Instead of investing billions of dollars for a new city every four years, we could create a permanent Olympics city, with facilities and athlete housing. Though any city could take this one, I’d prefer a small island with few inhabitants. This way, we’d avoid the disruption and social dislocation and eliminate the often-massive costs to citizens in the host cities. It would also serve our sportsmen and sportswomen. Younger athletes, especially from the less wealthy parts of the world, could practice there for years. The site could become an international convention center of sorts, serving as a gathering hub for arts and culture as well as sports.
.. The very recent Greek crisis provides an opportunity. The Greeks are in hock to around $271 billion to all official lenders. The government in Athens has agreed to transfer state assets of $80 billion to an independent fund. How about selling a permanent site in Greece for the Summer Olympics?
Why the Greek Deal Will Work
Finally, Germany, Spain, Italy, and several northern European countries required, for domestic political reasons, a ritual humiliation of radical Greek politicians and voters who openly defied EU institutions and austerity demands. Having achieved this, EU leaders have no further reason to impose austerity on Greece or strictly enforce the terms of the latest bailout. Instead, they have every incentive to demonstrate the success of their “tough love” policies by easing austerity to accelerate economic growth, not only in Greece but throughout the eurozone.
.. This raises a key issue that the Tsipras government and many others misunderstood throughout the Greek crisis: the role of constructive hypocrisy in Europe’s political economy. Gaps between public statements and private intentions open up in all political systems, but these become huge in a complex multinational structure like the EU. On paper, the Greek bailout will impose a fiscal tightening, thereby aggravating the country’s economic slump. In practice, however, the budget targets will surely be allowed to slip, provided the government carries out its promises on privatization, labor markets, and pension reform.
How Germany Prevailed in the Greek Bailout
“The belief that the euro can be used to bring about the economic ‘re-education’ of Europe’s south will prove a dangerous fallacy — and not just in Greece,” Joschka Fischer, a left-leaning former German foreign minister,wrote this week.
.. Meanwhile, Mr. Schäuble, Ms. Merkel’s finance minister, is a hard-nosed politician who was paralyzed from the chest down by an assassination attempt in 1990, and he is more popular in Germany (70 percent approval in a recent ARD-DeutschlandTrend poll) even than Ms. Merkel (67 percent).
.. “Mrs. Merkel has behaved in an incredibly modest way,” said Marcel Fratscher, president of the D.I.W. Berlin think tank. “You couldn’t find her saying a bad word about Greece or anything populist, and even though German public opinion was very strongly in favor of a Grexit and no bailout deal,” he said, using shorthand for a Greek exit from the eurozone, “they secured a deal with no Grexit.”
Greece, the Sacrificial Lamb
None of this makes sense even from the perspective of the creditors. It’s like a 19th-century debtors’ prison. Just as imprisoned debtors could not make the income to repay, the deepening depression in Greece will make it less and less able to repay.
.. Consider the case of milk. Greeks enjoy their fresh milk, produced locally and delivered quickly. But Dutch and other European milk producers would like to increase sales by having their milk, transported over long distances and far less fresh, appear to be just as fresh as the local product. In 2014 the troika forced Greece to drop the label “fresh” on its truly fresh milk and extend allowable shelf life. Now it is demanding the removal of the five-day shelf-life rule for pasteurized milk altogether. Under these conditions, large-scale producers believe they can trounce Greece’s small-scale producers.
.. One underlying problem in Greece, in both its economy and its politics, is the role of a group of wealthy people who control key sectors, including banks and the media, collectively referred to as the Greek oligarchs. They are the ones who resisted the changes that George Papandreou, the former prime minister, tried to introduce to increase transparency and to force greater compliance with a more progressive tax structure. The important reforms that would curb the Greek oligarchs are largely left off the agenda — not a surprise since the troika has at times in the past seemed to have been on their side.
.. Normally, the I.M.F. warns of the dangers of high taxation. Yet in Greece, the troika has insisted on high effective tax rates even at very low income levels. All recent Greek governments have recognized the importance of increasing tax revenues, but mistaken tax policy can help destroy an economy. In an economy where the financial system is not functioning well, where small- and medium-size enterprises can’t get access to credit, the troika is demanding that Greek firms, including mom and pop stores, pay all of their taxes ahead of time, at the beginning of the year, before they have earned it, before they even know what their income is going to be. The requirement is intended to reduce tax evasion, but in the circumstances in which Greece finds itself, it destroys small business and increases resentment of both the government and the troika.
.. When a country is down, there is all manner of mischief that can be done.
.. But these policy debates are really about ideology and power.