Sunday, July 5, 2015

Steve Keen — Time To Play Hardball Yanis

The Greek referendum has delivered a stunning victory for Syriza and its anti-austerity message. Despite the banks being closed as a result of the ECB limiting its provision of banknotes, and despite a united chorus of European leaders warning of dire consequences if the No vote succeeded, the Greeks have voted No in overwhelming numbers. The final result looks likely to be a 62% No to 38% Yes rejection of the Troika’s terms. Syriza now has overwhelming support from the Greek people to oppose the Troika (a result that opinion polls got completely wrong).
This was not a vote against the Euro—which the polls claim 75% of Greeks support (though whether the polls can be trusted on this issue is now moot)—but a vote against the austerity program that the Troika has insisted upon. So now is the time for Syriza to put an emphatic anti-austerity proposal to the Troika. Their political hand has been strengthened enormously, and they should use it.
Throughout the so-called negotiations to date, the Troika has refused to even discuss the economic impact of the program they have imposed upon Greece. Their position instead has been a simple “Ordo-Liberal” insistence that Greece must adhere to the contract it signed when it undertook the program back in May 2010. Yet there has been no Ordo-Liberal admission that this program has failed on its own terms: that the results this program promised have not been delivered.
The Economic Adjustment Programme for Greece”, penned by the European Commission and agreed to by the then Greek government, imposed harsh austerity measures with the promise that this would deliver economic growth within 2 years....
Syriza came prepared to negotiate, because it was well aware of the weaknesses of the Greek economy, and at all costs it wanted to remain inside the Euro—but it wanted a reformed Euro rather than one that was bound to austerity. Instead it entered an ideological war. And despite the fact that Syriza is in name the “Coalition of the Radical Left”, they were not the ones being ideological: the Troika was. And like all ideologues, they were unbending. They wanted austerity, and if Syriza resisted, they wanted Syriza to be thrown out of office and replaced by a more compliant party.
After Sunday’s vote, that isn’t going to happen. Syriza—and Yanis Varoufakis—aren’t going to go away....
Most Forbes readers and not going like hearing what Steve has to say.

Forbes
Time To Play Hardball Yanis
Steve Keen

2 comments:

Dan Lynch said...

A 3% deficit is a huuuuuge stimulus ? More likely it would allow the economy to tread water.

Anonymous said...

Yes, Tsipras should present a depression-ending growth and employment plan for Greece. Economic restructuring of a chronically under-performing economy, but with "Greek characteristics." He should make it clear that there is no way such a plan can be successful without debt forgiveness.