Tuesday, July 14, 2015
New York Times Editorial On Greek Deal
European leaders made a deal with Greece that kicks the real problem down the road. The real problem is that Greece is in no position to pay down its debt. The fiscal austerity, which has been imposed upon the government, is assumed to provide a surplus that can be used to pay down its debt. That has been tried in Greece and the economy has shrunk in response. The deal provides funds to Greece that might enable it to service some of its loans that are currently due. It does nothing to reduce the debt burden that is beyond the capacity of its government to service. Moreover, the negotiations have laid bare much of the disharmony that exists in the European Union. National politics dictate the behavior of the political leaders that should make decisions that are best for the community as a whole. This raises a question about the viability of the fragile union which was a noble idea which may have been poorly implemented.