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Greece and austerity

Continuing from my Greece post of last Friday, Stathis Kalyvas, my main man in Athens—well, New Haven CT, actually—has a short commentary on the Foreign Affairs website (registration required) entitled, “Syriza’s about-face: Is austerity here to stay?

And the Project Syndicate website has a piece, equally short, by Harvard University economics prof—and former Venezuelan minister of planning (1992-93)—Ricardo Hausmann, “Austerity is not Greece’s problem,” in which he makes observations on the Greek economy that I’ve been making since the crisis began six years ago.

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What Greece needs

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[update below]

My last post on Greece was a month ago, the day after the Syriza victory. This in no way means that I have not been following that country since. In fact, I read about Greece every day—newspaper articles, op-eds, sundry commentaries—and tweet stuff I find interesting (see Twitter feeds on the right). I have said more than once that my main clearinghouse specialist on all matters Greek is Yale prof Stathis Kalyvas. If Stathis recommends something to read on Greece—as on other subjects, d’ailleurs—I will read it. And, as it happens, Stathis has posted on social media this NYT op-ed by Aristos Doxiadis—identified as an economist and venture capitalist—saying that “if you must read one piece about Greece this is it.” So voilà. Doxiadis’s op-ed explains why Greece has done worse than everyone else in the Eurozone. The lede: “Bigger businesses, more innovation and foreign investment are the key. But Syriza seems to be against all that.”

FWIW, here’s a piece from four days ago by the libertarian jurist and scholar, Richard A. Epstein, “Greece on the brink,” published on the Hoover Institution website.

And as long as I have it in mind, here is Paul Krugman’s column today, “What Greece won.” The lede: “Why all the negative analysis about the debt deal that has actually done the rest of Europe a favor?”

UPDATE: In the comments thread below see the text of a commentary published in an Athens daily by Konstantinos Meghir, the Douglas A. Warner III Professor of Economics at Yale University, entitled “Supporting Growth and Surviving in the Eurozone.”

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Greece: The Syriza victory

Alexis Tsipras, Athens, January 25th (Photo: Reuters/Marko Djurica)

Alexis Tsipras, Athens, January 25th (Photo: Reuters/Marko Djurica)

It was expected and I’m pleased. Syriza (acronym of the Coalition of the Radical Left) is the most left-wing party to ever win a legislative election in a Western democracy. And by far, as the socialists (PASOK), who are to Syriza’s right—and were all but wiped out yesterday—will in no way be associated with the new government. We now have a democratically elected government in a Western country composed of communists (small c), Trotskyists, and other motley gauchistes, who will now have to put their money where their mouths are and deliver the goods. Très bien. I will be watching with great interest.

It looks like Syriza will bring in the conservative, Eurosceptic ANEL as a coalition partner. In France this would be akin to a Front de Gauche/EELV/NPA-led government with support from Nicolas Dupont-Aignan’s Debout la France. Quelle hypothèse saugrenue. Now such a government in Paris would end in certain fiasco—it would crash and burn within months—but in Greece it could possibly work, as Alexis Tsipras’s hands will be sort of tied when he goes to Brussels and Berlin—he won’t have much margin of maneuver—but just about everyone outside Germany is fed up with the EU’s austerity politics of the past six years, the specter of deflation is looming, the ECB is engaging in unprecedented quantitative easing, and it’s simply clear to everyone—again, outside Germany—that something has to change in Europe and fast. So Syriza is coming to power at the right moment, when there will be more openness in the EU to accommodating it if it commits itself to serious reforms (on taxation, corruption, etc). We’ll soon see if the “loud-mouthed radical” Tsipras—as the FT called him back in ’12—will become un homme d’État.

As it happens, my Greek political science friends haven’t been too optimistic over the prospects of a Syriza government or Tsipras transforming himself into that homme d’État. My go-to man on anything having to do with Greece, Stathis Kalyvas, the Arnold Wolfers Professor of Political Science at Yale University—and who is not a Tsipras fan—has an instant analysis of yesterday’s election in Foreign Affairs (registration required), “So Long, Austerity? Syriza’s Victory and the Future of the Eurozone.” If you read just one article on the Greek election, let it be this.

Yesterday Stathis posted on social media “An improvised crash course in recent Greek political history,” which is both useful and cleverly put together.

Michalis Moutselos, a sharp political science doctoral candidate at Princeton, has also not been too impressed with Syriza. Back in November, in a social media response to a starry-eyed tribune in The Guardian, “Europe’s new left parties can make the dreams of 1968 come true,” authored by the starry-eyed Croatian gauchiste philosopher Srećko Horvat, Michalis thus let loose

I have had enough with the normalisation of SYRIZA and ensuing love affair with European leftist-progressives. Friends, those of you who think that these guys are the European avant-garde, you really should know what you are getting in bed with. These are people who talk about creating a Ministry or some kind of state sub-committee for about anything that you can imagine, from tourism to dancing to IT. They repeatedly call the German government occupiers and neo-colonialists in public and make speeches in the European parliament about World War II reparations. They are against any kind of reform of the Greek public sector (anything, from simple evaluation to firing people who have not showed up to their posts in months). They make sure to justify Russian foreign policy and shake hands with Putin’s ministers. Their MPs repeatedly justify acts of vandalism in Greek universities – and I mean not sit-ins and occupations of auditoriums to prevent votes -, but locking up professors who disagree in their offices. In terms of nationalism, populism, and sheer staleness of opinions and policies, they are a Leftist version of the Tea Party. Greeks are voting for them out of spite for the old parties and that is understandable. But at least foreigners who follow Greek politics and are not affected by the polarised atmosphere of the country should know better before getting too excited. You might have to do a big volte-face once SYRIZA are in power.

Aïe. As we say here, Michalis n’y va pas par quatre chemins. And on social media today, he slammed the budding Syriza coalition with the right-wing souverainistes

For those abroad following Greek election results: it might come as a surprise that Tsipras chooses to form a coalition with populist/nationalist/right-wing Independent Greeks rather than more centrist parties, like POTAMI or PASOK. However, it should not be… What you see as a progressive, leftist electoral uprising is really a negative coalition around anti-austerity and the desire to restructure the national debt without any conditions attached. For SYRIZA it is thus preferable to sacrifice progressive, left-liberal policies (cutting down on defense spending, recognizing gay rights, regularizing second-generation immigrants) or leftist tax-and-spend policies mending the pitiful welfare state in Greece, in order to retain a united “national” front on debt negotiations. There is also no deeper sociological, working-class/historical experience to unite SYRIZA voters – sorry, but unemployment and “humanitarian crisis” do not cut it. Thus the precariousness of the anti-austerity vote. Which will try to find new radical “harbors” when it is realized that SYRIZA+ANEL cannot achieve a new haircut without isolating the country and causing bank runs. The vicious circle of pseudo-radicalization will only stop when there is a realization that debt maturities have been (and will further be) extended so far in the future that debt repayment is not the foremost issue behind Greek exceptionalism, and that the inability to produce our way out of the stalemate is really the issue.

It would be a real shame if the coalition with ANEL causes Syriza to scrap its progressive policy proposals on migrants and nationality acquisition. A question to Michalis: You mean “leftist AND RIGHTIST NO-tax-and-spend policies,” n’est-ce pas? Hasn’t the problem in Greece been lots of spending—by both PASOK and ND—but with no tax revenue to pay for it?

When I asked Michalis the other day for a good link or two on the Greek election, he offered this WSJ piece, dated January 23rd, “Greece: Austerity, Relief, or Exit.”

He also recommended “Who Is Afraid Of Alexis Tsipras,” originally published on January 18th in El Mundo.

I found informative a lengthy interview with King’s College London political theory prof—and Syriza central committee member—Stathis Kouvelakis, published January 22nd in Jacobin, “Greece: Phase One.” The lede: Syriza is the Left’s best chance at success in a generation. But for socialists, the hard part starts after election day.

Writing in OpenDemocracy as last night’s election returns came in, University of Georgia prof—and specialist of European populist movements—Cas Mudde offered “five predictions of a much similar future” after Syriza’s landslide.

André Sapir, economics prof at the Université Libre de Bruxelles and adviser to former European Commission president Romano Prodi—which means he’s mainstream—was interviewed by Libération’s Jean Quatremer, where he said that “La volonté de réformes de Syriza peut être la solution.” Inshallah.

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Greece’s German rage

[update below]

Amitai Etzioni writes in The National Interest about the rage in Greece against Germany. One understands the Greek anger, though only up to a point. Etzioni thus concludes his commentary

As a Jewish child who escaped Germany in 1935, and as someone who lost most of the members of his sizable extended family in the concentration camps, I have more reasons to resent Germans than most Greeks. However, I cannot find a moral ground on which to condemn those Germans now with us—most of whom were not even born by the time the Nazi regime ended or were children during its waning days—for the actions of their forefathers. Moreover, I respect Germans for having faced up to their past and for making very substantial efforts to ensure that they will be never again commit such atrocities through numerous educational drives and constitutional arrangements. Comparing the way Germany has learned from its past to postimperial Japan (and even Austria) helps to highlight my point.

Germany may or may not find it prudent to support and help underwrite an even larger bailout for Greece. But I fail to see the moral reasons today’s Germans owe Greece more, a nation that by grossly manipulating its data faked its way into the European Union. Surely demonizing the Germans is hardly a recommended way to win them over.

There is a lesson here for other nations that face severe austerity. They should be careful not to yield to the temptation to lay the blame on the other and seek bailouts (or “loans”) rather than engage in painful reforms. Otherwise, they truly may end up as miserable as Greece is.

The last paragraph may be debated but the general point is well taken. As for Nazis, swastikas, and the like, Aristides Hatzis, a professor of law at the University of Athens, has a tribune in the FT (h/t Stathis Kalyvas) on the rise of extremist parties in Greece, of both the left and the right. This is a big danger for Greece, of course, but also for the rest of Europe, including Germany (and which the Germans need to think about).

I can only imagine what the atmosphere will be in Athens on Friday night, when Greece plays Germany in the Euro 2012 quarter-final. Sorry, but I have to leave politics out of this one and focus strictly on the sporting side. Auf gehts Deutschland!

UPDATE: I just came across this op-ed in the NYT from a week ago by Charles Grant of the Centre for European Reform—the best think tank devoted specifically to the EU—, where he explains the veritable views of German policy makers on the euro crisis. Policy makers in Paris should take note of what they have to say about France.

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The FT called him that, not me, in a portrait (h/t Stathis Kalyvas) of the man who may become Greece’s prime minister after today’s election. If the stakes weren’t so high I would hope his party, the hard left Syriza, wins and that he accede to state power, so as to put his money where his loud mouth is. Then again, maybe one should hope for this anyway. Money quote

In fact, [Syriza’s radical policy stance] may misread Mr Tsipras’s poker-style tactics: he is raising the ante before he knows what is in his hand, and once he sees his cards after the election he may adopt a less intransigent approach. He has noticeably toned down his anti-creditor rhetoric since Greece’s May 6 election, when Syriza was catapulted from nowhere into second place by the collapse of support for Pasok, Greece’s once dominant socialist party. Syriza no longer denounces outright the EU-IMF loan terms, but calls for their “replacement”. Influential party strategists insist Syriza will not unilaterally suspend Greek debt repayments and will, in its own way, honour Greece’s commitments to fiscal discipline.
Lefties the world over are eagerly hoping for a Tsipras victory. But, as with Lula in Brazil (and Mitterrand in France, etc), they may end up disappointed. I’ll be worried for Greece even if New Democracy wins, which, in view of its track record, hardly reassures. Au contraire. And with Pasok, which was no great shakes, out of the picture, a Syriza victory may not be the worst outcome for Greece.

UPDATE: Stathis Kalyvas, who knows Greece far better than anyone I’m ever likely to meet—and to whom I will reflexively defer on matters having to do with this country—, sends me the following comment on this post: “Believe me, he’s no Mitterrand or Lula. Take my word for it, as I really, really don’t wish to test my belief.”

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Dani Rodrik—who is no slouch economically and intellectually speaking—lays out a scenario of what may happen if the situation in Greece goes from bad to worse. Not quite the end of the world but not far from it. The scenario may be remote, Rodrik concludes, but “not remote enough.” Read it. It will make your day.

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Stathis Kalyvas, professor of political science at Yale (and personal friend), has an article on the Foreign Affairs website on the upcoming Greek election, the rise of the radical left coalition, and the eventual demise of Europe. Stathis is one of the sharpest social scientists I know. And when it comes to Greece, he knows of what he speaks.

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