once again this author here had to read just one story by Business Insider: How A German Balance Sheet Recession Fueled The Euro Crisis in order to explode and write another blogpost. It was the last straw that broke the camel's back.
The other piece detected earlier was of course by Paul Krugman: Greece as Victim
The title of this blog entry of course a related to the movie: A Bridge Too Far which describes how a military operation intended to be a short cut to VE day , turned out to be too ambitious due to its mastermind's main driving motive behind it: personal ego ! So the plan was ambitious and right and could have worked, but the last bridge to get conquered in Arnhem was just driving the plan over the edge.
And the author here, although basically acknowledging that a functioning euro zone needs some measures of rebalancing such as free flow of labor force and also some measures of stimulants to repower growth in some of the regions effected most by economic decline (The main reason why states couldn't meet deficit criteria, so search for contributors to economic decline). And the author here can even follow Krugman's thesis for 'money recycling' in order to keep e.g. Germany's exports to EZ flowing, but after other countries with large current account deficits try their best to regain export strength by exporting to BRICS and other emerging markets !
Although latest piece of professor Krugman contains a small acknowledgement that there are some things that Greece is responsible for:
>>Yes, there are big failings in Greece’s economy, its politics and no doubt its society.<<professor Krugman goes on :
>>But those failings aren’t what caused the crisis that is tearing Greece apart, and threatens to spread across Europe.<<source: Greece as Victim
Extending the story to Greece is by the way also a contradiction to earlier estimates by most economists as well as Mr Krugman himself that the situation in Greece isn't to be compared to that in Ireland or Spain where both states had even better debt to GDP ratios than Germany prior to the Lehman event. When pointing out that 'one approach fits all' by some Germans is wrong they all got a point, but Mr Krugman is just trying to apply exactly such a simplified model and thus giving the misdiagnosis of those some credit again.
He even contradicts himself now in 'Greece as Victim' by saying:
>>No, the origins of this disaster lie farther north, in Brussels, Frankfurt and Berlin, where officials created a deeply — perhaps fatally — flawed monetary system, then compounded the problems of that system by substituting moralizing for analysis.<<What else is he doing now than pointing the finger of blame to Europe's North or more specifically to Germany ?
As with latest row concerning the successful transition of some Baltic states professor Krugman recently tries to eliminate all 'disturbing other evidence' to lift his views from being very accurate for some developments to a higher level: 'explaining all'. Perhaps driven by the same ambition than those masters of physics looking for the ultimate formula to explain it all !
In my humble opinion economics should detect all or at least the greatest mistakes in an economy. Not for gaining personal glory but to help economies in trouble to perform better or those currently performing quite well to prevent them falling into recession.
In Greece it seems professor Krugman likes to ignore those rankings of world wide corruption or those of countries with most obstacles to establish an enterprise as well as those of blowing up Greek public sector employees . (=> Why in Greece everything is blocked since years Die Welt (ger)) Or those reports of Greek government hiring experts in the early 2000s to cover up the real deficit numbers in order to sneak in the monetary union or wide spread fraud in Greek's social benefit system etc etc.
By oversimplifying Greece's problems as being merely a result of too relaxed lending policies to the country he contributes to letting those really responsible for the Greek decline to the point of becoming a 'failed state' off the hook and prevents the country of getting rid of those elements who still obstruct and prevent a change to the better. Mr Krugman likes the provocation so i dare to ask him if Germany , ECB , whoever... is also responsible for misery in Somalia, or Iraq or Afghanistan ?
After the author expressed his anger about imprecise analysis he found this piece much more to his liking:
Jean Pisani-Ferry:Who lost Greece?