Zizek's Modern How-To Guide

Who thinks Greece is doing the right thing? Krugman does!

 

http://en.protothema.gr/who-thinks-greece-is-doing-the-right-thing-krugman-does/

A lot of people are pointing fingers at Greece’s leaders with claims that they are acting irresponsibly, but Nobel-prize winning U.S. economist Paul Krugman said Greece is doing the right thing.

He argues that the financial noose around Greece’s neck has strangled the Greek economy. Every loan comes attached with spending cuts, austerity and damage to the Greek economy.

In the past, in every situation Greece has caved, becoming little more than a “financial slave state mired in an economic depression. There is no way Greece will ever be able to cut its way to prosperity,” says Krugman. Given that Europe refuses to restructure Greece’s debt in a sustainable way and allow the country to try to grow its way out of its misery, Greece has no choice but to default and withdraw.”

Despite Greek PM A. Tsipras being called “weak” to put the question to the test, Krugman notes that he is being smart by not making the decision single-handedly. Rather, he is forcing his own government and people to make the decision with him, democratically via a referendum. This will improve Tsipras’ own odds of surviving the messy and scary period to come.

The current Euro structure, in which country governments control their own spending but borrow in a single currency, will never work over the long-term unless, says Krugman, unless states like Germany subsidize the poorer ones much like the richer states in the United States subsidize the poor ones. This concept is a no-go for Europe’s elite and this means that weak states like Greece are better off on their own.

Writing for his blog in New York Times, Krugman notes he would vote ‘no':

I would vote no, for two reasons. First, much as the prospect of euro exit frightens everyone — me included — the troika is now effectively demanding that the policy regime of the past five years be continued indefinitely. Where is the hope in that? Maybe, just maybe, the willingness to leave will inspire a rethink, although probably not. But even so, devaluation couldn’t create that much more chaos than already exists, and would pave the way for eventual recovery, just as it has in many other times and places. Greece is not that different.

Second, the political implications of a yes vote would be deeply troubling. The troika clearly did a reverse Corleone — they made Tsipras an offer he can’t accept, and presumably did this knowingly. So the ultimatum was, in effect, a move to replace the Greek government. And even if you don’t like Syriza, that has to be disturbing for anyone who believes in European ideals.

Paul Krugman: Breaking Greece

http://krugman.blogs.nytimes.com/2015/06/25/breaking-greece/

I’ve been staying fairly quiet on Greece, not wanting to shout Grexit in a crowded theater. But given reports from the negotiations in Brussels, something must be said — namely, what do the creditors, and in particular the IMF, think they’re doing?

This ought to be a negotiation about targets for the primary surplus, and then about debt relief that heads off endless future crises. And the Greek government has agreed to what are actually fairly high surplus targets, especially given the fact that the budget would be in huge primary surplus if the economy weren’t so depressed. But the creditors keep rejecting Greek proposals on the grounds that they rely too much on taxes and not enough on spending cuts. So we’re still in the business of dictating domestic policy.

The supposed reason for the rejection of a tax-based response is that it will hurt growth. The obvious response is, are you kidding us? The people who utterly failed to see the damage austerity would do — see the chart, which compares the projections in the 2010 standby agreement with reality — are now lecturing others on growth? Furthermore, the growth concerns are all supply-side, in an economy surely operating at least 20 percent below capacity.

Talk to IMF people and they will go on about the impossibility of dealing with Syriza, their annoyance at the grandstanding, and so on. But we’re not in high school here. And right now it’s the creditors, much more than the Greeks, who keep moving the goalposts. So what is happening? Is the goal to break Syriza? Is it to force Greece into a presumably disastrous default, to encourage the others?

At this point it’s time to stop talking about “Graccident”; if Grexit happens it will be because the creditors, or at least the IMF, wanted it to happen.

Tsipras states that referendum is fundamental to democracy and states that the Greek nation is called to show “daring and virtue”

http://en.protothema.gr/pm-a-tsipras-defends-greeces-right-to-a-referendum/

Prime Minister Alexis Tsipras says that he will not be riled into a political skirmish by responding to main opposition ND party leader Antonis Samaras’ accusations as the whole of Greece knows their role in bringing the country to where it is today.  He says that today will remain in history as a day when eurozone members cast out a member not allowing the leader of a democratic country to express itself as it has a right to do. “We will all respect the result. We will defend democracy, popular sovereignty and the founding values of Europe,” he said.

“We will not ask, in the land where democracy was born, the permission of Mr. Schaeuble and Mr. Dijsselbloem to give the floor to the Greek people,” he said. He said Europe shouldn’t fear referendums – many countries have held them before, including in cases where treaties such as Maastricht were implemented.

He accused the International Monetary Fund of coming to Europe to cause a rift.

“Yesterday our creditors blackmailed us with the threat of depriving liquidity,” he said. “Today they used the fear of a bank run.” He referred to a “propaganda of fear” but he argued that the referendum could shake it off.

Though Greece is a peaceful country, he said that the country is not afraid of fighting when necessary. “We negotiated with our back to the wall,” he said. “Despite these conditions, every citizen in this land knows that Greece over these months, and the Greek government has made an honest effort to negotiate with decisiveness and dignity.”

Tsipras said that the IMF presence zeroed the chances of an “honorable compromise.”

“They asked us to place the burden on pensioners… to cut pensions, even the subsidy for the lowest pensions,” said Tsipras. “They made it clear that they weren’t interested in measures to tax wealth and would not include these in the measures.” He pointed to the contradictions in negotiations and backtracking on agreements that had already been made. Tsipras criticized creditors for insisting on further cuts to pension spending, hitting the poorest and refusing to raise the minimum wage.

Tsipras pointed to the creditors’ demands on VAT in tourism. “Who are they working on?” “What interest do they serve?” “Why do they want to create problems to Greece’s greatest asset – tourism?” were some of the questions Tsipras asked.

After listing all the demands the creditors had offered, he pointed to the vague pledges given in return. He said that the measures would have brought “slow death” to Greece.

“Once you said that we were leading the country to the rocks. Next, you said that we were signing memorandums,” he said, referring to the opposition’s contradictory criticism. “Perhaps there was envy that we are doing what you wanted to do but couldn’t, which is resist!”

“Greece will not surrender! Greece is not a game that’s over!” he said, adding that the intent was for an “honorary compromise” and for a truly “viable solution”. He said that he wanted an honest negotiation, not blackmail.

A referendum is not a “coup” as some suggest, said the leader, who points out that calling the people on their own future is not a problem. He said that the result of the referendum will be respected.  He criticized efforts to turn a memorandum on creditors’ proposals into a memorandum for an exit from the euro, adding that this is not the intent of the government.

“Greece is not a visitor or guest in the European structure. We are equal amongst equals. No one has the right to show us the door out from our common house and we are not intending to give anyone this right at any rate,” he said, pointing to the popular mandate on January 25 that gave an opportunity to Europe to change its course. The vote also gave “Troika” the chance to become “institutions” to become democratic organs, but they chose to “continue being troika that kill democracy in Europe.”

“We don’t have the right to make Greece a debt colony for the next few decades,” he said, adding that there would be no death plaque placed on democracy in the land where democracy has lived for thousands of years.