Europe must back away from Greek austerity cliff: Joseph Stiglitz
Joseph E. Stiglitz 4:14 p.m. EDT July 7, 2015
Will financial leaders find the courage to admit they were wrong?
Greek voters have overwhelmingly rejected the conditions Europe had imposed on them. Rightly so.
As I wrote before the referendum, "I can think of no depression, ever, that has been so deliberate and had such catastrophic consequences." Those conditions had led to a 25% decline in gross domestic product, a 28% unemployment rate and a youth unemployment rate almost twice that.
I don't believe Europe's leaders were seeking to punish Greece. They were just using bad models — evidenced by the enormous gap between what they thought would happen and what did happen. Europe and the International Monetary Fund predicted a fairly quick turnaround. The reality was deepening recession.
And it wasn't because Greece didn't do what it was supposed to; it was because it did. On the all-important macroeconomic front, Greece had the biggest and fastest fiscal consolidation among the advanced European economies in the aftermath of the global financial crisis, ruthlessly cutting back expenditures and raising new revenues.
The Greeks did not doall of the structural reforms that were asked of them. Some it should have done, such as doing a better job of collecting taxes from the rich. Others might make sense when the economy is on the road to recovery — but not now, in the middle of a great depression.
in full: http://www.usatoday.com/story/opinion/2015/07/07/greece-crisis-referendum-eu-austerity-column/29763347/