Monday, June 29, 2015

Joseph E. Stiglitz — Europe’s Attack on Greek Democracy

The rising crescendo of bickering and acrimony within Europe might seem to outsiders to be the inevitable result of the bitter endgame playing out between Greece and its creditors. In fact, European leaders are finally beginning to reveal the true nature of the ongoing debt dispute, and the answer is not pleasant: it is about power and democracy much more than money and economics....
We should be clear: almost none of the huge amount of money loaned to Greece has actually gone there. It has gone to pay out private-sector creditors – including German and French banks. Greece has gotten but a pittance, but it has paid a high price to preserve these countries’ banking systems. The IMF and the other “official” creditors do not need the money that is being demanded. Under a business-as-usual scenario, the money received would most likely just be lent out again to Greece. 
But, again, it’s not about the money. It’s about using “deadlines” to force Greece to knuckle under, and to accept the unacceptable – not only austerity measures, but other regressive and punitive policies....
The not-so-hidden agenda.

Good post, especially considering most of what is published at Project Syndicate is neoliberal nonsense.

Project Syndicate
Europe’s Attack on Greek Democracy
Joseph E. Stiglitz | Nobel laureate in economics and University Professor at Columbia University, was Chairman of President Bill Clinton’s Council of Economic Advisers and served as Senior Vice President and Chief Economist of the World Bank

See also
Nobel laureate tells TIME that the institutions and countries that have enforced cost-cutting on Greece "have criminal responsibility"Time
Simon Schuster


Ralph Musgrave said...

What’s this idiot Stiglitz rambling on about? … “almost none of the huge amount of money loaned to Greece has actually gone there. It has gone to pay out private-sector creditors – including German and French banks.” Er.. no.

Private banks loaned Xbn to Greece, and the Troika then took over those loans. So Greece got Xbn which it may never pay back.

If Stiglitz bought a house for $Y with a $Y mortgage from a bank and the bank was taken over by another bank, presumably Stiglitz would expect a check in the post for $Y and to retain the house. $Y profit for Stiglitz!!

Tom Hickey said...

What he is implying is that the governments of the creditors took over the debts that Greece had accumulated and the international institutions that the core controls are standing behind the creditor nations. The proper procedure would have been the debtors in Greece negotiating loan restructuring with the respective creditors rather than transferring the private debt to public and putting the negotiation on the level of finance ministers and the troika.It was a power play to protect the financial systems of the creditor nations and make the private creditors whole. JS is calling BS on it more politely than I would.

Detroit Dan said...

Ralph-- Stiglitz obviously is referring to the "bailout" money, and he's right about that.

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