The world's financial markets and the EU's political leaders will act as if the Greek No vote in their referendum has created a crisis this morning. But if they do it is one of their political making.
Greece undoubtedly needs money. It is reasonable for it to presume its central bank (the ECB) will provide it. That is what central banks exist for, after all. They are lenders of last resort. But the ECB will not play that role. That is a political decision that undermines its fundamental purpose. That is a crisis, but not as such for Greece. That's a crisis for other EU countries that might ever need its services.
And there is a crisis because what Germany says seems to prevail in matters relating to Greece. That was never what a Union was meant to be about. But again, that's as much a crisis for other states as it is for Greece.
What there is not is an economic crisis. Greece needs modest sums of money now in the grand scheme of things and overall €60 billion over the next few years according to the IMF. Set this in the context of the EU QE programme of €1 trillion over the next year or so and the sums are almost totally insignificant. It is a choice to deny this programme to Greece, and nothing more. The risks involved from including it are affordable, can be met out of money that needs to be created out of thin air, and will have no impact on EU inflation.
Certainly over the rest of this year Greek debt would still need to be restructured and haircuts should happen, preferably sooner rather than later. Cyprus set the precedent for that and it is still in the euro. But that process does not change the need for action now. It's just part of a management process.
But a crisis? Certainly economically there is none. If there is one it is political, and is largely if Germany's making in refusing to accept Greek democracy and sovereignty. It's also a crisis created by neoliberal dogma. But both are of much greater significance than the real economics of this, because they are and always were manageable.
So sure there is a crisis, but let's name it for what it is. The crisis is that Germany and the EU cannot accept the democratic right of a sovereign state to reject neoliberal economics. That's what all this is about.
That's also why the No vote is so important. Sanity has prevailed in Greece. The Emperor has been told he has no clothes. But he / she really, really resents it. And their tantrum is now our crisis.
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Even if this political crisis is over, there is one little thing our Keynesian Mandarins just can not figure out as the reality just does not fit into their models: the world’s unsustainable debt problem.
“Growth!” they say..but without trust, no growth. And trust takes a generation to build, but you lose it is a fortnight.
“the democratic right of a sovereign state to reject neoliberal economics”
That will be the country which twice in a year has denied the vote to taxpaying permanent legal residents because they were EU nationals ( the UK does this too ) and has that horrible neo-liberal protectionism for agriculture and scores of professions.
No one denies Greece needs reform
Least of all Syriza who have been in office for months
So please don’t make absurd comments because they have not done all they might as yet. They have had some other matters to deal with too
So. The turkeys in Greece just voted no to Christmas.
Who would have guessed it?
All eyes on the massive EU propaganda war, which will descend upon the next EU serfdom to dare to hold a referendum on anything EU-ish.
“I consider it my duty to help Alexis Tsipras exploit, as he sees fit, the capital that the Greek people granted us through yesterday’s referendum.
And I shall wear the creditors’ loathing with pride”
I like that guy.
So unlike our expenses-fiddling-seat-warming 650.
I’d say we have some worth keeping
With a group of sovereign nation any decision can be taken either by agreement of all or by majority voting.
Currently the first is happening and Greece has a veto like everybody else. That’s why we have an impasse.
Variations of majority voting could be: every sovereign state gets one vote (like US senate) or the European Parliament gets to decide by majority vote or each representative carries votes according to size of population.
This talk of Greek democratic decision goes nowhere. It disrespectful to the rest of the world.
Is the IMF a sovereign nation?
Or the ECB?
Did Greece make the voting rules?
When it’s all but universally acknowledged that Greece cannot repay all its debts, largely because of the impact of five years of ill-advised austerity and the ineptitude/corruption of PREVIOUS Greek governments, why would the EU fail to address that issue as part of the negotiations and why would the IMF wait until after the negotiations failed to admit that debt relief is essential?
The Troika is the source of whatever democratic deficit exists, not Greece.
What I find deeply shocking is that Lagarde, Diejselboem (sic), Tusk et al NEVER mention the humanitarian disaster that has been playing itself out in Greece over the last 5 years. There zomboid responses show the true face of neo-liberal bureaucracy.
Varoufakis resigned because they coudn’t cope with being told what they really were! Varoufakis is a bright man but I also think he let his ego go for a ride as well (motorbike/natty jackets/photo shoot with attractive wife for French magazine -not sensitive in a country going through such terrible times).
He does, undoubtedly, have weaknesses
But I’d rather them than those of the Troika
Is this the truth?
HUMANITY vs INSANITY – #44 : Greek Tragedy – with William Engdahl
https://www.youtube.com/watch?v=Rk3o5XY8if8&feature=youtu.be
As you believe so hard in democracy, you would support a referendum in the rest of the Eurozone, whether to buckle to Greeces demands for endless debt increases and write off. Should we not all have a say if we want to bail out Greece forever.
The democratic way now is to hold off talks until the rest of Europe can vote on this.
We elect governments to make decisions
That is democracy
Unfortunately, no one elects the ECB or president of the EU
Oh there is a Crisis alright …the Lunatics have taken control of the Asylum.
The vultures are already starting to circle Greece as evidenced by the arrival there of troublemakers like Victoria Nuland.