From Prof Vicky Pryce.

Sir, It is indeed “too early for Greece to claim victory” (Tony Barber, 30 July). “Beware the bankers from the north bearing gifts of cheap, painless money” should have been inscribed over every Greek ministry after the country joined the euro. Instead, Greek politicians, left and right, took the money from Germany, France and other EU member states and recycled it to the north by way of often pointless defence purchases or spent it on boosting an already bloated and inefficient public sector. To be sure, poor tax collection, corruption and other bad practices continued unchecked, although some progress has indeed been made. But the drug of cheap money was the main problem across the economy.

Externally imposed austerity with a 25 per cent fall in gross domestic product during the past six years has done little to improve underlying competitiveness and today it is the young and old of Greece who are paying the price.

The country is in the equivalent of a 19th century debtors’ prison. Unless the crushing burden of debt is lightened by the IMF, EU and ECB, the Greek tragedy will not reach a final act.

Vicky Pryce, Author, ‘Greekonomics’, UK

Get alerts on Letter when a new story is published

Copyright The Financial Times Limited 2018. All rights reserved.