Paul Krugman: Greece has done more, not less [Chart]

Greece has done a lot more austerity than those countries cited as supposed success stories (which is another issue—success being defined as ‘not total collapse, and slight recovery after years of horror’—but that’s a different story).”

The Left and the EU: Why cling to this reactionary institution?

“Indeed, in its unwavering support for neoliberalism the EU represents nothing less than an attempt to perpetuate an economic model which advantages European businesses, whilst eroding the living standards of most Europeans. Particularly in the countries of the eurozone, democracy has been eviscerated by the adamant insistence of the EU on more cuts to government spending. […]

The EU is not internationalist in any sense that a genuine member of the left would support. It exists to advance the interests of the business class as against workers, and in its zeal to enrich corporations at the expense of ordinary people it has succeeded in creating such disaffection with the political establishment that fascism, the very phenomenon the EU was in theory designed to prevent, has once more become a formidable force in countries languishing in the grip of high unemployment and low wages. […]

There is a moral case for leaving, based on the fact that Brexit would probably result in the dissolution of the EU and ease the suffering of nations currently held captive by neoliberal economics. […]

A myth has gained ground amongst large sections of the left that the rights which British workers have come to take for granted, such as maternity leave and paid holidays, were gifted to Britain by the EU, and that Brexit would free the Conservatives to intensify their assault on the working class, uninhibited by a social Europe which at present exercises a restraining influence over neoliberal governments. Even supposing that the remain camp is right in assuming that the Conservatives will hold onto power until the next general election in four years time, a questionable assumption in light of the fact the Conservatives are deeply split over the referendum, it is simply false to claim that we owe whatever rights we enjoy to the EU, As others have documented, most of the rights that are invoked by the mainstream left as a reason to vote remain were already in place when we joined the EEC in 1973, and they owe not to a beneficient bureaucracy of Eurocrats but to Britain’s working classes, who won these rights over the course of many years and after a series of hard-fought struggles with the capitalist class. Likewise, the retention of these rights will depend not on the good-will of a remote bureaucracy, which is actively undermining those same rights elsewhere, but on the determination of workers to band together in defence of their standard of living.”

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Nigel Farage: “You should all be fired!” [Nov. 2011]

From the start, this blog was about making a case for Grexit. Widening the scope though, and taking into account recent developments in Europe, it is also about a left-wing exit (“Lexit”) of as many Eurozone member states as possible—consigning this ill-conceived monetary union to the dustbin of history, as UKIP leader Nigel Farage has put it so eloquently.

As strange a bedfellow libertarian/right-populist single-issue party UKIP may be for progressive forces in Europe, they at least have achieved a remarkable victory last Thursday. The outcome of the EU referendum is a shot across the bows of this clunky old tanker—aka “neoliberal superstructure”—called the European Union. (Or maybe it was a torpedo to its side—only time will tell.)

In the days and weeks to come, we will post a lot more about the current state of affairs regarding Lexits. Until then, a walk down memory lane with Nigel Farage lends this endeavour a light-hearted bipartisan tinge: this particular Member of the European Parliament was (is) so right on so many issues that we simply refuse to fall for the platitudes—bordering on character assassination attempts—put forth by mainstream media. We’d rather listen to the man instead:

Even the Left must exit the EU to avoid economic horror seen in Greece

I would’ve never thought that I’d be quoting The Sun one day—of all papers!—, but where this rag is right, this rag is right:

“Unemployment is touching 30 per cent of the workforce, savage cuts to pension benefits are lined up, the economy has shrunk by a quarter since 2010 and tortuous negotiations with the country’s creditors are continuing into summer.

Some things never change and Greece’s Euro-torment is one of them.

This could be happening in Britain had we listened to the likes of Peter Mandelson, Michael Heseltine, Michael O’Leary and Nick Clegg 15 years ago and signed up to Europe’s single currency. […] One glance at the horrors inflicted on Greece because it lost control of its currency and interest rates gives some idea of the quality of these gentlemen’s advice. […]

Increasingly, however, the Leave coalition is linking traditional Conservative Eurosceptics with those on the Left who, seeing the carnage wrought by the euro, are rapidly concluding that there is nothing remotely ‘progressive’ about either the euro or the wider EU project.

Widerstand gegen harten Sparkurs: Spaniens vorbildliche Sünden

„Wenn Spaniens Wirtschaft aus der Rezession gekommen ist, dann gerade weil die Regierung irgendwann aufgehört hat, wie irre Ausgaben zu kürzen und Steuern anzuheben. Und stattdessen die Konjunktur auch mal wieder ankurbelt. Den letzten großen Sanierungsschub gab es gemessen am Abbau des strukturellen Staatsdefizits 2013. Im Jahr 2014 wurde der Fehlbetrag kaum noch abgebaut, will heißen: den Menschen im Land kaum noch Geld abgenommen.

Vergangenes Jahr stiegen dann die staatlichen Konsumausgaben erstmals seit Langem wieder, ebenso wie die öffentlichen Investitionen, die von 2,1 auf 2,5 Prozent der Wirtschaftsleistung stiegen. Vor allem ließ Rajoy im Wahljahr die Steuern senken.

Ist es ein Zufall, dass 2014 auch die Wirtschaft wieder anzuziehen begann? Und dass das Wachstum just 2015 auf mehr als drei Prozent beschleunigte? Dass seitdem die Menschen in Spanien wieder mehr Geld ausgeben und dank des Aufschwungs auch die Arbeitslosigkeit endlich wieder sinkt? Natürlich nicht.

So ist das eben mit den gesamtwirtschaftlichen Wirkungsketten. Nichts für einfache Gemüter oder religiöse Sittenwächter.“

U.S. foreign policy got in the way of helping Greece, Varoufakis says

President Barack Obama offered stinging criticism of Germany’s treatment of Greece in February 2015 remarks.

But as the crisis escalated, the Obama administration declined to speak out.

Only in late June and July, when Germany and other international creditors appeared prepare to force Greece out of the eurozone, with the Greek banking system on the brink of collapse, did the administration speak up.

[Secretary of the Treasury Jack] Lew called for Greece’s creditors to allow the country to restructure its debts and for Greece to continue budgetary and economic reforms. Some experts believe the United States was behind the release of an IMF report characterizing the country’s debt as unsustainable. The report came out over European objections at the height of last-minute debt negotiations in early July. […]

[Yanis Varoufakis] argued on Wednesday that the United States’ inaction on Greece stemmed from a belief that Greece was ‚in the sphere of influence of Germany.‘ […]

Intervening was not worth the risk of jeopardizing German unity with the U.S. against Russian meddling in Ukraine, as well as collaboration on the U.S.’s agenda in Libya and Syria, according to the ex-finance minister.

Europa will aus der Griechenlandkrise nicht lernen

„Dieser zentrale Punkt betrifft den Schuldenschnitt, auf den der IWF und einige Europäer – gegen den Widerstand in Deutschland – immer lauter drängen. Griechenlands Staatsschulden werden im kommenden Jahr wohl auf 200 Prozent der Wirtschaftsleistung steigen.

Es ist ein Irrglaube, die künftigen Zinszahlungen auf diese Schulden seien gering. Denn diese Zinsen sind meist an die Marktzinsen in der Eurozone gekoppelt. Wenn sich diese in den kommenden Jahren (hoffentlich) wieder normalisieren werden, wird Griechenland wohl mindestens fünf bis sechs Prozent Zinsen zahlen müssen. Zusammen mit den Tilgungen, die durch Stundungen meist erst von 2023 an anfallen, wird Griechenland dann wahrscheinlich jährlich mehr als 15 Prozent der Wirtschaftsleistung an Schuldendienst leisten müssen. Nach Konsens aller wäre das exzessiv und nicht nachhaltig.

Europe’s liberal illusions shatter as Greek tragedy plays on

“The problem is a relatively simple one. Greece is bridling at the unrealistic demands of the European commission and the International Monetary Fund to agree to fresh austerity measures when, as the IMF itself accepts, hospitals are running out of syringes and buses don’t run because of a lack of spare parts. […]

[They mean] that once Greece’s debt payments are excluded, tax receipts have to exceed public spending by 3.5% of GDP. The exceptionally onerous terms are supposed to whittle away Greece’s debt mountain, currently just shy of 200% of GDP.

If this all sounds like Alice in Wonderland economics, then that’s because it is. Greece is being set budgetary targets that the IMF knows are unrealistic and is being set up to fail. It will then be punished further for being unable to do what was impossible in the first place.