And So It Goes…#459


Occasionally , the Usurer/Capitalist Commentariat have to speak the truth. Gleaned from the Daily Telegraph;

Greece was sacrificed for the cause of the euro, like the 300 Spartans, Thebans and Thespians cut to pieces at Thermopylae to save the alliance.

They were denied debt restructuring at the start – which is what much of the IMF board wanted, according to leaked IMF minutes – because this would have violated the sanctity of monetary union.

A set of policies was imposed upon them (with the collusion of their own leaders) that violated the IMF’s own lending rules and made no economic sense. It was chiefly intended to buy time for the eurozone to shore up defences elsewhere and avert contagion. (This too has been admitted by the IMF). Cynics would say it also bought time for northern banks to extricate themselves deftly and dump their toxic load on EMU taxpayers.

All the original estimates of the costs from austerity were wildly wrong. The EU authorities misjudged the fiscal multiplier by orders of magnitude. It was not 0.5 as supposed, but nearer 2.0.

They persistently blamed the Greeks for missing deficit targets when the chief cause of these breaches was the scorched-earth, pro-cyclical, and self-defeating ferocity of the fiscal squeeze itself (conducted without monetary anaesthetics), which caused tax revenues to collapse.

They accused the Greek authorities of failing to privatise fast enough when it was in reality impossible to sell anything into a collapsing asset and property market, especially at a time when politicians in Holland, Finland, Austria, and Germany were openly talking about expelling Greece from EMU, and therefore throwing currency risk into the bargain as well.

I think Greece would have recovered much more quickly with far less economic damage, and without blighting half a generation, if it had left EMU immediately and adopted a classic IMF package. It is impossible to prove this. We will never know.

It would be a miracle if the squalid and cruel saga did not leave a very bitter taste in Greece, or if it ended on the political terms of the EMU creditor bloc in five years time.

Greece has survived its ordeal without revolution or civil war. If that is a vindication of EMU debt-crisis strategy and the greater Project, the bar is set low.

Time for Revolution !

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