They could neither fix the problem with the policy tools a country with its own currency would have, nor did they have the automatic support from a central budget a region or state of a country would have.
replyGreece could have fixed their problems by cutting spending and collecting more taxes (not necessarily higher taxes, but actually collecting the taxes that were owed). Currency inflation was never necessary.
replyI think they did? At the cost of very slow recovery, which I think is the problem with austerity measures.
replyAusterity is not a "problem", it's simply the only remaining option when you run out of other people's money.
replyCountries can inflate their debt away at the cost of eroding savings and new borrowing becoming more expensive, no?
replyhttps://www.statbureau.org/en/greece/inflation-charts-yearly
Countries can't push that approach very far before new borrowing doesn't just become more expensive, it becomes effectively impossible.
reply> So you've described Greece as a bunch of scheming petulant children.
replyCan you quote where I did that, please?
No, the Greeks were cool and calculating, turning an inflating fake fiat currency into hard assets like real estate, while not working or producing anything.
replyThe introduction of the Euro was the start signal for each country to try to inflate as much as they can for their own benefit - since the first inflator gets the best value out of the currency. Idiots are left holding paper currency worth less and less each day. Having to work harder and harder in a never ending spiral.
The Euro had a much better set of inflation controls than most of the previous European currencies. Especially the lire.
replyAbsolutely. But when you inflate your own currency, it is you who have to deal with the consequences. If you inflate everyone's currency you reap all the benefits and leave everybody else with the burden of the consequences.
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