Archive for the ‘Greece’ Category


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Grexit or Gerxit? Ashoka Mody, visiting professor in international economic policy at Princeton—and previously of the IMF—writes in Bloomberg View that “Germany, not Greece, should exit the euro.” Those who read the NYRB will remember George Soros’s essay three years ago, “The tragedy of the European Union and how to resolve it,” in which he proposed precisely this solution: that either Germany assume its role as a benevolent hegemon and with the attendant responsibilities—here, to shore up Greece over the long run—or exit the euro.

At the risk of engaging in crass essentialism, Germany seems incapable of the former, as its only historical experience as a hegemon has been to militarily conquer countries and then brutalize them. So failing to be a benevolent hegemon, Germany should indeed consider quitting the euro (perhaps accompanied by fellow travelers Finland, Slovakia, and maybe the Baltic states) and reverting to its beloved Deutsch Mark, the immediate consequence of which would be a sharp increase in the value of the DM and with the euro plunging, but with the respective currencies, after a couple of years of chaos, finding their equilibrium.

Realistically speaking, though, Germany is not going to quit the euro. No one outside the pages of intello journals and webzines is proposing it. It is not on any agenda and is simply not going to happen. But as Germany is not going to act the benevolent hegemon as Soros suggests—and despite its “moral obligation to Greece,” as FP editor Daniel Altman puts it—the only alternative, in view of the manifest absurdity of the latest bailout agreement—a.k.a. the Agreekment, which no serious person thinks will be implemented, or can be—is Grexit. As Ambrose Evans-Pritchard put it on Thursday

What Greece is being asked to do is scientifically impossible. Almost everybody involved in the talks knows this. Yet the lie goes on because the dysfunctional nature of EMU politics and governance makes it impossible to come clean. The country is dishonestly kept in a permanent state of crisis.

Wolfgang Schauble is one of the very few figures who has behaved honourably in this latest chapter. As readers know, I have been highly critical of the hard-bitten finance minister for a long time, holding him directly responsible for the 1930s regime of debt-deflation and contraction imposed on much of Europe, and for refusing to accept that the eurozone’s North-South divide must be closed by both sides. Any policy that puts all the burden of adjustment on the South is destructive and doomed to failure.

But he is entirely right to argue that a velvet divorce and an orderly exit from the euro for five years would be a “better way” for Greece, as he did on German radio this morning [July 16th].

It would allow the country to regain competitiveness at a stroke without a disastrous over-shoot or the risk that events might spin out of control. It would clear the way for proper debt relief – or a standard IMF-style package. (…)

If accompanied by some sort of Marshall Plan or investment blitz – as Mr Schauble appears to favour – it would set the foundations for genuine recovery.

Huge sums of Greek money sitting on the sidelines would probably flood back into the country once the Grexit boil had been lanced. It is a pattern seen time and again in emerging markets across the world over the past 60 years. (…)

Perhaps. For Grexit to happen, there would have to be at least a ten or twenty year moratorium on interest payments on Greece’s debt, not to mention a scrapping of the impossible €50 billion privatization fund contained in the current agreement.

If one didn’t see it, AEP had a hard-hitting, must-read column on Wednesday on how “EMU brutality in Greece has destroyed the trust of Europe’s Left.” The lede: “The Left let itself become the enforcer of reactionary policies and mass unemployment because of the euro. Greece has broken the spell.” Ouch!

Here’s DSK, in an open letter “To my German friends” posted on Twitter, skewering the Agreekment.

The well-known French specialist of geopolitics, François Heisbourg, had an FT op-ed the other day on “The end of an affair for France and Germany.” His conclusion:

Unfortunately, by having avoided what they loathe — debt forgiveness — the Germans may now be hoist with their own petard. Adding billions to Greek debt, enforcing pro-cyclical pension cuts and tax increases in the middle of renewed recession, and positing as in 2011 a €50bn privatisation programme: this is as unlikely to work now as it was in the past. Now it has acquired the formal status of plan B, Grexit is likely to come back. France would then be faced with an impossible choice: to flow with the German-led tide of Grexit, clearly as a subordinate, or to fight a losing battle to prevent a country from being forced out of the European family.

Even Franco-German co-management may not be up to striking a workable compromise. The change behind the scenes is that the Paris-Berlin bond can no longer take strength from the shared project of European integration: France’s 2005 rejection of the proposed EU constitution was a turning point. The relationship has instead become utilitarian and as a result the EU’s days of ever closer union may be at an end.

For a reminder of the intimate involvement of outside actors in the Greek tragedy, see Robert Reich’s piece in The Nation on “How Goldman Sachs profited from the Greek debt crisis.” The lede: “The investment bank made millions by helping to hide the true extent of the debt, and in the process almost doubled it.”

And then there were the 2004 Olympics, which, in the words of freelance journalist Peter Berlin, “rotted Greece.” He poses “the obvious question: Should the International Olympic Committee shoulder some of the blame?” The answer too is obvious. But will the IOC ever shoulder any of the blame? Poser la question c’est y répondre.

Le Monde’s Alain Frachon, in a column dated July 9th, “Grèce, torts partagés,” had this

De Tokyo et avec le recul que confère la distance, le politologue franco-américain Robert Dujarric observe: «Tout le monde sait depuis le XIXe siècle que la Grèce est un Etat dysfonctionnel. Mais depuis son admission, l’UE n’a fait aucun effort pour la moderniser. L’abandonner maintenant serait comme un couple qui a adopté un enfant handicapé et décide de s’en séparer comme on jette une batterie usagée.»

«Au plan moral, les dégâts [du Grexit] pour l’Allemagne seraient incommensurables», dit le politologue Hans Stark, de l’IFRI, sur le site Boulevard extérieur qu’anime Daniel Vernet, grand familier des affaires hellènes. L’Allemagne se verrait reprocher de «n’avoir pas su prévenir un divorce entre peuples, opinions publiques et gouvernements du sud et du nord de l’Europe» ou, poursuit Stark, «de ne l’avoir pas voulu, par crainte de déplaire à une partie de son électorat et de sa classe politique».

Ben Bernanke, formerly chairman of the Fed, has a worthwhile post on his Brookings blog, “Greece and Europe: Is Europe holding up its end of the bargain?” His conclusion:

I’ll end with two concrete proposals. First, negotiations over Greece’s evidently unsustainable debt burden should be based on explicit assumptions about European growth. If European growth turns out to be weaker than projected, which in turn would make it tougher for Greece to grow, then Greece should be allowed greater leeway after the fact in meeting its fiscal targets.

Second, it’s time for the leaders of the euro zone to address the problem of large and sustained trade imbalances (either surpluses or deficits), which, in a fixed-exchange-rate system like the euro zone, impose significant costs and risks. For example, the Stability and Growth Pact, which imposes rules and penalties with the goal of limiting fiscal deficits, could be extended to reference trade imbalances as well. Simply recognizing officially that creditor as well as debtor countries have an obligation to adjust over time (through fiscal and structural measures, for example) would be an important step in the right direction.

Putting forth the libertarian perspective, Cato Institute Senior Fellow Alan Reynolds asserts in Politico that (surprise!) “Greece is being taxed to death.” The lede: “No debtor ever became more creditworthy by being forced to accept less income.” Sounds right to me.

Also writing in Politico, James K. Galbraith, the well-known UT-Austin econ prof and Yanis Varoufakis’s BFF, says (surprise!) that Greece faces a “death spiral ahead.” The lede: “How the latest ‘solution’ to the debt crisis locks Europe into a grim next chapter.” Yep.

In a similar vein, see the analysis by the très gauchiste New School for Social Research econ prof Sanjay Reddy, writing on his Reddytoread blog, “Greece and the Eurozone: The real stakes.”

On why Germany is being so tough on Greece, investigative journalist Dick Laabs, writing in The Guardian, says to “Look back 25 years: To understand Wolfgang Schäuble’s demands in the bailout talks, look at what he inflicted on his own country when it reunified.”

For an explanation of German views of Greece by a historian and specialist of Germany, see the interview in Libération with Johann Chapoutot, who teaches at the Université Sorbonne-Nouvelle, “‘Pour les Allemands, les Grecs d’aujourd’hui ne sont pas à la hauteur des Grecs anciens’.”

Looking at the other side of the equation, Pavlos Eleftheriadis, who is a barrister and Fellow of Mansfield College, Oxford—and an activist in the Greek center-left party To Potami—insists, in an op-ed in The Telegraph, that “Greece is a victim of its own cronyism and corruption.” The lede: “Postwar Greece never established welfare systems or open institutions—now it’s paying the price.”

Finally, see the essay in OpenDemocracy by Ronald G. Asch, professor of early modern history at the University of Freiburg: “The decline and fall of the European Union: is it time to rip it up and start again?” The lede: “There was no distinction in EU politics between friend and foe. Everything worked so nicely. But this was also the reason why nobody was greatly interested. This has definitely changed now.” I read Asch’s piece quickly, noting a number of interesting points. Now I have to go back and reread it carefully.

UPDATE: So how is the Agreekment playing in Greek public opinion? According to a poll, 70% are for, with only 24% for default and Grexit. And another poll shows Syriza’s popularity to be up. Stathis Kalyvas’s comment on this: “Greece shows that you can strike a heavy austerity bailout deal that goes against your stated principles and promises and gain in popularity.”

2nd UPDATE: Pierre Crétois, an agrégé in philosophy, has a philosophical meditation in Slate.fr, “Grèce: Et si on n’avait rien compris à la dette?” The lede: “Tout le monde part du principe que la Grèce, débitrice, est responsable du remboursement. Mais le créancier est lui aussi responsable de la dette. Petit rappel philosophique de ce qu’est une dette, de ses enjeux et de sa violence.” Haben Sie Französisch, Herr Schäuble lesen?

3rd UPDATE: Here are links to a few pertinent articles and tribunes in Le Monde from the past three weeks—and which are not too tender toward Greece:

Marie Charrel, “La Grèce a perdu toute la richesse gagnée depuis son passage à l’euro” (July 4th). The lede: “Athènes a utilisé les facilités de la monnaie unique pour accroître les salaires et les dépenses publiques, laissant gonfler les déficits.”

Annick Cojean et Adéa Guillot, “Le système politique grec miné par le clientélisme et la corruption” (July 5th). The lede: “Les réformes destinées à favoriser la méritocratie et la transparence n’ont pas été entreprises.”

In other words, an absolutely colossal, astronomical amount of European money has been wasted in Greece—gone up in smoke—since it joined the euro, as, entre autres, Greece utterly lacked the political and state institutions that should normally have been a precondition for membership in the Eurozone. So does Europe (Germany, France et al) bear at least some of the responsibility for this?

On Greece spending colossal European transfers to no productive end, see the tribune by Christian Saint-Etienne, who holds the chair in economics at the CNAM in Paris, “Athènes est responsable de ce que lui arrive” (July 15th). Money quote:

La Grèce s’est mise largement toute seule dans sa situation actuelle, car le pays a bénéficié de 200 milliards d’euros de fonds structurels depuis son entrée dans l’Union européenne et n’a pas su développer une économie compétitive. L’Etat est structurellement faible et l’évasion fiscale, considérable. Depuis la crise de 2009-2010, la Grèce a bénéficié d’une remise de dette de 105 milliards d’euros par les banques en 2012 et de réductions de sa charge d’intérêt qui porte l’aide accordée au pays à environ 175 milliards d’euros. Si on ajoute les 200 milliards de transferts structurels, la Grèce a déjà obtenu une aide de l’Union européenne de 375 milliards d’euros, supérieure au double de son PIB actuel !

Arrêtons de dire que le pays est écrasé par l’Europe alors que la Grèce ploie sous le poids de son régime oligarchique et du refus de payer l’impôt ! La dette actuelle du pays de 320 milliards d’euros serait de 495 milliards sans l’aide massive déjà obtenue. (…)

La Grèce brûle aujourd’hui du cash au rythme de 20 à 25 milliards d’euros par an. Les banques, qui avaient rétabli leur situation fin 2014, sont à nouveau virtuellement en faillite. Elles devront être recapitalisées à hauteur de 30 milliards d’euros. Même si on réduit sa dette, la Grèce reviendra continuellement tendre la main sans un programme crédible de réformes structurelles. (…)

Those are big numbers there.

4th UPDATE: Fernando Betancor, an American economist living in Madrid, has an essay in OpenDemocracy (July 17th), “Germany’s demographic challenge,” in which he argues strongly against a hypothetical return to the Deutsche Mark. The lede: “Germany is by no means an unstoppable juggernaut, and the re-erection of trade barriers across the continent and a return to a strong Deutschmark would ravage the economy.”

5th UPDATE: On Project Syndicate, Harvard Kennedy School economics prof Jeffrey Frankel asks “Is Tsipras the new Lula?” (July 17th) and Jeffrey Sachs weighs in on “Germany, Greece, and the future of Europe” (July 20th).

6th UPDATE: The New Yorker’s James Surowiecki has an interesting, worthwhile piece in the issue dated July 27th, “How can Greece take charge?” The lede: “If Europe won’t help, the only option is reshaping the economy.”

7th UPDATE: University of Pennsylvania poli sci prof Julia Gray has a post on WaPo’s Monkey Cage blog on “How Greece’s credit went south” (July 20th).

8th UPDATE: Professors Vassilis K. Fouskas and Constantine Dimoulas, respectively of the University of East London and Panteion University in Athens, have a sharp and worthy article—in which they make a number of good points—in OpenDemocracy, “Greece has two choices, and so do the creditors” (July 21st). The lede: “After 13 July 2015, Syriza’s Greece and, for that matter, the creditors have two choices. Modernise the Greek state; or let Greece default and risk disintegration not just of EMU/EU but also Nato.”

9th UPDATE: Kathleen McNamara, who teaches government and international affairs at Georgetown, has a smart, must-read post on WaPo’s Monkey Cage blog (July 21st), “This is what economists don’t understand about the euro crisis – or the U.S. dollar.”

10th UPDATE: Anatole Kaletsky, who, entre autres, chairs the governing board of the Institute for New Economic Thinking (co-founded by George Soros), has a commentary in Project Syndicate (July 22nd) on “Why the Greek deal will work.” This one merits reading.

11th UPDATE: Libération’s incontournable Jean Quatremer has, on his Coulisses de Bruxelles blog, a lengthy, unsparing critique (July 24th) of the current Greek prime minister and his action since taking office in January, “La déroute d’Alexis Tsipras.” Quatremer’s demolition of Tsipras and Syriza is a must-read, so please take the time to do so.

12th UPDATE: Joschka Fischer has a commentary in Project Syndicate (July 23rd) on “The Return of the Ugly German.” See also Zeit Magazin’s graphic novel “Game of Greece” (July 23rd; translated from the German). The lede: “The rise and fall of Greece explains a great deal about Europe, politics and power – in a way not unlike ‘Game of Thrones.’ An illustrated guide throughout the crisis.”

13th UPDATE: Now here is a totally excellent, absolutely must-read article, published on the website of the Harvard Business Review (July 27th), “Greece’s problem is more complicated than austerity,” by Michael G Jacobides, who is Associate Professor of Strategy and Entrepreneurship, plus Sir Donald Gordon Chair of Entrepreneurship and Innovation, at the London Business School. And he’s Greek. Please read it. Now.

14th UPDATE: Deborah Boucoyannis, who teaches politics at the University of Virginia, writes in Foreign Affairs (August 6th) on “The myth of the bloated Greek state.” The lede: “The real problem is the private sector.”

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Today is Bastille Day. La fête nationale. I would normally have a special post on it—as I have every July 14th since AWAV was launched—but not this year. Am too distracted by Greece. And Europe. À propos of this, here’s an on-target commentary I came across earlier today, “Tormenting Greece is about sending a message that we are now in a new EU,” by the well-known Irish Times columnist Fintan O’Toole. He starts

What’s the difference between the Mafia and the current European leadership? The Mafia makes you an offer you can’t refuse. The leaders of the European Union offer you a deal you can neither refuse nor accept without destroying yourself.

The European Union as we have known it ended over the weekend. That EU project was all about the gradual convergence of equal nations into an “ever closer union”. That’s finished now.

Read the whole thing. As an observer in one of the PIGS, O’Toole knows of what he speaks. And in addition to being a sharp analyst, he has a fine sense of le second degré, as one may glean in this tweet

#Greece should have declared itself a bank. Would have been bailed out no questions asked.


Simon Tilford, the deputy director of the Centre for European Reform in London—the best think tank on the EU—has an op-ed in today’s NYT, “The Eurozone’s fault lines,” in which he begins with this

The euro was supposed to boost European economic growth and living standards, strengthen public finances and hence the sustainability of welfare states. Politically, it was supposed to bring the European Union’s member states together, and prevent a newly united Germany from becoming too dominant. But the opposite has happened.

The hoped-for convergence in living standards between richer and poorer members of the eurozone has failed to materialize. Far from the single currency nurturing a European polity, relations between northern and southern countries have never been more fraught. And the crisis has put the burden on a German leadership that is poorly equipped to exercise it.

On relations between the EU north and south, see the piece in Foreign Policy on the goddamned f*cking Finns, “Tiny Finland could complicate new Greek bailout deal.” Anyone for a #finexit? (just kidding) Europe is doomed if populist politicians in little EU countries gain the ascendancy in the European Council and Eurogroup.

CER analysts Christian Odendahl and John Springford, writing on the CER website, assert that “The Greek bailout deal resolves nothing,” that “[e]ven if the new bailout makes it through the Greek parliament in coming weeks, the programme’s economic incoherence will make it fall apart.” And in the same vein, Barry Eichengreen, writing in Social Europe, argues that to save Greece is to save Europe.

While one is at it, see as well the comment by Social Europe editor-in-chief Henning Meyer, “What are the consequences of the Greek deal?” Also the piece by WaPo Wonkblog reporters Roberto A. Ferdman and Matt O’Brien, “How Greece became the worst economy in Europe.”

À suivre.

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It’s only a matter of time. The European Council may have reached its last-minute deal to avert a Grexit this month—with the certain calamitous consequences for Greece and the rest of Europe this would have entailed—but the damage has been done. This past week has to have been the worst ever in the 65-year history of the construction of Europe. What has happened is a disaster for Europe—for the idea of Europe, if that still means anything. Arthur Goldhammer is right in saying that “the euro [may be] saved, but the euro, it is now clear, is going to be a thorn in Europe’s side if not a spike in its heart for years to come.” How can it not be, with people like Wolfgang Schäuble and Jeroen Dijsselbloem all but calling the shots? Of course the successive governments in Athens have been hugely responsible for what has happened but still, who do the f*cking Finns and Slovaks think they are to lecture the Greeks and threaten them with expulsion from Europe? Who the hell does Alexander Stubb think he is to be reading the riot act to anyone outside his little country? And for the big country in Europe—Wolfgang Schäuble’s—to be humiliating a member EU state—or any state, for that matter? Art Goldhammer nailed it again

[The deal] was nothing less than a humiliation of a small and suffering member state, a sadistic display of naked financial power. Do as we say or we will “collapse your banks,” Eurogroup Chairman Jeroen Dijsselbloem had apparently told Greek negotiators earlier. In the climactic weekend it emerged that he wasn’t bluffing. Despite the fact that the ‘No’ vote had scored a resounding victory in a national referendum a week earlier, Greek Prime Minister Alexis Tsipras decided he had no choice but to surrender to all the creditors’ demands, but in the end it turned out that even unconditional surrender was not enough.

Germany’s implacable finance minister, Wolfgang Schäuble, saw weakness in his opponent and went for the jugular. He insisted on “guarantees” that Greece would keep its word, including sequestration of Greek assets in a fund under his control. No such guarantees had been demanded previously, but now Chancellor Angela Merkel, who had previously seemed less exigent than Schäuble, declared that Greece had forfeited the “trust” of its European partners. In the end she proved to be a good German but not a good European.

As for what happened in Brussels last night, the FT thus reported

“They crucified Tsipras in there,” a senior eurozone official who had attended the summit remarked. “Crucified.”

Wolfgang Münchau has an awesome FT tribune today, “Greece’s brutal creditors have demolished the eurozone project.” No money quotes, as the whole piece is one. Just read it. All of it.

This social media comment by Yascha Mounk, a recent Harvard Ph.D. who teaches political theory in the Government Dept there (and who’s German)—no doubt reflects the sentiments of many

It’s strange to think that, back when I was a teenager, the European project still seemed like the kind of thing to which one might nobly devote one’s life. But the European dream is dead—not just because of Greece, but because of the depth of nationalism the euro crisis has revealed, and the ugly hatred it has incited.

The best we can now hope for is an orderly slimming of the EU to its key achievements: free movement of people, coordination on the most important regulations, etc. (I deliberately exclude political values: as the case of Hungary shows, the EU is incapable of safeguarding those in any case.) But the centrifugal forces, and the strength of the populists, will be such in the next years that we may wind up losing even that.

Again, the posture of Germany and its little country allies may have killed the European idea. As for big country France, I shudder in anticipation of the coming public opinions polls on attitudes toward Europe. Revulsion is all but guaranteed. And in polls outre-Manche, Brexit will no doubt leap.

It’s now beyond doubt that the euro has been “a curse,” as retired longtime Christ Church, Oxford, economics professor Peter Oppenheimer asserted recently.

N.B. the euro, not Europe; not the European idea. The problem is not the Treaty of Rome or even the Single European Act; it’s Article 109 of the Maastricht Treaty, and all that ensued from that.

The Telegraph’s Ambrose Evans-Pritchard, in a comment entitled “Greek deal poisons Europe as backlash mounts against ‘neo-colonial servitude’,” weighs in on the deal. E.g.

“Greece has been devastated and humiliated. Europe has showed itself Pharisaical, incapable of leadership and solidarity,” said Romano Prodi, the former Italian prime minister.

An independent fund will take control of €50bn of Greek state assets, collateral to prevent Syriza reneging on the deal at a later date. Three-quarters of this will be sued to recapitalise the Greek banks and repay debt.

International inspectors will have the power to veto legislation. The radical-Left Syriza government will be forced to repeal a raft of laws passed since it took power in January, stripping away the last fig leaf of sovereignty.

“It is unconditional surrender. We get serious austerity with no debt relief. We will have foreign supervisors crawling over everything,” said Costas Lapavitsas, a Syriza MP and one of 40 or so rebels who plan to abstain or vote against the deal, mostly from the Left Platform.

“They are telling us that from now on, they are going to govern the country…”

In the plan is a provision for ending laws against Sunday trading. Rhetorical question: What does having stores open on Sundays have to do with economic growth and/or reimbursing national debt? Concrete question: Are stores in Germany open on Sunday? Answer here.

Back to Ambrose Evans-Pritchard, TWS senior editor Christopher Caldwell, in a piece on Greece in the latest issue—in which valid points are mixed with Eurosceptic pablum and other silliness—writes this

Ambrose Evans-Pritchard of London’s Daily Telegraph has therefore asked whether we are right to focus on Greece at all. Evans-Pritchard is a conservative writer whose well-informed essays on European finance are a bracing contrast to the conservative sloganeers in the United States, who often write as if the virtuous party in any dispute were always the one with the most money. “The currency union itself is delinquent,” Evans-Pritchard asserts. He is right. Greeks could borrow what they did because they were now members of a rich family. If Brad Rockefeller walks into a casino in a soiled T-shirt and runs up a million-dollar debt that neither he nor his family will repay, what was the casino’s mistake? Trusting some T-shirt-wearing guy or trusting the Rockefellers?

In the Paris business daily La Tribune, Romaric Godin asserts that “La défaite de la Grèce [est] la défaite de l’Europe.” Disheartening reading but necessary. See also Godin’s piece from last Friday—an eternity ago—”Grèce: où Alexis Tsipras veut-il en venir?

I’ve been ranting here but so be it. I’m really quite dismayed and dejected about all this.

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The #Greferendum


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The polls in Greece closed fifteen minutes ago as I write. We’ll know the outcome of the vote in a few hours. In the meantime, Stathis Kalyvas, my go-to man on anything Greek—and who voted ‘Nai’ today—has an op-ed just up on WaPo’s Monkey Cage blog, on “Why the Greek referendum is the referendum from hell.”

Personally speaking, I thought the referendum was a crackpot idea from the outset. Since when, in a serious democracy, does a national referendum get called for the following week, on such a momentous issue, and with the question so incomprehensibly worded? À propos, Zizi Papacharissi, professor and head of the communication dept at the University of Illinois-Chicago—who is Greek and presently in Athens—had a commentary yesterday on “A GReferendum state of mind,” in which she argues “why the GReferendum is a bad idea [and] also why all referenda in general rarely work.”

Also à propos, the BBC News website had a comment on June 29th on how “The Greek referendum question makes (almost) no sense.”

Looking at the French angle, columnist Bruno Roger-Petit, observing events from Paris (July 1st), took a dim view of “La gauche française et le référendum de république bananière de Tsipras.” That’s right: Tsipras’s Banana Republic. Money quote

Que diraient [les] entichés de Tsipras si François Hollande, David Cameron ou Angela Merkel organisaient un référendum en moins d’une semaine sur la question européenne, sans campagne et sans question connue dès l’origine ? Ils protesteraient de ce que l’on méprise le peuple français. Ils dénonceraient le populisme de l’affaire. Et ils auraient bien raison.

France Inter political editorialist Thomas Legrand, in his commentary last Wednesday morning, also critiqued the Greferendum, calling it a “bizarrie” and an “aberration.”

Dimitri A. Sotiropoulos, who teaches politics at the University of Athens, weighed in on the Greferendum on the Heinrich-Böll-Stiftung Greece website (July 3rd), where he said that there has been “A series of blunders of which the largest and latest was Syriza’s…”

À suivre.

UPDATE: Here are Stathis Kalyvas’s “18 tweets on the Greek referendum of July 5, 2015” following the announcement of the ‘Oxi’ victory.

2nd UPDATE: Voilà the early Monday morning roundup of instant analyses:

Paul Krugman (of course), “Ending Greece’s bleeding.” Can hardly disagree with The Man here.

Romaric Godin (of the Paris business daily La Tribune), “Grèce: le ‘non’ grec place Angela Merkel au pied du mur.” This one is quite good.

Zachary Karabell (head of global strategy at Envestnet and contributing editor at Politico Magazine), “Don’t believe the hype about Greece. The Eurozone isn’t on the verge of collapse, yet.”

An interview with Thomas Piketty in Die Zeit, dated June 27th, and translated into English, in which he tells the Germans a few home truths about their own history when it comes to repaying—or not repaying—debt. Piketty is great here. A total must-read.

Pascal Riché (well-known journalist at L’Obs/Rue89), “Grèce: après le ‘non’, tout sauf le ‘grimbo’!” The lede: “Il y a le grexit et le new deal. Mais aussi le ‘grimbo’, l’interminable entre-deux, la solution qui serait de loin la pire. Pour l’éviter, Hollande et Merkel doivent faire preuve d’audace.”

3rd UPDATE: Some late Monday/early Tuesday links:

A smart commentary by FT columnist Gideon Rachman, “Europe should welcome Greece’s vote: Athens and the eurozone have a common interest in making Grexit as painless as possible.” Money quote

If European leaders were thinking clearly, they should see that rather than punishing Greece, it is now in the EU’s interests to do its level best to make sure that Greece can leave the euro, but stay inside the EU with a minimum of pain. If that means giving Greece debt relief as part of the exit package, so be it. Debt relief, in return for Grexit, could make political as well as economic sense.

Even so, restoring the drachma in Greece without provoking an even more intense economic crisis will be very difficult. But, if it could be done, the EU may finally have a model for liberating other European nations from a malfunctioning euro.

George Magnus, Senior Economic Adviser to UBS, in Prospect Magazine, “Greek crisis: How Greece became Europe’s fault line,” in which he reviews Stathis Kalyvas’s latest book. The lede: “Alexis Tsipras and his government will re-engage with their creditors but Greece’s membership of the euro is now in doubt. How did it come to this?”

A nice post by Matthew Yglesias in Vox, “Greek crisis: 11 people and institutions to blame,” i.e. just about everybody. I particularly like nºs 8, 9, and 11.

Stathis Kalyvas observes on Twitter that “The single best example I can give to convey institutional failure in ‪#‎Greece‬ is the inability to enforce smoking ban in restaurants.” My comment on this: Smoking bans in Turkey are scrupulously respected. I guess that makes the Greeks even more non-European than the Turks…

4th UPDATE: A few Tuesday afternoon links:

Yale University political science prof Nicholas Sambanis writes in WaPo’s Monkey Cage blog on “Why the Greeks rejected Europe’s bailout.”

Indiana University political science prof Kindred Winecoff has a must-read post on the Duck of Minerva blog, which skewers Thomas Piketty’s posture on Germany (see above): “Why Piketty is wrong about debt forgiveness.”

A “Letter from Greece” in Politico by Yannis Palaiologos, a features reporter for the Athens daily Kathimerini, “A populist revolt rocks Greece.” The lede: “Greeks are standing behind their Prime Minister. And courting disaster.”

In Politico.eu, Megan E. Greene, chief economist and managing director of Manulife, says it’s now “Europe’s turn to say ‘Oxi’.” The lede: “After the referendum, a Greek deal may not be impossible but is unlikely.”

Voilà Jean Quatremer of Libé’s latest, “Grexit: tu veux ou tu veux pas?

And Elie Cohen and Gérard Grunberg deliver their verdict in Telos, “Grèce: et maintenant?

Robert Misik, an Austrian writer and political commentator, has a lengthy piece dated June 27th, translated from German, and reblogged on Social Europe, “My Greece: The journey inside Syriza.”

5th UPDATE: More late Tuesday links:

Dani Rodrik, who is known to everyone, has a typically on-target piece in Project Syndicate, “Greece’s vote for sovereignty.”

Writing in The Guardian’s ‘Comment is free’, Daniel Howden, a former correspondent for various British publications who presently works for an Athens tech start up, asks “Is Tsipras really looking for a deal with Europe?” The lede: “Despite the Greek leader’s rhetoric on social justice, he appears more intent on consolidating power than resolving this crisis.”

Daniel Cohn-Bendit was the guest on France Inter this morning, with Greece the sole subject (here and here). Entre autres, Dany called for a mediator in the negotiations between Greece and the Eurogroup.

Mark Blyth, the Eastman Professor of Political Economy at Brown University, has a piece in Foreign Affairs on “A pain in the Athens: Why Greece isn’t to blame for the crisis.” So what are roots of the crisis? Answer: they’re far away from Greece and lie in the architecture of European banking.

6th UPDATE: A few Wednesday and Thursday links:

The New Yorker’s John Cassidy asks “Will Angela Merkel Save the European Ideal?

The Telegraph’s Ambrose Evans-Pritchard says that “Europe is blowing itself apart over Greece – and nobody seems able to stop it.” The lede: “Prime Minister Alexis Tsipras never expected to win Sunday’s referendum. He is now trapped and hurtling towards Grexit.”

Texas Christian University econ prof and Forbes contributor John T. Harvey gives “Five reasons why the Greeks were right.”

University of Wisconsin political science prof Mark Copelovitch, weighing in on the Greek ‘no’ vote in WaPo’s Monkey Cage blog, asks “Is this the end of the Eurozone?

Also in Monkey Cage is a post by University of Zürich international relations and political economy prof Stefanie Walter, “What were the Greeks thinking? Here’s a poll taken just before the referendum.”

Joseph Stiglitz, writing in Time magazine, asserts that “The U.S. must save Greece.”

Mediapart has a “document” (in English), “‘We underestimated their power’: Greek government insider lifts the lid on five months of ‘humiliation’ and ‘blackmail’.” The lede:

In this interview with Mediapart, a senior advisor to the Greek government, who has been at the heart of the past five months of negotiations between Athens and its international creditors, reveals the details of what resembles a game of liar’s dice over the fate of a nation that has been brought to its economic and social knees. His account gives a rare and disturbing insight into the process which has led up to this week’s make-or-break deadline for reaching a bailout deal between Greece and international lenders, without which the country faces crashing out of the euro and complete bankruptcy. He describes the extraordinary bullying of Greece’s radical-left government by the creditors, including Eurogroup president Jeroen Dijsselbloem’s direct threat to cause the collapse of the Hellenic banks if it failed to sign-up to a drastic austerity programme. “We went into a war thinking we had the same weapons as them”, he says. “We underestimated their power”.

Looking at the larger picture, Nobel Prize economics laureate Jean Tirole, in a tribune in Le Monde reblogged in English translation by Social Europe, says that “Europe’s future is federal.”

Swarthmore College visiting professor George Lakey, who has written prolifically on non-violent social action, offers “Four lessons from Iceland and Greece for movements fighting austerity.”

Here’s a pertinent commentary by La Tribune’s Romaric Godin, dated May 12th, “Grèce: pourquoi Yanis Varoufakis est-il insupportable aux Européens?”

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Greece and the Grexit


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I’ve been riveted to the Greece-Eurozone/IMF psychodrama, which is to say I’ve been reading more about it than any other single news story these past few days (and the past week has been pretty intense news-wise). My head is spinning at this point; I almost don’t know what to think; or, to put it another way, my attitude shifts based on the last good analysis I read (and I will readily admit to this). As I’m not a specialist of Greece and follow events and politics in that country episodically, not daily or weekly, I am therefore dependent on the analyses and commentaries of persons who are specialists, follow Greece as part of their jobs, and/or whose perspectives I trust. And I read/know highly smart, well-informed persons on both sides of the cleavage on the question, i.e. those who have been pointing the finger at Alexis Tsipras and his Syriza government as the main culprits in the current mess—and which looks to be headed toward a debacle of potentially catastrophic consequences, i.e. a Grexit—and then those for whom the guilty party is the European Commission-ECB-IMF Troika, the Eurogroup, and the entire German-imposed austerity of the past six years.

In the first, anti-Syriza group are three excellent Greek political scientists whose commentaries I see almost daily on social media: Stathis N. Kalyvas, the Arnold Wolfers Professor of Political Science at Yale University, my go-to man on anything having to do with Greece, who’s a public intellectual there, and is presently in Athens (check out his latest book, just out last month: Modern Greece: What Everyone Needs to Know); Michalis Moutselos, who’s finishing a doctoral thesis at Princeton (his latest social media comment is here); and Takis Pappas of the University of Macedonia in Thessaloniki, and presently visiting professor at the University of Freiburg (see his latest post here, on “10 harsh realities for Greece”). To this trio may be added historian Nicolas Bloudanis (e.g. see his piece from March on how, under Syriza, Greece is once again oscillating “between democracy and an authoritarian regime.”).

Michalis linked today to this “essential guide into the #Greferendum and the current state of affairs regarding #Grexit,” by Thessaloniki-based lawyer Zen K. and with this comment

A nice overview, in English, of some of the legal and economic issues behind the Referendum for those who have not followed the details as closely. Again, this has eventually become a referendum on the position of the country in the Eurozone if not the European Union, so a lot of these matters do not weigh as much on what people are voting for/against (once more, we vote YES unequivocally!). But it does demonstrate some of the legal derailments the government was willing to allow and, again, are not good omens, if Greece finds itself isolated.

Tsipras’s hastily called referendum—a fuite en avant if there ever was one—has, for the record, likewise been critiqued by University of Poitiers law professor Pascal Mbongo in a post, “Le référendum grec: un objet juridique non-identifié,” on his website Libertés & Droits Fondamentaux. Another Greek commentator, whose existence I just learned of the other day, is C. J. Polychroniou, a research associate and policy fellow at the Levy Economics Institute of Bard College, who had a worthy tribune in Al Jazeera English two days ago on how the “Greek referendum is a Machiavellian plot.” The lede: “Alexis Tsipras gambles on Greece’s future with a sham referendum.” See as well Polychroniou’s contribution in today’s NYT’s Room for Debate, in which he asserts that “Greece can’t afford to leave the euro, though it should.”

A high-profile critic (in the French media) of Tsipras and his Syriza comrades is Jean Quatremer, Libération’s Brussels correspondent, who’s written extensively on Greece over the past several years and has been going to town on it this past week (e.g. his piece of last Friday, “Aux racines de la crise grecque.” Every time I read JQ’s analyses, I say “yep, he’s right” (ouais, il a raison). Here’s Quatremer’s latest commentary/lament, posted on his Facebook page late last night

Petit coup de fatigue devant l’incompréhension d’une fraction de l’opinion de gauche devant ce qui se passe en Grèce. Le problème actuel de ce pays, ce n’est pas la dette vis-à-vis des Européens (moratoire jusqu’en 2023), mais celle vis-à-vis du FMI où siègent des pays infiniment plus pauvres que la Grèce. Et les exigences des créanciers, ce n’est pas pour punir la Grèce, mais simplement pour équilibrer ses comptes, réformer son Etat afin qu’il collecte l’impôt, remettre sur pieds son économie. Personne ne dit quelle serait la solution: l’annulation de la dette des Européens (celle vis-à-vis du FMI n’est pas négociable) ne réglerait aucun des problèmes grecs (et j’y suis favorable, il faut payer pour notre erreur de l’avoir admise dans la zone euro). Quelqu’un est-il favorable à ce que les citoyens européens payent les dépenses grecques pour l’éternité? Si oui, il faut le dire au lieu de s’indigner vainement.

Voilà. But then there are the denunciations of the Troika, Eurogroup, Angela Merkel/Wolfgang Schäuble et al, which are more numerous on my various news feeds and whose arguments are equally convincing. First, the usual Nobel Prize-winning economist suspects, i.e. Paul Krugman (latest salvo here) and Joseph Stiglitz (here). Guillaume Duval, editor-in-chief of the excellent monthly Alternatives Économiques—of which there is no equivalent in English: a slick, glossy magazine on economics from a progressive/Keynesian perspective aimed at an educated but non-specialist readership; economics journalism at its best—has been shredding Greece’s European creditors almost daily on the AlterEco website (e.g. here) and his Facebook page (where he has kindly taken the time to respond extensively to my questions or critiques of his positions). My dear friend Alice Sindzingre—research scholar at the CNRS in Paris, visiting lecturer and research associate in the economics department at SOAS, specialist of African political economy, who’s worked at the World Bank, and knows the international financial institutions (IMF et al) well—has been riveted to the Greek psychodrama drama more than I—and is much smarter about it than I will ever be—and emphatically delivered to me a week ago, and in convincing manner, her virulent indictment of the Troika/Eurogroup/et al and defense of the Greek position. I could hardly disagree.

One source of analysis on Greece that Alice has highly recommended is Romaric Godin, the assistant editor-in-chief of the La Tribune, one of the Paris dailies (mainstream) on the economy and business. Godin is indeed quite good on the issue, as I have noted, e.g. see his piece from three days ago, “Grèce: la victoire à la Pyrrhus de Wolfgang Schäuble.” My blogging confrère Arthur Goldhammer, always measured in his analyses and critiques—and not too sympathetic toward Jean-Claude Juncker & Co—weighed in on the Greek crisis on WaPo’s Monkey Cage blog on Sunday. Two commentaries, in particular, merit mention. One is by Jeffrey Sachs, writing in Project Syndicate exactly two weeks ago, on “The endgame in Greece.” This one is particularly unsparing toward the Troika et al and absolutely worth the read. The other is by Ambrose Evans-Pritchard, international business editor of the Telegraph and well-known critic of the single currency, who had a severe commentary eleven days ago, in which he asserted that the “Greek debt crisis is the Iraq War of finance.” No less. Money quote

Personally, I am a Burkean conservative with free market views. Ideologically, Syriza is not my cup of tea. Yet we Burkeans do like democracy – and we don’t care for monetary juntas – even if it leads to the election of a radical-Left government. As it happens, Edmund Burke would have found the plans presented to the Eurogroup last night by finance minister Yanis Varoufakis to be rational, reasonable, fair, and proportionate.

Comme quoi, the Greece vs. Troika et al issue does not cleave along left-right lines.

A non polemical commentary has been offered by the well-known French economist Elie Cohen—one of my longtime references—on the excellent website Telos, “Leçons grecques pour l’Europe.” And probably the best proposal for a satisfactory way out of the Greek crisis has come from Dominique Strauss-Kahn, unveiled, as it were, on his Twitter account on Saturday, “Greece: On learning from one’s mistakes #Greece #EU.” Smart and reasonable man he is, DSK, at least when it comes to economics. Too bad he’s made so many mistakes in his own life.

UPDATE: Martin Wolf’s column in the June 30th FT, “The difficult choices facing the Greeks,” gets it exactly right IMO. The lede: “If I were a [Greek] voter, I would bemoan my government’s leftism and the eurozone’s self-righteousness.”

2nd UPDATE: Jürgen Habermas, in a tribune in Süddeutsche Zeitung dated June 22nd—and translated by Social Europe—explains “Why Angela Merkel is wrong on Greece.”

3rd UPDATE: Gerassimos Moschonas, who teaches political science at Panteion University in Athens, has a most interesting and informative piece in Telos, dated May 22nd, “Syriza et l’UE après la première longue bataille: bilan des négociations.” Also in Telos (June 30th) is a response by Charles Wyplosz to Elie Cohen’s piece linked to above, “Quelle politique économique pour la Grèce?

4th UPDATE: Takis Pappas has a commentary in OpenDemocracy (July 2nd) on “What is at stake in the Greek referendum?,” in which, entre autres, he critiques Paul Krugman and Joseph Stiglitz. The lede: “[If the ‘no’ wins, h]ow will Greece be able to fix its economy in a desert landscape, with no appetite for reforms, without helpful partners and with a crippled democracy?”

5th UPDATE: Michalis Moutselos has posted this pertinent comment (July 2nd) on his Facebook page

Several friends, mostly from abroad, have written to me in good faith about my steadfast support of the YES in the referendum, wondering whether I do not see the elephant in the room: “But don’t you agree that austerity is pointless, self-defeating and harmful to Europe as a whole? Don’t you agree that European policy has been captured by powerful pro-austerity interests and that the struggles of the Greek government deserve our understanding, if not solidarity”?

Here is a first way to answer to this question. For anyone following this wall somewhat closely, it should be clear that my distaste for SYRIZA (and their right-wing partners ANEL) was never purely economic. These two are parties that would never budge before calling European partners and institutional lenders gangsters, usurers, blackmailers and perpetrators of a social genocide. These are parties that would undig the most self-victimizing, national-populist themes of Greek political history (the cult of NO, war reparations, civil war themes) and tie them to metaphors regarding the negotiations. These are also parties that would say no to everything in terms of reforms of the Greek state, reforms that did not have anything to do with fiscal consolidation, regardless of whether they were included in the Memorandums. Their supposed, newfound “reformism” during negotiations that was meant to make up for their demands for debt reduction was laughable for anyone who followed their domestic campaigns. In sum, these are, basically, parties targeting the lowest, reactionary instincts of frightened and angry mobs, not the grievances of citizens being unjustly underrepresented or over-punished. No Nobel-prize winning economist made the effort to dig into these aspects of the SYRIZA-ANEL phenomenon, nor did many intelligent leftists (many still don’t care to see). So now that these two parties seem to have completed their strategy of isolationism; now that even those friendly to them are wondering why they abandoned the negotiatons two days before the closeing of banks without really realizing there was no spirit of cooperation with Europe to begin with; the debate becomes not just about whether austerity measures were good or bad, but also whether we want these people running the country outside the European fora, uncheckered by the rules and norms of Europe. This has now, evidently, become more existential than whether 3-4% primary surplus per year was a self-defeating strategy or not.

And this from Takis Pappas, posted on his FB page

My reason for voting “Yes”:

Here is a Greek story. It begins in Anatolia with my grandparents, who came to Greece as refugees after the forced exchange of populations – for them it was “The Disaster” – in the early 1920s. They became merchants and relatively prosperous Greek citizens. It continues with my parents, who worked their way in the private sector both in times of political tumult and in peace; politically moderate and wise folks as they were, they taught me to be a good citizen and productive member in society. The story is now at a chapter where I have long ago moved residence from Greece to somewhere near the heart of Europe, happily seeing my own children to develop as true European citizens and proud heirs of a mixture of cultures. This has been a century-long, tortuous but also dignified journey from the Ottoman east to the enlightened West. And I don’t want to see it reversed by a “leftist riffraff” in partnership with ultra-nationalists and neo-Nazis. To have a happy ending, this story demands that I vote “yes”.

More opinions, mostly supporting the “No”, in the link below.

The link is “Greferendum: an anthology,” by Alex Sakalis, associate editor of OpenDemocracy. The lede: “Some of our best contributors on the Greek crisis give their thoughts on how they would vote in Sunday’s referendum.”

6th UPDATE: Ana Swanson of WaPo’s Wonkblog has a meritorious report (July 1st) on “The forgotten origins of Greece’s crisis [that] will make you think twice about who’s to blame.” Also on Wonkblog is a piece (July 3rd) by WaPo policy editor Zachary A. Goldfarb, “18 key facts about Greece that will leave you totally up to date about a huge crisis,” in which he links to “an excellent primer” by University of Chicago business school professor Anil Kashyap.

7th UPDATE: Check out the commentary (July 3rd) by The New Yorker’s John Cassidy, “Greece’s debt burden: The truth finally emerges.”

8th UPDATE: Le Monde’s economy supplement (June 30th issue) has a “retour sur les trente-cinq années qui ont conduit l’Europe et la Grèce au bord de la rupture.” The full text of the article is in the comments thread below.

9th UPDATE: Spiegel Online International has a most interesting analysis (July 3rd), “Angela’s ashes: How Merkel failed Greece and Europe.” The lede: “Angela Merkel relishes her reputation as queen of Europe. But she hasn’t learned how to use her power, instead allowing a bad situation to heat up to the boiling point. Her inability to take unpopular stances badly exacerbated the Greek crisis.”

10th UPDATE: Oxford University econ prof Simon Wren-Lewis skewers “The ideologues of the Eurozone,” i.e. the Troika and other austerians, in a post on his Mainly Macro blog (July 3rd; reblogged by Social Europe). In the post he links to an analysis (July 2nd) by economist Angel Ubide, “A political and intellectual proxy war over Greece,” on the blog of the Peterson Institute for International Economics.

11th UPDATE: Thomas Piketty gives his view of the Greek crisis (“ceux qui cherchent le Grexit ‘sont de dangereux apprentis-sorciers'”) in a must-watch 25-minute video interview (July 2nd) with Le Monde’s Arnaud Leparmentier.

12th UPDATE: Economics blogger Steve Randy Waldman, who’s billed as a libertarian, has a detailed, well-worth-the-read analysis (July 3rd) of the Greek predicament on his Interfluidity blog.

13th UPDATE: Here’s Jeffrey Sachs in Project Syndicate again (July 3rd), offering “A way out for Greece,” involving four steps and after the Greek people vote ‘No’ in the Greferendum (as Sachs says they should).

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The flag-waving Greek left

www.neakriti.gr page=newsdetail&DocID=1208125

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That’s the title of an article (here)—dated Feb. 9th but that I just got around to reading—by Christopher Caldwell, reporting from Athens, in the right-wing TWS. The lede: “A collision between national sovereignty and the European Union in the birthplace of democracy.” Caldwell, who is not on the left, loin s’en faut, is surprisingly sympathetic to SYRIZA. Or perhaps not so surprisingly in view of his euroscepticism, which he wears on his sleeve whenever writing about the European Union. But whether one is a eurosceptic or not—and I am not—Caldwell’s piece is smart, interesting, and worth the read.

Libération’s Brussels correspondent Jean Quatremer, who is definitely not a eurosceptic, has a must-read, blow-by-blow account (March 12th) of what happened behind the scenes during the negotiations between the new Greek government and the leaders of the Eurozone, “Grèce vs Eurozone: histoire secrète d’un bras de fer.”

A reader has brought to my attention a post (dated Feb. 25th) on the leftist Analyze Greece! website by three academic political economists—Spyros Lapatsioras, John Milios, and Dimitris P. Sotiropoulos, all SYRIZA members—who argue that “SYRIZA’s only choice [is] a radical step forward.”

And if one hasn’t seen it by now, the latest issue of Paris Match has a photo spread—that has been the rage on Twitter the past couple of days—of Yanis Varoufakis and his wife Danae Stratou—an internationally known installation artist—at their well-appointed Athens pad. La belle vie. Monsieur Varoufakis se pipolise, semble-t-il. If Yanis & Danae ever invite me over for lunch on their terrace, I certainly won’t decline…

UPDATE: Manos Matsaganis, Associate Professor at the Athens University of Economics and Business, has an absolute must-read piece (dated March 14th; h/t Stathis Kalyvas) on the OpenDemocracy website, “The trouble with SYRIZA.” The lede: “Despite being ‘a man of the Left’, and despite being hugely critical of the parties that ruled the country since 1974, there are several things about the rise of SYRIZA that absolutely terrify me.” This passage is particularly notable

Summing up, to a great extent SYRIZA is a mutant Left: unfamiliar to western eyes (and hence poorly understood by many western observers), but all too terrifyingly familiar to those living in that unhappy corner of the world otherwise known as ‘the Balkans’. To stretch an analogy, the nationalistic left ruling Greece today is in many respects far more akin to the ethno-bolshevism of Slobodan Milošević than to Spain’s Podemos

In his piece, Matsaganis links to a 77-page report he co-authored with Aristos Doxiadis in 2012 on the neo-Nazi party Golden Dawn, “National populism and xenophobia in Greece.” In the report, which was published by Counterpoint, the authors “argue that Golden Dawn is in many ways a manifestation of a world view that is widely shared in Greece, albeit at its most violent extreme.”

2nd UPDATE: Guillaume Duval, editor-in-chief of the excellent Alternatives Economiques, has a piece in L’Humanité (March 12th) in which he asserts that “L’inaction des gauches au pouvoir pèse sur les difficultés de Syriza.”

Le reportage de "Paris Match" sur Yanis Varoufakis.

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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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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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Le Monde had an interesting full-page enquête the other day on the complaints of Greek private sector employers. As the piece is difficult to find on LM’s website even for subscribers, here’s the whole thing

La complainte des patrons grecs
Article paru dans l’édition du 26.05.12

Un secteur public tentaculaire, des syndicats tout-puissants, une politique clientéliste : en Grèce, les entrepreneurs ont une interminable liste de griefs. Eux-mêmes ont délocalisé, négligé la recherche et le développement, pratiqué à outrance l’évasion fiscale

Larissa (Grèce)
Envoyée spéciale

Assez vite, Andreas Liontos a senti le vent tourner. D’abord, il y eut quelques retards de paiement, des explications douteuses, puis plus de paiement du tout. Inéluctablement, sa compagnie d’assurances, créée en 1990 à Larissa, ville agricole du centre de la Grèce, en Thessalie, a basculé dans le rouge. Etranglés par les mesures d’austérité, les Grecs se fichaient bien de souscrire un nouveau contrat d’assurance-vie ou de protéger un véhicule – que le plus souvent ils n’avaient plus. Pour Andreas, l’ardoise a été salée : 5 millions d’euros.

A 45 ans, l’homme, ambitieux et taiseux, n’a pas sombré. Il a compris que son avenir se jouait désormais hors des frontières et qu’il ne devait compter que sur lui-même. « Tout ce que j’ai fait, je l’ai toujours fait seul, sans aide, sans (more…)

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Jean Quatremer, Libération’s Brussels correspondent, has a must read essay on his Libé blog ‘Coulisses de Bruxelles’, “Grèce : le grand malentendu.” He is not too tender toward the Greeks and their apparent lack of will to carry out necessary reforms, and despite the massive, unprecedented transfers they have received from the rest of Europe, not just during the current crisis but since the country was admitted to the EC three decades ago. Read it. The whole thing.

[European Union: who pays, who receives]

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Greek immobilism

Greek writer and philosopher Nikos Dimou had an op-ed in Le Monde last week on how “immobilism in Greece has gone on for way too long.” The piece was translated from English but as I couldn’t find the original version here it is en français

LE MONDE | 24.05.2012 à 13h35

Par Nikos Dimou, écrivain et philosophe grec.

En 2009, quand Georges Papandréou est arrivé au pouvoir, la situation était critique, mais pas désespérée. La Grèce pouvait encore obtenir des prêts sur le marché des titres. Mais le gouvernement s’y est pris tout de travers. Au lieu d’élaguer les dépenses et de miser sur la productivité, il a dilapidé les fonds publics. En mars 2010, au bord de la faillite, la Grèce a dû faire appel à la communauté internationale.

La troïka formée par le Fonds monétaire international, l’Union Européenne et la Banque centrale est venue renflouer la Grèce et l’a exhortée à restructurer son économie. En vain. Certains membres du Pasok (dont des ministres) et les syndicats tout-puissants se sont montrés hostiles à toute réforme. Il s’agissait d’éponger le déficit budgétaire en réduisant la voilure, en allégeant le secteur public, en liquidant les entreprises publiques déficitaires. Et de lutter contre ces fléaux nationaux que sont la corruption et la fraude fiscale.

Au lieu de cela, le gouvernement a procédé à des coupes horizontales de 20 % à 30 % sur les salaires, a augmenté l’impôt sur le revenu et la taxe foncière (acquittés par les rares contribuables honnêtes) et majoré les impôts indirects (la TVA a augmenté de 23 %).

Si les fonctionnaires ont sauvé leur poste, un million de salariés du secteur privé se sont retrouvés au chômage. Sur l’essentiel, rien n’a changé. Les professions “fermées” le sont restées : taxis, notaires, pharmaciens, avocats, transporteurs et une centaine d’autres catégories réglementées sont à l’abri de la concurrence. Nous vivons encore sous le régime des guildes médiévales !

Pourquoi un tel immobilisme ? Le philosophe Stelios Ramfos dénonce une société statique, en proie à l’insécurité, au ressentiment, à la méfiance et à la peur du changement. Cet état d’esprit ne date pas d’hier ; il repose sur des fondements culturels et religieux (de même, la défiance des Grecs envers l’Occident a alimenté plusieurs théories du complot). La seule réforme votée à une écrasante majorité par le Parlement concernait le système universitaire. Même cette loi n’a jamais été appliquée : les universités refusent d’évoluer.

Les lourdeurs et la corruption qui plombent l’administration empêchent l’application des lois et des réformes. Et que dire de son obsolescence ? La plupart des fonctionnaires ne savent pas se servir d’un ordinateur. Des procédures qui pourraient se régler en un clic prennent des semaines. Au cours des dix dernières années, l’Etat a investi 8 milliards d’euros dans des équipements informatiques qui n’ont jamais été utilisés.

Dans un premier temps (le 17 juin, si tout se passe comme prévu), les Grecs auront à élire un gouvernement. Celui-ci devra négocier un nouveau mémorandum. La déflation et la récession sont aujourd’hui les principaux problèmes et, si le pays ne reprend pas la voie de la croissance et de la productivité, il ne pourra pas survivre (encore moins rembourser sa dette !).

Ce qu’il nous faut, c’est une nouvelle génération d’hommes politiques, un nouveau secteur public (plus dense et plus efficace), un nouveau plan économique. Plus important encore, il nous faut adopter une nouvelle mentalité. Le temps est venu de nous secouer de notre torpeur et de nous ouvrir à la modernité. Telle était l’ambition partagée par tous les grands dirigeants politiques grecs au cours de ces deux siècles de liberté. Qui sait ? Peut-être la crise aura-t-elle un effet bénéfique ?

The bit about how most Greek functionaries don’t know how to use a computer struck a personal note with me. From the early 1980s on I had a dear friend in Athens, whom I visited a few times there and carried on a regular correspondence with. When I first wrote her a letter printed from a computer, circa 1986, she took it negatively. She thought the computer-generated printed word was cold, impersonal, unspontaneous, devoid of emotion… I hadn’t heard that one before (and haven’t since). Several years ago—not having heard from her in some time—I called her in Athens and, among other things, asked if she had e-mail. Response: oh no, not at all, don’t know about that. I said that was really too bad, as it’s hard to stay in touch otherwise (does anyone still write letters and send them via the post office?). I imagine she still doesn’t have it (otherwise I think I would have heard about it by now). And my friend was not some time-serving functionary but a lawyer, whose office was in central Athens and home in an upscale suburb (Kifisia). Now I know there are plenty of Greeks who are computer savvy, use the Internet, are on Facebook, etc, etc, but if my friend is at all representative of educated Greeks of her generation (she’s in her late 40s), then, as we say here, la Grèce n’est pas sortie de l’auberge…

[The person on the left (labeled “European inspector”) is saying “I have come to impose some order.” The person on the right (Greek civil servant sitting at the desk with the message “state apparatus”; there is a pun, see below) responds “Not even Chuck Norris can achieve this, my friend.” The pun consists of the use of the word “mihani” (as in ex machina, mechanics, etc) for apparatus; adding an “a” at the beginning has the same effect as adding an “un” in English and the word means something like “unfunctionability”. — Thanks to Yannis M. for the translation.]

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Like Ford to NY City in Oct. ’75. Christine Lagarde at the IMF is talking tough to the Greeks, telling them that they need to pay their taxes and STFU. If she’s saying it, don’t expect softer talk from Merkel or Barroso. (h/t Stathis Kalyvas)

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Don’t fear the Grexit

So say Thomas Oatley and Kindred Winecoff, of the political science dept at UNC-Chapel Hill, on the Foreign Policy website. Based on their research on global financial networks, they argue that the global economy will weather the storm of a Greek exit from the euro with relatively little damage. Inshallah.

For his part, Nouriel Roubini, the so-called Dr. Doom, says that Greece must exit the euro and the sooner the better. Better pain now than greater pain later. Roubini carries considerable cred given his predictions of the 2008 financial meltdown but I’d like to know how his analyses since then—which I read episodically but not systematically—have held up. Is he a one-prediction wonder like French intello flake extraordinaire, Emmanuel Todd, who predicted in 1976 that the Soviet Union would eventually disappear but was à côté de la plaque on most things since then? My question is if Greece quits the euro what will the price of gas at the pump be there? Will Greeks be able to afford to drive their cars and heat their homes in winter?

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France is the country with the most to lose from a Greek exit from the euro, reports Les Echos (via Walter Russell Mead). We’re talking about France taking a €100 billion hit. Seen from this angle, now I’m not so sure about the desirability of a Grexit…

UPDATE: From today’s NYT, “What history can explain about Greek crisis.”

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Peter Baldwin, professor of history at UCLA, has a good, succinct piece in TNR summing up the pickle the European Union finds itself in. I’ve said it numerous times and will say it yet again: all this is ultimately the fault of France. It was the French (Giscard d’Estaing) who wanted Greece in the EC, it was the French (Mitterrand and Delors) who led the charge for EMU, and it was the French (Chirac and Jospin) who pushed to bring Greece into the euro. If it had been up to the Germans and/or Brits, it is unlikely any of these things would have happened. Désolé mais ce que je dis est vrai.

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