Introduction
Many people around the world know that Greece has been
under "austerity" since May 2010 when PASOK (Socialist party) government under
George Panadreou invited the IMF, the European Central Bank and the European
Union via the European Commission to propose reforms in everything from public
finances to labor policy. The word is Greek (austeros) and it means (bitter or harsh) conditions that are severe or very strict. Second,
the term refers to IMF policy conditions on strict or severe fiscal
policy, namely budgetary cuts intended to reduce the size of public
spending. This is expecially in the domain of any social spending, wages
and benefits for public employees, but not in defense and stimulating
big business through tax incentives and subsidies. In the absence of
such "conditionality" the debtor member of the IMF cannot receive any
credit and it is completely cut off the private markets because the IMF
has not deemed it credit worthy. Third, the word austerity has
been identified with the IMF for the past half century because the
ultimate goal is to reduce labor costs and all value of assets,
especially in the public sector, thus allowing new private capital,
domestic and especially foreign to enter and stimulate economic growth.
In short, the goal is massive transfer of public sector assets into the
hands of the private sector at a substantially reduced cost relative to
market value. Fourth, austerity refers to a monetary policy
that diminishes any Keynesian (deficit spending) intended to stimulate
growth by absorbing surplus capital concentrated in the hands of the
wealthiest individuals. Austerity has always resulted in massive capital
transfer from the lower and middle income groups into the hands of the
top income earners. Fifth, austerity is intended to keep the
value of money high - lowering inflation - by raising the cost of
borrowing for the public sector. Therefore, the public sector's role in
stimulating economic growth diminishes, allowing the strongest elements
in the private sector to dominate. For this reason, the term monetarism
is invariably associated with austerity or anti-inflationary economics
intended to stimulate growth by raising consumption. Austerity lowers
mass consumption owing to income transfer from the lower and middle
cincome groups into the hands of creditors.
With the strongest economy and greatest contributions to the ECB, Germany has been the catalyst in these negotiations, although the IMF has also played a role that all of the Western creditors and Germany wish for it to have. The promise of the IMF-EU was that very shortly Greece would have lower unemployment, higher and sustainable growth, more domestic and foreign investment, lower public debt, and creditworthiness so it could borrow at low rates from the private bond market instead of relying on the IMF and EU governments. Five years later, not a single one of those goals has been achieved, and the opposite of what was promised has taken place.
With the strongest economy and greatest contributions to the ECB, Germany has been the catalyst in these negotiations, although the IMF has also played a role that all of the Western creditors and Germany wish for it to have. The promise of the IMF-EU was that very shortly Greece would have lower unemployment, higher and sustainable growth, more domestic and foreign investment, lower public debt, and creditworthiness so it could borrow at low rates from the private bond market instead of relying on the IMF and EU governments. Five years later, not a single one of those goals has been achieved, and the opposite of what was promised has taken place.
The problem is very simple. Greece total public debt
to GDP ratio was about 110% in 2010 when the Troika imposed austerity and
neoliberal policies, rising to 175% in 2015. Greece had unemployment of just
under 10% before the TROIKA, but 27% in 2015. The Greek GDP fell by 25% under
TROIKA, while the poverty rate doubled from about 17% to 35%. With a consumer
driven economy lacking any major export product such as crude oil, gold, diamonds,
etc, Greece cannot possibly service the debt due mostly to foreign creditors, a
reality that even the most orthodox austerity and neoliberal ideologues
acknowledge.
Writing off the debt totaling about 320 billion in
2015 would mean losses of roughly 160 billion to German and French creditors,
which the respective governments would have to absorb to a large degree;
meaning that the taxpayers will bail out the private investors of public bonds.
Moreover, there would be other losses to the private sector within Greece as
well as outside in case of a return to a national currency in place of the
euro, even if there is a plan to keep the euro for international trade and
external payments.
As an importer of just about everything from
pharmaceuticals to beef, from electronics to automobiles, Greece would need
credit to continue international trade and it would need the backing of hard
assets of its own currency. Even if GREXIT takes place, this means that once
again, EU has no choice if it wishes but to pour money into Greece because it
wants it integrated into the zone; a reality that has its roots in the 1820s
during the War of Independence when the first loans were contracted and set the
precedent for Greek external financial dependence.
I have argued in the last three years that the cost of
GREXIT to the EU would be at least one trillion euro, and this is a conservative
estimate, given that the German Finance Ministry estimates losses to France and
Germany at 160 billion. This does not take into account the ripple effect on
bank and stock markets, on the value of the euro, on trade between the euro
zone and its Asian partners. Even the markets of China and Japan are rattled every
time the news about Greek debt negotiations is pessimistic. Nor does this
scenario take into account the incalculable political costs, considering that
nationalists and leftists in a number of European countries are waiting for the
chance to strike against the EU; this is certainly the case in Spain with
PODEMOS that shows political promise, and in Poland where nationalists are
skeptical about the euro.
In spite of these harsh realities, the EU governments,
Western businesses, Western media and apologist of austerity and neoliberal
policies have been perpetuating myths – massive propaganda - about Greece, the
EU and the IMF, hoping to inculcate fear and trembling not just in Greece among
the public but across Europe and indeed across the world. The reason for this
is that they want no compromise on austerity and neoliberal policies, no matter
the impact on the weakening middle class, on workers and pensioners who are
asked to essentially pay to transfer capital from the periphery to the core
countries, from the bottom of the social classes whether in Greece or Germany
injecting funds to help Greece repay creditors.
Western media, business and economic analysts have
been urging Western public officials and the IMF to pressure Greece and bring
the government to its knees, no matter the consequences on the 11 million
people in Greece and the unforeseen consequences at all levels from economic to
political on the rest of Europe. Among the sagacious advice of the hard-line
neoliberal ideologues are the following:
a)
Pressure
tactics include but not limited to complete and immediate ECB credit cut off
and threaten Greece with financial isolation even after it adopts its own
currency.
b)
Humiliate
the Greek government in a public relations campaign and discourage tourists
from visiting Greece.
c)
Boycott
Greek products and shipping that is one of the world’s largest.
As long as the state’s role is to cater to creditors
and investors, this is all that matters in society, whether it is a case of a
hand full of creditors vs. millions of people as has been the case with
Argentina since 2002. This is exactly the mindset that has prevailed throughout
the post-WWII period when the US would have the CIA assist overthrow regimes
such as Allende’s Chile because he dared pursue national sovereignty rather
than integration under the aegis of Western market interests. The same
mentality prevails today in the case of Argentina as well as Greece, indicative
of the immense influence of capitalists over policy government international
financial relations.
GREEK MYTHS ADVANCED BY APOLOGISTS OF AUSTERITY AND
NEO-LIBERALISM
1. Greece has no time to waste and must agree to IMF-EU
demands otherwise it will face disaster. In reality, this myth has proved as repetitive as the
“cry wolf” story, because we have been seeing it in headlines in the last five
years continuously. Now that SYRIZA (claiming the leftist political label) is
in office since late January 2015 this “imminent deadline” scenario has become
even more prominent. Yet, it keeps getting postponed until the next day, next
week, next month, and so it goes proving it is another pressure tactic intended
to force Athens into submission of more austerity and neo-liberalism – lower
wages, lower pensions, more public workers dismissals, total abolition of
workers’ rights, higher indirect taxes, and more public asset sales for a
fraction of their actual value to large domestic and foreign investors.
2. “GREXIT” will have no impact of any sort on Germany,
the EU or the West.
This is the most frequent myth, massive propaganda that apologists of austerity
and neo-liberalism have been producing in order to scare and confuse the public
and force Athens to accept what the EU and IMF have put on the table. If indeed
a possible GREXIT does not matter, then why are Western markets so impacted on
any kind of news on the ongoing Greece-EU-IMF talks? If indeed a GREXIT is a
possibility, how do we explain that one month after the January 2015 election
of the self-proclaimed anti-austerity SYRIZA government hedge funds were betting
on a Greek recovery? These include Third Point, York Capital Management, Alden
Global Capital, Greylock Capital Management and Eaglevale Partners. Even more
revealing how do we explain that amid the Greek debt negotiations Allianz SE,
Europe’s largest insurer and asset manager, increased its holdings of Greek
sovereign debt to more than 1.2 billion euros ($1.4 billion) from about 1
billion euros reported in May 2015? Why is PIMCO-Allianz taking such a risk on
Greek bonds to become Greece’s second largest bondholder after the European
Central Bank? Is GREXIT a reality for PIMCO-Allianz or a remote possibility?
The myth promoters argue that GREXIT is meaningless to
the West because a US computer company, for example, ought not to suffer negative
consequences because Greece is a mere 2% of the EU economy. While this is true,
why then do stock prices of Apple Computer along with all others decline on
negative news regarding the Greek debt negotiations? It is not because the
Greeks will not be buying American computers made in China and transported
aboard Chinese vessels, but because the entire European market will suffer partly
because of real impact, partly because markets are driven by psychology –fear
and greed – partly because of political instability of what comes after Greece.
The myth of Greece does not matter is nothing more than comfort talk for
investors not to panic and head for the exits if and when Greece abandons the
euro because it has been forced to do so, and it is forced to declare monetary
sovereignty.
3. Greece has a radical left-wing government, implying
that this is a Socialist regime pursuing socialist policies. Actually, the social policies of Greece are less
generous than the social safety net of conservative (neoliberal, pro-austerity)
Germany. Moreover, ruling party SYRIZA is self-baptized leftist, but it is made
up of diverse elements, that include some committed to social democracy, but
only a minority of roughly one-third of elected members who demand an end to
austerity and neoliberal policies. In fact, SYRIZA has proved in the last five
months that it is willing to follow austerity and neoliberal policies, but not
to extend them as the IMF and Germany have been demanding.
After making massive concessions to the EU-IMF, SYRIZA
is simply rejecting new tougher measures that would raise the public debt,
reduced GDP growth and reduce living standards for Greece to the level of its
northern Balkan neighbors currently not in the euro zone and not enduring the
high cost of living of the EU that has a hard currency. Even finance minister
of Greece Varoufakis has argued that the goal is compromise but not piling up
more austerity and neoliberal measures. This from an individual who has described
himself as a “neo-liberal Marxist”- a blatant contradiction coming from an
economist who s=ought to know better than resort to such nonsense. However,
this is indicative of how far this government is from any commitment to
Socialism or even to reformism based on a Keynesian model.
4. Varoufakis and ”Game Theory ” have inhibited negotiations. I have argued
in previous articles that even if Nelson Mandela and Albert Einstein were negotiating
together on behalf of Greece the outcome would be about the same because
creditors want to make money, even if it means the EU governments and ECB bail
them out by purchasing their bonds. Meanwhile, the Greek government wants terms
with which it can live in everything from debt reduction to fiscal policy,
labor relations, and pensions. Otherwise, there is the fear of a massive
popular backlash if poverty rises to 50% of the population. After all, SYRIZA
was elected with the campaign promise to stop austerity as a matter of
reclaiming national sovereignty.
It is a myth that Varoufakis is the real problem
because even after Prime Minister Tsipras sidelined him in May 2015, the negotiation
results were exactly the same as before. It is true that Varoufakis is an
individual who was a very poor choice for finance minister not because he came
from the PASOK camp that had embraced neo-liberalism as policy, but because he
lacks credibility in any ideological or political camp. He described himself as
an “erratic Marxist” before revising his self-description to “neo-liberal
Marxist”, indicative of absence of substance. Although he stands in the camp of
neo-Keynesian economics, having worked with the son of John Kenneth Galbraith
and influenced by Galbraith’s brand of economic theory, he has associations
with neo-liberals and promoted one such candidate to represent Greece at the
IMF.
The candidate, Elena Panaritis, has a long-standing
record of advancing neoliberal agendas after her experience in Peru during the pro-US
dictatorship of Alberto Fujimore. “
Panaritis' reform work in Peru implemented by Alberto Fujimori
regime named "Fujishock", while "improving" macroeconomic
figures and keeping the global financial community satisfied, led to poverty
millions of people after a 10 year governance based on authoritarianism,
corruption, human rights violations, mass population sterilisations and mass
executions and ended failed in the year 2000 elections.” (http://en.wikipedia.org/wiki/Elena_Panaritis)
That SYRIZA actually place a neoliberal ideologue as a candidate to the IMF
post is indicative its commitment to going along with much of the neoliberal
and austerity agenda. However, it is not enough for the IMF and EU to have
SYRIZA compromise to the degree of abandoning its pre-election promise to halt
austerity and neoliberal policies, there are new harsher demands that would in
essence sink the bottom half of the population into chronic poverty.
5. AUSTERITY is the only solution to the problem. The myth that austerity is the only solution to the
debt crisis has been disproved not only by the actual performance of the
economy from 2010 to 2015, but by all cases where austerity has been imposed
and exacerbated the problem rather than solving it. Of course, austerity does
result in massive capital concentration in the hands of the very few domestically
and it results in low labor costs and asset values, allowing new investment to take
advantage of such opportunities. However, this is to the detriment of workers
and the middle class.
Austerity also results in massive capital outflows. Greeks
have behaved no differently than all other capitalists in the last five decades
when austerity is imposed by taking their money out of the country and placing
it in safer places. In other words, money flows out of the country suffering
austerity and only comes in after years when there is a clear picture about the
stability of the economy that austerity undermines.
If austerity was such a magic solution to economic
crisis, then why did the US adopt a liberal monetary policy under Obama in 2009
in order to help the economy recover? After all, such a policy only adds to the
public debt that stands at roughly $17 trillion in the US, or about equal to
GDP. If austerity works, then why has it not worked to realize the goals that
both the IMF and EU promised Greece in 2010? The myth hides behind it the
reality that austerity works to concentrate capital and achieve even greater
integration with the global economy which is its real goal. In short, the myth of austerity working for
the benefit of the country undertaking it is exposed by the empirical evidence of
the economic performance statistics.
6. Greece risks bankruptcy if it does not meet payments
to its creditors.
This is a huge myth because Greece has been in technical
bankruptcy since May 2010 when Prime Minister Papandreou invited the IMF and EU
to bail out Greece. Default and bankruptcy are technically two different things
in this case. Default is failure to meet creditor obligations on time. Bankruptcy
is a legal process involving creditors with political authority to oversee the
finances of the debtor, something that has been taking place in Greece in the
last five years.
If the IMF and EU had not provided funding to meet
creditor obligations from 2010 until 2014, Greece would not have been able to
meet the debt payment schedule. Second,
the 50% debt “haircut” deal negotiated in November 2011 was further proof of
bankruptcy. Third, Greece did not make the IMF payment due in early June 2015,
insisting that it was merely postponing and bundling the payments for delayed
repayment schedule. If no deal is reached in the summer of 2015, or if a
“band-aid temporary solution” – much more realistic possibility – then this too
technically is further proof that Greece remains in a chronic state of
bankruptcy.
Prime Minister Tsipras has already announced that
Greece will not meet the June 2015 debt service obligations, unless the EU and
IMF come to an agreement with Athens and release about seven billion euros,
money that would be used to meet such obligations to foreign creditors. The
private markets are off limits because the 10-year bond hovers at around 12%
rate, so the government is at the mercy of public lenders, mostly the EU. That
Greece is already bankrupt gives it enormous leverage, because it can now go
the next step and default, claiming it will be “bundling” payments until such
time as the creditors come to an agreement about the solvency of the Greek
debt.
7. Integration of Greece with the EU is insignificant to
the EU. Because it is a mere 2% of EU GDP with a labor
force of 1.7% of the EU, Greece is hardly significant argue the neoliberal
apologists promoting myths about the reality of the many dimensions of
integration. If the issue of Greek integration were merely one limited to the
common currency and economy, then why should be much significance? However, the
larger question is political, and this is something that SIRIZA, with all of
its broken campaign promises, has been arguing. The integrity of the EU as a
political entity is at stake, not just the euro as a hard currency. When we
consider that the euro-skeptics in a number of countries, including the UK and
France, will simply use the Greek crisis as a pretext to give political fuel to
their campaigns, then we need to think of the multiple dimensions of this
question, rather than limiting it to creditor vs. debtor relationship and funds
transferring from Greece to Germany.
The possibility that Spain under the rising popularity
of the PODEMOS party (similar to SYRIZA) poses a threat to the European Union’s
integrity is real. If Spain resists the austerity-neoliberal route, then others
will also follow. Germany knows this very well and it is trying to crush SYRIZA
so that it fails and sends a signal to the rest of Europe. No matter how much
the EU and IMF tried to make an example of Greece as a center-leftist
government that has no choice but to accept austerity and neoliberal policies
so that no other country would dare challenge monetarist and neoliberal
policies, the voters of Spain have shown defiance. At the same time, the voters
of Poland have done the same by electing a euro-skeptic Andrzej Duda.
Euro-skeptics are itching for an excuse to convince
their constituents that integration of the EU is not working any longer.
Euro-skeptics love to place the burden for the EU super-government on the
German hegemonic leadership that plays well as a nationalist-populist issue
even Greece has been playing. I have argued many times that Chancellor Angela
Merkel does not want to go down in history for undermining the integrity of the
EU, even if it means profits to the creditors would not be as high and as
immediate as she hopes. It is a myth that Merkel will not do everything
possible to prevent a catastrophe than may start in little Greece but spread
into the heart of Europe.
8. Greece has no options other than Western integration. Greece has options of diversifying
its integration model, but the EU and US will not allow it. After all, China
already controls Greek ports and wants even greater integration of Greece, as
does Russia using the gap pipeline as a catalyst. In May 2015, the Greek
government revealed that the US demanded prolonging anti-Russia sanctions,
despite the detrimental impact on the weak economy of Greece to the tune of 4
billion euros annually and long-term contracts at risk. Defense Minister Panos
Kamenos, an conservative noted the following: "I was asked to support the
prolongation of the sanctions, particularly in connection with Crimea. I
explained the Ukrainian issue was very sensitive for Greece as some 300,000 Greeks
live in Mariupol and its neighborhood, and they feel safe next to the Orthodox
Church.”
Russia
has been Greece's ally and a friendly country interested in expanding
commercial relations for various reasons, including breaking the Western
sanctions solidarity. Kamenos noted that: “Annually about 1.5 million
Russian tourists visit Greece. We export agricultural products to Russia. I
explained that the European Union does not reimburse losses to Greek farmers on
these issues.” Russia and Greece have been improving economic cooperation largely
because the US and EU has decided to impose austerity on Greece without
providing any alternative to stimulating economic growth. President Vladimir
Putin invited Athens to become the sixth member of the BRICS New Development
Bank. Greece immediately stated that it was interested in the offer.
In
April 2015 when Tsipras visited Putin, they agreed on a number of deals, including
participation in the Turkish Stream gas pipeline delivering Russian gas to
Europe. On 19 June 2015, Tsipras again meets with Putin and other Eurasian
leaders, putting additional political pressure on the West to ease on austerity
demands. This does not mean that Greece is about to become a Russian economic
satellite because Germany currently holds that honor, while the US has
continued to hold the honor of using Greece as a strategic NATO partner.
Because of its economic and strategic dependence on the West, the integration
options of Greece are limited to whatever the West will permit. Moving toward a
multilateral model of economic relations has been a dream of Greek centrists
since the early 1960s, but the West always obstructed it, arguing there is no
choice for Greece but to remain faithful to its existing partners.
9. The US favors Greece against
Germany in the negotiations. This is a myth that the media has promoted, owing
largely to the underlying tensions between Germany and the US over a number of
issues ranging from US-Russia relations over the Ukraine and sanctions that
have not worked to the best manner of dealing with the situation in Syria and
the Middle East. It is true that Germany and the US do not see eye to eye on
many issues, and it is also true that the US has been urging a compromise on
Greece. However, the US has been using the IMF to promote its own agenda, which
is neoliberal policies and strategic interests in Greece. For its part, Greece
has been trying to use the US as a political bargaining chip against Germany, but
that has not worked at all. Greek strategic dependence on the US and NATO makes
it vulnerable, so Greece cannot directly criticize the US, although it has made
noise about Washington’s unreasonable stance on Russian sanctions.
Greece is to
blame for high defense spending that does not permit savings to meet creditors’
obligations, largely because of the enormous bribes involved as we have seen by
the guilty verdict the Greek court issued against former defense Minister Akis Tsochatzopoulos, one of the very few pillaging with the cooperation of
German and other Western defense contractors. Throughout the austerity years, Greece did not slash
defense because the US would not allow it, and Western European – French and
German - defense contractors did not wish to lose the lucrative contracts. German
newspaper Frankfurter
Algemeiner Sonntagszeitung recently noted that the Europeans finally agreed with Tsipras about
defense cuts as a means of reducing budgetary spending so that creditor
obligations could be met. However, the IMF, presumably acting on behalf of the
US, vetoed that agreement, arguing defense cuts are off the table. The savings
from such cuts were about $500 million, a small amount but significant enough
to meet some short-term debt obligations. Although Merkel and French President
François Holland signed off on Juncker’s compromise plan to cut Greek
defense budget, the IMF refused to go along, accusing the EU officials of
sidelining them.
As different as
the interests of the US and Germany may appear to the unsuspecting observer,
they have a great deal more in common and it is in their interest to keep
Greece as dependency as it has been throughout its modern history than to fight
over. Clearly, the Greek defense cut is an issue of catering to creditors vs. catering
to US-NATO demands and here we see disagreement. However, there is no
disagreement on the larger issue of keeping Greece well integrated in the
Western camp, only about how to achieve that goal.
10. No one is making money as a result of the Greek public
debt crisis. According
to the former IMF representative of Greece, Panayiotis Roumeliotis, the
delaying tactics of the IMF and the EU in reaching a deal with Greece are
intentional to give time to the German banks holding an estimated 35 billion
euro in Greek bonds, and to French banks holding 60 billion in such bonds to
dump them in 2012. Such delaying tactics are continuing as are the myths
intended to influence the direction of bond yields, the currency and securities
markets.
Besides a massive transfer of private capital estimated
in the hundreds of billions from Greece to northwest Europe, austerity has also
resulted in transfer of public capital from Greece to the banks of northwest
Europe as well. The IMF and EU loaned Greece 252 billion euros. Of this amount,
150 billion paid debt and interest to bondholders, 48 billion was used to bail
out the Greek banks – owned mostly by Greek millionaires - and 35 billion was
used as incentive to private investors so they would accept the 2012 debt restricting
deal. The remaining 25 billion euros
went for domestic needs of the bankrupt government to meet various obligations,
including high defense spending that benefited German and French defense
contractors.
There have been Greek millionaires that have made a
great deal of money as well, benefiting from the sale of everything from public
lottery that was very profitable under state control to prime sea-side real
estate that the government sold ten times lower its assessed value. The reason
that on 16 June 2015, Prime Minister Tsipras accused the IMF of having “criminal
responsibility” for the situation in Greece is because the IMF was the vehicle
that the wealthy within Greece and abroad used to score profits in the billions
at the expense of the general population. "Right
now, what dominates is the IMF's harsh views on tough measures, and Europe's on
denying any discussion over debt viability. The fixation on cuts... is most
likely part of a political plan... to humiliate an entire people that has
suffered in the past five years through no fault of its own." Because Tsipras knows firsthand that billions of euros have
transferred from the general population to the pockets of a few wealthy
individuals and institutions inside and outside of Greece, he chose to lash out
at the IMF that even his European counterparts view with tremendous suspicion
and skepticism.
Conclusions
What
does the future hold is what everyone wants to know? Greece has been integrated
with the West ever since its creation as a nation-state in 1832. The benefit vs.
risk scenario for both Greece and EU is what is examined by all sides. Greece
cannot leave and go to another planet. It will remain a European country and in
some manner integrated with Europe, just as Mexico is integrated with the US
because of geography. There is no question that no matter what happens, the
pensioners, workers and middle class of Greece will pay the price. Beyond this
reality, the option of leaving the euro as a reserve currency has as many risks
for the Europeans as making some compromises to keep milking the Greek cow
whose milk is running out and it must option its future well into the 21st
century.
Capital
controls could be part of the temporary band aid deal so that negotiations drag
out longer and Greece is forced to accept all austerity and neoliberal
measures. In short, they would accept much lower living standards with few
prospects of growth and development, in exchange for stability and knowing they
are in the EU. Another option is that of Iceland 2008 when the three largest
banks were nationalized because they defaulted. Tsipras is on record saying
that creditors have pillaged Greece, making money right and left during the
crisis, while Greece is saddled with debt for the next 50-100 years.
Do
the Greek political and financial elites have any responsibility for the
current crisis, or is all the fault of foreign predatory creditors? Greek
government officials – everyone from defense ministers to the lowly customs
port official - have been among the most corrupt in the world, taking bribes at
every turn. Public and private sector corruption accounted for the tremendous
growth of the subterranean economy that is estimated at one-third, for massive
tax evasion from shipping tycoons to the small store owner, for squandering billions
of EU subsidies intended for growth and development but instead finding their
way into private consumption for the most part. In other words, the capital
culture of Greece immersed in systemic corruption contributed to the current
crisis. However, to argue that Greece, which was well integrated into the EU,
is alone responsible for the current crisis would be to ignore the empirical
evidence of the role of EU officials, the EBC, and oversight organizations that
knew all along about the problems but were silent because large private firms
such as Siemens were making money.
The only leverage Greece has ever had in the last six
years is the threat to leave the eurozone, but it never used it because
entrenched political interests representing a few thousand families who own
more than 80% of the wealth have gone along with the EU and IMF austerity and
neoliberal policies. In January 2015, SYRIZA, claiming it is leftist ideologically
and representing the workers and middle class, came to office with the solid
campaign promise to end austerity and neoliberal policies that were responsible
for a 25% GDP decline from 2010 to 2015 and official unemployment of 26%.
Ever since I began writing about this topic in 2010, I did not see GREXIT, no matter the rhetoric from
various political and financial interest groups that apologists of austerity
and neo-liberalism follow. On behalf of EU Commission president Juncker, Austrian
Chancellor Werner Faymann is negotiating with Tsipras so the two sides can come
to an arrangement that is politically and economically feasible to the two
sides. There are parallel efforts from behind the scenes by various other
actors, including the US trying to find a way to keep stability in the EU by
keeping Greece integrated. This will take time and something along the way
could always go wrong, but as I have stated above, Greece is not going anywhere
and Europe will have to deal with it one way or another the day after with the
cost about the same no matter what course of action is followed.
