Stiglitz writes: "European leaders are finally beginning to reveal the true
nature of the ongoing debt dispute, and the answer is not pleasant: it is
about power and democracy much more than money and economics."
Joseph Stiglitz. (photo: AP)
How I Would Vote in the Greek Referendum
By Joseph Stiglitz, Guardian UK
30 June 15
ALSO SEE: CrowdFunding a Bailout Fund for Greece
Neither alternative - approval or rejection of the troika's terms - will be
easy, and both carry huge risks
The rising crescendo of bickering and acrimony within Europe might seem to
outsiders to be the inevitable result of the bitter endgame playing out
between Greece and its creditors. In fact, European leaders are finally
beginning to reveal the true nature of the ongoing debt dispute, and the
answer is not pleasant: it is about power and democracy much more than money
and economics.
Of course, the economics behind the programme that the "troika" (the
European Commission, the European Central Bank, and the International
Monetary Fund) foisted on Greece five years ago has been abysmal, resulting
in a 25% decline in the country's GDP. I can think of no depression, ever,
that has been so deliberate and had such catastrophic consequences: Greece's
rate of youth unemployment, for example, now exceeds 60%.
It is startling that the troika has refused to accept responsibility for any
of this or admit how bad its forecasts and models have been. But what is
even more surprising is that Europe's leaders have not even learned. The
troika is still demanding that Greece achieve a primary budget surplus
(excluding interest payments) of 3.5% of GDP by 2018.
Economists around the world have condemned that target as punitive, because
aiming for it will inevitably result in a deeper downturn. Indeed, even if
Greece's debt is restructured beyond anything imaginable, the country will
remain in depression if voters there commit to the troika's target in the
snap referendum to be held this weekend.
In terms of transforming a large primary deficit into a surplus, few
countries have accomplished anything like what the Greeks have achieved in
the last five years. And, though the cost in terms of human suffering has
been extremely high, the Greek government's recent proposals went a long way
toward meeting its creditors' demands.
We should be clear: almost none of the huge amount of money loaned to Greece
has actually gone there. It has gone to pay out private-sector creditors -
including German and French banks. Greece has gotten but a pittance, but it
has paid a high price to preserve these countries' banking systems. The IMF
and the other "official" creditors do not need the money that is being
demanded. Under a business-as-usual scenario, the money received would most
likely just be lent out again to Greece.
But, again, it's not about the money. It's about using "deadlines" to force
Greece to knuckle under, and to accept the unacceptable - not only austerity
measures, but other regressive and punitive policies.
But why would Europe do this? Why are European Union leaders resisting the
referendum and refusing even to extend by a few days the June 30 deadline
for Greece's next payment to the IMF? Isn't Europe all about democracy?
In January, Greece's citizens voted for a government committed to ending
austerity. If the government were simply fulfilling its campaign promises,
it would already have rejected the proposal. But it wanted to give Greeks a
chance to weigh in on this issue, so critical for their country's future
wellbeing.
That concern for popular legitimacy is incompatible with the politics of the
eurozone, which was never a very democratic project. Most of its members'
governments did not seek their people's approval to turn over their monetary
sovereignty to the ECB. When Sweden's did, Swedes said no. They understood
that unemployment would rise if the country's monetary policy were set by a
central bank that focused single-mindedly on inflation (and also that there
would be insufficient attention to financial stability). The economy would
suffer, because the economic model underlying the eurozone was predicated on
power relationships that disadvantaged workers.
And, sure enough, what we are seeing now, 16 years after the eurozone
institutionalised those relationships, is the antithesis of democracy: many
European leaders want to see the end of prime minister Alexis Tsipras'
leftist government. After all, it is extremely inconvenient to have in
Greece a government that is so opposed to the types of policies that have
done so much to increase inequality in so many advanced countries, and that
is so committed to curbing the unbridled power of wealth. They seem to
believe that they can eventually bring down the Greek government by bullying
it into accepting an agreement that contravenes its mandate.
It is hard to advise Greeks how to vote on 5 July. Neither alternative -
approval or rejection of the troika's terms - will be easy, and both carry
huge risks. A yes vote would mean depression almost without end. Perhaps a
depleted country - one that has sold off all of its assets, and whose bright
young people have emigrated - might finally get debt forgiveness; perhaps,
having shrivelled into a middle-income economy, Greece might finally be able
to get assistance from the World Bank. All of this might happen in the next
decade, or perhaps in the decade after that.
By contrast, a no vote would at least open the possibility that Greece, with
its strong democratic tradition, might grasp its destiny in its own hands.
Greeks might gain the opportunity to shape a future that, though perhaps not
as prosperous as the past, is far more hopeful than the unconscionable
torture of the present.
I know how I would vote.
Error! Hyperlink reference not valid. Error! Hyperlink reference not valid.
Joseph Stiglitz. (photo: AP)
http://www.theguardian.com/business/2015/jun/29/joseph-stiglitz-how-i-would-
vote-in-the-greek-referendumhttp://www.theguardian.com/business/2015/jun/29/
joseph-stiglitz-how-i-would-vote-in-the-greek-referendum
How I Would Vote in the Greek Referendum
By Joseph Stiglitz, Guardian UK
30 June 15
ALSO SEE: CrowdFunding a Bailout Fund for Greece
Neither alternative - approval or rejection of the troika's terms - will be
easy, and both carry huge risks
he rising crescendo of bickering and acrimony within Europe might seem to
outsiders to be the inevitable result of the bitter endgame playing out
between Greece and its creditors. In fact, European leaders are finally
beginning to reveal the true nature of the ongoing debt dispute, and the
answer is not pleasant: it is about power and democracy much more than money
and economics.
Of course, the economics behind the programme that the "troika" (the
European Commission, the European Central Bank, and the International
Monetary Fund) foisted on Greece five years ago has been abysmal, resulting
in a 25% decline in the country's GDP. I can think of no depression, ever,
that has been so deliberate and had such catastrophic consequences: Greece's
rate of youth unemployment, for example, now exceeds 60%.
It is startling that the troika has refused to accept responsibility for any
of this or admit how bad its forecasts and models have been. But what is
even more surprising is that Europe's leaders have not even learned. The
troika is still demanding that Greece achieve a primary budget surplus
(excluding interest payments) of 3.5% of GDP by 2018.
Economists around the world have condemned that target as punitive, because
aiming for it will inevitably result in a deeper downturn. Indeed, even if
Greece's debt is restructured beyond anything imaginable, the country will
remain in depression if voters there commit to the troika's target in the
snap referendum to be held this weekend.
In terms of transforming a large primary deficit into a surplus, few
countries have accomplished anything like what the Greeks have achieved in
the last five years. And, though the cost in terms of human suffering has
been extremely high, the Greek government's recent proposals went a long way
toward meeting its creditors' demands.
We should be clear: almost none of the huge amount of money loaned to Greece
has actually gone there. It has gone to pay out private-sector creditors -
including German and French banks. Greece has gotten but a pittance, but it
has paid a high price to preserve these countries' banking systems. The IMF
and the other "official" creditors do not need the money that is being
demanded. Under a business-as-usual scenario, the money received would most
likely just be lent out again to Greece.
But, again, it's not about the money. It's about using "deadlines" to force
Greece to knuckle under, and to accept the unacceptable - not only austerity
measures, but other regressive and punitive policies.
But why would Europe do this? Why are European Union leaders resisting the
referendum and refusing even to extend by a few days the June 30 deadline
for Greece's next payment to the IMF? Isn't Europe all about democracy?
In January, Greece's citizens voted for a government committed to ending
austerity. If the government were simply fulfilling its campaign promises,
it would already have rejected the proposal. But it wanted to give Greeks a
chance to weigh in on this issue, so critical for their country's future
wellbeing.
That concern for popular legitimacy is incompatible with the politics of the
eurozone, which was never a very democratic project. Most of its members'
governments did not seek their people's approval to turn over their monetary
sovereignty to the ECB. When Sweden's did, Swedes said no. They understood
that unemployment would rise if the country's monetary policy were set by a
central bank that focused single-mindedly on inflation (and also that there
would be insufficient attention to financial stability). The economy would
suffer, because the economic model underlying the eurozone was predicated on
power relationships that disadvantaged workers.
And, sure enough, what we are seeing now, 16 years after the eurozone
institutionalised those relationships, is the antithesis of democracy: many
European leaders want to see the end of prime minister Alexis Tsipras'
leftist government. After all, it is extremely inconvenient to have in
Greece a government that is so opposed to the types of policies that have
done so much to increase inequality in so many advanced countries, and that
is so committed to curbing the unbridled power of wealth. They seem to
believe that they can eventually bring down the Greek government by bullying
it into accepting an agreement that contravenes its mandate.
It is hard to advise Greeks how to vote on 5 July. Neither alternative -
approval or rejection of the troika's terms - will be easy, and both carry
huge risks. A yes vote would mean depression almost without end. Perhaps a
depleted country - one that has sold off all of its assets, and whose bright
young people have emigrated - might finally get debt forgiveness; perhaps,
having shrivelled into a middle-income economy, Greece might finally be able
to get assistance from the World Bank. All of this might happen in the next
decade, or perhaps in the decade after that.
By contrast, a no vote would at least open the possibility that Greece, with
its strong democratic tradition, might grasp its destiny in its own hands.
Greeks might gain the opportunity to shape a future that, though perhaps not
as prosperous as the past, is far more hopeful than the unconscionable
torture of the present.
I know how I would vote.
http://e-max.it/posizionamento-siti-web/socialize
http://e-max.it/posizionamento-siti-web/socialize
