With Alex Katsiatis we have written a post two years ago about the dysfunctional Greek politics in the context of the Hungarian bailout of ’08, predicting that the Greek party will lead to a similar hangover. Very interesting in retrospect.
The only reason why the money markets could not pick on Greece instead of Hungary in October [2008] is that Hellas has fixed a place within the euro-zone (as it turned out later, with creatively accounting for the Maastricht criteria). The EU funds sank in an empty-bottled bucket, lazy hours in the workplace with benefits from borrowed money, one size-bigger cars that your income would allow were all signs of such a social disease that the markets stopped lending Hungarians the next credit tranche.
Do we learn from bailout to bailout? According to Messrs. Reinhardt and Rogoff, the answer after 800 years is a clear ‘no’. The original blog post here. (See you on Twitter!)
