As I have mentioned previously on my post, Re-Inventing the Wheel and other Original Ideas, from time to time I have come across articles on the internet which echo my exact thoughts and support a particular point of view of mine so well. In these cases, it seems a totally pointless exercise to try to write a similar article myself.
One of my rules is that I never intend to poach any material of others and try to pass it off as my own. Therefore I will be re-publishing posts on this blog and giving full credit to the original author. I have laid down the guidelines of how this will be done on my post, Please May I Borrow your Stuff?
Now that all the media flurry over Yanis Varoufakis has died down, what he did, what he didn’t do, what he did right and what he did wrong and so on, I intend to go into a little more depth regarding the subject-matter of this blog. And, in an attempt to maintain a high standard of discourse, from time to time I will focus on one or two excellent articles that have caught my attention.
I have already introduced you to Pavlos Papageorgiou. I see that he does not always write posts that often, but when he does, I consider what he writes to be superb. If Pavlos had written the speech for Alexis Tsipras when Tsipras went back to Brussels that fateful day after the Referendum, this is what would have been on the public record and maybe, just maybe, things might have turned out differently. This article was written on 2 July 2015, but is as relevant today as it was a few weeks ago:
You wouldn’t think so given a week of awkward handshakes, public contradictions, sternly worded demands to fall into line, and galling bankers’ ultimatums to destroy an economy, but Greece and Europe agree on most things:
Europe: You must reform your economy.
Greece: We plan to reform and modernise our economy even more than has been already accomplished. However we want growth oriented changes, not ones that are just destructive.
Europe: You must reduce graft and waste.
Greece: Our finance minister travels economy. He fired the ministry “consultants” and re-hired the outsourced cleaning ladies. Down to earth is the new normal.
Europe: You must collect taxes properly.
Greece: We’re the first Greek government determined to do that, including going after the big fish. International help would be appreciated. But sending German in tax inspectors at this time would be unwise.
Europe: You must pay your debts.
Greece: We have the interest of all European taxpayers in mind so please hear our case. During the bubble years your banks lent recklessly to Greece while our government committed financial fraud. We’re sorry. Then your governments transferred private investment losses onto the shoulders of European taxpayers. At the same time the Troika imposed austerity that crushed our economy by 25% and raised debt to GDP from 115% to 170%. European governments mismanaged the crisis and lied to you that you were helping Greece.
Right now we need to end the most damaging aspects of austerity so that we can have growth, and then agree a debt service schedule that this small economy can sustain. Greece is already making a surplus and paying back money to Europe. You are not “financing Greece”, we’re paying you back. We want to make that repayment slower, 1.5% of GDP instead of 4.5%, so that it’s possible to have an economic recovery.
Your central banks won’t get back the full value of the debt at commercial rates. You’ll get less in total or less interest or over a much longer time. However these are by now paper losses in the books of central banks. We’re trying to bury a loss of around €150 billion at a time when the ECB is creating €1.1 trillion of new money on the books of the same banks. That means there’s no need for Europeans to lose money or pay higher taxes over this, and if your politicians make you take this loss it’s their choice.
Europe: You must privatise everything.
Greece: If that’s not letting go of a profitable asset at fire sale prices, sure. Right now the income stream from public enterprises is worth more than the sale price.
Europe: You must stay in the Euro.
Greece: We want to stay in the Euro but the ECB is kicking us out.
Why then all the bluster? Greece’s new government is a popular government. The good kind. We don’t want to see the other one. With the exception of Merkel, the people they face are mostly technocrats. I don’t understand German politics, but from outside it seems clear that capital rules politics and is spinning a morality tale for the people.
Where Greece and Europe don’t agree is where people (in Greece and elsewhere, even Germany) want one thing and narrow capital interests want another:
Europe: You must continue with Austerity.
Greece: We won’t continue with this policy that destroys wealth and evidently doesn’t work.
Europe: You must take this money from our taxpayers.
Greece: We have no right to take any more money from your taxpayers.
Europe: You must do as the previous governments.
Greece: Have you heard of democracy? We have a strong popular mandate for change.
Europe: We have agreements with Greece, not a government.
Greece: It’s like marriage. If you offer solidarity we’ll do the same, and by coercion no.
Europe: You must comply with the Troika inspectors.
Greece: We were elected to end this humiliation. We’re committed to reforms but we’re not a debt colony.
Europe: We have rules here.
Greece: We’re bankrupt, partly as a result of bad rules. We’ll follow the rules we can, and if we can’t you may throw us out.
Europe: You’re one country versus 18.
Greece: Have you noticed that the Eurozone is increasingly a club people want to leave? How much democratic opposition to these failed policies will it take to change them?
And that’s really the the point of disagreement this past week, and probably next week or until Greece’s democratic flare is resolved. Greece is arguing for a democratic Europe that works for its people. The establishment is arguing for a largely undemocratic status quo that doesn’t work, or works only for large industrial capital.
It’s been a while since Greece had a government that actually represents the interests of the people. Maybe more than two thousand years. If the other governments in Europe were similar, or Europe could be jolted into reviving democracy, we would find many more parallels than differences and the crisis would be quickly over.”
Superb article, Pavlos. You took the words right out of my mouth!