The parallels with Argentina are there. A broken banking system, an unsustainable debt, and the need to restore and enhance international competitiveness, but there are reasons to think that reintroduction of the drachma and devaluation would do less for Greece than devaluation did for Argentina. Greece is less open, it exports less.

Barry Eichengreen

Categorized in : Business

The consequences of a collapse would not be pretty. Whichever country precipitated it - Germany by threatening to abandon the euro, or Greece or Spain by actually doing so - would trigger economic chaos and incur its neighbours' wrath.

Barry Eichengreen

spain wrath country

More than the Big Mac, Coca Cola, or Levi's 501 jeans, the dollar is surely the United States' signature export.

Barry Eichengreen

jeans signatures united-states

The 1992 crisis proved that the existing system was unstable. Not moving forward to the euro would have set up Europe for even more disruptive crises.

Barry Eichengreen

unstable europe moving

Southern Europe has not done enough to enhance its competitiveness, while northern Europe has not done enough to boost demand. Debt burdens remain crushing, and Europe's economy remains unable to grow.

Barry Eichengreen

crush southern europe

Political union means transferring the prerogatives of national legislatures to the European parliament, which would then decide how to structure Europe's fiscal, banking, and monetary union.

Barry Eichengreen

political europe mean

For those unfortunate enough to experience it, long-term unemployment - now, as in the 1930s - is a tragedy. And, for society as a whole, there is the danger that the productive capacity of a significant portion of the labour force will be impaired.

Barry Eichengreen

unemployment tragedy long

As for the single market, the E.U.'s landmark achievement, there is no question that a euro zone breakup would severely disrupt its operation in the short run.

Barry Eichengreen

achievement breakup running

The 24% unemployment reached at the depths of the Great Depressio... by Barry Eichengreen

The 24% unemployment reached at the depths of the Great Depression was no picnic.

Barry Eichengreen

picnics unemployment depth

Across the continent, political divisions are deepening. For all of these reasons, the specter of a euro zone collapse has not been dispatched.

Barry Eichengreen

division political reason

While holding the eurozone together will be costly and difficult and painful for the politicians, breaking it up will be even more costly and more difficult.

Barry Eichengreen

politician painful together

Why was there so much work-sharing in the 1930s? One reason is that government pushed for it. In his memoirs, President Herbert Hoover estimated that as many as two million workers avoided unemployment as a result of his efforts to promote work-sharing.

Barry Eichengreen

effort government two

Every day it seems more likely that we are destined - or should one say doomed? - to replay the disastrous economic history of the 1930s.

Barry Eichengreen

every-day say day history

This crisis of long-term unemployment is having a profoundly damaging impact on the lives of those bearing the brunt of it. We know this thanks to a series of careful studies of the problem conducted in the depths of the 1930s Great Depression.

Barry Eichengreen

great thanks problem depression