Norbert Häring is an economist and journalist. Since 2002, he has covered finance and economics for the German business newspaper Handelsblatt. He is co-founder and co-director of the World Economics Association [12,000 economists worldwide] and co-editor of the World Economic Review magazine, both of which aim to promote diversified economic research methods. In 2014, he won the Keynes Economic Writing Award for his contribution to Handelsblatt.
NorbertHäring
FMi: What do you think of the current state of the Greek economy? For many years, the general view of Greece has been to continue to pay attention to the EU, especially the Eurozone. The Greek people were not asked about the EU and the euro and were not told.
NorbertHäring: Well, almost no one asked. If countries have to conduct a referendum on the euro and the treaty, then a big country tends to refuse. They are often voted until they are right, or their vote is completely ignored, just like the recent cooperation treaty between the Netherlands and the EU and Ukraine.
FM: Today, the trend of dual/parallel currency supporters is becoming more apparent, similar to Mr. Schauble's view of the matter. This involves Greece staying in the euro zone, paying debts with hard currency, and wages and pensions will be paid in this "parallel" currency. What do you think of this? Does this policy contradict the EU rules, which stipulate that only one currency, the euro, can be circulated in the euro zone?
NorbertHäring: The rules of the euro zone are already in all directions, I don't think it matters. However, for the Greeks, if they had to use hard currency to pay their debts and earn much less, it would be terrible. These debts cannot be repaid because the GDP of hard currency will be very low.
FM: Why do you want to follow such a currency [parallel] instead of a national currency with proportional sovereignty?
NH: Because creditor countries are much better. They maintain all power.
FM: Is monetary change sufficient to promote the economy in a globalized environment? What else do you need? How does the EU like Greece completely destroy how the economy recovers and is competitive in a globalized environment?
NH: That will be very difficult. Depreciation does not help restore the standard of living that Greets is used to. This will only help to reduce the employment rate. Without any help and debt relief, Greece's wages and living standards will fall to levels in countries such as Bulgaria and Romania. Greece no longer has an important industrial base, which may benefit a lot from currency devaluation. The whole problem of Greece, Spain and Portugal began when the EU was greatly expanded by many eastern countries and wages were much lower. They are mainly aimed at competition in Mediterranean countries.
FM: What do you mean by the current currency depreciation, the so-called internal depreciation of the euro or the devaluation of the Greek national currency return? How does it reduce unemployment? Attracting foreign investment by providing cheap labor?
NH: Internal depreciation is not a depreciation. This is just a euphemism for a wage reduction plan, or a downsizing process. Wages cuts have hurt domestic demand. This is a bad plan. Currency devaluation does not harm domestic demand, but without debt relief, it is still difficult to succeed, almost impossible.
FM: You have said that the Greek government has an obligation to allow creditors to provide incentives for payments without cash. In Greece, they promoted this idea [electronic payment] as a way to reduce tax evasion. On the other hand, because many companies are striving for funds, some economists use this idea as a way to increase the liquidity of the Greek market. What do you think of this?
There are many good reasons for the Greek government to switch from cash to digital payments, because the European Central Bank has been using cash to support them because they still strictly control cash because banks are particularly troubled in Greece. That's why Greece is a very good place to let the warriors oppose cash and create an example, and then they use them to impress the German population. They said, I did not say: "Look at all these countries have introduced all these rules in cash and put themselves at the forefront of the war on terrorism and tax evasion. We can't stay." At the European level, or for not being For the strangled Greek government, these specific arguments for the cash that applies today to Greece will not apply.
FM: The EU has become a territorially large territory, while southern European countries, especially Greece, have become modern colonies. Does the EU have cheap labor to compete in the Chinese economy? A plan that is further strengthened by uncontrolled immigrant groups?
NH: There is no EU plan, there are different national interests. I am not sure if anyone in Germany follows such a plan, but it looks a bit like they are at least not opposed to the South exiting the Eurozone, depreciating, and providing cheap raw materials, labor and immigration employers to the industrialized Nordic region. In the early 1940s, Albert O. Hirschman wrote a book describing the German trade policy of the 1930s. The description is different from what we are observing now, although of course there are no policies announced in this direction.
FM: It seems that Greece has fallen into a dead end. Do you think the restructuring economy will be better? Is it possible to build an economy in the euro zone? Can an unpopular country gain a competitive advantage in a globalized environment?
NH: I think the only hope is that many countries that have been plagued by the euro have left the euro zone. This means that countries will not be hit hard by the market and the EU, because they will inevitably leave the euro zone in their own time. This is just a very uncertain guess. I am very happy that I did not make this decision. It is difficult for weak countries to coordinate German orders, because if they try, they will immediately impose strict pressure. When Berlusconi and Papandreou tried, they were cancelled in a few weeks.
FM: Thanks to Norbert, your valuable insight!
Orignal From: Norbert Harvey and the Greek economy
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