Policy Debate

Economists to Greece: Just Say ‘No’

Clockwise from top right: Hans-Werner Sinn, Thomas Mayer, Paul Krugman, Joseph Stiglitz, Dennis Snower, Philippe Legrain.
  • Why it matters

    Why it matters

    Radical leftists aren’t the only ones advising Greeks to vote “no” on Sunday in their national referendum. Increasingly, notable economists are joining the call.

  • Facts


    • Greeks will vote on Sunday on whether to accept years of more austerity and structural reform to stay in the euro zone.
    • Most market watchers – 51 percent – expect Greece to leave the 19-nation euro zone, the likely scenario if Greece votes “no” on Sunday, according to Sentix.
    • Sixty-five percent of market watchers would vote “yes” on Sunday, Sentix found, but their numbers are dwindling.
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Paul Krugman, the Nobel Prize-winning U.S. economist, and Hans-Werner Sinn, Germany’s most notable economist, don’t have much in common when it comes to economic philosophy and solving the major challenges facing the globe.

Mr. Krugman, a policy standard-bearer of the U.S. left, typically favors public spending to fire up stagnant economies, and has persistently called on Germany to loosen up and spend more to help its European brethren.

Hans-Werner Sinn, the head of Munich’s Ifo Institute, is the poster child of Germany’s conservative right, a supporter of tough-love austerity and fiscal controls, who tends to see economic pump-priming as wasteful and ineffective.

But the two economists, perhaps surprisingly, actually agree on one thing: Greece would probably be better off voting “no” in its referendum on Sunday – even if that means becoming the first country to exit the 15-year-old euro currency bloc.

The two men aren’t the only economists calling for “Grexit” on Sunday, when voters will decide on an aid package from creditors that promises more austerity and painful reforms to pensions, labor markets and state-owned businesses.

It’s a package European leaders argue is best for the Greek economy and for Europe, and they warn that a “no” vote would effectively force Greece to leave the 19-nation zone they have belonged to since 2002.

Prime Minister Alexis Tsipras is asking his countrymen to reject the offer, which he says would condemn Greeks to years if not decades of economic servitude. Let’s call the lenders’s bluff, he urges. If it’s just a bluff, that is.

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