Paul De Grauwe — The Greek Election 2015 – Revolt Of The Debtors

The official narrative of this approach is that the intense austerity that was imposed on the Greek population is inevitable and in the end will bear fruit. Inevitable? Yes, of course, if the intention is to safeguard the interests of the creditors then there is indeed only one possibility: the Greeks have to pay the full price. Will it pay off in the end? Yes, of course if austerity is maintained long enough it will succeed in creating surpluses and transfers of resources from Greece towards the rich North of the Eurozone. 

This narrative, however, loses sight of the political upheavals triggered by the human misery that results from intense austerity. The millions of people who are pushed into misery by the creditors from the North of Europe are not passive subjects. They not only protest in the streets, something the creditors can easily live with. They also vote for those political parties that promise them that there is a better way to deal with the problem. And these are the parties that are out to break the established political and social order.…

It is appalling to see that the European political elite has been living in a cocoon, failing to take into account the political and social implications of the intense austerity programs they imposed in countries like Greece (but also in other countries of the periphery). This political elite still has not learned the lessons.

First Greece and then the world.

Social Europe
The Greek Election 2015 – Revolt Of The Debtors
Paul De Grauwe |  John Paulson Chair in European Political Economy at the LSE’s European Institute. Prior to joining LSE, he was Professor of International Economics at the University of Leuven, Belgium.