Greece, the Eurozone, and the Debt Crisis

The text of this lecture reviews the origins and nature of the Greek crisis. While the loss of competitiveness that the country has experienced ever since accession to the monetary union is a central force in its current condition, there have been other also troublesome developments, such as slowdown in productivity growth, overconsumption, the lack of productive investments, a continuing tendency for the public sector to assume the debt of insolvent public corporations and inability of the country to modernize while experiencing increasing inequality and corruption. However, there are also issues with the design of the Eurozone itself, which are contributing to Greece’s having become a particularly vulnerable member of the Eurozone. The Greek experience is discerned in the experiences of other Eurozone countries.

A full set of slides is here: http://greekeconomistsforreform.com/wp-content/uploads/Ioannides-Presentation-Fletcher-Oct-28-11.pdf

 

About Y_Ioannides

Tufts University

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One Response to Greece, the Eurozone, and the Debt Crisis

  1. Nalliah Thayabharan says:

    Germany was hopelessly broke when Adolf Hitler came to power in 1933 . The Treaty of Versailles (le Traité de Versailles) had imposed crushing reparations on the German people, demanding that Germans repay every nation’s costs of the war. These costs totaled three times the value of all the property in Germany.
    Private currency speculators caused the German currency to plummet, precipitating one of the worst runaway inflations in modern times. A wheelbarrow full of 100 billion-mark banknotes could not buy a loaf of bread. The national treasury was empty. Countless homes and farms were lost to speculators and to private Zionist controlled banks. Germans lived in hovels. They were starving.
    Nothing like this had ever happened before – the total destruction of the national currency – German mark, plus the wiping out of German’s savings and businesses. On top of this came a global depression. Germany had no choice but to succumb to debt slavery under international bankers until 1933, when the National Socialists came to power. At that point the German government thwarted the international bankers by issuing its own money. International bankers responded by declaring a global boycott against Germany.
    Adolf Hitler began a national credit program by devising a plan of public works that included flood control, repair of public buildings and private residences, and construction of new roads, bridges, canals, and port facilities. All these were paid for with money that no longer came from the private international bankers.
    The projected cost of these various programs was fixed at one billion units of the national currency. To pay for this, the German government (not the international bankers) issued bills of exchange, called Labor Treasury Certificates. In this way the National Socialists put millions of people to work, and paid them with Treasury Certificates.
    Under the National Socialists, Germany’s money wasn’t backed by gold which was owned by the international bankers. It was essentially a receipt for labor and materials delivered to the government. Adolf Hitler said, “For every mark issued, we required the equivalent of a mark’s worth of work done, or goods produced.” The government paid workers in Certificates. Workers spent those Certificates on other goods and services, thus creating more jobs for more people. In this way the German people climbed out of the crushing debt imposed on them by the international bankers.
    Within two years, the unemployment problem in Germany had been solved, and Germany was back on its feet. It had a solid, stable currency, with no debt, and no inflation, at a time when millions of people in the United States and other Western countries controlled by international bankers were still out of work. Within five years, Germany went from the poorest nation in Europe to the richest.
    Germany even managed to restore foreign trade, despite the international bankers’ denial of foreign credit to Germany, and despite the global boycott. Germany succeeded in this by exchanging equipment and commodities directly with other countries, using a barter system that cut the private bankers out of the picture. Germany flourished, since barter eliminates national debt and trade deficits. Today Venezuela does the same thing today when it trades oil for commodities, plus medical help, and so on.

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