[Marxism] James Galbraith on Greece: An Anti-austerity European Government
daynegoodwin at gmail.com
Tue Apr 7 13:09:04 MDT 2015
The Real Thing: An Anti-austerity European Government
by James K. Galbraith
April 7, 2015
I have just come from Athens where I have, for the last several days,
had the high privilege of working with the government of Greece, and
especially with the Finance Minister, my very good friend, Yanis
Varoufakis. I’ve actually had two occasions, so far, to observe the
drama that’s unfolding in Europe from a close vantage point.
. . .
At the same time it is also true that the new government confronts an
elaborate, well-laid political and economic trap. It’s more than a
trap actually. It’s more like a minefield or an obstacle course that
is entirely of human construction. It’s purely artificial.
. . .
To get past the trap, to get through the minefield, has required
manoeuvres of a fairly high order of adroitness in at least three
stages. The first was to establish, in principle, that the previous
agreement, the Memorandum of Understanding as it was called – which
had subjected Greece to a form of colonial government, according to
which practically everything that the government did was dictated from
outside, by the institutions known as the troika – was a thing of the
past. That it was finished, that the Greek public had rejected being
ruled this way in an open and decisive election. And, at least in
principle, that proposition was accepted, after some fairly rancorous
negotiations that led to the communique on 20 February. This was a
major step forward, although one that did come at the cost of
deferring certain measures in the SYRIZA election platform, including
raising the minimum wage, not reversing privatisations that have
previously occurred and accepting a primary surplus target, which,
although lower than the previous completely unrealistic one, was and
is still constraining on the Greek government.
The second stage, still ongoing, involves establishing this reality at
the operational level. It involves establishing a professional,
acceptable working relationship between the international teams, which
do have a legitimate role. And that role is finding out the facts and
assuring the European partners of the good faith of the Greek
government. And that has required an adjustment on the part of the
international teams who came back to Athens, I think, still hoping
that they could conduct business as they have done before, basically
under the same operational rules that had governed under the
Memorandum of Understanding. They found out that that was not the case
and there was a certain amount of friction that was associated with
. . .
A third stage in the process is one which has to be resolved at the
political level. And that involves restoring the liquidity of the
Greek government and giving enough financial stability to the banking
system so that economic activity can begin to resume. That’s been a
major problem, especially in these last two months, in the atmosphere
of fear that surrounded the election and the atmosphere of uncertainty
that has succeeded it. Basically, banks have suspended most of their
activity and a great deal of capital has left, requiring, as I say,
these intermittent and rather small increases in liquidity assistance
to keep the system in function.
But that is not sufficient to allow the government the breathing
space, either to develop its programme of reforms, or to begin to open
up the prospect of some recovery in the economy. And a decision to
move past that mechanism of destabilisation had to be taken at the
political level and it is possible that that was accomplished, in part
at least, in Berlin (on March 29).
And here I think, as was the case before the 20 February agreement,
the pragmatic intervention of someone, for whom I don’t ordinarily
offer a great deal of effusive praise, namely the Chancellor of the
Federal Republic of Germany, has to be acknowledged. It’s a pragmatic
step which may amount to a turning of the corner and an easing of the
pressures that have been extremely problematic in recent days from the
European Central Bank.
So as these manoeuvres, as I call them, mature, there emerges an
interesting possibility. And that is the possibility of a politically
stable, anti-austerity government in Europe, led, as I think you
probably have observed, by forceful personalities, and presiding over
an economy which is so far down that it has no place to go but up. And
that may well be, within a short period of time, on a track of some
recovery, some improvement in jobs performance and stabilisation of
its external debt situation.
. . .
This I think will pass. It will pass because the leader of the Greek
government, the Prime Minister, Alexis Tsipras, is the real thing.
I’ve gotten to know him, not as well as I know Yanis. But I have to
say, I’ve met a lot of political leaders in my time and I have not
known very many who approach Alexis in his ability to assess a
political situation with a very cool eye and to make a very solid
judgement about it, which is why he came from nowhere – after less
than four years, really, in less than a year and a half – to be the
Prime Minister now of a European country.
The Greek people after all, elected their government in complete
defiance of their own media and they have rallied behind it in the
crisis that followed the election by margins that reached 80%, which
meant that half or so of those who voted against them in the election
have come to support them, at least at some point in the period that
There is a spirit of dignity in Athens that is worth a great deal more
than money. That’s something very profound to observe. I’ve only
observed it on maybe two or three occasions in a lifetime. And that is
a spirit which is contagious and it may be felt in Spain, and it may
be felt in Portugal and it may be felt in Ireland, and elsewhere
So I hope that you will not find me too portentous if I convey to you
just how much this particular moment, and the chance to participate in
it, has meant to me by closing with the words of Zola: la vérité est
en marche et rien ne l’arrêtera. Merci.
[The truth is on the march, and nothing shall stop it.]
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