Seven Myths about the Greek Debt Crisis

By Stergios Skaperdas
Greek Left Review
November 12, 2011

In Greece and other countries of the Eurozone there are a number of misconceptions about the debt crisis. I argue against seven of such misconceptions (or, myths) about the effects of default, the primary cause of the crisis, the likely effects of an exit from the Eurozone, the bargaining power of the Greek government in its negotiations with the EU/ECB/IMF troika, and others. Default and exit from the Eurozone appears to be the most viable alternative in the long run; such a move would seem to require considerable preparation under short time constraints and a government with broad political support.

In reporting and in opinions presented in the mainstream Greek press there are a surprising number of misconceptions and myths about the causes, consequences, and available policies to combat the crisis. Some of the misconceptions are consciously propagated by the government and mainstream media while they know that they are untrue. Other misconceptions might be apparently believed by government officials, those close to them and most of the press.

Many Greeks who are not economists or experts consciously or instinctively understand that there is a serious problem with the dominant narrative, but they do not have the knowledge to argue in detail against the misconceptions. Moreover, many of those who know better and could argue against the misconceptions either self-censor or have difficulties in accessing mainstream media.

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