Greek Capital Controls

[Saz]

I never said risk wasn't inherent. I'm saying they calculated the risk incorrectly, and more importantly, it was calculated in a manner that was negligent or foolish even at the time it was done. Risk is inherent but it's still a stupid decision to 1)incorrectly evaluate the risk when the information to properly do so was available 2) pursue a course of action that may not be within your risk tolerance. I know you might just think I'm being contrarian but this issue matters for any similar future endeavors. This is not just a case of an ambitious program gone wrong, this is a case of poor planing, poor execution, and over exuberance. To say no one knew any better at the time this was done is simply not true. Plenty of people knew better, including the leaders themselves, and yet they chose to ignore obvious issues.

I think it's funatmentally incorrect to just look at this and say bad luck, or the risk didn't man out. There were so many failures at each step of the way this problem was one of European creation that could have been avoided, not some inherent risk that they rational chose to gamble on.

[Dylan]

What was the alternative approach? Wait for the members to reach agreement on assignment of fiscal policy to the ECB or a similar entity prior to agreeing to adopt the same currency?

Thus reducing the odds of success from reasonable to zero.

[Saz]

[Saz]

Greece blew it's IMF payment yesterday. Referendum sunday. Greeks should just put themselves out of their misery.

[Dylan]

[Saz]

Eh i'm not going to go digging around for number from the mid 90's but the vast majority of countries, including germany, were not meeting the requirements. Had the countries been serious about the limits set out in Maaastrict the Euro would have been delayed by a few years at least, while a critical mass of members met the requirements. Basically all these countries agreed to a set of rules in theory that basically none of the countries followed. But if they knew, as france did, that they had no intention of meeting the SGP guidelines anytime soon, then embarking on the Euro was foolish.

Here is the debt to GDP ratio mandated by the Stability and Growth PAct that lays out the fiscal guidelines. As you can see, most eurozone members are still not in compliance. It get's very hard to selectively enforce such rules aginast the greece's and portugals of the EU but not the France's and Germany's.