greek economists that it is about time for the following penny to drop: this crisis has NOTHING to do with Greek unions, tax evasion or corruption.

I suggest that there is another penny which should drop on those Greek economists: there are several crises. The European debt crisis has indeed nothing to do with Greek unions, tax evasion, corruption, etc. In fact, that crisis was caused by EU-elites in my opinion (helped by clever bankers who managed to turn their own problems over to the EU-elites).

On the other hand, the crises of the Greek economy and state are exclusively home-made and there Greek unions, tax evasion and corruption play important roles but not the only roles. There is sufficient evidence that the state of law is not functioning well in Greece. There is all the evidence in the world that Greek public administration is light-years away from modernity. There is specific evidence that Greece is a lousy place to do business in (see the latest “Doing Business 2012” report of the World Bank/IFC).

With regard to the latter, only Greece and Greeks themselves can make a turn-around. Others can help (and the EU Task Force is an excellent example in my opinion) and Greece would be well advised to accept that help. But if Greece is to avoid a fall-back in living standard by a few decades; enormous hardships for large parts of the population and mass emigration of young people and other talent, then Greeks better get started soon to work on their own challenges!

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