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The Way Out for Greece

Don't send cash. Austerity isn't the problem.
Sorry, it wasn't the austerity.

Sorry, it wasn't the austerity.

Photographer: Kostas Tsironis/Bloomberg

A widely told narrative of the economic crisis in Greece holds that it is the product of excessive austerity, imposed by arrogant outsiders who misread the situation. The only way out, the story goes, is to break the resulting recessionary spiral with a policy of fiscal stimulus.

This account doesn't stand up to scrutiny and needs to be countered if the current brinkmanship over Greece's bailout is to end well.