Why wasn't Greece kicked out of the Euro once it was clear that they falsified their statistics to join in the first place?

8

The EU knew back in 2004 that Greece lied about their economic success in order to join the Euro.

So why didn't the Eurocomission reevaluate their original bid and kick them out of the Euro? Did anyone bring up the idea back in the early 2000's?

JonathanReez

Posted 2017-05-02T10:20:01.563

Reputation: 36 466

1Because it would have just been the first domino. By the time you remove greece, italy, spain,a number of other countries want out and before you know it there is no EU. At least that was the fear before Brexit. I really hope that EU realizes they are not as fragile as they thought now and fixes its house before it collapses. – SoylentGray – 2017-05-02T18:13:34.987

@SoylentGray but AFAIK Spain didn't lie about their economy in the first place, so there wasn't a clear reason for kicking them out before trouble started – JonathanReez – 2017-05-02T18:35:16.833

1The problem is once you start pruning the economically stronger are going to want to muscle out the weaker states that are a drag on the EU Economy. And lets face it when things are going badly people in the government make bad decisions that reflect poorly on that nation. We may not know about any "Lies" but there is undoubtedly something there to find if we go scouring and open up the scope just a little bit. – SoylentGray – 2017-05-02T18:40:54.373

Because there wasn't and there isn't any process to "kick" a nation out of the Euro. Before the Treaty of Lisbon (2009) there wasn't even a legal way to leave the EU.

– Martin Schröder – 2017-05-06T13:43:22.063

@MartinSchröder The EU treaty prohibits bail outs, but still Greece received one. In time of crisis, everything is possible. – Sjoerd – 2017-05-07T01:49:22.347

Answers

9

Kicking Greece out would be the same as admitting the politicians had made a mistake. And as you know, they never admit that - at least not voluntary.

"Kicking the can and hope the problem disappears over time" is the favorite way to handle problems in the EU.

At first, allowing Greece to stay in was easier than to kick it out, so that was the approach. Nowadays, after billions of euros spent, nobody wants to admit that it was all for naught.

Only once regime change has happened in multiple countries, this might stop.

Did anyone bring up the idea back in the early 2000's?

Almost everyone believed that a small country as Greece couldn't possibly have a big impact. So keeping the status quo was widely preferred over kicking them out.

Of course, some must have brought up the idea. But only a few did so, so they were easily ignored.

By the time Greece started to require billions to be saved, it was 2010 already, so that's not "early 2000's" anymore.

As an example, the Dutch politician Wilders acknowledges the weakness of Greece in his 2005 declaration that launched his party (link in Dutch), but he doesn't propose to kick them out; he just doesn't want to admit any new countries to the Euro. As soon as Greece required billions, his stance became "not a single penny to Greece."

Sjoerd

Posted 2017-05-02T10:20:01.563

Reputation: 5 260

1" But one got branded as "populist" as soon as one did so." - source? – JonathanReez – 2017-05-02T13:18:39.247

@JonathanReez When Wilders started his own party, back in 2005, he acknowledges the problems around admitting Greece to the Euro. He doesn't advocate for kicking them out at that time yet. As soon as the first troubles appeared, in 2010, he did. (Source in dutch: https://www.pvv.nl/index.php/component/content/article/30-publicaties/684-onafhankelijkheidsverklaring )

– Sjoerd – 2017-05-02T13:28:14.470

4Can you prove that Wilders is branded as "populist" for that remark and for that remark alone? if not, your statement in the answer is not really backed up by your comment. – Federico – 2017-05-02T13:31:10.847

@Federico Changed that part of my answer. I couldn't find anything for the early 2000's, although by 2010 Wilders clearly advocates for it. – Sjoerd – 2017-05-02T13:43:11.017