prof. krugmanthat may be pushing it in bit far. it was a raw assertion of power. there is never a case made that yesterday program made sense or there's a reasonable way of working your way out, but all that happened was essentially, the european central powers -- i just coined that right now -- the european central powers that we will destroy your economy was -- unless you go along. joe: it wasn't just the european central powers. you had really tough lines from the finance ministers of slovakia and finland who were being asked to -- this is their taxpayers' money they are giving to another country. why can't they demand strict conditions? prof. krugman: well, obviously they can, but the funny thing is nobody thinks this money is coming back. greece cannot in fact pay more. this is not about how much greece will repay, which is going to be very little regardless. it's about how much the greeks have to suffer and this was all about sending a message that there is no escape. you don't get away with

prof. krugman: greece had structural problems but it did not have 23% unemployment. greece is not a successful economy, but it was not the disaster it is now. greece desperately needs some relief. debt, itsome relief on needs -- if it had its own currency, you would say in a heartbeat, it needs devaluation. if you think about argentina, argentina has match the structural -- has massive structural problems. but when argentina abandoned its peg to dollar, the economy began to recover and grew 63% over the last two years. euro has turned into a roach motel -- once you go in, you cannot come out, it's a disastrous thing. argentina, big commodity exporter and at the same time china was booming. with greece, what's the value of devaluation given that they don't have a manufacturing sector to her and you don't associate greece with exports? prof. krugman: first of all, greece has what it always has had -- sun and sand. the -- a very favored tourist destination for large numbers of peru -- of beer swilling