“I would vote no, for two reasons. First, much as the prospect of euro exit frightens everyone — me included — the troika is now effectively demanding that the policy regime of the past five years be continued indefinitely. Where is the hope in that? Maybe, just maybe, the willingness to leave will inspire a rethink, although probably not. But even so, devaluation couldn’t create that much more chaos than already exists, and would pave the way for eventual recovery, just as it has in many other times and places. Greece is not that different.
Second, the political implications of a yes vote would be deeply troubling. The troika clearly did a reverse Corleone — they made Tsipras an offer he can’t accept, and presumably did this knowingly. So the ultimatum was, in effect, a move to replace the Greek government. And even if you don’t like Syriza, that has to be disturbing for anyone who believes in European ideals.”
I know I keep saying that economics is not a morality play. But when it comes to Greece, I can find no other satisfactory explanation for what is going on.
The harsh treatment meted out to Greece over the last five years makes no economic sense whatsover. It has driven Greece into a deep depression that not only makes its government budget unsustainable but renders its debt unpayable: it has not only caused poverty and distress among Greece’s population, but it has driven businesses into bankruptcy and done serious damage to the supply side of Greece’s economy. And yet creditors want more.
“These talks did not fail by accident. The Greeks have to be humiliated, because the alternative – of treating them as equal parties or “adults”, as Lagarde wished them to be – would lead to a debate about the Eurogroup: what its foundations are, what accountability would look like, and what its democratic levers are – if indeed it has any. Solidarity with Greece means everyone, in and outside the single currency, forcing this conversation: the country is being sacrificed to maintain a set of delusions that enfeebles us all.”
“Then there is the economic and therefore human cost in Greece. It is pointless to go over all the past mistakes: there are enough to fill all the confessionals in all the churches in the great Polish city of Wrocław (where I write these lines), and I can tell you that there are a lot of people waiting to audit the sins of others. Needless to say, Greece should never have joined a eurozone which should itself never have been introduced with such a flawed design. Needless to say, clientelist Greek governments able to borrow at German interest rates made an already bad situation worse during the early years of the euro, in cahoots with their oligarchs; the post-crisis medicine prescribed by Germany and the IMF was almost bound to worsen the condition of such a sickly patient; the patient only pretended to take some of that medicine; and so on. But this is not the moment to be quarrelling over history.
Apportion the blame where you will, the fact remains that many Greeks have suffered terribly. In cold figures, real spending in the Greek economy fell by roughly a third in seven years, with close to one in every two young people out of work. A colder figure still: the number of suicides increased by more than 35% between 2010 and 2012. I cannot get out of my head the story of Theodoros Giannaros, the head of Elpis hospital in Athens, exhausted, chain-smoking, working 20 hours a day with drastically cut medical resources. As Giannaros worked to save lives, he received news that his 26-year-old son had taken his own life by jumping in front of an underground train.”
E, the last but not the least, a simples contabilidade:
“My colleague Martin Sandbu calculated how an adjustment of such scale would affect the Greek growth rate. I have now extended that calculation to incorporate the entire four-year fiscal adjustment programme, as demanded by the creditors. Based on the same assumptions he makes about how fiscal policy and GDP interact, a two-way process, I come to a figure of a cumulative hit on the level of GDP of 12.6 per cent over four years. The Greek debt-to-GDP ratio would start approaching 200 per cent. My conclusion is that the acceptance of the troika’s programme would constitute a dual suicide — for the Greek economy, and for the political career of the Greek prime minister.”