International Herald Tribune
November 9, 2011
Having been led down an ever-worsening spiral by the euro zone and its own government, Greece now faces two options, both of them painful: stay the course, or default and exit the monetary union.
Each presents difficulties and uncertainties, but in the long run there is no question that default, and a return to the drachma, offer the better chance of economic growth and employment.
Staying the course — which, despite the impending change of government, is still Greece’s plan — means continuing austerity and unemployment for the foreseeable future. The young and skilled will go abroad, leaving behind an older, less productive and needier population to endure a crushing debt. In the meantime, all important economic decisions will be made in Paris, Berlin and Brussels.
Default at Greece’s initiative, by contrast, would allow Greece to influence its destiny. The process would be largely governed by Greek law, instead of its being a matter of private discussions between the German chancellor and the French president, and would thus lead to a more sustainable debt burden.
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