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Bust: Greece, the Euro and the Sovereign Debt Crisis Hardcover – December 13, 2010
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‘…Lynn blends financial history, politics and current affairs to tell the story of government deceit, unfettered spending, and cheap borrowing.’
—Finance & Management Faculty, October 2010.
‘The more interesting the book, the less likely you are to put it down, and I just wanted to read from beginning to end.’
—Fool.co.uk, MoneyTalk, December 2010.
‘…thrilling account of the Greek financial crisis…lively, engaging, and thought provoking…Bust, reminds us just how interconnected the world really is.’
—Hereisthecity.com, December 2010.
‘…fast-paced, entertaining and perceptive.’ (FT.com, January 2011).
From the Inside Flap
In Bust: Greece, the Euro, and the Sovereign Debt Crisis, leading market commentator Matthew Lynn blends financial history, politics, and current affairs to tell the story of how one nation rode the wave of economic prosperity and brought a continent, a currency, and, potentially, the global financial system to its knees.
Bust is a story of government deceit, unfettered spending, and cheap borrowing: a tale of financial folly to rank alongside the greatest in history. It charts Greece's rise, and spectacular fall from grace, but it also explores the global repercussions of a financial disaster that has only just begun. It explains how the Greek debt crisis spread like wildfire through the rest of Europe, hitting Ireland, Portugal, Italy, and Spain, and ultimately provoking a crisis that brought the euro to the edge of collapse. And it argues that the Greek crisis is just the start of a decade of financial turmoil that will eventually force the break up of the euro, and a massive retrenchment in the living standards of all the developed economies.
Written in a lively and entertaining style, Bust: Greece, the Euro, and the Sovereign Debt Crisis is an engaging and informative account of a country gone wrong and a must-read for anyone interested in world events and global economics.
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Top Customer Reviews
First, Lynn introduces Mundell's idea of Optimal Currency Areas to make a case for why the Euro is a bad idea. It's the right theory, but a horrific misapplication. Yes, the core European economies (Germany, France, et al.) are fundamentally different from the peripheral European economies (Greece, Spain, et al.), but no more different than, say, New York's and Mississippi's economies. So why is the US an optimal currency area while Europe isn't? The answer is a simple one, which Lynn ignores. It has everything to do with language and labor mobility. In the US, if California's economy is in deep recession while Arizona's, or even Florida's, is booming, people can relocate without much problem. Since everyone speaks the same language and the culture is essentially still the same, the transition is fairly seamless. The implication of that is that the central bank can focus on stabilizing broad aggregates-- even if one region's economy is struggling while the US as a whole is overheated, the Fed can still confidently raise interest rates and know that people will relocate from the depressed area to the one where jobs are in abundance, thereby stabilizing the national economy.Read more ›
but his thesis (I guess I'll call it that) is that the Euro is doomed. I don't see that.
Regardless, if your interested in the subject buy the book and enjoy.
However, no mention is made of the efforts made by New democracy government to cut Geeece's debt in early 90s, as if it was not possible that a Greek gvt. could try to be responsible. The Mitsotakis (who is never mentioned once in the book, see index) gvt. was defeated after 3 years in power with massive demonstrations against any cuts to the unions power or any major privatizations. Had the people been more responsible in not throwing out this gvt. (the Fyrom name issue was also a factor), then maybe cuts to debt would have made the present better a la Canada in the 90s and today.
The successive gvts. were paralyzed to do anything because they remembered what happened to the Constantine Mitsotakis gvt. when it tried to reform the country. How the author never mentions this part of modern Greece history is either a disbelief or an attempt to hide the fact that Greek gvts. could try to be responsible.
Other than that, a recommended read.
Greece joined the euro in 2001, and was at once allowed to borrow whatever it wanted. Indebtedness doubled to 230 per cent of GDP by 2008. Goldman Sachs arranged swaps that disguised the extent of Greece's debts. Greece has 300 billion euros of debt.
Spain had a huge property bubble, the world's second biggest trade deficit (foreign debts were 95 per cent of GDP by 2009), and families owed 130 per cent of their disposable income. Since the euro was launched, Spain's debt levels have doubled to 366 per cent of GDP.
Ireland's debt relative to GDP more than doubled to more than 700 per cent of GDP; the financial sector's debt alone was 410 per cent of GDP. France, Germany and Britain have a combined exposure to Portugal, Ireland, Greece and Spain of $1.2 trillion.
In May 2010, the EU put together a 750 billion euro package to save the euro - 440 billion to a special fund which would sell debt directly to markets and use that cash to buy government bonds of high-deficit countries; 60 billion from the EU budget - the European Stabilisation Mechanism - whereby the Commission can issue bonds, using the EU's 140 billion annual budget as collateral; and 250 billion from the IMF. Britain is liable for 8 billion euros (corresponding to our 13.6 per cent share of the EU budget), if any country that has received these loans defaults on them.Read more ›
Most Recent Customer Reviews
Standard single-sided view expressing a very particular ideology.
I couldn't recommend this unless you are already indoctrinated into a clown.
Matthew I've just been reading everything you write. You have an amazing perspective
Email me at Leonardo.Palomera@gamil.com is you ever read this
Bom livro, conta rapidamente a historia da grecia e de sua entrada na zona do euro, vale a pena ler.Published on October 2, 2012 by Teo
This is a completely engrossing read and an excellent explanation of the financial crisis experienced by Europe in general and Greece in particular. Read morePublished on October 19, 2011 by The Peripatetic Reader
For a relatively small country, Greece has made outsized contributions to the world: mythic legends and heroes, great art and architecture, illuminating philosophers and thinkers,... Read morePublished on August 25, 2011 by Rolf Dobelli
This book gives an overview of the whole Eurozone situation in addition to Greece. If you want to
understand what is happening there today "Bust" is both immensely... Read more