Open Cyprus in Europe

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Cyprus- Why Krugman got it wrong

Welcome back an to industrious Cyprus

Η πελλάρα εν ΠΟΛΛΩΝ λογιών

Much like the the last time I disagreed with Krugman, disagreement is of the “yes, but” variety. The last time, he was telling off austerity, but I doubt he had in mind economies in which (shockingly wasteful) state spending reaches 54% of GDP. This is taxes and spending on a very long list of things like the 42 architects employed for 30 years -with regular pay hikes and promotions- to build dams.

We were done building dams 20 years ago.

Likewise, everything he says about Cypexit, stands correct on its face. There is no doubt that the Euro translates to deep recession for Cyprus, especially after the horrific Eurogroup idea to propose losses on depositors in order to stave off a banking crisis. I’ve wondered before if this was sheer stupidity or bad intentions.

But then again, Krugman suggests that “leaving the euro, and letting the new currency fall sharply, would…

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This entry was posted on March 28, 2013 by in Direction and tagged , .

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