It’s a thing.
The IMF continued: “There are…political economy lessons to be learned. Greece’s recent experience demonstrates the importance of spreading the burden of adjustment across different strata of society in order to build support for a program.
A spokesman for the EU commission said: “We fundamentally disagree… With hindsight we can go back and say in an ideal world what should have been done differently. The circumstances were what they were. I think the commission did its best in an unprecedented situation.”
ECB President Mario Draghi has entered the debate too, saying: “We tend to judge things that happened yesterday with today’s eyes. We tend to forget that when the discussions were taking place the situation was much, much worse.”
The failure to use monetary policy more aggressively has been a problem; the failure to address credit market problems has been a serious problem as well. Now, in 2013 five years into the crisis the ECB is beginning to talk about some kind of securities’ market and credit market intervention and about addressing the financing problems of small and medium enterprises. Too little too late, one more time.
Growth cannot come only from exports. The Eurozone as a whole is too big to be able to export its way out of the crisis. Every Eurozone economy is trying to export more to the other Eurozone economies; and that does not add up. Some of the impetus for growth is going to have to come from internal demand and that in turn means there has to be more fiscal policy support.
Economist Barry Eichengreen (above), via Crisis Observatory.