“Euro Exit Strategy Crucial for Greece: new bailout about protecting banks, not people. Early default will change that” (Costas Lapavitsas/Guardian)


Costas Lapavitsas writes in The GuardianEuro exit strategy crucial for Greeks:

Greek default and exit has always been the most likely outcome of the eurozone crisis. The truth is that economic and monetary union has failed, not least because it has created an unsustainable gap between core and periphery. For peripheral countries, EMU membership is likely to be a source of stagnation and income inequality. For Greece it has already been a failure of historic proportions…

Even a first year undergraduate could have worked out that the last thing a bankrupt needs is further punitive loans and a cut in income; inevitably the stabilisation plan has been a disaster, missing just about all its original targets…

The response of the troika reveals systemic failure at the heart of the eurozone…

What, then, is the point of the fresh bailout ? The answer is rescuing international bondholders and buying time for banks. Jean-Claude Trichet, the ECB president – an unelected bureaucrat – has imposed his will on Angela Merkel, Europe’s most powerful politician. In 2015 Greece will be bankrupt but its debt will be held overwhelmingly by public lenders: the EU, ECB and IMF. When default comes, the banks will be out of it and Europe’s taxpayers will bear the burden. Meanwhile, Greece will have gone through the austerity mangle, putting up with official unemployment of about 15%. And when the EU writes Greek debt off, as it must, it will impose extortionate demands, perhaps including open pressure to exit the eurozone.

Unfortunately for the troika, this time the Greek people have worked out the nastiness of what is proposed. They are also profoundly angry at their politicians, and at being slandered. After all, they work longer hours than most people in the EU and, as wage earners, can’t avoid tax. The Rubicon appears to have been crossed in recent weeks as the country is openly weighing the option of default and exit.

Should that take place, it will be a major blow to the economy. But Greeks are prepared to put up with straitened circumstances if they see a path to recovery, something EU policy is denying them. A political force that promised to deliver default and exit in a democratic and sovereign manner while putting people before banks would sweep all before it.

Read more.

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This entry was posted in Accountability, Bankers' Bailout, Budget, Civil Disobedience, Debt Default/Restructuring, ECB/IMF, Economy, Elections, EU, Euro / Sovereign Money, Geopolitics, Greece, Independence/Nationalism, ireland, Solutions and tagged , , , . Bookmark the permalink.

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