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Two Unanswered Questions about the Greek “Bailout” Deal

July 13, 2015 2 comments

Yesterday the Greek PM (Alexis Tsipras) agreed to a tentative deal with other EU leaders that would provide a “bailout” of 86 billion Euro to Greece in exchange for levels of austerity and privatization far surpassing those reject in a referendum about a week ago. Leaving aside all the speculation surrounding the circumstances of this deal, there are two broader questions about this situation that have not been answered properly (i.e without speculation, self-serving lies and bullshit).

Question 1: Why do such a large percentage (over 65%) of Greeks want to remain in the Eurozone?

One of the central electoral promises of Syriza was that it would stop further EU-imposed financial austerity and still keep Greece in the Eurozone. But even more curiously, various polls showed that 2/3 rds of Greeks wanted to stay in the Eurozone. While those percentages might have gone down in the last few weeks, I still have a hard time understanding why Greeks would want to be on a team where most other members hated and abused them. I mean, it is possible to remain in the EU even after exiting the Eurozone.

While average incomes in Greece (as measured in Euros) did rise after joining the Eurozone, it is hard to make the case that it has made their lives any better. The sad reality is that they could have gotten most of the benefits of joining the Eurozone by joining the EU but maintaining their own currency. While I can understand why the Greek 1% ers (or 10% ers) wanted to join the Eurozone, the extensive popular support for retaining the Euro as the default currency in Greece does not make much sense. It is ego? Is it false consciousness? Is it the desire to be seen as European rather than Mediterranean?

Question 2: Do Germans (both its leaders and average citizens) think that making Greece sign an economic version of the Versailles treaty in 2015 will somehow stabilize a fundamentally defective currency?

Let us for a moment assume that Tsipras can get this deal through the Greek parliament and make sure that it is implemented in full. Let us also assume that his government, or any other replacing it, can keep it going for a couple of years. Then what? Does it improve the economic situation of the average person in Greece over the next two years.. five years.. ten years.. twenty years? My point is that pretty much any plan based in the neoliberal scams of austerity and privatization will almost inevitably cause more open-ended financial deprivation for the average Greek person. To put it another way, there is no light at the end of this tunnel.

Even if we ignore the very real possibility that such policies would almost inevitably lead to the the rise of right-wing nationalist parties in Greece, we are still left with an even bigger problem- namely, that other countries in the Eurozone might decide, or end up, sabotaging the Euro. It is no secret that significant minorities of the population in France, Italy and Spain have always been hostile to the idea of a common European currency. It is also well known that two out those three countries are not in the best of financial circumstances- at least as seen through the lens of neoliberal capitalistic dogma. However unlike Greece, they are large and have economies diverse enough to go willingly exit the Eurozone- if it comes to that.

Now consider the terms imposed by Germany on Greece and its likely effects on the later. Do you think people in those three large Eurozone countries will ignore what they are now seeing (economic colonialism) and will almost certainly see (more economic deprivation) in the future. Do you think they would still want to retain a common currency with Germany, if the later can do to them what it is doing to Greece? Why would you retain a common currency with a dominant country in a group if you have no political representation in the decision making process of that country? Let us not forget that the US Dollar works because all states in the USA send elected representatives to Washington DC. If they did not, states not benefiting from the common currency would start dissociating themselves from those that did so at the cost of the former.

What do you think? Comments?