The EU establishment henceforth faces what it has always feared: a political war on two fronts at once.
It is long been fighting an expanding coaltion of free marketeers, parliamentary "souverainistes", anti-immigrant populists on the Right.
Its has now lost its remaining emotional hold on the Left after the scorched-earth treatment of Greece over the past five months - culminating in the vindictive decision to impose yet harsher terms on this crushed nation just days after its cri de coeur in a landslide referendum.
We all know what the game was. Germany and its allies were determined to make an example of Syriza to discourage voters in any other country from daring to buck the system…
It is, in any case, a double-edged strategy. Costas Lapavitsas, a Syriza MP, said the salient message of the past five months is that no radical government can pursue sovereign policies as long as it is at the mercy of a central bank able to switch off liquidity at any time. "It is now perfectly clear that the only way out of this is to break free of monetary union,” he said.…Lost the Right. Lost the Left. Will the center hold?
The Telegraph
EMU brutality in Greece has destroyed the trust of Europe's Left
Ambrose Evans-Pritchard
2 comments:
That's the risk - there is no centre. If you know that negotiation is pointless, all you can do is threaten to leave the euro. It means that when the end comes, there will be no can kicking, and the EU will be in shock. How anyone thinks this was a good strategy is beyond me.
However the Left is paralysed by this 'primary surplus' nonsense and the obsession with fixing and controlling exchange rates.
Exchange rates are just supply and demand. Whatever the players in the market think, ultimately somebody has to deliver currency to somebody else. And to do that you have to get some from somewhere.
The left and standard economics get two things wrong. They think the government bond market has no market makers when they generally do, and they think the foreign exchange market has market makers when it generally doesn't.
As we've seen with the ECB and Greece, control the liquidity and you control the behaviour.
The Left really need to learn how to turn into that skid properly. Because the Right have already worked it out.
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