Europe’s Austerity Mirage

nytimes.com — The way the Greeks and their government have been treated tells us a great deal about the way Europe is structured and the dangers that beset it. The technocratic leaders of Greece have lost the confidence of the people, who are rioting because the conditions attached to help from the rest of Europe are so stringent that Greece would be better off in the future without such “assistance.” Yet this is not the first time the world has seen such zeal in the name of financial rescue. During the 1997-98 financial crisis, bailouts from the International Monetary Fund left Asian countries with no choice but the strictest of austerity measures and free-market reforms. These countries learned their lesson: they insured themselves against future macroeconomic instability — and vowed never to repeat the humiliating experience of an I.M.F. loan. The European Union is repeating this pattern, without even noticing that its version is even more violent than the I.M.F.’s.

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