Must-Read: Timothy B. Lee: The euro was a big mistake, and Greece is paying the price
: The euro was a big mistake, and Greece is paying the price: “The problem is that the ECB is responsible for both Greece and Germany…
…and 17 other countries as well. The right policy for Greece will be a disaster for Germany, and vice versa. Any policy the ECB picks will be either too tight for some European countries or too loose for others. The ECB is headquartered in Germany and has strong ties to German policymakers. So in practice, it tends to pay more attention to the needs of Germany than other European countries. The result has been an economic disaster for Greece. And not just Greece. Spain’s debt problems aren’t nearly as bad as Greece’s. But its 24 percent unemployment rate is nearly as high, and the Spanish unemployment rate has been above 20 percent for about five years…