A bridge too far

Excertos de "A Money Too Far", por PAUL KRUGMAN. Publicado a 6 de Maio no The New York Times:


(...) "The only thing that could seriously reduce Greek pain would be an economic recovery, which would both generate higher revenues, reducing the need for spending cuts, and create jobs. If Greece had its own currency, it could try to engineer such a recovery by devaluing that currency, increasing its export competitiveness. But Greece is on the euro.


So how does this end? Logically, I see three ways Greece could stay on the euro.


First, Greek workers could redeem themselves through suffering, accepting large wage cuts that make Greece competitive enough to add jobs again. Second, the European Central Bank could engage in much more expansionary policy, among other things buying lots of government debt, and accepting — indeed welcoming — the resulting inflation; this would make adjustment in Greece and other troubled euro-zone nations much easier. Or third, Berlin could become to Athens what Washington is to Sacramento — that is, fiscally stronger European governments could offer their weaker neighbors enough aid to make the crisis bearable.


The trouble, of course, is that none of these alternatives seem politically plausible.


What remains seems unthinkable: Greece leaving the euro. But when you’ve ruled out everything else, that’s what’s left."