Greece is being given exactly two choices. It’s a rather black-and-white choice. -- Alexander Stubb, Finance Minister, Republic of Finland
If Slovakia managed to carry out reforms then Greece has to be able to do it, too, there is no room for mercy from our side. For any negotiations on the third program to start, the Greeks have to adopt legislation in parliament. We want to see what they will do with VAT, with the pension system, individual laws. This is a basic pre-condition for the start of the talks and doesn’t necessarily mean that we will agree with the aid package. -- Robert Fico, Prime Minister, Slovak Republic.
Greece is not Finland. Greece is not Slovakia. But then, Mississippi is not Massachusetts nor, Colorado, Wyoming.
Arguments about politics are always and in each and every case about economics and precisely, money. The fear of losing the income and wealth you have and, the fear of how others can "adjust" your income and wealth. We can take it to the first derivative and touch upon the "rate of growth" or less-growth but it is a Sunday in July.
For starters, America has its own income divide. The Department of Commerce says Massachusetts has an average income 121% of the nation's per capita income. Mississippi, at 74%, indicates the broad differences within our federal system. Europe is not America as seen in this weekend essay by Jeffrey D. Sachs of Columbia University. Sachs is correct to touch on the Articles of Confederation. The Wikipedia on the Articles is actually wicked interesting and touches on some of the struggles the Less-United States of Europe face this 2015.
The above chart speaks: Greece is in depression as evidenced by the white line. No jokes allowed: the white line will further descend (this is EUROSTAT data for per capita, PPP income, normalized to the peak of Greece prosperity in 2009). The wonderful and elevated green line is a surprise. It is the success and advance of Slovakia. They have come from near-nothing to do better. Critically, Slovkians have massaged "income" now slightly above Greeks. Germany, France and Finland are bundled in the middle, but the bundle again, speaks volumes. Germany, in yellow, has advanced, partially advantaged by weak EUR-USD that boosts exports. Where would German exports be if Grexit occurs or unthinkable, if Berlin returns to the Deutsche mark? France muddles along, in red. The go-nowhere economy is the base case for getting by. I find Finland the most interesting: Finland did better than embrouille long France but has seen a recent turn for the worse, in light blue.
The argument against this weekend's hysterics is that the benefits of a combined union of Europe far, far outweigh each nation's fears. Some benefits are obvious but others are less so and the obvious and less obvious is founded on trust. As many have predicted, Germany and to an extent France get the headlines while the smaller nations have always worried simply of a deficit of trust.
Pegged off Germany and using UN data, America has 122% greater income, Finland 87% of Germany and widening the wrong direction, and France 85%. Greece is depressed with 57% or lower income while Slovakia has 59% of the per capita income of Germany. Bratislava wonders why it should salvage Athens.
The Sunday Summary: These are "black-and-white" statistics of relative income. It's about fear.