Comments on: PANDYA: Were the Euroskeptics Right?

By: Paul Marin

Paul Marin — Sat, 20 Feb 2010 22:17:49 +0000

Here is a great read on the Greek Crisis from Foreign Policy: http://www.foreignpolicy.com/articles/2010/02/19/greek_disease

I thought you might be interested.

By: Om

Om — Thu, 18 Feb 2010 20:48:45 +0000

Yeah, Greek military spending is out of control. That should probably be the first to go but eventually they will be forced to make some tough decisions on public spending.

By: Paul Marin

Paul Marin — Wed, 17 Feb 2010 23:19:05 +0000

From a EU perspective, it is a big balancing act concerning Greece. I agree that Greece needs a haircut (and so do the other PIGS) and I also agree that the EU should not set a precedent of bailing out defaulting states. However, kicking Greece out of the Eurozone could have some wild and unforseen economic implications throughout the eurozone. And nobody wants that. I would prefer the IMF route of a bailout for Greece with very strident conditions. And if Greek politicians don’t want to make hard choices on public sector wages they can start selling off some of the Greek Air Force — a country like Greece does not really need 150+ F16s and shouldn’t buy new EuroFighters. If the Greeks pursue balance of power politics vis a vis the Turks in the Aegean, they are completely idiotic. First they would lose the arms race as Turkey manufactures F-16s at home. And second, the Turks would never flex their military muscle at a EU and fellow NATO country given that they want to join the EU…

By: Tim

Tim — Wed, 17 Feb 2010 17:37:30 +0000

This is a really great post. I actually think that the EU is ultimately doomed to failure for many of the reasons expressed here.

This is one of the instances where I disagree with the Cato Institute. Monetary sovereignty is absolutely essential.

By: Om

Om — Tue, 16 Feb 2010 18:35:16 +0000

You are absolutely right about the Lisbon treaty restricting bailouts except for in certain circumstances, but those “certain circumstances” loopholes can be exploited. Also, the Lisbon treaty was not meant to be a suicide pact. The reality of an insolvent state is something that the EU will probably deal with, even though it might cause some discord. But I absolutely agree with you on the point that Greece needs a restructuring plan that involves massive spending cuts and EU oversight.

By: Amanda C

Amanda C — Tue, 16 Feb 2010 18:11:00 +0000

You should rephrase your section about other EU members possibly bailing out Greece. In the Lisbon Treaty, ratified in December, EU countries are not allowed to bail out fellow members. Anything done to help out Greece would have to be done through other means. What Greece really needs is a strict restructuring program that, if they do not follow, then leads to consequences.