Oxi: a political opening amid economic suffocation

This week has been a taste of what the economy would look like with a real rupture with the Eurozone: uncertainty, elite blackmail, banks teetering on the brink and the start of rationing. That the mobilization of Syriza and the left outside it has overcome this and made Oxi a possibility is impressive. Greece and its economy can expect no miracles either way Sunday’s vote goes and for quite some time afterwards, but they deserve full international solidarity.

And so on the eve of the Greek referendum, with the streets of Athens still buzzing from Friday night’s enormous Oxi!/No! rally in Syntagma Square, I’ve collected and parsed some of my notes on Greece from afar. A text on where things stand is first, then some notes on how things came to be for those not keeping close track the past few months.

Where things stand

Five months of torturous, fruitless negotiations came to a head last week when the more-or-less polite dance around the table in Brussels abruptly broke down. Whether this was a costly demobilization or a calculated strategy to demonstrate the intransigence of the Institutions doesn’t quite matter at this point. When Alexis Tspiras called a referendum on a take-it-or-leave-it offer last Friday, he precipitated a political rupture, which soon started to foreshadow the economic rupture that Greece leaving or being pushed out of the Euro would bring.

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Europe ready to kill Greece to keep TINA alive

My latest piece on Greece was published yesterday at Ricochet. In short, Europe and the IMF’s message that ‘there still is no alternative’ proves that objective of punitive austerity is political, not economic. Here it is in full:

The project’s aim is to make an example of Greece and solidify austerity as the only option within a Europe united by elite interests. Emergency summits, duelling proposals, trickles of banking system support and stern warnings create an economic veneer to paper over ultimately political aims.

Take the latest “compromise” proposal made yesterday by Greece’s ruling party Syriza. It offers a whopping additional €8 billion in austerity measures over the next year and a half. These measures amount to 1.5 per cent of GDP in 2015 and nearly 3 per cent of GDP in 2016. Rather than a compact for growth, or even stability, Europe has squeezed out yet more painful austerity that will make it much harder for Greece to escape its 21st-century Great Depression.

It is “not the right moment” to discuss debt relief, Jean-Claude Juncker, the head of the EU Commission, was quoted saying, despite the increasing concessions. This is the political, not economic, function of the Greek debt. It’s not the right moment economically to discuss the debt because Greece has long been insolvent, its debt repayments kept on track by drip-fed funding via subsequent agreements of austerity. Politically, it’s never the right moment, because each new agreement maintains austerity as the only possible option. (more…)

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