Greece Will Get Some Form of Austerity No Matter What (Video)
Peter Schiff shared his take on the Greek crisis with RT. Peter argues that Greece needs to dismantle its giant government and embrace free-market capitalism to grow its economy.
Highlights from the interview:
“I don’t know what’s next [for Greece]. The people who voted ‘no’ believed that they were voting against austerity. But that’s impossible. There’s going to be austerity regardless of what happens. The question is where is it imposed? Is it imposed from Brussels or Germany? Or is it going to be imposed internally from Athens? I think it might backfire on the Greeks, because I think the austerity that will result from an exodus from the eurozone and the euro currency and a readopting of the drachma – I believe the massive decline in the purchasing power of the drachma will basically deliver a much bigger decline in the average standard of living in Greece than they would have endured had they agreed to the type of reductions that the Europeans were demanding…
“I think Europe [would benefit from a Grexit]. Everybody thinks that it’s important to keep Greece in the eurozone… If Greece was to fall into line and adhere to the terms of the bailout, then maybe it would be in Europe’s interest to maintain the union. But at the cost of creating a moral hazard that would disintegrate the entire monetary union, they cannot allow Greece to hold everybody else hostage. If Greece can secede, then what about Portugal, what about Spain? There will be no credibility to any other discipline within that union…
“There should never have been any unconditional bailouts of Greece that involved Greece going deeper into debt, because that was never going to work…
“The type of austerity that they really need is not the type of austerity that they have. What they need is a substantial dismantling of the Greek government. That is the problem. What they need is more free-market capitalism in Greece and less government. They need to privatize assets. They need to reform their tax structure. They need to deregulate the labor markets in exchange for a reduction in debt. There’s no question that Greece owes too much money, and they need to have substantial debt forgiveness. But in exchange for real, concrete reforms that will stop the bleeding. What the Greek politicians want to do is have their cake and eat it too. They want to continue the massive government that is the root cause of their fiscal problems and stay within the European Union…”
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