One step closer to nowhere

There is no doubt: Greece must remain in the eurozone. Any other perspective would be a tragedy. Comparing the troubles of today's society with the problems of an uncontrolled bankruptcy smacks of political frivolity. A serious policy would be one that, leaving aside partisan choices, could also take nuances into account. The “split” (either/or, left/right) is a poor advisor.

In this sense, the question is not whether to be “in or out” of the euro. The response of every conscientious citizen is “in”. The real question is: beyond its unacceptable severity, can the new austerity plan imposed on us by our creditors – with all it will bring for better and worse – get us out of the crisis? Or is it the swiftest path to uncontrolled bankruptcy?

Basically, we are being asked to undertake an extreme devaluation in our domestic economy which, as things stand, will bring more harm than good. More generally, no economic plan without social viability, accompanied by uncontrolled bankruptcy and rampant unemployment and recession, can either stabilise the economy or restart it – let alone whip up a new production model geared to exports.

The Germans have “yanked too hard on the rope”

It “punctures the tyres” with an incredible thoughtlessness, all the while assuring us that the car will go faster this way in 2012 and 2013. What is worse is the fact that when this is mentioned to those who have brought the country to this impasse, they tell us: “Well, give us an alternative,” as if theirs was a viable and serious one.

I greatly fear that, given the context of talks with other member countries, there is no solution. The responsibilities of the dominant political system are huge. Even now, after two years of crisis, there is still no realistic plan to get out of the crisis that could gain the backing of all of Greece’s political leadership. The troika brings us the loan, and as for us, we have nothing to negotiate...

On the other hand, Europe has its responsibility. The Germans have “yanked too hard on the rope.” Their plan is one that neither Greece nor any other European country can withstand. It’s Germany that will soon have the problem! We have to put up with it. Changes to the “bailout plan for Greece” are inevitable, with new actions over the debt, the EU and IMF loan, and the struggle against the recession...

Eurozone crisis

Time to let Greece and Portugal default

In his Monday column Wolfgang Münchau of the Financial Times lambasts the “ignorance and arrogance” of Europe’s policymakers as it enters “year five of a recession”. Following the Greek’s parliament’s approval of €3.3bn in savings for a second bailout worth €130bn, he predicts –

A period of calm will set in, but after a few months it will become clear the cuts in Greek wages and pensions will have worsened the depression. Europe’s policymakers will also find out that, in such a desolate environment, even a reduced target for privatisations is unrealistic. Greek GDP fell 6 per cent in 2011, and continues to decelerate at a similar rate this year. And before long, another round of haircuts beckons.

Some say it would be better to force Greece out of the eurozone right now, and use the funds to save Portugal. I disagree. I personally believe it would be best to recognise the desolate state of both countries, let both default inside the monetary union, and then use a sufficiently increased rescue fund to help them to rebuild themselves, and to ringfence the rest at the same time. […] This will be very expensive. But to ignore reality for another two years will be ruinous.