I have been going back through my snippets library looking at what economists and politicians said back earlier in the crisis and comparing the predictions with reality to try to understand better why Europe is lagging behind. I have been compiling national profiles for various nations lately to ensure I remain cogniscant of the detailed developments that have been occurring. It takes some organisation. I have been concentrating by interest on Finland, Spain and Portugal lately. It astounds me when I read or hear that the Eurozone has been a success because the currency is stable. Even that last statement is false given the monetary union is fighting deflation at present with recessed output levels and entrenched mass unemployment. The current statements coming out of European leaders accord almost directly with the same sort of things they were saying in 2010 as the region was plunging deep into recession. It seems that they have learned nothing. Some of the past leaders have retired with handsome pensions and will not be held to account for their policy incompetence. Others remain in office and their public statements demonstrate that they cannot see beyond the blindness of the Groupthink that defines the patterned behaviour of the elite European policy-making institutions.…Bill Mitchell – billy blog
The Eurozone Groupthink and Denial continues …
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
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Yesterday, the French paper "Libération" published an important interview with German Finance Minister Wolfgang Schäuble, where he explains what really happened in July when Germany proposed a Greek exit from the eurozone.
The link is here (in French): http://www.liberation.fr/planete/2015/10/19/wolfgang-schauble-il-n-y-a-pas-de-diktat-allemand_1407375
Here is a translation to English of the relevant parts of the interview, concerning Grexit:
"Nobody understood what his (Tsipras') strategy was or even if he had really planned this referendum. What happened next was not clear, either: while the Greek people followed his voting instructions, rejecting the (EU) assistance program by a 60% margin, he decided to implement it anyway. And the Greeks have accepted this turnaround. That is something I do not understand, but then I'm not Greek.
I've always asked myself, like many economists, whether for Greece, with its economic situation and its administration - as Jean-Claude Juncker says, the Greeks are a great people, but Greece is not a state - it would not be better for her to proceed with the necessary recovery of the economy through a currency devaluation.
And that is why I explained that it might be in the interest of Greece herself that she abandon the euro for a while, to recover economically and improve its competitiveness, before returning.
But I have never advocated that we expel Greece (from the euro). I simply said that if Greece itself was of the opinion that that would be best for her - and there were many actually saying so, in Greece - so we should help and support.
And about whether, for Greece, the best solution would be to leave the euro for some time - a timeout - fifteen finance ministers shared this opinion. Only French, Italian and Cypriot ministers were not on that line.
We thus cannot speak of a German diktat. And that's the truth. All the rest is propaganda at worst or misunderstanding at best."
I said it then and I say it again: Schauble in this case was doing them a favour and was in the right position.
I lost a lot of respect for Greece and the Greeks a few months ago after the elections. I can't blame Tsipras alone any more.
There is no hope for the people who does not think they can govern themselves, they are as crooked as the people they elect with their terrible can-kicking ideas.
Germany can be as ruthless as they want with Greece, such a strong people in the past should be ashamed of their current idea. What is worse though as that they are not alone, I'm pretty sure this will reflect over most developed nations.
Neoliberalism has won because it has kilt any will to fight, people will have to accept the new feudal order they are building with the current institutions and coming 'trade deals' when the next crisis hits. Disgusting.
/rant
Yes, Schäuble was right and Tsipras dead wrong.
"There is no hope for the people who does not think they can govern themselves,"
Sadly true... we are fouled with weak leadership currently...
The Greek people rejected what was on offer and were then betrayed by their government. They can be excused for not wanting to take to the streets and endure the bloodshed that will follow.
Yes, before the German offer and Tsipras's absurd rejection, James Galbraith noted that people were missing the French & ECB Rasputins behind the German fall guys. France did intervene, playing a phony "Mr. Nice Guy" at the last minute of the farce to help ensure Greece rejection of the German offer.
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