Greece Is More Screwed Than You Realize

A blog about business and economics.
Feb. 16 2012 2:15 PM

Greece Is More Screwed Than You Realize

ATHENS, GREECE - FEBRUARY 16: A woman looks out from a window of a towerblock opposite Athens' Central Market in the Omonia district on February 16, 2012 in Athens, Greece.

Photo by Oli Scarff/Getty Images

The austerity mongers at the European Central Bank and in the German government have come in for a lot of criticism from Americans, particular of the progressive ilk, and it's mostly been deserved in my view. But on the specific subject of Greece, I think a lot of the critics are not grappling with the full extent of the problem. The best possible solution for the United States of America would be for the European Union to just treat Greece the way we treat Mississippi—as a not-so-big, not-so-important, not-very-functional geographical region that's full of poor people and needs open-ended transfer payments—but there are obvious reasons why this isn't on the table politically.

But once you accept that it's not on the table, then the questions get very hard. I highly recommend Daniel Davies' "Choose Your Own Adventure" on this. The key point is that even with full default, Greece is still insolvent and Greece is not a commodity exporter that gets a quick and obvious boost from a devaluation. 

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.



Smash and Grab

Will competitive Senate contests in Kansas and South Dakota lead to more late-breaking races in future elections?

Stop Panicking. America Is Now in Very Good Shape to Respond to the Ebola Crisis.

The 2014 Kansas City Royals Show the Value of Building a Mediocre Baseball Team

The GOP Won’t Win Any Black Votes With Its New “Willie Horton” Ad

Sleater-Kinney Was Once America’s Best Rock Band

Can it be again?


Forget Oculus Rift

This $25 cardboard box turns your phone into an incredibly fun virtual reality experience.

One of Putin’s Favorite Oligarchs Wants to Start an Orthodox Christian Fox News

These Companies in Japan Are More Than 1,000 Years Old

Trending News Channel
Oct. 20 2014 6:17 PM Watch Flashes of Lightning Created in a Lab  
  News & Politics
Oct. 20 2014 8:14 PM You Should Be Optimistic About Ebola Don’t panic. Here are all the signs that the U.S. is containing the disease.
Oct. 20 2014 7:23 PM Chipotle’s Magical Burrito Empire Keeps Growing, Might Be Slowing
Oct. 20 2014 3:16 PM The Catholic Church Is Changing, and Celibate Gays Are Leading the Way
  Double X
The XX Factor
Oct. 20 2014 6:17 PM I Am 25. I Don't Work at Facebook. My Doctors Want Me to Freeze My Eggs.
  Slate Plus
Tv Club
Oct. 20 2014 7:15 AM The Slate Doctor Who Podcast: Episode 9 A spoiler-filled discussion of "Flatline."
Brow Beat
Oct. 20 2014 9:13 PM The Smart, Talented, and Utterly Hilarious Leslie Jones Is SNL’s Newest Cast Member
Oct. 20 2014 11:36 PM Forget Oculus Rift This $25 cardboard box turns your phone into an incredibly fun virtual-reality experience.
  Health & Science
Medical Examiner
Oct. 20 2014 11:46 AM Is Anybody Watching My Do-Gooding? The difference between being a hero and being an altruist.
Sports Nut
Oct. 20 2014 5:09 PM Keepaway, on Three. Ready—Break! On his record-breaking touchdown pass, Peyton Manning couldn’t even leave the celebration to chance.