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Sep 14 2011

What EU can learn from South Africa

Published by at 8:20 am under Europe,Opinion,Top Stories

German newspapers are full of articles on what might happen to the Greek economy should the country default on its debt and leave the EU. This is a good thing, since Greece will default sooner or later. What I find lacking, however, is that no-one studies the past for lessons on what Greece could/should do before and after the inevitable happens.

One debt default which I think can be particularly useful to study (mostly for how to handle the crisis on your own), is that of South Africa in 1986.

In fact, if I was a Greek and/or EU economic policymaker, I would have met with the key people in South Africa’s debt default drama long ago, to hear firsthand how they handled it, why they did it that way, and how the case study is relevant in the current Greek situation.

I think it is highly relevant.

It is well documented. So, if Greek officials can’t afford the flight tickets down, they could also just read about it.

The SA debt crisis and rehabilitation process played itself out between 1986 and 1994 (maybe low-key for a few years into the Mandela period). So, it took SA at least 10 years to get back on its feet. It is unlikely Greece will rehabilitate quicker (they haven’t got anything to export…SA had gold and other resources).

 

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