The Reboot Greece Needs … Greece's prime minister, George A. Papandreou, comfortably survived a confidence vote on Tuesday, momentarily stabilizing his fragile Socialist government and clearing the way for a fresh infusion of financial assistance from the European Union. But the country's economic crisis, which began at the end of 2009 when the world belatedly realized that Greece's fiscal and trade deficits were unsustainable, is far from over; in fact it has taken a new and dangerous turn. – New York Times
Dominant Social Theme: If we could all just get along … Let the politicians lead the way.
Free-Market Analysis: Loukas Tsoukalis has written an editorial for the New York Times (excerpt above) that provides us with yet another glimpse into elite thinking when it comes to the salvation of the European Union.
It is perhaps persuasive on paper, but we would humbly submit that the laundry list Tsoukalis proposes is proof positive of the EU's dire circumstances. None of them are practical, at least not when pursued to their logical conclusion. That they appear in the pages of the New York Times and are presented as logical outcomes is further evidence of the undoing of the euro, and perhaps the union itself.
As we mentioned, the article SOUNDS reasonable, in a kind of soft-authoritarian way. He provides us, throughout, with a fear-based dominant social theme – that disaster will occur if Greece is not properly "fixed." He then suggests political solutions, beginning with a meeting of the minds of the leadership and a "government of national unity."
For Tsoukalis and many others, the EU is a grand experiment, embodying all that is noble about the human spirit. Tsoukalis has even built his career around it. He is "a professor of European integration at the University of Athens and the president of the Hellenic Foundation for European and Foreign Policy."
As someone who specializes in "integration" – a euphemism we would suggest for forced centralization – Tsoukalis has many ideas. He begins oddly enough (or perhaps not so oddly) with Marxian terminology, explaining that "The SPECTER of a default on Greece's sovereign debt — close to $500 billion, most of it owed to other Europeans — is haunting bankers and politicians."
Having made the requisite obeisance to Karl Marx and Friedrich Engels, he provides us with an increasingly apocalyptic vision of a Greek default. It could set off "domino effects" not only within the EU but beyond. "Greece, a country of only 11 million people, risks being caught in an unbreakable cycle of decline," he warns.
And while the government has succeeded in reducing Greece's budget deficit, it has not done so well as regards structural reforms, especially economic adjustments and privatization. Unemployment, he claims, remains at 16 percent. (Actually, it's probably a lot higher.)
So what's the solution? Gee, it's political. "Greece desperately needs a radical renewal of its political class; at stake is the survival of many members of that establishment. It also needs a peaceful revolution in its economy and society. But democracy takes time. The next parliamentary elections may not be very far off, but the political and economic climate has to improve first."
Tsoukalis has economic ideas as well, chief among them is "more effective tax collection." He wants to couple "effective" tax collection with the creation of a "safety net" for economically vulnerable Greeks. Then, there's catharsis. "The people who have mismanaged public funds should be brought to justice." Such an investigation is necessary, he believes, along with the creation of a national unity government.
What would a national unity government entail? Tsoukalis suggests a program of limited duration that would help restore public confidence. This is necessary in order to create sufficient support for the rest of the necessary program to be implemented – "notably the elimination of public sector jobs."
Tsoukalis is firm on this. He believes, like porridge, the International Monetary Fund has gotten it just right. "For the heavily indebted and uncompetitive economies of the European periphery, fiscal consolidation and structural reform — the mantras of I.M.F. economists — are a must."
In the final analysis, Tsoukalis demands "growth." If Greece can grow, he informs us, then problems with debt and unemployment will be alleviated. "Growth is the key," he explains. Here's the conclusion to the article:
In trying to cut bureaucratic tape, Greek politicians will need to create an environment that is propitious to investment, which has not been the case for many years. European funds for investment could bolster the determination of local politicians to proceed with structural reform.
Some in Europe are already talking about a new Marshall Plan for financially embattled countries. Solidarity with strings attached is a politically intelligent form of investment. The sovereign debt problem in several European countries, including Greece, raises the question of who should pay for the accumulated mistakes of the past — taxpayers or private creditors — and how much of the burden each country should bear …
Greece is at a dangerous crossroads. Other countries — Portugal, Ireland, maybe Spain — are coming behind it. The consequences of excessive borrowing and consumption, of the bursting of the credit bubble, have caught up with us. If we fail to deal with them effectively, the achievements of decades of increasing integration and shared sovereignty in postwar Europe may no longer be taken for granted.
Let us summarize now. Tsoukalis wants political renewal, austerity, growth and a government of a national unity. All of this is to be imposed by Greek politicians under the watchful eye of the IMF. If the money runs out, Europe should implement some sort of civilian Marshall Plan. (Never mind that the initial Marshall Plan apparently didn't work and only retarded the recovery of Europe by distorting the real economy with misapplied capital.)
What do the Greeks themselves want? Obviously they don't want top-down austerity measures. Nor do they even want IMF aid apparently. They do want "justice" but we would humbly point out that the justice in question should inevitably rise up even beyond Greece itself and proceed to Brussels and thence to the City of London, Washington DC., even Israel. There is no doubt who is behind the wretched European Union – it is the Anglo-American axis and their world-spanning ambition for global consolidation.
Tsoukalis has a vision of European integration. It is to be implemented with rigor, led by politicians, supported by vast public works programs if necessary. We would suggest that the political will to do any of this is lacking at this point, or it would have been done. The Greek government itself is on the way out and it is doubtful that the Greeks themselves will cooperate.
As the spectacle of Greek resistance continues, it has spread to Spain and has touched both Italy and Britain as well. The truth-telling of the Internet – and of the Internet Reformation itself – is an ongoing process, not an episode. The same could be said for the unraveling of the EU, a reincarnation of Charlemagne's Frankish empire, only built on dissembling rather than conquest.
It is an entity so corrupt that EU auditors refused to sign off on the books for over a decade. Its supreme chambers operate under the principle of "insulated decision-making" which is a euphemism for the creation of arbitrary and unaccountable rulings that no one can disobey.
The EU budget has ballooned to an incredible US$500 billion a year (no Greek austerity measures here) and the leadership is now readying some US$400 million to explain itself once more to the peons. You'd think they already know. Surely the Greeks do. And the supporters of the recently successful True-Finns party as well (Finland having just essentially tried to vote itself out of the union). There will be more of these episodes, we would think.
There are plenty of good reasons why the EU will remain in one piece and eventually prosper. But none of them seem to be persuading average Greeks, or many other disabused Europeans either. Editorials such as Tsoukalis writes are one thing. But reality, increasingly, seems to be another.