“Greece and the Euro: An Economy Crumbles”:
But Greece’s economic problems are too big to be fixed quickly. Despite a jobless rate that has risen to 18%, Greece still has a current-account deficit of 10% of GDP. For an economy to have so much slack and yet consume more than it produces is a sign of chronic uncompetitiveness. The IMF has said it will take more than a decade for Greece to become competitive. Some reckon it would be easier for Greece to regain its edge by going back to the drachma and devaluing than by keeping the euro and suffering grinding wage deflation. The short-term disruptions would be outweighed by long-term gains.
