New Perspectives on the Euro Crisis, and the Need for Greece to Default

Delighted though I am to see the back of Silvio Berlusconi, no one should be reassured that his replacement, the unelected technocrat and former EU commissioner Mario Monti — or another unelected technocrat, Lucas Papademos, a former vice-president of the European Central Bank., who has taken over in Greece from former Prime Minister George Papandreou — are in a position to provide a solution to the financial crisis sweeping Europe.

Even before the unelected technocrats were parachuted in, those intent on addressing the crisis through austerity cuts of unprecedented savagery had a crisis of authority, having failed to consult with the electorates of the countries involved, and imposing unelected leaders is a truly alarming development.

For those seeking to understand why, it is clear that the fault lies primarily with the entire Euro project, and not with individual countries, but understanding that involves certain Northern European countries putting aside their dreadful knee-jerk racism regarding their southern neighbours’ purported laziness and corruption, and understanding that the Euro is and was an inherently flawed project, biased in favour of the richer countries, and essentially presided over by a handful of unaccountable officials.

As the Guardian noted in an article last week, “the latest phase of Europe’s sovereign debt crisis has exposed the quite flagrant contempt for voters, the people who are going to bear the full weight of the austerity programmes being cooked up” by “the Frankfurt Group, an unelected cabal made of up eight people: [Christine] Lagarde, [the head of the IMF]; [Angela] Merkel; [Nicolas] Sarkozy; Mario Draghi, the new president of the ECB [European Central Bank]; José Manuel Barroso, the president of the European Commission; Jean-Claude Juncker, chairman of the Eurogroup; Herman van Rompuy, the president of the European Council; and Olli Rehn, Europe’s economic and monetary affairs commissioner.” Read the rest of this entry »

Crisis in Greece: Experts Call for Return of the Drachma, As Prime Minister Cancels Bailout Referendum

This week’s G20 Summit in Cannes was overwhelmed by the Greek economic crisis, when Prime Minister George Papandreou (who was not invited) threw a huge spanner into the works by stating, while the ink was still drying on the latest bailout plan for the Greek economy, that he would be submitting the agreement to a referendum. In response, the markets took fright, the G20 leaders ran around like headless chickens, and Papandreou was left fighting for his political survival when his finance minister and long-time rival, Evangelos Venizelos, publicly opposed the plans.

As was reported early this morning, the latest news is that, although George Papandreou narrowly won a vote of confidence last night, he “has agreed to step aside to make way for a government ‘of broad acceptance'” that, it seems, will be led by Evangelos Venizelos. As the Guardian explained, “The deal with Venizelos was struck in a desperate bid to avoid snap elections that Papandreou said would be ‘a catastrophe’ for a country on the edge of political and economic collapse.”

Prominent voices call for the return of the drachma

The referendum may have been cancelled, but that doesn’t mean that the huge problems with the bailout deal for which George Papandreou wanted a referendum have been resolved. In the last few days, these problems have, to my surprise, been most eloquently explored in the mainstream media outside Greece in a column for Fox News by Peter Morici, a professor at the Smith School of Business, University of Maryland School, and former chief economist at the US International Trade Commission.

In his column on Thursday, Morici began by explaining that, although the latest bailout plan for Greece involved writing off half of the debt held by private institutions, it also involved a further round of “draconian austerity measures” that will be ruinous for the Greek people, as they will “further drive up unemployment, and shrink Greece’s economy and tax base at an alarming pace, placing in jeopardy eventual repayment of Athens’ remaining debt.” Read the rest of this entry »

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Andy Worthington

Investigative journalist, author, campaigner, commentator and public speaker. Recognized as an authority on Guantánamo and the “war on terror.” Co-founder, Close Guantánamo, co-director, We Stand With Shaker. Also, singer and songwriter (The Four Fathers) and photographer.
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