The Idea Department

Once again,Greeceis on the brink of collapse and is making the headlines almost everyday. Despite the fact that the country’s GDP only represents 0.5% of world output and that its debt represents less than 1% of global debt, its fall has had huge impacts on the economy. A selection of articles published by Project Syndicate explain exactly why that is the case.

First, the collapse of Greecehas defied all the hopes that were put in the European Union and the Maastrichttreaty. Indeed, Just as George Sorros explains it in “Europe needs a plan B”, http://www.project-syndicate.org/commentary/soros68/English the Greek crisis has proven that European integration has turned into disintegration, and that the two speedsEurope that has emerged is driving member countries further apart. In addition, it has also revealed just how deep the discrepancies between member countries are and has shed lights on the deficiencies of the euro

Kemal Dervis, in his article “Small Economies, Big Problems, and Global Interdependence” http://www.project-syndicate.org/commentary/dervis4/English proves how much is at stake with Greece’s fall by highlighting the fear of contagion to other European countries (the PIGS) in case Greece falls and the impact it will have on foreign exchange markets and by illustrating the harmful role that Greek derivatives and CBDs could have on the overall global economy.

Robert Skidelsky on the other side picks up on the moral crisis that the Greek crisis has brought about by asking a daunting question “Is the social value of making finance cheap worth the days of reckoning for stricken debtors?” in his article on “ the battle of the bonds. http://www.project-syndicate.org/commentary/skidelsky43/English 

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