Die Eurokrise dauert nun fünf Jahre. Sie ist längst zur chronischen Krankheit geworden. Das Sparrezept von Frau Dr. Merkel verfängt nicht. Griechenland wird am 25. Januar wählen. Eine linke Regierung könnte dann die glücklosen Chefärzte des Neoliberalismus das Fürchten lehren. ...
Griechenland stirbt. Sechs Jahre Rezession, eine Arbeitslosigkeit, die bei 26 Prozent liegt, unter Jugendlichen sogar bei mehr als 50 Prozent, die Löhne sanken zwischen 2010 und 2013 um 23 Prozent. 36 Prozent der Griechen gelten als arm und sozial ausgegrenzt - ein Anstieg um etwa sieben Prozentpunkte seit Ausbruch der Krise.
Ja, Griechenland erwirtschaftet inzwischen wieder einen kleinen Überschuss - aber nur vor Schuldendienst. Die Last der Gläubiger hängt wie ein Mühlstein an Griechenland.
[The euro crisis has lasted for five years now. It has long sense become a chronic illness. The savings {austerity} prescription from Frau Dr. Merkel doesn't work. Greece will vote on January 25. A left government could then put the fear of God into the luckless chief physicians of neoliberalism. ...
Greece is dying. Six years of recession, an unemployment rate that stands at 26%, among young people even at more than 50%, salaries sunk betwen 2010 and 2013 by 23%. Thirty-six percent of Greeks are counted as poor as socially excluded - a rise of around sever percent points since the outbreak of the crisis.
Yes, Greece again generated in the meantime a small {national budget} surplus - but only before debt service. The burder of the creditors hangs like a millstone on Greece.]
Natalie Kitroeff and Joe Weisenthal provide an analysis of middling quality in Why You Should Care About Greece Again Bloomberg Businessweek 01/02/2015. In the first paragraph, they declare allegiance to the Merkel austerity doctrine: "The fallout of this round of turmoil will be a critical sign of whether European leaders can hold on to power long enough to stay the course on the fiscal reforms needed to lift economies in the region." (my emphasis)
The neoliberal true believers have converted "reform" into a synonym for cuts to wages, salaries and pensions; slashing and privatizing; opening borders to unrestricted capital transfers, which can allow speculators to earn massive profits at the expense of devastating whole countries. Kitroeff and Joe Weisenthal profess faith that "fiscal reforms" will someday, somehow will "lift the economies in the region." Despite the abject failure of such policies in the Great Depression. Despite six years of failure in the eurozone of the present and elsewhere.
Treating the crisis as one of debts and financial markets, rather than that of a serious economic depression in the eurozone "periphery" countries, they write:
People are calmer this time around for a few reasons, but the big one is that the current situation is less about debt sustainability and more about internal politics. If Greece were pushed out of the euro zone, it’s likely that other countries would be in OK shape, partly because the ECB is there as a backstop.
This is the Merkel-austerity public position of the moment, saying, hey, it's not a big deal if Greece leaves the eurozone (Austritt aus der Währungsunion: Bundesregierung hält Ausscheiden Griechenlands aus dem Euro für verkraftbar Spiegel Online 03.03.2015):
Kanzlerin Angela Merkel und Finanzminister Wolfgang Schäuble (beide CDU) halten einen Austritt des Landes aus der Gemeinschaftswährung für verkraftbar. Grund dafür seien die Fortschritte, die die Eurozone seit dem Krisenhöhepunkt 2012 gemacht habe, heißt es in Regierungskreisen. So sei die Ansteckungsgefahr für andere Länder begrenzt, weil Portugal und Irland als saniert gelten.
Chancellor Angela Merkel and Finance Minister Wolfgang Schäuble (both CDU) consider an exit of the country {Greece} out of the common currency {the euro} to be manageable. The reason for this is the progress that the eurozone has made since the high point of the crisis in 2012, according to government circles. So the danger of infection of other countries is limited, because Portugal and Ireland are held to be cleaned up.
As Charlie Pierce might say, this is all my balls. If one country escapes from the austerity trap, it's likely to open a rush for the exit among other eurozone countries suffering under Merkel's brutal austerity policies.
Among other things, kicking Greece out of the euro will provide a real-world test of just how vulnerable Germany is to the Target 2 system. When "Target 2" starts appearing in the financial news, you can bet the German government is getting worried. For contrasting views on Germany's Target 2 vulnerability, see: Hans-Werner Sinn, TARGET losses in case of a euro breakup VoxEU 10/22/2012; De Grauwe and Yuemei Ji, TARGET2 as a scapegoat for German errors VoxEU 11/02/2012. This is a fairly obtuse question, rarely discussed in the business or general press. I'm inclined to think that the Target 2 system would require Germany to substantially re-capitalize the Bundesbank in the event of event a Greek withdrawal from the eurozone.
Ireland is still in sad shape. And Portugal along with Spain and Italy will require debt write-offs if they expect to return to something like healthy economies this side of Heaven.
After a few paragraphs of stale conventional wisdom and regurgitating of Merkel's propaganda line, Kitroeff and Weisenthal actually get around to stating the real point: "Still, the big issue is that the economy remains horrible across the euro zone. And until there’s a recovery, it’s going to be hard for establishment leaders to remain popular and powerful."
Merkel's position is negotiating bluff. And it's one that she and Schäuble can take because of ridiculously lazy press reporting. Tsipras has been very clear that he wants Greece to stay in the euro and the EU but insists on a stimuluative economic policy that has a chance of getting Greece out of depression - something at which Merkel's austerity policies have failed spectacularly. And he also insists that Greece's creditors recognize the reality that the existing Greek debt has to be substantially written down. The last figure I saw was that the debt-to-GDP ratio stands around 200%, a level that Japan or the US can sustain, but not a Greece that has seen it's economy shrink by a quarter since 2008 and has no hope for returning to health in any foreseeable future under Merkel's austerity policies.
Spiegel Online is running a strange article that must be some kind of weird propaganda spin. (Staatsverschuldung: Griechenland zahlt Mini-Zinsen 02.01.2015) Most readers will presumably come away from this article thinking that Greece is paying an interest rate on its debt lower than Germany's. Which is goofy. The interest Greece must pay on bonds has risen to about 10%; Germany is paying 0.6%. (Die Sorge vor dem Grexit kehrt zurück Rheinische Post 02.01.2015) The Spiegel Online piece, so far as I can see, is comparing apples (some of the rates Greece pays to the ECB) with oranges (German bond rates).
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