I just watched an interesting talk by Yanis Varoufakis on the topic of the European Monetary Union (EMU).
I part ways with him regarding the best way forward. (I would prefer a gradual dissolution of the EMU with the introduction of parallel currencies as a first step.) … But regarding the “crisis management” by the European establishment, in particular Angela Merkel, I completely agree: it has been utter and complete idiocy.
First, bad debt held by private investors was shifted to European taxpayers (why would anybody think this was a good idea?), then readjustment of wages and prices between Germany and the South was made unnecessarily costly by German austerity.
Expansionary fiscal policy in Germany, driving up wages and prices in Germany, would have reduced the amount of “internal devaluation” Greece and other countries had to go through. Instead, Germany was even running budget surpluses .
Today, after a decade of economic crisis, unemployment in Greece is still above 20%.