America's Greece: Fixing Puerto Rico Could Provide Answers for Europe

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http://www.spiegel.de/international/world/greece-essay-by-barry-eichengreen-a-1042609.html



The Greek crisis could have been stopped years ago if European politicians hadn't been so stubborn. They should have followed the example set by the United States in dealing with Puerto Rico's problems.

America's Greece: Fixing Puerto Rico Could Provide Answers for Europe
An Essay By Barry Eichengreen
July 08, 2015 – 10:58 AM

In Puerto Rico, the United States now has its own version of Greece. The territory's debts are unsustainable. Public employment and pensions are swollen. Work in the underground economy, where taxes are evaded, is rife. Modern infrastructure is lacking. The commonwealth exports little for an economy of its size. Many of the best and brightest have decamped in search of better opportunities. Since these problems were a long time in the making, fixing them will take years.

So Puerto Rico is, in a literal sense, Greece in another guise. But can you imagine the United States putting all other domestic and foreign policies on hold while it attempts to resolve the crisis? The idea is ludicrous. But that is precisely what Europe has done.

Europe has been unable to broker a comprehensive agreement on how to handle its Mediterranean boat-people problem. It has been unable to effectively counter Vladimir Putin's incursions in Ukraine and veiled threats to Eastern Europe, while watching Athens drawing closer to Moscow's orbit. It has been unable to mount a coherent response and even pay sustained attention to events in Syria.

Part of the problem is that European leaders and their publics are preoccupied and exhausted by the endless sequence of euro-crisis briefings and late-night emergency meetings. To be sure, the Greek government has been difficult and erratic. But European leaders, by their own obstinacy, have helped to create this problem.