EMU: Paul Krugman: "Stop listening to the deficit scolds — they’ve lost all credibility"

Five years after the country embarked on a harsh, internationally-imposed austerity regime, Greece suffers from sky-high unemployment and plummeting wages.

Moreover, Krugman notes, the country’s debt-to-GDP ratio has actually gotten worse, largely because dramatic cutbacks have sent Greek GDP plunging.

Amid this sorry economic climate, the Greek ruling class could soon face a reckoning. As Krugman writes, polls show the left-wing anti-austerity party Syriza poised to win control in a general election, which the center-right government is desperately trying to avoid.

While Syriza avoids the xenophobia and extremism that define other anti-establishment parties in Europe, Krugman observes that its rise has occurred as extremist parties like France’s National Front and Italy’s Northern League have seen their political fortunes improve.

“This is what happens when an elite claims the right to rule based on its supposed expertise, its understanding of what must be done — then demonstrates both that it does not, in fact, know what it is doing, and that it is too ideologically rigid to learn from its mistakes,” Krugman writes.

Therein lies the real lesson Greece provides.

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