But the cost of economic reform has been staggering. 2013 will mark the sixth year of Greece's "Great Depression," during which the country has lost more than a quarter of its GDP. Although the United States' depression saw GDP decline 27 percent, it lasted for only four years (1929 to 1933) and the country returned to its pre-Depression GDP level only eight years later, surpassing it the year after. This kind of recovery will almost certainly not happen in Greece before 2020.The European Union under Frau Fritz' leadership has gone from being an organization of international solidarity that promotes democracy to one that enforces German nationalistic economic goals. With horrible results in places like Greece.
Moreover, Greece's depression dynamic is far worse than what the piecemeal policies prescribed by the "troika" -- the International Monetary Fund, the European Union, and the European Central Bank -- could possibly remedy. Personal income has been in free-fall since 2010, and it's unlikely that wages will rebound for many years. At the same time, the country's output has regressed to levels last seen in the 1990s -- before nearly two decades of European integration that pulled GDP per capita in Greece to within striking distance of the EU average. And as the country's debt sustainability is being put to the test, so is society's ability to withstand hardship.
And he warns, "Despite government statements to the contrary, things will likely get worse before they get better."
Tags: angela merkel, austerity economics, eu, euro, european union, greece