KostasVergopoulos
After the victory of the new Greek government, a direct result of the popular, democratic will, international reactions are far from unanimous. Even though everyone accepts the result of popular verdict, many people are doubtful about the decision. It seems as if the Greek people are free to democratically elect their government, but their European and international counterparts are also free to ignore the content of the people's democratic verdict and enforce, in an undemocratic manner, the misguided and destructive recipe that the Greek people voted against.
Significantly, while the result of the election brings to the surface doubts and questions in France, Italy and Spain about the efficacy of the choices that have driven the entire Eurozone to the brink of deflation, the German side does not share these doubts. On the contrary, they threaten that any deviation from the "one-way path" that has been taken during the last five years will have consequences for those who diverge from it.
It is odd that the German side does not offer any real arguments about the questions that have arisen in the rest of Europe. It offers only threats, without feeling the need to prove the fiscal efficacy of its choices.
The first blackmailing argument that it poses is that a potential unburdening of austerity in Greece and the rest of Europe would make for a more lax attitude towards structural reforms that aim to boost competitiveness. However, analysis of the past five years is clear: the spread of austerity in the Eurozone has led directly to a generalized recession and deflation for all member states, Germany included. As far as the infamous structural reforms are concerned, especially with regards to the job market and welfare state, as the Financial Times points out, they have been inextricably linked to recessionary pressure.
The IMF's estimate is similar: structural reform is necessary but difficult to implement during a recession. These reforms must be implemented only if they do not lead to further financial recession. If there is one thing that has poisoned the European economy after the 2008 crisis, it is the German idea that a purge comes before a recovery.
The second, blackmailing argument that the German side poses is that no debt write-off can be accepted by any country, as this would lead other countries to attempt the same. Again, this does not take into account a nation's ability to repay its debt, nor the humanitarian and economic disaster that has befallen it because of the faulty plan the lenders have implemented; it only considers the potential for disobedience and contagion to other debt-ridden countries.
However, given that no argument beyond obedience and the halting of disobedience is presented to these questions that concern the serviceability of debt and the need to immediately combat rising unemployment, there is little to dispute the conclusion reached by Nobel winner Paul Krugman that the German Chancellor is managing the European economy in the style of the Godfather, Michael Corleone. One supreme managerial leader, with an argument for power, obedience and "virtue" no matter what the cost to Europe or the world.
The third false argument that is always presented by this side is that the cost from a potential debt write-off would fall on the shoulders of European taxpayers. The French newspaper Figaro rushed to estimate that such a write-off would cost each French taxpayer 735 euros and even more for German citizens. However, these commentators fail to mention that these amounts that have been shelled out and are owed by the Greek people return right back to French and German banks, and only a small portion of them enters the Greek economy. The repeated "bailouts" of the Greek economy are, for the most part, nothing more than bailouts for European credit institutions.
In accordance with the idea of former French president Nicolas Sarkozy, the money is placed in a special account outside of Greece, to which Greece has no access to, and debt is serviced from there. Since austerity has been enforced, debt rises faster than national income and therefore debts become even less serviceable. Thus, the system seems to work against lender nations-- and aren't they the ones to blame for the inability to pay off debts?
Anyone familiar with the economic history of mankind, as Martin Wolf of the Financial Times is, also is familiar with the fact that "what cannot be paid, will not be paid." Everything else is an excuse, in attempt to cover up the blame for the sad situation that Europe finds itself in today. It has inexcusably, unjustifiably and by choice become a huge and menacing "black hole" for the world economy.
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