Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze

The IMF board approved the disproportionate and risky Greek bailout not because it made sense in its own terms, or was good for Greece, but because on the track record to date, Europe’s inability to contain the Greek crisis meant that there was “high risk of international systemic spillover effects.”66 Instead of restructuring Greek’s unsustainable debts, what would be restructured were its entire public sector and its creaky economy. Heroic assumptions about cost cutting and efficiency gains were the ways in which the IMF squared the Greek program with its conscience. Perhaps if it were shaken thoroughly enough, “sclerotic” and “clientelistic” Greece could be jolted onto a higher growth path that would make its debts sustainable after all. Austerity and “reform” were the only items on the agenda that the otherwise divided parties to the deal could agree on. Whether this was economically effective or politically sustainable and what it would mean for the democratic politics of Europe was another matter altogether.