Thomas Fazi has just interviewed me for ONEURO on Greece and the Eurozone two months before a possible Greek election. To read the interview as published in Italian click here. For the Q&A in its English original…
- There’s a lot of talk about Greece’s supposed ‘recovery’, a sign of the ‘success’ of austerity. How do you judge this narrative, and how would you describe the real state of the Greek economy? (It would be great if you could mention what you said in Florence, about Greece’s ‘GDP growth’ being non-existent when deflation is taken into consideration)
Greece is and remains in a Great Depression. Seven years of precipitous falls in income, coupled with negative investment, have spawned a humanitarian crisis. In each of these years, the European Commission, the European Central Bank and the International Monetary Fund predicted that recovery was “around the corner”. It was not! Now, on the basis of one quarter of positive real GDP growth, they are celebrating the recession’s ‘end’. But if we look carefully at the numbers, it turns out that, even according to official figures, the recession is continuing. Consider this: real GDP rose by 0.7% at a time that prices, on average, fell by 1.9%. I remind our readers that real GDP equals GDP measured in euros divided by an index of average prices. Given that this index went down by 1.9%, and that the whole ratio (real GDP) only rose by 0.7%, this means that GDP as measured in euros declined! So, the rise in real GDP happened because national income, in euros, went up. It rose because total income, in euros, fell more slowly than prices did. Preposterously, the powers-that-be expect the Greek people to celebrate this as the ‘End of Recession’. They won’t!
- Regarding the state of the Greek economy: is this simply the unintended result of ‘flawed’, ideologically-driven policies, or should it rather be considered the desired outcome of such policies?
Neither, I think. These policies were the only policies they could come up with which would not require an admission that the Eurozone was badly designed and that the crisis is systemic. They were also the only policies consistent with their prime objective; that is, to shield bankers from expropriation by the European Union or member-states. In short, a proud nation was forced into an internal devaluation that caused great hardship, and made private and public debts unpayable, so as to maintain the lie that the Eurozone design was pristine and, more pertinently, to hide the fact that their number one priority was to shift gargantuan losses from the books of the private banks onto the shoulders of the weakest of taxpayers. Once this strategy was in place, it was embellished with neoliberal ideology…
- Following the call for early presidential elections, markets have gone into a panic. Do you think their fears of an early general election are justified? If so, what are they so afraid of, in your opinion?
They are justified. What they are afraid is that the twin bubbles that the Berlin, Frankfurt and Brussels so elaborately pumped up over the last year, in the bond and stock markets, so as to pretend that Greece was recovering, would burst. But this is the fate of bubbles: they burst. And the sooner they do the better our chance to facing reality and doing something to make it better for the majority of the people – both in Greece and in the Eurozone at large.
- Do you think a victory by SYRIZA is a realistically possible option? Or will establishment forces avoid that outcome at all costs?
Both. There is no doubt that the establishment will throw everything they can at SYRIZA, inspiring the maximum amount of terror in the hearts and minds of Greek voters. But, at the same time, it is looking increasingly likely that this campaign of fear will fail to prevent a SYRIZA victory.
- How do you judge Mr. Juncker’s call to avoid the ‘wrong outcome’ in the elections (i.e., the victory of ‘extreme forces’)?
It reveals a deep-seated contempt for democracy and a colonial attitude that makes a mockery of the notion of a Union that respects the sovereignty of its member-states. The European Commission is supposed to be answerable to the citizens of member-states. The citizens of member-states are not answerable to the Commission and, by definition, the Commission can have no view on what is a ‘correct’ and what is a ‘wrong’ electoral outcome. Mr Juncker took his office further into disrepute by overstepping the mark and widening spectacularly the democratic deficit typical of the European Union. His intervention was probably one of the most fiercely anti-European moves, to the extent that he managed singlehandedly to de-legitimise the Commission and, by extension, the Union.
- Could you outline the main points of SYRIZA’s program (for Greece and for the EMU)?
In three short sentences: First, a SYRIZA government will work tirelessly to ensure that Europe has the ‘conversation’ it has so far refused to have about the faulty design of the Eurozone and the fact that the bailouts were toxic both for the Periphery and for core countries like Germany. Secondly, it will strive to render Greece’s social economy viable again through a New Deal for Europe that lifts the veil of depression from the whole Periphery – not just Greece. Thirdly, it will struggle to reform Greece, both its public and private sectors, in a manner that enhances creativity, improves productivity and shapes a better society.