Europe is a contract-based community of states that permanently agree on mutually beneficial rules, with the finest privilege (for those who do economically well enough) being membership in the euro club.
.. Greece made considerable progress on closing its deficits. Between 2010 and 2014 it implemented spending cuts virtually unprecedented in a developed country. Those cuts meant hardship to many in Greece. But they began to pay off: By the end of 2014, Greece was spending less than it was collecting in taxes (if you leave aside interest payments).
.. As childish as it sounds, Mr. Tsipras and his fellow fighters are still raging against the triviality that you can spend only what you earn.
.. over the past five months Europe has heard way too much from his government about the impossibility of further cuts and way too little about possible sources of new income.
.. To many Northern Europeans, both the Greek government and the Greek people have finally demonstrated that, according to them, no given rule is ever fixed. This mentality is not just alien to the rather Protestant northerners. It also holds a danger for Europe’s political fabric.
.. Unemployment in Italy, Portugal and Spain remains high, and anti-European Union populists are on the rise in all three. The conclusion that people there could draw from a third bailout program for Greece would almost certainly be that voting for radical parties and obstructive behavior are eventually rewarded. You just have to be cocky enough.
.. Europe could end up with a calamitous north-south divide along camps known from the Cold War: the “socialists” there, the “capitalists” here.
.. Yes, Greece still must be rescued. But no, it need not be rescued within the eurozone.
Germany, in fact, understands moral hazard backward. The standard definition refers to lenders; covering their losses will encourage them to make bad loans again. And that is, let us not forget, exactly what Europe’s creditors have done. Their financial assistance to Greece was deployed to pay back German, French and other foreign banks and investors that held Greek debt. It did Greece little if any good.
.. But Adam S. Posen, who heads the Peterson Institute for International Economics, says he thinks it has more to do with political cowardice. Greece’s creditors were not prepared to take a hit from a Greek debt write-down and then explicitly bail out their own banking system. So they resorted to what Mr. Posen calls “extend and pretend.”
The average Greek is working a full 40% longer than the average German.
.. “The Greek labour market is composed of a large number of people who are self-employed, meaning farmers and – on the other hand – shop-keepers who are working long hours.”
Self-employed workers tend to work more than those who have specified hours in an employment contract.
.. The second reason Mr Marianna points to is the different number of part-time workers in each country.
“In Germany, the share of employees working part-time is quite high. This represents something like one in four,” he says.
As these annual hours figures are for all workers, the large proportion who work part-time in Germany is bringing down the overall average. In Greece, far fewer people work part-time.
