FXStreet (Guatemala) – In respect of the Greek saga, analysts at Brown Brothers Harriman explained that there are issues that many, including Varoufakis, are still struggling to get their heads around.
Key Quotes:
“First, there is a clear link between solvency and sovereignty. The more insolvent a country is, the less sovereignty they have. Greece is insolvent. It has lost much of its sovereignty. When Varoufakis and others complain about the encroachments into Greek sovereignty, it shows they fail to appreciate this critical link. Greece is being asked to do things that other countries have a choice about, like whether shops should be open on Sunday, or when to pass the Bank Recovery and Resolution Directive. It also has to accept EU officials embedded in numerous ministries.
Second, Varoufakis and his many sympathizers fail to appreciate that not all of Greece’s problems can be blamed on Germany, the creditors, or the euro. Similarly, many of Varoufakis’ critics fail to recognize any role whatsoever of external factors. The role of the oligarchy in Greece, or the prevalence of rent-seeking behavior and tax avoidance cannot simply be dismissed as a German plot. Varoufakis and the Syriza fundis talked tough but did nothing to address them even in the most preliminary way.
There are numerous measures that Greece can take to make it easier to cope with the structural rigidities posed by the surplus countries in EMU failing to offset the restrictive course of the deficit countries. Ultimately, creating the conditions for sustained growth arguably will do more to help Greece than all the complaining about EMU’s systemic defects or the creditors’ hypocrisies.”
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