Does anyone in their right mind think that any country would willingly put itself through what Greece has gone through, just to get a free ride from its creditors? If there is a moral hazard, it is on the part of the lenders -- especially in the private sector -- who have been bailed out repeatedly.
ATHENS -- The strong mandate he got from the polls, has put a burden on Mr. Tsipras to fulfill the great expectations he produced. If he succeeds, the Spanish Podemos, the French Front National and Italy's Bepe Grillo could all follow suit and question Berlin's fiscal orthodoxy. The much feared domino effect set off by Greece at the outset of euro crisis in 2010 could now materialize in another way.
There was a bit of good news from Europe last week. Two of the nations that desperately need some respite from austerity essentially told German Chancellor Merkel to stuff it. France, under pressure from Germany and the European Union to meet the E.U.'s straightjacket requirement of deficits of no more than three percent of GDP (whether or not depression looms) informed the E.U. that they will not hit this target until 2017. The government of President Francois Hollande, under fire for failing to ignite a recovery, now plans economic stimulus measures -- and the target be damned. Under E.U. rules, France can be fined up to 0.2 percent of its GDP. The French seem to be saying, 'So sue us!'
It's been a very bad week for the merchants of austerity. In Europe, the just-released statistics on first quarter performance show EU nations sliding deeper into recession. In Spain and Greece, unemployment rates are approaching a staggering 30 percent. In Britain, the Tory government took as good news the fact that the UK managed to eke out 0.3 percent growth. Even Germany, the prime sponsor of these policies, is on the edge of recession. You don't promote growth by slashing demand. Supposedly, fiscal tightening improves business confidence. But if some entrepreneur somewhere decided to break ground for a new factory because the president and Congress at last cut the budget, nobody could find such a person. Even the Washington Post editorial page, which has long been promoting a budget bargain built on more cuts, warned in its lead Sunday editorial, that austerity is pinching too hard -- in Europe, that is. How about at home?