The policies and the policy effects of central banks are measurable in elementary ways. This is not an opinion. It's very important to realize the role of the ECB and the Euro in this recession, because the current popular alternative--mindless national hatred--has not turned out very well for Europe, historically speaking.

Not seeing this. Unlike most national central banks, the ECB is also not concerned with national economic issues such as fiscal balance, tax revenues, employment numbers, national trade balance etc. (This may well turn out to be a blessing in the medium-term or long run. Perhaps by design?) They're exclusively tasked with maintaining a certain level of price stability within the eurozone. Draghi even declared recently that they don't even give a hoot about the EURUSD exchange rate! Now maybe internally they do care about it emotionally, but it's not their mandate to worry about it.

Now granted, with their weight they did have the resources to buy up some 200B of "temporarily tanked" eurozone government debts in a time of crisis, which they then sold on at a later point "for a profit" (nominal, not that I think they really care, but a good for the public), which elegantly weathered "the euro crisis". Not the Greek or Spanish or Italian economic woes, to be sure. But "the euro crisis", back in 2011 or so. Done deal.

(Good thing, I think personally, they're not blanko-buying-up $1 trillion of EU government debts per year currently... sure the Greek equivalent of the S&P500 might "soar" for a year or two but it wouldn't be felt on the ground, I don't think... )

Point in fact, what could the ECB have done better? They could have reduced interest rates faster and more aggressively, but would that really have changed so much? What else could they have done?

I think the blame lies squarely on fiscal policy, namely the European obsession with austerity. Mainstream (that is, non-pundit) macro-economics correctly predicted that austerity would hurt, yet European politicians still follow that prescription.

In part, the structure of the Eurozone is at fault. If the automatic stabilizers like unemployment insurance and other social programs had been a part of a supranational budget, the crisis would never have become as deep.

Also, even if it wouldn't have been that effective, more aggressive interest rate moves would have done something, and that something on the margin means less suffering in the world.

Having own currency allows for nation-wide bloodletting through inflation, a classic option of dealing with economic collapse. Having succumbed to Deutschmark er.. Euro, they lost the easy option.

On the other hand "massive inflation" isn't exactly the easy option. It's just very easy to understand if you are prepared to oversimplify macroeconomics.

But before going into that, I'd like to ask you to be more specific: To which things are you referring to?

You are saying, contrary to propaganda, the greek government sector and the state-run enterprises were in a splendid and efficient state a couple of years ago?

Furthermore, contrary to propaganda, their is no problem with the completely ineffective and unefficient tax collection system?

I didn't know that, I am very sorry...

Had Greece not been part of the Eurozone, their currency would have lost value during the crisis. This would have driven a recovery as Greeks would have turned to producing more things locally, both for domestic use and for exports.

This has a very negative psychological effect to people who see their salaries cut to a third of what they used to be (rather than seeing imported goods rise to three times their former prices), and doesn't allow exports to become instantly more competitive by virtue of being cheaper right away.

I agree with you that, if Greece weren't part of the Eurozone, things would at least have been smoother.

But as long as you say you don't understand economics or politics, the mistake of oversimplifying monetary economics is understable...

BTW Argentina followed the IMF as many other countries. None ever recovered. Iceland did not, proved to be better off.

Stiglitz and Krugman (both Nobel prizes) share the same view on this matter and Greece (should have opted out of the Euro and defaulted in 2008, in 2011 everything would be fine).

ps. Another fact that you're missing here is that you think this Crisis in Europe and US has to do with economics, while it's clearly a political crisis. The numbers never turned up right, Greece will never pay the debt, there were no financial reason to punish Cyprus other than sending a political message, etc. Even the IMF said that the Greek program was mis-calculated because doesn't wont to be part of the eminent epic failure...

[1] http://en.wikipedia.org/wiki/Timeline_of_the_Icelandic_finan...

If Greece hadn't defaulted, they wouldn't have cut 25% of the public workforce. Oh no. They wouldn't have been able to pay nearly any salaries.

That's your personal opinion, nothing more.

Yes they did. Goldman Sachs did it for Greece and many other countries like Italy for example. France, Italy, Greece and many others never respected the 3% budget deficit imposed by Maastricht crieria.

> Greece did not take on more debt than even the faked statistics supported?

Greece did, but everyone knew it and allowed as long as they saw fit. Also there are hints that many other countries did. Goldman Sachs didn’t offer it’s services only to Greeks. That was a very well known method of falsifying the statistics.

As a side-note… The man who acted as the middle-man for this fraud, was Lucas Papademos. It was Merkel’s first choice for Technocratic Prime Minister in the short period Greece stayed without PM. It’s a little bit weird to choose the man who is responsible the very thing you blame them, to lead the way.

> You are saying, contrary to propaganda, the greek government sector and the state-run enterprises were in a splendid and efficient state a couple of years ago?

No of course not. But in many cases they were almost entirely forced to make uncomfortable choices by Germany and France. Local army companies were out of business because of forced contracts the country did with Germany in order to buy things that could be produced at home, while at the same time paying the employees to buy votes. The national railway got into debt because of accounting tricks more than anything else.

Greece since 1821, was never a 100% free country, in the sense that was able to make sane choices. Take a look a this submarine[1] story or the Siemens[2] scandal.

> Furthermore, contrary to propaganda, their is no problem with the completely ineffective and unefficient tax collection system?

Even if you assume that Greek corruption is the problem in Greece, does not explain what is happening elsewhere. Let’s say in Greece the problem is corruption. What’s the problem with Italy, Ireland and Spain?

You are mixing two different problems: The Euro zone allowed Germany to export it’s expensive products, for 20 years to all these countries they are trashing now as PIGS, by allowing them to expand their credit.

Give it another two years and the German economy will sink like everyone’s else, since exports to Mars are not possible as of today :-)

> I didn't know that, I am very sorry...

You’re sorry for what? I’m Greek and I’m not sorry for Greece. I know that to an extent it’s getting only what it’s citizen deserve by being so afraid of change. But really, what is happening in Greece has absolutely nothing to do with Greece’s flaws and everything to do with Euro-zone structural problems. The problem is political, not economical, at every level.

To give a perspective: 3 years ago, in 2009, my Italian uncle made the same exact reasons of why Greece is in trouble and Italy will never get there. I told him the same things and that Italy was right on track, because what is happening in Greece is not related to Greece but to Euro. After a year we had the same conversation again and he agreed. Because he saw the same thing happening to Italy, which has corruption at all levels, but it’s way more balanced than Greece (which has no division of powers, French revolution didnt pass by).

[1] http://www.lepointinternational.com/it/politica/europa/550-t... [2] http://en.wikipedia.org/wiki/Siemens_Greek_bribery_scandal

I can't say for sure about the latter two, but Italy is famous for corruption.