by Frank Schnittger
Mon Jul 20th, 2015 at 08:56:41 AM EST
Now that the EU has effectively taken over the running of Greece, it follows, logically, that it should also be held responsible for the outcome of its policies. So what happens if Greece goes further into even deeper recession, the debt becomes even more unsustainable, and the "reforms" do not bring about the turnaround in economic performances that neo-liberal economic "theory" says they will?
It's those lazy Greeks of course! It's the untrustworthy left wing Government that didn't implement the reforms properly! And the slightest upward blip in performance will be treated as overwhelming proof that "the reforms are working" whilst the widespread evidence of poverty and decline will be ignored.
And what will the European "left" do then? The maiden speech by 20 year old Scottish MP, Mhairi Black, is instructive (h/t Helen).
Parties which have lost touch with the growing under classes in our societies have no idea what is really going on. Perhaps a "study group" of high ranking politicians will visit Greece; stay in 5 star hotels, listen to a few think tank presentations, talk to a few waiters, and declare all is well.
After all the people living on the street don't vote and don't really count.
Meanwhile Schäuble is playing a clever game. By floating the negotiated Grexit option and declaring his lack of confidence in the "reform" programme, he is insulating himself and his government from criticisms that austerity doesn't work when the economy shrinks further and the debt becomes even more unsustainable. "We told you so", we offered you the Grexit option but you turned us down!
Apparently Schäuble has discovered that debt write-downs aren't legal within the Eurozone. But what about the debt write-down in 2010? Can only banks write down debts? So why were banking debts transformed into sovereign debts then? To make a further write-down impossible? But it was the banks which Greece borrowed from. What the banks did later to lay off their responsibilities isn't Greece's problem.
Meanwhile Merkel is trying to play good cop to Schäuble's bad cop. It's not going well...