[Marxism] Fwd: Wolfgang Schäuble, the Hero of the Greek Austerity Crisis?
lnp3 at panix.com
Tue Jul 21 06:32:52 MDT 2015
(When I stated that Schauble was "veering to the left" by supporting
Grexit, I was busting chops. In this article Dean Baker takes his
proposal seriously, making it sound like the sort of thing you would
hear from Alex Callinicos or Michael Roberts.)
There are two major benefits from the Schäuble plan. First, it would put
Greece in a position to restructure its debt. While there would be many
battles with creditors over the extent and conditions of any
write-downs, the immediate outcome would be to free Greece from the
obligation to run large primary budget surpluses to pay interest on its
debt. This could provide a substantial boost to its economy as money
that would be flowing out of the country for debt service could instead
be used for domestic purposes like sustaining infrastructure and paying
for health care and pensions.
The other major benefit would be that a lower valued currency would make
Greek goods and services more competitive internationally. This should
provide a substantial boost to its net exports, which would lead to
growth and jobs.
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