Eurozone Myth Busting

Michael Stephens | October 25, 2011

Research Associates Marshall Auerback and Rob Parenteau have a long piece up at Naked Capitalism taking on the lazy anthropology that poses as economic analysis regarding Greece and the euro zone crisis.  With respect to the image of Greeks lolling about living off an absurdly generous dole at the expense of frugal Germans, they provide some helpful contextual data:

… the Greek social safety nets might seem very generous by US standards but are truly modest compared to the rest of the Europe. On average, for 1998-2007 Greece spent only €3530.47 per capita on social protection benefits… By contrast, Germany and France spent more than double the Greek level, while the original Eurozone 12 level averaged €6251.78. Even Ireland, which has one of the most neoliberal economies in the euro area, spent more on social protection than the supposedly profligate Greeks.

One would think that if the Greek welfare system was as generous and inefficient as it is usually described, then administrative costs would be higher than that of more disciplined governments such as the German and French. But this is obviously not the case, as Professors Dimitri Papadimitriou, Randy Wray and Yeva Nersisyan illustrate. Even spending on pensions, which is the main target of the neoliberals, is lower than in other European countries.

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