March 30th, 2010
This op-ed was written by Elena Panaritis back in early February 2010 Celebrex For Sale, , in response to inaccurate and misleading comparisons made by a number of economists, between Greece of today and Argentina of 2001. In her original piece “Last Tango in Athens”, Elena questions and refines this analogy by offering a more even account of the causes for the crisis in Greece and the larger EuroZone, is Celebrex safe, as well as concrete steps for reform in the medium term. Buy Celebrex no prescription, Today, Greece’s economic outlook looks grim. Bond spreads are climbing as are the country's risk ratings, buy cheap Celebrex. Finger pointing is in full-force, Purchase Celebrex, centering on the way Greece is managing the crisis. This is hardly fair given the fact that Greece is a member of the EuroZone – a monetary union regulated and overseen by its members, Celebrex For Sale. More worrisome, over the past two weeks, where can i buy Celebrex online, have been the comparisons between the Greek experience and that of Argentina in 2001. Effects of Celebrex, But is this analogy correct. Are we about to see one last tango in ancient Athens, or are we really in line for a group dance in the courtyard of the EuroZone, Celebrex mg.
The crisis in Greece became evident last October (2009), Real brand Celebrex online, when the newly installed government rushed to Brussels to explain that its predecessors had understated Greece’s budget deficit by 7 percentage points of GDP, and that the actual deficit was a staggering 12.7% of GDP, more than four times the allowable level for European Union member states, my Celebrex experience. Celebrex For Sale, To make matters worse, the new government had inherited an economy that was contracting even as its deficit was rising. Sovereign bond holders were left to wonder how many other areas of the Greek government were dysfunctional and whether institutional strengths have been overestimated. It wasn't just Greece that came under scrutiny: the EU surveillance mechanisms also were called into question. Celebrex samples, Greece’s original sin, as it is now evident, has been its long history of running budget deficits, Celebrex class, averaging 7.5% of GDP for the past 20 years. The crisis in Greece is not about a simple adjustment of macroeconomic fundamentals and is certainly not a dilemma that appeared overnight. In fact, Rx free Celebrex, it reflects a large level of informality in many economic sectors, low productivity growth, weak institutions and a too-large civil service leading to a large waste of resources, purchase Celebrex online no prescription.
Is the comparison to Argentina of 2001 instructive?
Many make the mistake of linking present day Greece to Argentina of 2001 (because both gave up their monetary policy and local currency to a stronger different currency; Argentina with the US dollar and Greece with the Euro) and of predicting one last tango in Athens, Celebrex blogs, ignoring the fact that the tango actually is being danced in the EU at large.
When Argentina entered into a Currency Board with the US dollar, it signaled that the country was serious about economic reforms, Celebrex price, attracting foreign direct investment and moving toward a sustainable path to prosperity. The currency board allowed Argentina to insulate its monetary policy from any populist or political pressures taming the problem of hyperinflation, Celebrex For Sale. Fast shipping Celebrex, The central government and its 23 provinces were bound by the Argentine Constitution to follow US monetary policy. There was, however, buy Celebrex from mexico, no Argentine representation at any meetings of the U.S. Celebrex australia, uk, us, usa, central bank. Any increase of the US interest rates would have increased the capital inflow in Argentina creating internal inflationary pressures and reducing competitiveness, as well as the ability of the country to service its debt, order Celebrex from United States pharmacy. Celebrex For Sale, In the meantime, the informal sector in Argentina remained at very high levels - informality keeps productive capacity and wealth outside the country's measurable GDP. Institutional reforms to address the root causes of the country’s weaknesses were not adopted, Where can i buy cheapest Celebrex online, hindering gains in competitiveness.
If we look closely at that period, we would also notice that Argentina’s provinces engaged in more and more fiscal spending, Celebrex street price, perhaps under the presumption that Buenos Aires would bail them out if they got into trouble. Celebrex from mexico, But what many local governors did not know or preferred to ignore was the fact that a currency board would have made it impossible to pick up the local tab. Argentina could not print US dollars.
In brief, what appeared to be an economic rescue for the country in 1992, namely the peg to the US dollar, in about 10 years had proven deadly for Argentina, Celebrex For Sale. Exit from the currency board was not well contemplated, Celebrex pics, nor were any clauses that could have allowed for the central government to mature and transform its institutions that handle property rights, Celebrex interactions, contract enforcement and transaction costs.
Similar to Argentina, the Euro zone (not Greece alone) has come to face its structural deficits in a painful manner, what is Celebrex. In this context, Australia, uk, us, usa, the Greek experience resembles those of Argentina’s indebted provinces leading up to the 2001 crisis, with one important difference: unlike Argentina’s local and national government, Greece has a seat at the table and is represented at the European Central Bank.
The main structural problem of the EU as a monetary union is that not all members of the EuroZone were equally ready to adopt the Euro, online buying Celebrex hcl. Institutional differences were assumed away, Celebrex use, while informality and the cost of enforcing contracts were underestimated. Celebrex For Sale, EU subsidies were used to resolve and compensate for economic weaknesses that were not identified as institutional in nature. In reality, subsidies often exacerbated existing institutional failings in some member countries, Celebrex overnight. They also increased the lack of transparency in the local public sectors, Buy Celebrex without a prescription, raised transactions costs and dampened eagerness and political will to deal with structural problems.
This leads us to where we are today: The financial markets are looking beyond Greece and the ability of the Greek government to stem the crisis and are questioning the ability of the European bureaucracy to manage EU members. In fact, Celebrex maximum dosage, Greece may have its unlikeliest hero in the socialist Prime Minister George Papandreou. The mounting crisis is pushing the Greek PM to adopt immediate fiscal measures (such as tightening public spending and fighting tax evasion) along with longer term structural reforms (such making the public sector more efficient and integrating the informal economy). Herbal Celebrex, If Papandreou is able to advance tough reforms, he may set the course for an EU structural reform effort, create a social network for the Union's weaker members, Celebrex no rx, or allow for the issuance of financial products such as a Euro Bond, Celebrex long term, that might avoid punishing high interest rates.
At the moment, the EU lacks the legal ability to design and implement a bailout for an individual member under duress, including Greece, order Celebrex online overnight delivery no prescription. But legal obstacles can be overcome and the EU clearly recognizes the gravity of the situation. If Brussels can establish an action plan and lead the support to Greece possibly also enlisting the experience of the International Monetary Fund. In the short-term, the focus should be on finding a viable (if ad hoc) solution for Greece. Such move will provide the EU with some breathing space to design and implement a long-term structural reform of the EuroZone that will allow for sovereign debt restructuring while addressing the issue of member countries' overextended public debts with an expectation of a bailout.
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