Austrian economist tends to blame soft money, market inefficiencies and a bloated state for the Greek crisis.
However, since these have been present for decades in the Greek economy, they can’t be responsible for the unprecedented collapse.
In our view, the combination of hard money, the constraints of a fixed currency system and unprecedented austerity has been responsible for the Greek crash.
Curiously enough, these are all part of Austrian recommendations.
While their emphasis of debt retirement and structural reforms are useful, we think they are missing the essence of the crisis entirely.