Everything you say is true but it has nothing to do with the linked article. This wasn't an article about Greece's place in the EU but about how the IMF viewed austerity in trying to save Greek economy. Also I find it ironic that you are talking about how Greece shouldn't be in the EU when the IMF claims that uncertainties like that pushed the Greek economy further down. Also, economic data from the article:But having agreed that there were exceptional circumstances that warranted the biggest bailout in the Fund's history, officials were taken aback by the much bigger than expected slump in the Greek economy. The country is now in its fifth year of recession and the economy has contracted by 17%. The IMF thought it would contract by just 5.5%.
What I am arguing is that the two are inextricably linked: the notion that Greek austerity was a rational remedy was seeded in the same fallacy, that Greece was a nation fiscally sound enough to participate in the Eurozone before the downturn. If you don't buy into the notion that Greece was qualified to get into the Eurozone to begin with (much less deserve the financing leverage that came with it), then you aren't apt to believe that they can handle the fallout by restructuring. I'm not sure I follow you here. I'm not saying Greece shouldn't be in the EU. I'm saying that they didn't qualify for the eurozone. They didn't maintain the fiscal discipline that eurozone countries are ostensibly required to.This wasn't an article about Greece's place in the EU but about how the IMF viewed austerity in trying to save Greek economy.
Also I find it ironic that you are talking about how Greece shouldn't be in the EU when the IMF claims that uncertainties like that pushed the Greek economy further down.
I don't see this as an economic problem but as a moral problem. If they had applied a stimulus program in Greece instead of austerity, maybe the economic contraction wouldn't be too big, but there would still be some. In corrupted countries neither austerity or stimulus are the solution. The solution is not an economic one, but a moral one. Iceland solution, which is so much used as an example in these discussions, wasn't an economic one of defaulting on their debt, but of jailing corrupt bankers, putting the blame in the right places, taking out the defective cogs out of the great system and adding mechanisms to prevent new defective cogs from appearing. The defaulting is a consequence of that, not the reason. A stimulus program in Greece wouldn't do much neither, because most of the money would be concentrated in a few corrupted pockets instead of trickling down to a large amount of the population.