But if you walk through the requirements of Greece's new program, there is another possibility. That possibility is an economic death spiral – contraction leading to banking failure, banking failure leading to contraction – first in Greece and, later on, elsewhere in Europe.Politico
Here's what that would look like….
Greece: Death spiral ahead
James K. Galbraith | Lloyd M. Bentsen Jr. Chair in Government/Business Relations and Professor of Government at the Lyndon B. Johnson School of Public Affairs, The University of Texas at Austin
ht Clonal
10 comments:
It doesn't matter. Allowing Greece to deficit spend would have meant destroying unified Europe idea any way. The very idea James Galbraith loves. Syriza tricked people the whole time, their economic ideas were bad to start with. Running primary surpluses is not ending austerity. They are not that stupid not to understand that. Tsipras and Varoufakis both knew that. Yet this is what they were fighting for so hard, to have it few % smaller. The whole thing was a show.
They know it is a bad deal yet Hollande is presenting this as a victory for Europe and he is talking about his plans of European government. People are being sacrificed for a "better Europe tomorrow". Bill Mitchell's book title "Grouptink and Denial on a Grand Scale" really nails It. This is an utopian project like John Gray says, and these have to collapse, utopian projects are never dismantled orderly. This MMT paradigm about sovereign currencies "one state one currency" doesn't fit unified Europe idea. That is the whole thing. They do whatever It takes to save Euro. Banks may collapse and people suffer but euro is here to stay. By the way Tsipras destroyed Podemos too. Latest polls from Simple Logica show that. http://www.simplelogica.com/iop/iop15010_intencion_voto_popularidad_lideres.asp
PP 26,2% +2.4
PSOE 23,1% +3.7
Ciudadanos 18,4% +1.1
Podemos 14,9% -8.4
IU 5,4% +1.3
Not that Podemos was any better than Syriza, they are already talking about the need to reduce budget deficitis to comply the rules of the monetary union. The only forces remaining against the project now are the far right and most decent people won't vote them.
"The only forces remaining against the project now are the far right and most decent people won't vote them."
Yet.
Wait until things get worse. Then people will vote for anyone that promises change credibly.
Yes Tom, It is going to be a mess politically. That's what I would guess. That's what happened in Germany before the Nazies. Who knows what the forces are going to be now, It doesn't have to be the far right but it looks most likely candidate now.
They are for unified Europe and they won't let it go. Euro is an important part of it and if you think about it, It really is an important part for United States of Europe. If california had its own currency how would it fit with federalism in US?
They can't let the member states deficit spend, they know this whole thing is going to fall apart then. In their mind the fiscal transfer union cannot happen before superstate is created. Left party after left party surrenders to austerity because of that. Hollande promised to end austerity himself. If me and you were European federalist dreamers politicians and if you told me that this cannot happen before we have the superstate, I would understand.
Greek Guilt and Syriza Perfidy
http://journal-neo.org/2015/07/16/greek-guilt-and-syriza-perfidy/
EMU: Death spiral.
Maybe EEU death spiral too.
It's nip & tuck for awhile.
Kristjan:
The only forces remaining against the project now are the far right and most decent people won't vote them.
Most of Syriza was not for this absurd "deal". Elections will be held soon - probably by October - when things get even worse because of this. Merijn Knibbe's guess is 30-35% unemployment. Employment in selected Eurozone countries. No austerity or neoliberal miracles
No matter how many deny it, the referendum showed that the substantial majority of Greeks are not for the Euro at all costs. See This is a Betrayal: Interview with Professor Spyros Marketos
JT [Joshua Tartakovsky]: How would you respond to the argument that Tsipras did what he did because most Greeks want to stay in the Euro and therefore he did not have a mandate to leave the Euro?
SM [Spyros Maketos]: It was very clear that 61.3 percent that voted in the referendum did this in full cognizance of the fact that almost everybody told them that the consequences would be to get out of the Euro, if they vote No. They voted No anyway. This was a referendum, it was not a Gallup poll. Everyone, behaves, in the government and media, as if it was just a Gallup poll, a survey. Something that disappeared that they don’t talk about. They try to make the people forget about it, but the people did not forget about the referendum. They knew that probably, a consequence of a No, would be a Grexit and yet they voted. And even Tsipras stated this at some point.
Speaking of Gallup polls, of course there is that 2014 Gallup International poll showing 52% pro-Drachma vs. 32% pro-Euro. :-)
Thanks Calgacus
It's interesting that this idea that Greeks are for the Euro has taken root.
Another truth by repeated assertion.
Kristjan: You're welcome. In the same vein, from his important recent very long, but very informative Jacobin interview.
Stathis Kouvelakis: So it’s completely irrational to say that the people voting for No were not in the very least taking the risk of a possible exit from the euro if that was the condition for saying “no” to further austerity measures.
Both he and Maketos refer to early elections.
Confirming this, 3 days ago:
Interior minister Nikos Voutsis "told Sto Kokkino radio that elections are "very likely" and that if they don't take place in September, then it'll be October."
But Tsipras says Greek PM: Early elections unlikely despite weakening Syriza support - not until after "an agreement with the creditors is reached".
The latest I can find on the topic is Greek reshuffle hints at autumn election again suggesting elections soon, but probably after an "agreement" is confirmed by the legislature.
Neil: Yes, by repeated assertion - like "Greece cannot feed itself." On that, I've seen "70-80% of Greece's food is imported" & "Greece's consumption of calories has decreased 30% since the crisis started". Some of this is from formerly or usually reliable sources too. But the usual hallmarks of truthiness: precise-sounding whoppers are prefaced by "this is calm, cold- blooded looking at the facts, not idealistic dreaming", but never, ever a source that confirms the statements.
Another one is the Euro treaties say the Euro is "irrevocable", say that getting out of the EZ means getting out of the EU. Experts can & do argue that, but they also argue the opposite. The treaties are not clear. The word "irrevocable" is used only to say after such date, the peg of the paleodrachma (or paleolire, or paleomark) to the Euro is "irrevocable". Says nothing about the Euro vs a neodrachma etc many years later - so this argument is very bad, based on ignorant repetition (almost always), or dishonesty (occasionally).
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