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Thomas Piketty on the Euro Zone: 'We Have Created a Monster' Der Spiegel Interview by Julia Amalia Heyer and Christoph Pauly March 10 SPIEGEL: You publicly rejoiced over Alexis Tsipras' election victory in Greece. What do you think the chances are that the European Union and Athens will agree on a path to resolve the crisis? Piketty: The way Europe behaved in the crisis was nothing short of disastrous. Five years ago, the United States and Europe had approximately the same unemployment rate and level of public debt. But now, five years later, it's a different story: Unemployment has exploded here in Europe, while it has declined in the United States. Our economic output remains below the 2007 level. It has declined by up to 10 percent in Spain and Italy, and by 25 percent in Greece. SPIEGEL: The new leftist government in Athens hasn't exactly gotten off to an impressive start. Do you seriously believe that Prime Minister Tsipras can revive the Greek economy? Piketty: Greece alone won't be able to do anything. It has to come from France, Germany and Brussels. The International Monetary Fund (IMF) already admitted three years ago that the austerity policies had been taken too far. The fact that the affected countries were forced to reduce their deficit in much too short a time had a terrible impact on growth. We Europeans, poorly organized as we are, have used our impenetrable political instruments to turn the financial crisis, which began in the United States, into a debt crisis. This has tragically turned into a crisis of confidence across Europe. SPIEGEL: European governments have tried to avert the crisis by implementing numerous reforms. What do mean when you refer to impenetrable political instruments? Piketty: We may have a common currency for 19 countries, but each of these countries has a different tax system, and fiscal policy was never harmonized in Europe. It can't work. In creating the euro zone, we have created a monster. Before there was a common currency, the countries could simply devalue their currencies to become more competitive. As a member of the euro zone, Greece was barred from using this established and effective concept. SPIEGEL: You're sounding a little like Alexis Tsipras, who argues that because others are at fault, Greece doesn't have to pay back its own debts. Piketty: I am neither a member of Syriza nor do I support the party. I am merely trying to analyze the situation in which we find ourselves. And it has become clear that countries cannot reduce their deficits unless the economy grows. It simply doesn't work. We mustn't forget that neither Germany nor France, which were both deeply in debt in 1945, ever fully repaid those debts. Yet precisely these two countries are now telling the Southern Europeans that they have to repay their debts down to the euro. It's historic amnesia! But with dire consequences. SPIEGEL: So others should now pay for the decades of mismanagement by governments in Athens? Piketty: It's time for us to think about the young generation of Europeans. For many of them, it is extremely difficult to find work at all. Should we tell them: "Sorry, but your parents and grandparents are the reason you can't find a job?" Do we really want a European model of cross-generational collective punishment? It is this egotism motivated by nationalism that disconcerts me more than anything else today. SPIEGEL: It doesn't sound as if you are a fan of the Stability Pact, the agreement implemented to force euro-zone countries to improve fiscal discipline. Piketty: The pact is a true catastrophe. Setting fixed deficit rules for the future cannot work. You can't solve debt problems with automatic rules that are always applied in the same way, regardless of differences in economic conditions. . . . <http://www.spiegel.de/international/europe/thomas-piketty-interview-about-the-european-financial-crisis-a-1022629.html Greece Against the Eur-Owe Zone by Stanley Aronowitz The Indypendent March 14, 2015 <https://indypendent.org/2015/03/10/greece-against-eur-owe-zone> Stanley Aronowitz is a professor of sociology at the CUNY Graduate Center and the author of more than two dozen books, including The Death and Life of American Labor: Toward a New Workers’ Movement (Verso, 2014). He hosted the leaders of Syriza when they visited the Graduate Center last year during their pre-election tour of the United States. Syriza - a Necessary Compromise or Avoiding an Inevitable Conclusion? Dimitri Lascaris and Leo Panitch discuss the Greek government's negotiating strategy and whether it should be preparing to leave the Eurozone The Real News Network March 15, 2015 . . . Panitch...I think the really important thing, if you're talking about preparing the Greek people, is that I'd like to see the left platform, if they really were doing anything. Show me any more inclination or ability to turn SYRIZA as a party into the type of party that is capable of taking the solidarity networks and developing all kinds of initiatives around workers co-ops, around social solidarity, demanding that the government not only think about plan B in economic policy terms, but be appointing people inside the state who would be animators of that type of change in this society. You know, what happens in SYRIZA meetings are slanging matches over plan A or plan B. ...ordinary people, they walk away in disgust, 'cause they don't--this is abstract arguments by economists. And as I've often said on The Real News--and I'll say it again--the most worrying thing about SYRIZA all along has been that it often looked like here is this tremendous social movement-based party that was using the party as a booster rocket to put in a new government but hadn't thought through--and this was clear to me when I was in Greece last year--how to animate that party so it was a really mobilizing and educating party, building from the base, at the bottom. That's what worried me when I was there last year, and I don't see any evidence that those who are calling for plan B are any more oriented to having the party do this than is the government. In fact, I'd say rather less. . . . <http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=13412> Europe’s rulers trash democracy by Mick Armstrong Red Flag, Socialist Alternative, Australia March 11, 2015 The bankers, the billionaire financial speculators and the heads of the European Union – backed up by all the key political powerbrokers and the major media corporations – are trying to squash Greece’s newly elected left wing Syriza government. Syriza was swept into office by a groundswell of opposition to brutal austerity measures that have destroyed the lives of a whole generation. The EU-imposed policies turned the recession that followed the 2008 financial crisis into a full-blown depression. In return for bailout funds to cover Greek government debt, the “Troika” (the European Commission, the European Central Bank and the International Monetary Fund) took over the administration of Greece. The bulk of the money was simply used to bail out financial institutions and speculators, in many cases German and French banks, rather than to shore up the Greek economy, let alone to help the mass of the Greek population. The Troika forced a series of compliant Greek governments to slash public sector jobs and salaries, make deep cuts to social spending and privatise government services. Regressive taxes that hit workers hardest were sharply increased. Government revenues flowed out of the country to boost the profits of foreign banks. The overall impact was to send the Greek economy spiralling downwards. Rather than helping to reduce the debt burden, it actually rose. The unemployment rate has shot up to more than 25 percent (the youth unemployment rate is more than 50 percent) and real wages have fallen 30 per cent. Some 2.5 million people (out of a total population of just 11 million) live below the poverty line, with another 3.8 million at risk of falling below it. The health system has been ravaged. Syriza came to office promising to reverse the worst effects of this catastrophe. Its election victory was met with a wave of enthusiasm in Greece and in a number of other European countries, such as Spain, which have also been racked by recession, cutbacks and mass unemployment. At last it seemed it was possible to begin to reverse the tide of attacks on the living standards and basic rights of working class people. But the powers that rule European capitalism and the world financial system are having none of that. They are determined to humiliate Syriza and to teach the Greek working class a bitter lesson for having had the effrontery to hope for something better and for rejecting all the mainstream parties. . . . So the hardline stance against Syriza was not just about teaching Greek workers a lesson; it was a warning to the likes of Podemos in Spain and workers all across Europe that anyone who attempted to challenge austerity would faced no-holds-barred opposition from the capitalist establishment. There is a very different lesson that those of us who stand for genuine democracy and the interests of workers and the oppressed need to draw from the unrelenting response of Europe’s ruling classes to Syriza’s electoral victory: it is not enough simply to reject the mainstream neoliberal parties and vote a left wing government into office. That can only be a first step. We have to go much further. To stand up to ruling class intimidation and to counter any wavering from the leadership of a left government, there need to be mass popular mobilisations on the streets, in the workplaces and on the campuses. Workers have to refuse to implement cuts to essential services such as hospitals and schools. Workplaces facing mass sackings needed to be occupied and run under workers’ control. Popular organisations need to be formed to prevent evictions of the poor or the cutting off of essential services like gas and electricity. In other words, we need another form of democracy – a genuine mass popular democracy – in which the millions of the exploited and the oppressed take control of every aspect of their lives and break the power of the rich. <http://redflag.org.au/article/europe%E2%80%99s-rulers-trash-democracy> _________________________________________________________ Full posting guidelines at: http://www.marxmail.org/sub.htm Set your options at: http://lists.csbs.utah.edu/options/marxism/archive%40mail-archive.com
