Economist Krugman: I Would Vote ‘No’ in Referendum

Paul Krugman

Through a New York Times blog post published on Sunday evening, the Nobel Prize-winning economist Paul Krugman urges the Greek people to vote “no” in the upcoming referendum regarding their creditors’ bailout terms.

In his article, Krugman expresses his personal opinion that it would be better for Greece to exit the euro currency union putting this way an end to the dysfunctional austerity regime that makes people suffer for the last five years.

“Maybe, just maybe, the willingness to leave will inspire a rethink, although probably not,” Paul Krugman mentions on his blog post in the American newspaper. And he continues: “But even so, devaluation couldn’t create that much more chaos than already exists, and would pave the way for eventual recovery, just as it has in many other times and places.”

Furthermore, the American economist stresses that voting “yes” on the referendum would undermine Greece’s popularly elected government leading to its future replacement and challenge its order which is to try to stop the harsh austerity policies that were imposed by Greece’s international creditors.

“The troika clearly did a reverse Corleone — they made [Greek Prime Minister Alexis] Tsipras an offer he can’t accept, and presumably did this knowingly,” the economist claims. “So the ultimatum was, in effect, a move to replace the Greek government. And even if you don’t like Syriza, that has to be disturbing for anyone who believes in European ideals,” he concludes.


  1. What Paul Krugman Got Wrong About Ireland’s Economy
    Anthony B. Kim researches international economic issues at The Heritage Foundation, with a strong focus on economic freedom. Kim is the research manager of the Index of Economic Freedom, the flagship product of the Heritage Foundation in partnership with The Wall Street Journal. Read his research.New York Times columnist Paul Krugman once commented derisively on Ireland’s ongoing economic recovery: “It seems obvious to me that Ireland keeps being proclaimed a success because it’s supposed to be a success: they did the austerity thing forcefully, with a minimum of complaints, so there must be a pot of gold at the end of that rainbow, right?”

    The answer, according to recent data, is “Yes, there was a pot of gold—or at least broad prosperity—at the end of that rainbow.” Undoubtedly, the Celtic Tiger is making a roaring return.

    Credit for the recovery goes to the very policy choices derided by Krugman—downsizing of a bloated public sector and efforts to reduce the fiscal deficit and public debt. As a result, Ireland has regained its fiscal health and become the first country to exit a European Union bailout. According to thelatest economic data, Ireland has become Europe’s fastest-growing economy, attracting jobseekers from all around Europe.

    In fact, as documented in The Heritage Foundation’s Index of Economic Freedom, over the past two years the Celtic Tiger has reversed six years of decline in its economic freedom and reclaimed a place as one of the world’s 10 freest economies. With the economy buttressed by institutional strengths such as strong protection of property rights, efficient business regulations and competitive tax rates, the government’s fiscal restraint has been just what was needed to unleash faster growth.

    Even the International Monetary Fund has joined in the praise, saying in a recent report that the Irish recovery remains strong and the economy is “starting to fire on all cylinders.” In an International Monetary Fund economic conference entitled “Ireland—Lessons from Its Recovery from the Bank-Sovereign Loop,” a member of the executive board of the European Central Bank remarked that “the Irish economy has been an outstanding success over the last years and months.” The official warned against complacency but lauded the flexibility that has become the key component in Ireland’s success and helped it cope with shocks.

    Perhaps it is time for Krugman to reconsider his claim that “the repeated invocation of Ireland as a role model has gotten to be a sick joke.” It looks like the joke is on him.

  2. Would you support Communists with Capitalist policies or Capitalists with Communist policies.
    If this were your choice would you be wise enough to make the right decision.
    Greece needs UNITY from all Greeks and giving in to the Europeans is a sell out of Greece.

  3. Greeks must vote NO! No to further enslavement to the Troika! No means HOPE AND FREEDOM for self determination . Greece must disentangle themselves from the unequal political and economic relationships with European powers that push them to the edge of mendicancy.