June 23, 2010
How to rescue Greece: return to 1897
Op-ed at the New York Times by Michael Strauss on how Greece could recover from the current economic trouble:
"There are plenty of countries that wouldn’t mind securing temporary rights in parts of Greece or in other troubled E.U. nations like Portugal or Spain. Even restricted rights can be attractive, like the ability to exploit a single resource or engage in some other lucrative activity.
Greece itself was the laboratory that showed this can work, back in 1897. It had declared bankruptcy four years earlier, curtailing payments on foreign debts. After long, tough negotiations, an agreement was reached that gave the creditor nations the ability to pay themselves off with future funds generated on Greek territory. They got the right to collect import duties at the port of Piraeus, to keep revenues from state monopolies that sold oil, salt and matches, and to collect taxes on tobacco until the debts were paid off. Greece retained complete policymaking authority in the areas concerned, notably trade.
The process was tightly controlled. A commission created by the creditors would receive the collected funds and invest them in financial instruments abroad. The proceeds replaced Greece’s international debt service payments. Any excess funds generated by the investments would go to Greece, to service its domestic debts."
Related:
2011 – Creating the European Financial Stability Facility (EFSF) & the "PIIGS"
2017 – Another Greek Economic Crisis?
The Drachma almost returned to Greece 2013–2017
Greek economic Survival in the 1990s
Greece's Golden Visa program
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