Europe's emergency aid to Greece, A dual disappointment

Is it too early to admit to hopeful tears as the results of the Greek ref come in?

https://pbs.twimg.com/media/CJLGAGYWEAExnbU.png

This should be more widely known, given how much ink has been expended on the Greek situation. Funny it is not a focus of the reports, really

http://neweconomicperspectives.org/2015/07...er-no-vote.html

Not sure quite where to put this, but it is relevant to Greece, though not really about Greece per se. It rehearses many of the arguments I have put forward in other places on this board, not least the fact that the Greek bail out was clearly inadequate to deal with the crisis, and known to be so when it was made; and the fact that the money did not go to Greece (or in its turn, to Ireland) but rather to the banks. The genesis of the "sovereign" debt in Ireland through the government's decision to take responsibility for private losses is also reiterated.

Trichet's praise for the strength of the Irish economy prior to the crash, because of its adoption of neoliberal prescriptions is better elaborated in this piece than it has been on this board, though the points have been outlined here before.

I am linking to this piece "lest we forget". Mr Trichet was on Radio 4 this morning to demonstrate that he has learned precisely nothing from the comprehensive failure of his analysis since he made the speech referred to in the article. One would think that a person who publicly makes his position and understanding clear, and who finds it is wrong in every particular, would change his mind. But that is not the neoliberal way, of course, being faith based.

One wonders what would count as disproof of a theory, if this does not. Maybe I should put it in "crazy things economists believe" instead.

Me neither. I am furious but I am also puzzled. I truly do not understand anything that has happened since the referendum in Greece.

I like your theory: it makes more sense than anything else

http://www.forbes.com/sites/francescoppola...es-master-plan/

Interesting perspective from Frances Coppola

It seems to me that Syriza was in an impossible position because of the point you raise: that the Greek people appear to want to stay in the euro at any price. Without the possibility of a decision to walk away, they had to accept anything that the EU decided to impose. It is likely that they were a bit naive, in that they may have thought that a certain pragmatism would be in play and that the EU would wish to find some solution with a chance of working. If so then I think they misunderstood entirely what is actually happening here. None of this is about solutions: all of it is about maintaining the neoliberal hegemony and so called "globalisation". It is no longer possible to believe that the elite are honest when they maintain that this position will lead to greater prosperity for all: they have no interest in the adverse effects on ordinary people; no commitment to democracy; and they know that their rhetoric is a a fairy story. They are not mistaken.

I regret that Greece has condemned her people to perpetual and increasing poverty and debt servitude: and I think that is what has happened here. I see no end to the worsening of the problem, as framed by this "deal". The IMF (for whom I hold no brief at all) appears to agree. The EU powers pretend to respect for the expertise of the IMF, but had their analysis before the negotiation and chose to ignore it. Apparently we are all supposed to do what the IMF tells us; but only if it suits the pre-determined conclusions. In other words, their role is to provide a fig leaf for what the plutocrats want to do. If they step out of that role then suddenly they do not count. This is also true of economists, who are sidelined where they do not support the project of plutocracy.

To me, Syriza have not been straight with the people of Greece. I think that is down to naivity, not the kind of dishonesty displayed by the other side. But it would have been better if they had presented the Greek people with the reality that their wishes are inherently contradictory: for Greece cannot reject austerity while refusing to contemplate leaving the eurozone. And this was obvious before the recent events. It is most like that they cannot reject austerity and stay in the eurozone: but that is not absolutely certain, because it depends on how the other party calculate the price of a Greek exit. Maybe they would have offered a workable deal if Syriza had that option. They didn't choose to seek that mandate during the referendum and this is the result.

I have no idea if that mandate would have been granted, if sought. I do not know what price Greek people were prepared to pay for their preferred option. But I do know that they will pay it now and all they have gained is continued membership of a eurozone which will continue to kill them, intentionally and without concern. While we are using loades words, "appeasement" is one

In this country the Germans are getting the blame for this, amongst those commentators who do not see it as workable, at least. There is suspicion of Schauble and of the German government and there is a perceived split between Germany and France. Other nations are variously assigned to one side or the other and it is all discussed in terms of the nation state. This is not a good development because parallels are being drawn with past German attempts at european domination, and there is now a narrative which suggests that German ambition is just as it was in the last century. At present the phrase is domination using banks not tanks. How long will that last? I have long been concerned that the neoliberal economic policy necessarily ends in war: for ages I could not see who would fight. More recently I became worried that it would be "the same people as last time". In the UK this seems to have moved us a step closer to that outcome, and anti german feeling is never far from the surface here.

This is not about nation states, or about national character: it is about class war, IMO. But it will not be framed that way and it will not be perceived that way. It takes a long time to set up a situation which allows war in europe. And perhaps the "commemorations" of various military anniversaries here is coincidence. But we marked the start of WW1 last year: and we have been treated to accounts of Waterloo and the battle of Britain this year as well. I hope I am paranoid. I hope that the "annexation of Greece" does not become a phrase in the future when discussing the genesis of WW3. Perhaps the war will remain purely financial and will not become a matter of armies. Not sure that ever happens, however.

For this is "annexation" so far as I can see. Greece, as a nation state, no longer exists. It seems to me that for some of the european plutocrats that is not a bad thing. What does "ever closer union" mean to them? I suspect it means a european plutocratic state, perhaps organised federally, but nonetheless one state. The peoples of europe are not ready for that, I don't think. But if it is effected this way, where will they find the means to resist? There is the appearance of a national government, but no substance to it. Our democracies do not appear to have a defence, so far. You can vote for anyone you like, but the banks always win the elections. For they have bought the governments, now, not just the parties.

There are opposition movements in many places, and they will look on the Greek experience and they will learn. But what will they learn? That it is hopeless? That peaceful means do not work in a plutocracy? We have seen this polarisation before, with its concomitant demands for "strong leadership/government" whether of left or of right. Peace in Europe is not a consequence of the nuclear deterrent, though that is the story. To me it was a consequence of the post war consensus which met the needs of everyone to some extent, and of no one completely. That was due to the recognition that laissez faire economics causes violent division: we have abandoned that understanding and we travel a road well worn. Or so I fear.

There are also those who do not see the imposition of one european state as the aim, however. Some here are suggesting that the aim is to force the weaker economies out of europe: first Greece then Spain, Italy, Portugal and who knows who else. Then the others will be happy in a union which is economically more equal and all will be well. But they still envisage a smaller EU built on German prescriptions, and so those voices do not challenge the German domination narrative. So that does not help.

It is said that people were sleepwalking into the first world war. That nobody wanted it but it arose because of smaller agreements and treaties and tension which incrementally made it inevitable. And one small event sparked it, and it could not be stopped. I am not sure that is correct. But if it is, are we there again? Or on the way there?

If I am merely paranoid, I want to be corrected. Soon please.

PS: I just heard that Japan has decided to abandon its pacifist stance and allow its soldiers to take military action overseas. Coincidence, I hope

Edited by FionaK - 16/7/2015, 13:41

"Finland was in nothing like the same position, unless you have information to show otherwise. However it did join the euro in 1999, as I understand it. We will see how it fares in the future."

I wrote that on this thread in 2012. I take no pleasure in linking this report about Finland's currrent position

http://www.businessinsider.com/finland-is-...ion-2015-6?IR=T

It is from Business Insider, which , it will come as no surprise to learn, does not reflect my views about what should be done, at all. But it does show that the mooted "work your way out of economic problems" does not work under current arrangements.

"Soini has admitted that he is "not committed" to the single currency, while the country's crisis in the 1990s was helped by a massive devaluation, which cannot be repeated now that Finland belongs to the 19-nation club."

Nonetheless the govt does not admit that devaluation would work, and instead puts faith in the same failed austerity which has destroyed lives across Europe.

That is something I said in response to Vorgoeth in 2012. It came back to me when I was reading a post from Bill Mitchell today

http://bilbo.economicoutlook.net/blog/?p=33294#more-33294

In brief, the 1990's recession was resolved by depreciation (though not immediately): the current recession began in 2008, like everywhere else. The Finnish government reacted with a stimulus package which was working in terms of better GDP growth, by 2010. But the EU didn't like that, as usual, and so demanded the usual austerity measures. So the recovery reversed. Finns appear to have elected a right wing government which is happy to meet those demands ( much as has happened in the UK). So we get the usual catalogue of cuts to pay and benefits. And we get the usual results: high unemployment; low growth and increased inequality.

As ever there is an accompanying narrative: euro not to blame; living beyond means; profligacy of the very idea of a welfare state.

You may or may not agree with Bill Mitchell's analysis. I do. And it was entirely predictable that adoption of the euro would have this result. Though of course any country can do the same without the euro, as the UK shows. All they need to do is pretend they have the same constraints as eurozone countries have wrt currency. But they don't, as the earlier Finnish experience shows.

Re Finland
http://www.reuters.com/article/us-eurozone...t-idUSKCN0XP2FP

A petition has led to a debate in the Finnish parliament about whether the country should leave the Euro. The report says it is unlikely that they will secure a referendum on the issue since there are several stages and parliament would have to back it

Curiously it notes there was a poll in December which found that 54% wanted to stay in EZ; 31% wanted to leave; yet 44% said they thought the country would do better outside the EZ. This reminds me of Greece, where there was a strong wish to stay in EZ even though many seemed to recognise that there were good reasons to leave in terms of the prosperity of the people. At least that is what seemed to happen

I do not understand why people appear to want to stay in a system which is damaging them. But that seems to be the situation.

http://www.counterpunch.org/2017/02/21/fin...-pay-back-debt/

Interview with Michael Hudson. Not new thoughts, but worth restating