The other side of the coin
True to form, public opinion has spotted another enemy. What is to blame for rising inflation? The answer is easy: the euro. What is responsible for falling exports and rocky times for tourism? The euro. Soon we’ll be blaming the euro for everything that inconveniences and enrages us. Let’s suppose there is no euro and that we have returned to the old drachma. How would life be today? Just as it was before. The drachma would be in a controlled slide – except in periods of tension and crisis, when it would come under heavy pressure. The government would view a sliding currency as an acceptable means of pepping up exports in exchange for high inflation. Greece’s inflation was typically three times the EU average, which everyone accepted as an unavoidable (and imported) evil. In fact, the euro does not create inflation but rather reveals it, as with a small bottle of water that used to cost 100 drachmas but suddenly went up to 50 cents, or 170 drachmas. The introduction of the euro was an opportunity for easy profiteering, but it was hardly alone to blame for inflation in a country long inured to rising costs. The euro ensures stability in the economy, protecting it from external shocks; it also allows the country to develop in a low interest rate environment. Even so, it ensures that living standards can no longer be raised painlessly. Acceptance of the single currency requires governments to concede certain powers and obliges us to take specific steps: reducing state expenditure and increasing revenues; boosting exports by offering competitive prices based on lower business costs; and improving living standards by creating jobs. The euro does not create new problems, but reveals the old ones in such a way that we can no longer sweep them under the carpet. The euro has forced us to face reality, which is something we tend to avoid.
