Greece and the Crisis of Europe: Which Way Out?

[marmar]

from Dollars & Sense:


Greece and the Crisis of Europe: Which Way Out?
By Marjolein van der Veen | May/June 2013


The Greek economy has crashed, and now lies broken on the ground. The causes of the crisis are pretty well understood, but there hasn’t been enough attention to the different possible ways out. Our flight crew has shown us only one emergency exit—one that is just making things worse. But there is more than one way out of the crisis, not just the austerity being pushed by the so-called “Troika” (the International Monetary Fund (IMF), European Commission, and European Central Bank (ECB)). We need to look around a bit more, since—as they say on every flight—the nearest exit may not be right in front of us. Can an alternative catch hold? And, if so, will it be Keynesian or socialist?

The origins of Greece’s economic crisis are manifold: trade imbalances between Germany and Greece, the previous Greek government’s secret debts (hidden with the connivance of Wall Street banks), the 2007 global economic crisis, and the flawed construction of the eurozone (see sidebar). As the crisis has continued to deepen, it has created a social disaster: Drastic declines in public health, a rise in suicides, surging child hunger, a massive exodus of young adults, an intensification of exploitation (longer work hours and more work days per week), and the rise of the far right and its attacks on immigrants and the LGBT community. Each new austerity package brokered between the Greek government and the Troika stipulates still more government spending cuts, tax increases, or “economic reforms”—privatization, increases in the retirement age, layoffs of public-sector workers, and wage cuts for those who remain.

While there are numerous possible paths out of the crisis, the neoliberal orthodoxy has maintained that Greece had no choice but to accept austerity. The country was broke, argued Troika officials, economists, and commentators, and this tough medicine would ultimately help the Greek economy to grow again. As Mark Weisbrot of the Center for Economic and Policy Research (CEPR) put it, “[T]he EU authorities have opted to punish Greece—for various reasons, including the creditors’ own interests in punishment, their ideology, imaginary fears of inflation, and to prevent other countries from also demanding a ‘growth option.’” By focusing on neoliberal solutions, the mainstream press controls the contours of the debate. Keynesian remedies that break with the punishment paradigm are rarely discussed, let alone socialist proposals. These may well gain more attention, however, as the crisis drags on without end. ..............(more)

The complete piece is at: http://www.dollarsandsense.org/archives/2013/0513vanderveen.html

[Vincardog]

1. I believe there is precedent for Greece to 1) Jail the Banksters 2) Tell the holders of unregulated

instruments of financial speculation "It sucks to be you, we don't recognize those debts. 3) Tell anyone who wants to make an issue of it to "take it up with Goldman Sachs".
Start some Realistic Growth financial policies.

[blkmusclmachine]

2. Some days it feels as if we're in 1930's Germany. On purpose.

What's really going on?

[xchrom]

3. du rec.

[usGovOwesUs3Trillion]

4. Very good overview of the situation, and options. Thanks for sharing!

The capitalist think they are untouchable, however they always over-reach, and forget that crisis are also opportunities for change in the other direction, not just their desired direction.

I think today provides the greatest hope for real change/reform since 1933.

Of course it could go the other-way with disastrous results, too... but I am a firm believer that there are better-days-ahead, as there are many who are well aware today of what the stakes are and what happened in the past who will work with all of their might to prevent those horrors from repeating.