The upside of the credit crisis

The global financial crisis carries trouble as well as hope for Greece. The negative fallout is plain to see, as the credit crunch inevitably exerts added pressure on the local economy. On a more upbeat note, however, the crisis carries hope about the things that we must change at home. The fact that Greece’s real economy suffers more than its European counterparts’ reveals its structural shortcomings, which this and previous governments have shied away from facing. If the conservative administration does not remedy these defects when things are running smoothly, then at times of crisis these weaknesses are bound to bring the domestic economy to its knees. The meltdown must prompt Greek policy makers into thought and action. We must examine why the cost of borrowing has gone up in Greece compared to its EU peers and reduce the differential. Bold reforms to trim debts and deficits were useful when the international economy was going well. But now they are imperative, as every euro counts and the debt is becoming unbearable.