Sunday August 31, 2014 Search
Weather | Athens
31o C
24o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Why the American recipe wont work here

By Alexis Papachelas

A considerable number of critics, including main left-wing opposition leader Alexis Tsipras, have argued that the best way to deal with Greeces financial crisis would be to introduce a US-style stimulus package in order to boost growth and pull the anemic economy out of recession.

To be sure, every wise-headed person in this country would like to see good things like these happen. We all want to see growth, and we all want to see an end to the repeated waves of wage cuts and tax hikes hitting the population.

However, there are two serious issues with this American recipe, as it were. The first is that before you can make the central state help the economy, you first have to come up with the necessary money. But we now know we cannot borrow any money. Also, we are not in the position to print money. The prospect of handouts from Northern European Union member states to their suffering counterparts in the South, and particularly to Greece, is an extremely unlikely scenario given the current political environment.

This basic misunderstanding in the past led a number of established economists on the center-left to the erroneous some would say disastrous advice they gave to former Greek Prime Minister George Papandreou before Greece signed up to the bailout agreement with the European Union and the International Monetary Fund.

So one point is that there can be no neo-Keynesian policy if there is no one out there to lend or give you money to spend.

A second issue is that there can be no a la carte approach to the American recipe. Adopting a neo-Keynesian policy comes hand in hand with a brutally deregulated labor market, flexible working hours, universities that cooperate closely with the private sector and so on.

The banks and big companies in which the state stepped in as a main shareholder in the United States continued to operate as private enterprises, not as public utilities.

In the US, are particularly in the Barack Obama administration, Greece has found an important ally who is trying to convince German Chancellor Angela Merkel to give up her insistence on austerity.

The truth however is that Obama and Merkel do not stand that far apart on the issue of how a capitalist economy should run these days.

The American recipe has two sides that are inextricably linked: There is, of course, the fiscal side, but there is also the reality of a fully deregulated real economy.

ekathimerini.com , Tuesday Jan 22, 2013 (22:24)  
Keeping an eye on international developments
A few good men
Greek quest for debt relief faces hurdles in Paris
Stifled dreams
Traveling on public transport in Athens gets cheaper
Commuters will pay 20 cents less for tickets allowing them to use all modes of public transportation in Athens as of Monday, though they will be valid for 70 minutes rather than 90 as was th...
Push made for cuts in education as merger scheme fails
Finance Ministry officials are pressing the Education Ministry to cut costs after it emerged that a program for merging university and technical college departments failed to save 68 million...
Inside News
Disappearing inflation heightens Draghi concerns
Eurozone inflation dropped to a fresh five-year low in August, data showed on Friday, something likely to concern the European Central Bank but not force it into immediate policy action. Con...
Ministry launches work experience program for unemployed graduates
The Labor, Social Security and Welfare Ministry is preparing to launch a work experience program for unemployed youths aged between 18 and 24, through private sector jobs, as part of a new a...
Inside Business
SOCCER
Tough draw for Greek sides in Europe League Greek stage
Following Thursday nights high, when all three Greek teams competing in the Europa League made it into the group stage of the competition, a harsh reality struck Friday as they found out wh...
JUDO
Greek judoka Iliadis triples up as Aguiar stuns Tcheumeo
Greek star Ilias Iliadis claimed his third world title in the under-90kg category in Chelyabinsk on Friday as Brazilian Mayra Aguiar and Colombian Yuri Alvear won gold in the womens under-7...
Inside Sports
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
RECENT NEWS
1. Traveling on public transport in Athens gets cheaper
2. Push made for cuts in education as merger scheme fails
3. Govt aims to curb measures, secure loans, allow tax relief
4. DIMAR chief Kouvelis hints about presidency
5. French expert says Crete crocodile in good health, aged 4-7
6. Tensions mar regional ity swearing-in ceremony
more news
Today
This Week
1. Keeping an eye on international developments
2. A few good men
3. Disappearing inflation heightens Draghi concerns
4. Two men drown off Crete coast in strong tides
5. Traveling on public transport in Athens gets cheaper
6. Push made for cuts in education as merger scheme fails
Today
This Week
1. Attack on gay couple in Athens leaves one man needing surgery
2. Purification rituals
3. The battle against progress
4. Thessaloniki mayor Boutaris sworn in wearing yellow star amid Golden Dawn protests
5. Strong undersea quake occurs off island of Milos, felt in Athens
6. Athens finalizes Paris talks goals
Find us ...
... on
Twitter
... on Facebook
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright 2014, H KAΘHMEPINH All Rights Reserved.