Greece, Still Paying for Europe’s Spite (Varoufakis)
Last edited Wed Jun 1, 2016, 05:59 AM - Edit history (1)
... Greece’s economic misery seemed set to provoke a new standoff recently — except that, this time, it was between the International Monetary Fund and the European Union’s Brussels-Berlin nexus. Chancellor Angela Merkel of Germany is reluctant to confess to the Bundestag that Greece’s bailout loans were always unsustainable. To maintain the fantasy that they will be repaid as planned under the terms of last year’s deal, Berlin has insisted on setting a ludicrous target for Greece’s budget surplus. (That target is 3.5 percent of gross domestic product every year starting in 2018 — roughly equivalent, as a percentage of G.D.P., to America’s military budget, but in Greece’s case, purely to service its foreign debt.)
The German condition amounts to imposing permanently escalating austerity on Greece. The I.M.F. protested, correctly, that there was no level of austerity that could achieve this target.
In past weeks, there were indications that the fund was ready to insist on debt relief for Greece, allowing a lower budget surplus target and therefore less austerity. Unfortunately, last week’s meeting of the so-called Eurogroup — an informal body of eurozone finance ministers together with officials from the European Central Bank and the I.M.F. — dashed these hopes. With the I.M.F.’s managing director, Christine Lagarde, notably absent, her stand-in capitulated to the Brussels-Berlin axis, postponing any debt relief until 2018 at the earliest...
... Reason demands an end to this loop of doom. What Greece needs is a realistic restructuring of its debt and a primary surplus target of no more than 1.5 percent of national income. The government should also continue with reforms that target oligopolies in areas of the economy like supermarkets and the energy sector, as well as inefficiency and corruption in public administration.
Instead, the odd principle of imposing the greatest austerity for Europe’s most depressed economy lives on, spreading new misery through Greece and needlessly holding back recovery in Europe’s monetary union.
http://nytimes.com/2016/06/01/opinion/yanis-varoufakis-greece-still-paying-for-europes-spite.htmlAlso:
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