These first excerpts from an excellent, thought-provoking analysis by Adam Davidson published in The New York Times Magazine on 28 July 2015 deserves the closest attention of anyone who wishes to have a balanced understanding of the events shaping what we call here the “Greek crisis”. (A misnomer if there ever were one since what it is really and so tragically if you take the time to think it through is “The European Crisis: A sad tale of greed, incompetence and haste compounded by unbearable hubris”.)
There is definitive proof, for anyone willing to look, that Greece is not solely or even primarily responsible for its own financial crisis. The proof is not especially exciting: It is a single bond, with the identification code GR0133004177. But a consideration of this bond should end, permanently, any discussion of Greece’s crisis as a moral failing on the part of the Greeks.
The following listing provides links to selected references from international sources of high quality and with quite different points of view. Access to these sources are, as might be expected, quite uneven. About half of them require that you pay or subscribe to access full text of particles. But over these last weeks we have done fairly well with these addresses, offering as they do some quite different perspectives on these unfolding events.
* The Guardian on Greece – http://www.theguardian.com/world/greece
* Der Spiegel on Greece – http://goo.gl/PgxiPs
* Le Monde on Grèce – http://www.lemonde.fr/crise-grecque/
* Financial Times on Greece – https://goo.gl/2lGPNu
* Krugman on Greece – http://krugman.blogs.nytimes.com/?s=Greece
* The Economist on Greece – http://goo.gl/LjGsf7
Other SDED coverage here:
* SDED on the Greek Crisis – here.
* SDED Facebook Coverage: – here.
– by Michael Hudson,.Counterepunch.org. July 8, 2015
The major financial problem tearing economies apart over the past century has stemmed more from official inter-governmental debt than with private-sector debt. That is why the global economy today faces a similar breakdown to the Depression years of 1929-31, when it became apparent that the volume of official inter-government debts could not be paid. The Versailles Treaty had imposed impossibly high reparations demands on Germany, and the United States imposed equally destructive requirements on the Allies to use their reparations receipts to pay back World War I arms debts to the U.S. Government.
Legal procedures are well established to cope with corporate and personal bankruptcy. Courts write down personal and business debts either under “debtor in control” procedures or foreclosure, and creditors take a loss on loans that go bad. Personal bankruptcy permits individuals to make a fresh start with a Clean Slate.
It is much harder to write down debts owed to or guaranteed by governments. U.S. student loan debt cannot be written off, but remains a lingering burden to prevent graduates from earning enough take-home pay (after debt service and FICA Social Security tax withholding is taken out of their paychecks) to get married, start families and buy homes of their own. Only the banks get bailed out, now that they have become in effect the economy’s central planners.
Most of all, there is no legal framework for writing down debts owed to the IMF, the European Central Bank (ECB), or to European and American creditor governments. Since the 1960s entire nations have been subjected to austerity and economic shrinkage that makes it less and less possible to extricate themselves from debt. Governments are unforgiving, and the IMF and ECB act on behalf of banks and bondholders – and are ideologically captured by anti-labor, anti-government financial warriors.
The present discussions in the media more often than not give us the sense that within the various countries concerned the thinking and positions are basically uniform and widely shared. (See our posting that looks into this,”Why all the Bitter Accusations from the North” – https://goo.gl/wD6Ct6. ) But the truth is that in country after country there is considerable division of views on these topics, and particularly among economists who are in most cases deeply divided on the issues. Here you have an example of how one German economist reports on “How German Economists Really Think”. (The following article is reprinted here in its entirety. The original was published yesterday by the Institute of New Economic Thinking, and below you will find full references, links and credits.)
Hans Werner-Sinn, a noted German economist and Professor of Economics and Public Finance at the University of Munich. He is also President of the Ifo Institute for Economic Research and serves on the German economy ministry’s advisory council. In this interview he talks about a disciplined but also radical and flexible pro-Europe path out of the present impasse, for Greece and for Europe as an idea worth cherishing and taking into the future.
8 July 2015. –
Numerous Europeans view Europe as a one-way street: they appreciate its advantages but are little inclined to accept common rules. An increasing number throughout the Union are handing their vote to populist parties – Front National, Syriza, Podemos – that surf on this Eurosceptic wave and rise up against “foreign”- imported constraints.
Embroiled with the Greek crisis, European policymakers will soon have to step back and reflect on the broader issue of the Eurozone’s future. Before envisaging an exit or, on the contrary, more sustained integration, it’s right to reflect upon the consequences of each option.
Oversimplifying, there are three strategies for the Eurozone: (a) a minimalist approach that would see a return to national currencies, while keeping Europe perhaps as a free trade area and retaining a few institutions that have made a real difference such as common competition laws; (b) the current approach based on the Maastricht Treaty of 1992 and its fiscal compact update in 2012; and, finally, the more ambitious version of federalism. My own clear preference is for the federalist version but I’m not at all convinced that Europeans are ready to make it work successfully.