The European Union, not the Greeks, is as usual on holiday

In his new book ‘Purity’ Jonathan Franzen writes “I think it helps to start with people who are in an unstable, untenable position, an anxious making or a stressful position, because then you know that something has to change”. Exactly this is what the Greeks did after five years of hardship, crisis and humiliation. They elected a new government. Purity was what they needed mostly and subsequently a bit of breath from the harsh austerity measures.

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Καλημέρα Μιράντα /Good morning Miranda. Central Athens,Greece.

Obviously, the European leaders (see German) needed a change but they were based on what Prince Tancredi, a character in the Leopard, a famous novel set in 19th century Sicily, reckoned “if we want things to stay as they are, things will have to change”. In Creece a lot of things have changed since the start of the Greek crisis. The new Greek government had a new proposal in order to tackle the crisis inside the Eurozone but nothing was enough for the Eurogroup and European leaders who were guided by the supreme (German) leaders. The new Greek government(the change) had to follow the same 5 years program and to confront the same problems. Athens still cannot repay its debt and it is in a deeper recession and neither the eurozone and the European Union as a whole find any resolution as bailout follows bailout.  Merkel and Schauble are repeating the magic word “rules”  to their electorates in whatever concerns the Greek crisis, which of course these rules and laws can be bend and be quite flexible behind the doors of the meeting rooms in Brussels where there is no recording of any discussion. As consequence, the euro’s future itself remains uncertain.

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Marathon Bay. Marathon, Athens, Greece

It’s interesting to quote Ernesto Gallo and Giovanni Biava in their article about Greece and Europe “The Greeks have been often derided as “lazy” or “corrupt” when the key responsibilities lay elsewhere. The current EU has benefited from extremely low interest rates (still 0.05%), but will hardly survive without a political union. In addition, the rest of the world is moving fast. The United States has promoted a much coveted deal with Iran, also with the support of Moscow, as President Obama has recognised. Russia has hosted the summits of the BRIC states and the Shanghai Cooperation Organisation (SCO), which is opening to Pakistan and India. The European Union, not the Greeks, is as usual on holiday.”

In my recent visit to Greece, one week ago, the misery was depicted at every turn in the Athenian roads. The banks were under capital control with maximum withdrawal amount of 60 euros and big queues of old people in front of the ATMs. Most of the shops in the high streets of central Athens were closed down with the only survivors the Chinese “one euro” shops. And my compatriots, I think, are beyond any horror, terror, humiliation. They are tired and subdued. They had enough, they voted “no” to the austerity measures because they are in the same stage as the character in the scene of the film Network – Mad as a Hell- who says: I don’t care about the depression and the inflation and the Russians… The air is unfit to breathe, the food unfit to eat… I’m human being, my life has a value!

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Greece is in disintegration. But it’s always the sea, the sea and the sun will soothe my compatriots for a while…

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Greeks Deserve Respect

Love my compatriots. They are really tough lot! Despite all the terror from all the sides -the Creditors and all the Greek mass media- bullying them constantly with banks shut for a week and perhaps more and with no really light at the end of the tunnel, I can say, more hardship is yet to come, they decided to stand up against any terror.

The first results of the Referendum ( the question was : do you accept the austerity measures of the Eurozone ):

61 % No

38 % Yes

There will be more drama and more hardship to come but for tonight : JUST RESPECT!
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A Plea For Sanity : Greece

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Honoré Daumier’ caricature of the king as Gargantua.

Yesterday, 26 economists with established world credentials signed the following letter and sent it to Financial Times. It is mainly about this very frail concept of our times called Democracy in Europe.

“We believe it is important to distinguish austerity from reforms; to condemn austerity does not entail being anti-reform.” Six months on, we are dismayed that austerity is undermining Syriza’s key reforms, on which EU leaders should surely have been collaborating with the Greek government: most notably to overcome tax evasion and corruption. Austerity drastically reduces revenue from tax reform, and restricts the space for change to make public administration accountable and socially efficient. And the constant concessions required by the government mean that Syriza is in danger of losing political support and thus its ability to carry out a reform programme that will bring Greece out of the crisis. It is wrong to ask Greece to commit itself to an old programme that has demonstrably failed, been rejected by Greek voters, and which large numbers of economists (including ourselves) believe was misguided from the start.
Clearly a revised, longer-term agreement with the creditor institutions is necessary: otherwise default is inevitable, imposing great risks on the economies of Europe and the world, and even for the European project that the eurozone was supposed to strengthen.
Syriza is the only hope for legitimacy in Greece. Failure to reach a compromise would undermine democracy in and result in much more radical and dysfunctional challenges, fundamentally hostile to the EU.
Consider, on the other hand, a rapid move to a positive programme for recovery in Greece (and in the EU as a whole), using the massive financial strength of the Eurozone to promote investment, rescuing young Europeans from mass unemployment with measures that would increase employment today and growth in the future. This could both transform the economic performance of the EU and make it once more a source of pride for European citizens.
How Greece is treated will send a message to all its eurozone partners. Like the Marshall plan, let it be one of hope not despair.
1.Prof Joseph Stiglitz
Columbia University; Nobel Prize winner of Economics
2.Prof Thomas Piketty
Paris School of Economics
3.Massimo D’Alema
Former prime minister of Italy; president of FEPS (Foundation of European Progressive Studies)
4.Prof Stephany Griffith-Jones
IPD Columbia University
5.Prof Mary Kaldor
London School of Economics
6.Hilary Wainwright
Transnational Institute, Amsterdam
7.Prof Marcus Miller
Warwick University
8.Prof John Grahl
Middlesex University, London
9.Michael Burke
Economists Against Austerity
10.Prof Panicos Demetriadis
University of Leicester
11.Prof Trevor Evans
Berlin School of Economics and Law
12.Prof Jamie Galbraith
Dept of Government, University of Texas
13.Prof Gustav A Horn
Macroeconomic Policy Institute (IMK)
14.Prof Andras Inotai
Emeritus and former Director, Institute for World Economics, Budapest
15.Sir Richard Jolly
Honorary Professor, IDS, Sussex University
16.Prof Inge Kaul
Adjunct professor, Hertie School of Governance, Berlin
17.Neil MacKinnon
VTB Capital
18.Prof Jacques Mazier
University of Paris
19.Dr Robin Murray
London School of Economics
20.Prof Jose Antonio Ocampo
Columbia University
21.Prof Dominique Plihon
University of Paris
22.Avinash Persaud
Peterson Institute for International Economics
23.Prof Mario Pianta
University of Urbino
24.Helmut Reisen
Shifting Wealth Consultancy
25.Dr Ernst Stetter
Secretary General, FEPS (Foundation fro European Progressive Studies)
26.Prof Simon Wren-Lewis
Merton College Oxford”