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Greece is crumbling. Is there any way out?

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John Kolesidis/Reuters/File

(Read caption) People make their way in front of the Parthenon temple at the Acropolis hill in Athens last month. To climb out of its deep economic and political hole, Greece will have to embark on unimaginably difficult reforms.

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Regularly, we are told that Greece will get another bailout from the International Monetary Fund and the European Union bailout if it agrees to dramatically reform every aspect of its government operations. A few months later we are told that more time is needed to “fully implement” the reforms and another bailout is needed. As these games continue, the misery of the Greek population intensifies to levels we in America or Britain cannot imagine.

There is no solution forthcoming. There can be no solution as long as Greece puts off government reforms. But what can Greece's politicians do? If they embrace reform, the government cuts will knock the economy and Greek living standards back to levels worse than in the Great Depression. Doing  nothing is not an option and the third way means leaving the eurozone

Greece's dilemma is no proverbial rock and hard place. It's like swimming in volcanic lava and trying to survive.  

The problems of Greece stretch back to 1974 when democracy returned after military rule. A corrupt two-party state instituted a patronage-based system that was grotesquely inefficient (and corrupt) at two levels. First, in order to dole out patronage, the state was bloated. Even today, every department of government is overstaffed. State-owned industries, notably rail and the post office, are even more overmanned. Workers were paid for 14 months a year, enjoyed 35 hour weeks, and could retire on a full pension at 50.


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