Tuesday 20 February 2018

Euro fault lines evident from day one

By talking to the original players behind the euro, Allan Little and Jane Beresford reveal the astonishing sleights of hand that have brought the single currency to its knees

In the 1990s, the economist Miranda Xafa was at Salomon Brothers in London, watching from a distance as her native Greece prepared to enter the euro. She advised her clients that Greece's economy was not ready, that the statistics its government was publishing did not reflect reality.

"(In Athens) we always saw the head of the statistical agency of Greece who compiled statistics on the debt, the deficit and so on. We'd call him the magician because he could make everything disappear. He made inflation disappear. And he made the deficit disappear."

In 2004, with Greece a member of the euro, the conjuring trick was becoming transparent. A new, centre-right government was elected, with Peter Doukas appointed budget minister.

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