“Greek experiment ended in failure. The only way out - way out of the EU”

What saved Greece from the crisis - it is a dead end, in Brussels it is obvious to all. Today there is a complete confusion with the proposals and counter-proposals to save the country, but it was interesting to hear a clear, black-and-white scenario of the crisis, which is described by one of the leading German economist, director of the Munich Institute for Economic Research “Ifo” Hans-Werner Sinn. In one interview, he presented his vision of the genesis of the Greek crisis and its vision of a solution that will put an end to a vicious circle, in which the Greeks go in for five years.
“Greece has become a typical victim of the” Dutch disease “,” - said Zinn. When the Dutch in the sixties discovered gas reserves on their own and quickly due to their rich, salary in the country grew faster than the performance of the economy, the industry was losing export competitiveness. The country was in a recession. Economists call this phenomenon the “Dutch disease.” Only the reduction of gas production and the agreement on slowing wage growth healed Netherlands.
Today, Greece’s moment of truth, when investors in 2009/10 blocked the flow of capital, and its model of increasing standard of living without any economic justification could no longer continue to exist. The country is too high wages and other costs more than just was not competitive.
But after five years of trying to save Greece, according to Zinn, Athens managed to slightly improve the competitiveness, eight percent, but to catch up, competitiveness would have to increase by at least another two times. In practice this is not possible.
Greece has become the de facto bankrupt even in 2010. “After five years, the economic condition of the country is getting worse,” - says German expert. In particular, because the salvation of the country becomes more and more expensive every day.
According to calculations, “Ifo” Greece has been invested 325 billion euros, is 182 percent of GDP in Greece. Moreover, in 2012, was carried out the largest debt relief in history, banks and other private lenders declined from more than one hundred billion euros that Greece was they should.
Zinn’s mantra to rescue Greece - increasing competitiveness. Out of the crisis can be achieved in three ways.
Original article

11 June 2015

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