Tuesday, June 30, 2015
On Sunday 28th, Corby and 18 of his fellow Labour MPs, economists and campaigners signed a letter asking “David Cameron to support the organisation of a European conference to agree debt cancellation for Greece and other countries that need it (…)"
In his New York Times article The Awesome Gratuitousness of the Greek Crisis, Nobel prize-winning economist Paul Krugman refers to the Greek debt issue arguing: “How did this turn into a catastrophe that among other things saw debt soar to 170 percent of GDP despite savage austerity? The euro straitjacket, plus inadequately expansionary monetary policy within the eurozone, are the obvious culprits. But that, surely, is the deep question here. If Europe as currently organized can turn medium-sized fiscal failings into this kind of nightmare, the system is fundamentally unworkable.”
In Where did the Greek bailout money go?, economics correspondent for the Guardian and Observer, Phillip Inman, underlines that “Only a small fraction of the €240bn total bailout money Greece received in 2010 and 2012 found its way into the government’s coffers to soften the blow of the 2008 financial crash and fund reform programmes. Most of the money went to the banks that lent Greece funds before the crash. Unlike most of Europe, which ran up large budget deficits to protect pensioners and welfare recipients, Athens was then forced to dramatically reduce its deficit by squeezing pensions and cutting the minimum wage.”
Finally, looking at how the other EU countries are coping with their debt, in an article entitled European debt crisis: It's not just Greece that's drowning in debt, the Telegraph outlines that “13 EU nations saw their public debt accelerate at a faster rate than Greece’s over the period (2012-2014), while five have debts standing at over €1trn: Germany, Italy, the UK, France and Spain.”