[Marxism] Greek Deal Prospects Slim as Crisis Talks Resume

ehrbar at marx.economics.utah.edu ehrbar at marx.economics.utah.edu
Sun Jul 12 12:30:27 MDT 2015

Marv Gandall writes:

> The left critics of the Tsipras leadership ... argued from the
> beginning that the government should be mobilizing and educating the
> people and preparing the state administration for a Grexit, rather
> than doggedly reinforcing illusions ...

Syriza had the mandate of ending austerity while staying in the
Eurozone.  Instead of saying "this is impossible" they made efforts
to implement the mandate.  They thought there was a chance of
success because

(a) they counted on the solidarity of other marginal countries in the
EU.  This solidarity existed and exists, but it was not strong enough
to make a difference in the negotiations.

(b) they knew, and injected into the discussion, the fact the Germany
itself had been repeated beneficiary of debt relief.  This fact has
been noted, as much as Germany wants the world public to forget it again.

(c) the Greeks are not the only ones arguing that the architecture of
the Eurozone is faulty.  Syriza hoped that Greece would the impetus to
revise this architecture.  What architectural fault?  On the one hand,
there is the basic fault that the Eurozone is a monetary union without a
fiscal union.  This was not on the table because it will take many years
to remedy this.  Varoufakis was referring to the following fault in the
monetary sphere alone, which was also shared by the Bretton Woods system
of fixed exchange rates and which arguably brought it down: If there are
countries in the Eurozone which have a balance of payments deficit
(Greece) then there are other countries which have a balance of payments
surplus (Germany).  Right now, the Euro system puts all the pressure of
adjustment only on the deficit countries.  What is needed is a mechanism
that also forces the surplus countries to adjust.  This is not only a
matter of fairness, but also of pragmatism: it is much easier for the
surplus countries to adjust because they have extra money, while the
deficit countries have far fewer options because they are running out of
money.  In January, the Guardian published an article about this:


This is the only time I read about it in connection with the
Eurozone, although this was discussed widely in connection with the
breakdown of Bretton Woods.  Subsequent News articles only said that
Syriza thinks Greece will be the salvation or similar for Europe, which
can easily be dismissed as self-serving propaganda.  No, it was not; the
Eurozone has to be reformed, and Greece was justified to expect that the
critical situation of Greece would be considered in the framework of
broader reforms.

Therefore I do not think that Syriza was irresponsible.  They had viable
ideas how to fulfill their mandate.  They could not assume that their
reasonable proposals would not even be considered in the negotiations.

So far, Syriza has not made big mistakes.  The big question is what they
will do from now on, at a time of open polarization in Europe around the
Greek question.  I am confident that both Tsipras and the Left Wing of
Syriza know how important it is that Syriza does not splinter right now,
at a moment when clear leadership is needed in Greece.

Hans G Ehrbar

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