Greece's Alexis Tsipras has embarked on a European tour to win support for his economic agenda. European leaders should engage constructively with his proposals. There are many good economic arguments for Tsipras plans but the main reason to make concessions to Greece is a lesson from the politics of the Great Depression.
The economic dangers associated with the introduction of the Euro were predictable - and indeed predicted by many. Yet political leaders at the time chose to make a grand and hubristic political statement irrespective of the devastation it could bring to their citizens. The Euro is, maybe, the best example of the consequences of a political and policy elite living in their own world and totally divorced from the consequences of their actions on ordinary people.
In a press release dated February the 19th addressing the so-called "single resolution mechanism" to be decided by the European institutions, the Council of the European Union stated, in what is perceived as a negotiation declaration towards the European Parliament, there was agreement between the partners that: "bail-in and not bail-out is the main guiding principle for bank resolution."
In Europe, the pace has been considerably slower still. According to the Financial Times (2014.01.05) analysing a leaked proposal of the European Commission with a "narrowly defined version of the US Volcker rule" the official calendar expects an agreement no sooner than December 2015, the dates of its real implementation being anyone's guess.