Category Archives: European Union

Ending Greece’s bleeding

Paul Krugman writes: Europe dodged a bullet on Sunday. Confounding many predictions, Greek voters strongly supported their government’s rejection of creditor demands. And even the most ardent supporters of European union should be breathing a sigh of relief.

Of course, that’s not the way the creditors would have you see it. Their story, echoed by many in the business press, is that the failure of their attempt to bully Greece into acquiescence was a triumph of irrationality and irresponsibility over sound technocratic advice.

But the campaign of bullying — the attempt to terrify Greeks by cutting off bank financing and threatening general chaos, all with the almost open goal of pushing the current leftist government out of office — was a shameful moment in a Europe that claims to believe in democratic principles. It would have set a terrible precedent if that campaign had succeeded, even if the creditors were making sense.

What’s more, they weren’t. The truth is that Europe’s self-styled technocrats are like medieval doctors who insisted on bleeding their patients — and when their treatment made the patients sicker, demanded even more bleeding. [Continue reading…]

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Yanis Varoufakis explains why he resigned as Greece’s finance minister

Yanis Varoufakis writes: The referendum of 5th July will stay in history as a unique moment when a small European nation rose up against debt-bondage.

Like all struggles for democratic rights, so too this historic rejection of the Eurogroup’s 25th June ultimatum comes with a large price tag attached. It is, therefore, essential that the great capital bestowed upon our government by the splendid NO vote be invested immediately into a YES to a proper resolution – to an agreement that involves debt restructuring, less austerity, redistribution in favour of the needy, and real reforms.

Soon after the announcement of the referendum results, I was made aware of a certain preference by some Eurogroup participants, and assorted ‘partners’, for my… ‘absence’ from its meetings; an idea that the Prime Minister judged to be potentially helpful to him in reaching an agreement. For this reason I am leaving the Ministry of Finance today.

I consider it my duty to help Alexis Tsipras exploit, as he sees fit, the capital that the Greek people granted us through yesterday’s referendum.

And I shall wear the creditors’ loathing with pride.

We of the Left know how to act collectively with no care for the privileges of office. I shall support fully Prime Minister Tsipras, the new Minister of Finance, and our government.

The superhuman effort to honour the brave people of Greece, and the famous OXI (NO) that they granted to democrats the world over, is just beginning.

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Greece votes No: experts respond

By Costas Milas, University of Liverpool; George Kyris, University of Birmingham; James Arvanitakis, University of Western Sydney; Marianna Fotaki, University of Warwick; Nikos Papastergiadis, University of Melbourne; Remy Davison, Monash University; Richard Holden, UNSW Australia; Ross Buckley, UNSW Australia, and Sofia Vasilopoulou, University of York

The Greek people have voted, saying a resounding No to the terms of the bailout deal offered by their international creditors. What will this mean for Greece, the euro and the future of the EU? Our experts explain what happens next.

Costas Milas, Professor of Finance, University of Liverpool

Greek voters have confirmed their support for their prime minister, Alexis Tsipras, who now has the extremely challenging task of renegotiating a “better” deal for his country.

Nevertheless, time is very short. Greece’s economic situation is critical. On July 2, Greek banks reportedly had only €500m in cash reserves. This buffer is not even 0.5% of the €120 billion deposits that Greek citizens have to their names. It is only capital controls preventing Greek banks from collapsing under the strain of withdrawal.

Basic mathematical calculations reveal how desperate the situation is. There are roughly 9.9m registered Greek voters. Assume that – irrespective of whether they voted Yes or No – some 2.8m voters (that is, a very modest 28.2% of the total number of registered voters) decide to withdraw their daily limit of €60 from cash machines on Monday morning. Following this pattern, banks will run out of cash in three days and therefore collapse (note: 3 x 2.8m x 60 ≈ 500m).

There is therefore very little time for the Greek government to strike the deal with their creditors that will instantaneously give the ECB the “green light” to inject additional Emergency Liquidity Assistance (ELA) to Greek banks to support their cash buffer and save them from collapse. In other words, Greece does not have the luxury of playing “hard ball” with its creditors. An agreement has to be imminent.

Financial markets, expected to start very nervously on Monday morning, will probably stay relatively calm as the reality of the economic situation spelled out above is more likely than not to lead to some sort of agreement (provided, of course, that Greece’s creditors will listen to Tsipras). Whether this agreement is good for the Greeks, this is an entirely different story.

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Backing down on Greece’s debt is the safest, most rational option

John Quiggin writes: Lots of people have raised the suggestion of applying game theory to the the Greek debt crisis. I haven’t attempted this, reflecting my general scepticism about game theory in the absence of a well-defined strategy space.

But now the Greek government and public have made what is, in effect, a final move.

In view of the No vote, Syriza can’t accept a deal that doesn’t include an explicit debt write-off, or one that obviously crosses its stated red lines. Within those parameters, it’s clearly eager for a face-saving compromise.

For the other side (effectively the Troika and the German government), since Syriza’s move has already been made, the problem has now been reduced to one of decision under uncertainty, which is something I am comfortable with.

More precisely, it’s a choice between a “safe” option, with an outcome that is fairly predictable, and a “risky” option where the outcome is uncertain.

The safe option for the European institutions is to back down, write off lots of debt and lose a lot of face. [Continue reading…]

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Greek referendum No vote signals huge challenge to eurozone leaders

The Guardian reports: Five years of failed austerity policies in Greece and a total breakdown in trust between the leftwing Syriza alliance and the political leaders of its creditors climaxed in a national vote in which Greeks said no to the spending cuts and tax increases demanded by its lenders.

As the magnitude of the result became clear, thousands of no vote supporters began pouring into the central Syntagma Square in front of the parliament in Athens to celebrate, waving Greek flags and chanting “No, No.”

The sweeping victory for Tsipras, who challenged the might of Germany, France, Italy and the rest of the eurozone, represented a nightmare for the mainstream elites of the EU. With Greek banks closed, withdrawals limited, capital controls in place and the country rapidly running out of cash, emergency action will be needed almost immediately to stem the likelihood of a banking collapse. But it is not clear whether the European Central Bank will maintain a liquidity lifeline to Greece and whether the creditor governments of the eurozone will sanction instant moves to salvage Greece’s crashing financial system.

Germany’s vice-chancellor and social democratic leader, Sigmar Gabriel, said Tsipras had burned his bridges with the rest of the eurozone. But the Greek leader believes he has strengthened his negotiating hand.

Tsipras campaigned for a no vote, arguing that this was the best way to secure a better deal, keeping Greece in the euro while obtaining debt relief from its creditors. The leaders of Germany, France and others stated the opposite, that a no vote meant the Greeks were deciding to become the first country to quit the currency, membership of which is supposed to be irreversible.

It is not clear which view will prevail. The EU mainstream hoped for a yes vote, not only because it would have represented democratic assent to the euro and acceptance of austerity, but also because the Tsipras government would have come under strong pressure to stand down. Negotiations between the two sides have gone nowhere for five months and have become particularly rancorous in the past month as bailout and debt repayment deadlines came and went, with Athens missing a €1.5bn repayment to the IMF. The country now faces a €3.5bn payment to redeem bonds at the European Central Bank in two weeks.

Eurozone confidence in Tsipras is at rock bottom and there is virtually zero faith that he will implement reforms needed to secure cash even if he agrees to them. For his part, the fiery Greek leader as recently as Friday accused his eurozone creditors of blackmail, extortion, and seeking to humiliate his country.

What happens next in the five-year saga that has shaken the eurozone to its foundations is sheer guesswork.

But the Greek vote is a huge blow to EU leaders, particularly the German chancellor, Angela Merkel, who has dominated the crisis management through her insistence on fiscal rigour and cuts despite a huge economic slump, soaring unemployment and the immiseration of most of Greek society.

“The failure of the euro means the failure of Merkel’s [10-year] chancellorship,” said the cover of the latest issue of Der Spiegel, the German weekly. It depicted her sitting atop a Europe in ruins. [Continue reading…]

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How Europe played Greece

Alex Andreou writes: “They have decided to strangle us, whether we say yes or no”, said a Greek woman to me yesterday. “The only choice we have is to make it quick or slow. I will vote “oxi” (no). We are economically dead anyway. I might as well have my conscience clear and my pride intact.”

Her view is not atypical among friends and relations I have canvassed in the last few days. Trust has evaporated. Faith in European Institutions is thin on the ground. Lines have been crossed. At times of financial strain, a country’s currency issuer, its central bank, should act as lender of last resort and prime technocratic negotiator. In Greece’s case, the European Central Bank, sits on the same side as the creditors; acts as their enforcer. This is unprecedented.

The ECB has acted to asphyxiate the Greek economy – the ultimate blackmail to force subordination. The money is there, in our accounts, but we cannot have access to it, because the overseers of our own banking system, the very people who some months ago issued guarantees of liquidity, have decided to deny liquidity. We have phantom money, but no real money. There is a terrifying poetry to that, since the entire crisis was caused by too much phantom money in the first place. [Continue reading…]

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Greece, honor and the ancient ties of wergeld

By Alexander Douglas, Heythrop College, University of London

On the surface, it seems the Greek crisis is all about money. The Greek government has defaulted on a €1.6bn loan repayment to the IMF and is seeking a new bailout programme. Meanwhile, the Greek people are to take part in a referendum that is being billed as a choice between the euro and the drachma.

In fact this crisis is not about money. Greece’s creditors are well aware that Greece cannot repay or even service its debt. They are happy to keep finding ways to refinance it, so long as Greece agrees to punitive austerity policies. They aim for punishment, not repayment. They care about honour and vengeance, not money.

Modern Europe is witnessing an enactment of an ancient law known as wergeld. Greece is expected to continue paying, not until its financial debt has been cleared, but rather until its creditors think it has suffered enough.

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Quartet of crises threatens Europe’s core

Paul Taylor writes: An economic collapse of Greece, apart from the suffering it would cause and the lost billions for European taxpayers, could aggravate all three of Europe’s other crises and destabilize the fragile southern Balkans.

With tension already high in the eastern Mediterranean due to civil war in Syria, the eternal Israeli-Palestinian conflict, the unresolved division of Cyprus and disputes over offshore gas fields, a shattered Greece might turn to Russia for help. In exchange, it might veto the next extension of EU sanctions against Moscow, or even offer access to naval facilities once used by the United States.

Athens is already struggling with an influx of refugees from the Syrian and Iraqi conflicts who wash up on its Aegean islands, seeking the safest transit route to Europe’s prosperous heartland in Germany or Sweden.

Cash-starved Greek authorities are more than happy to see them head north in search of asylum elsewhere in the EU. It is not hard to imagine a government cast out of the euro zone using migrants as a means of piling pressure on EU countries.

The “boat people” crisis has proved divisive in the EU, with Italy and other frontline states accusing their northern and eastern partners of lacking solidarity by refusing to co-finance or take in quotas of refugees. Britain has refused to take any.

Failure to resolve Greece’s debt crisis after five years of wrangling makes the EU look weak and divided in the eyes of Russian President Vladimir Putin, Chinese President Xi Jinping and others looking to expand their power.

Brussels officials acknowledge that the euro zone crisis has caused a renationalization of decision-making on some policies and sapped the “soft power” of Europe’s model of rules-based supranational governance. It has weakened the EU’s hand in world trade and climate change negotiations.

Worse may yet be to come.

Britain’s demand to renegotiate its membership terms and put the result to an uncertain referendum by 2017 raises the risk of the EU losing its second largest economy, main financial center and joint strongest military power. [Continue reading…]

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Europe wants to punish Greece with exit

Clive Cook writes: There’s no doubt that Greeks want to stay in the euro system — though I find it increasingly difficult to see why. If Greece leaves the system, it won’t be because Greeks decide to leave; it will be because Europe decides to kick them out.

This isn’t just semantics. There’s no reason, in law or logic, why a Greek default necessitates an exit from the euro. The European Central Bank pulls this trigger by choosing — choosing, please note — to withhold its services as lender of last resort to the Greek banking system. That is what it did this week. That is what shut the banks and, in short order, will force the Greek authorities to start issuing a parallel currency in the form of IOUs.

A truly independent ECB, willing to do whatever it takes to defend the euro system, could have announced that it would keep supplying Greek banks with liquidity. If the Greek banks are deemed in due course to be insolvent (which hasn’t happened yet), that doesn’t have to trigger an exit, either. Europe has the wherewithal and a bank-rescue mechanism that would allow the banks to be taken over and recapitalized. These options are foreclosed because the supposedly apolitical ECB has let Europe’s finance ministers use it as a hammer to extract fiscal concessions from Greece.

Nobody ever imagined that a government default in Europe would dictate ejection from the euro zone. The very possibility would have been correctly recognized as a fatal defect in the design of the system.

If the Greeks vote no, a Greek exit is a possible and even likely consequence. But if it happens, the reason won’t be that Greece chose to go. The reason will be that the European Union and its politicized central bank chose to inflict exit as punishment. [Continue reading…]

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Germany faces billions in losses if Greece goes bust

Der Spiegel reports: “So far, Germany hasn’t had to spend a single euro from the federal budget on Greece.” It’s a line one has heard dozens of times on German talk shows in recent years. Soon, though, the claim may no longer hold true. A Greek insolvency is now within the realm of possibility and if the country does go bust, it could directly burden the German federal budget.

But how many billions of euros in German money are actually at stake? It may seem like a simple question, but there are no easy answers, because Germany’s actual liability for Greek debt depends on a number of factors. [Continue reading…]

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Europe is heading towards constitutional crisis, with or without Greece

By Nicole Scicluna, University of Birmingham

As Greek Prime Minister Alexis Tsipras stands off against the so-called Troika, questions abound about the future of his country.

But there should also be pressing questions about the future of the European Union. The shaky legal foundations of the EU have been laid bare by this crisis.

Over the past few months, Greek officials and representatives of the Troika have indulged in a succession of tit-for-tat exchanges masquerading as negotiations.

These are only the latest proof of the failure of the EU’s political and legal structures to effectively mediate conflicts and resolve differences between members.

The negotiation of a new Fiscal Compact, the creation of multiple bailout funds, and the (potentially illegal) expansion of the European Central Bank’s (ECB) mandate all failed to solve the problems that sparked the crisis in the first place.

Now, five years after Greece’s first bailout, solidarity and trust between citizens, governments and EU institutions are in desperately short supply.

All of this indicates that the euro crisis is a crisis of EU constitutionalism. The union has failed to strike the right balance between democracy and technocratic governance. It has failed to balance the needs of citizens and states in a highly diverse supranational polity.

German academic Fritz Scharpf famously asked 16 years ago whether EU governance could be both effective and democratic. Right now, it appears to be neither.

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‘How dare you put such a complex issue to common folk?’

Business Insider: It’s crunch time on Sunday for Greece.

Citizens will help the government decide — in a “Yes” or “No” referendum — whether the government should accept the conditions that its creditors have put forward for a bailout deal.

In an interview with Australian radio host Phillip Adams on Thursday, Greek finance minister Yanis Varoufakis gave some color on what the Eurogroup reaction was at their meeting.

It was less than enthusiastic.

Here’s what Varoufakis had to say:

“I was told in no uncertain terms that this is a very strange and even inappropriate course of action that we’ve taken. And the argument that was given to me by a colleague in the Eurogroup, whose name will remain unsaid, while everybody was more or less nodding, was ‘how dare you put such a complex issue to common folk?’ And I was just looking at them astounded, thinking ‘you have just negated the whole principle of democracy, which is that the common folk determine government; they determine very complex questions during elections.'”

In an interview with Bloomberg on Thursday, Varoufakis said he would sign an agreement if Greeks decide to vote “Yes” to the creditors’ proposals, though this vote would force him to to resign. [Continue reading…]

On his blog, Yanis Varoufakis explains “why we recommend a NO in the referendum – in 6 short bullet points”:

  1. Negotiations have stalled because Greece’s creditors (a) refused to reduce our un-payable public debt and (b) insisted that it should be repaid ‘parametrically’ by the weakest members of our society, their children and their grandchildren
  2. The IMF, the United States’ government, many other governments around the globe, and most independent economists believe — along with us — that the debt must be restructured.
  3. The Eurogroup had previously (November 2012) conceded that the debt ought to be restructured but is refusing to commit to a debt restructure
  4. Since the announcement of the referendum, official Europe has sent signals that they are ready to discuss debt restructuring. These signals show that official Europe too would vote NO on its own ‘final’ offer.
  5. Greece will stay in the euro. Deposits in Greece’s banks are safe. Creditors have chosen the strategy of blackmail based on bank closures. The current impasse is due to this choice by the creditors and not by the Greek government discontinuing the negotiations or any Greek thoughts of Grexit and devaluation. Greece’s place in the Eurozone and in the European Union is non-negotiable.
  6. The future demands a proud Greece within the Eurozone and at the heart of Europe. This future demands that Greeks say a big NO on Sunday, that we stay in the Euro Area, and that, with the power vested upon us by that NO, we renegotiate Greece’s public debt as well as the distribution of burdens between the haves and the have nots.
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Europe’s attack on Greek democracy

Joseph E. Stiglitz writes: The rising crescendo of bickering and acrimony within Europe might seem to outsiders to be the inevitable result of the bitter endgame playing out between Greece and its creditors. In fact, European leaders are finally beginning to reveal the true nature of the ongoing debt dispute, and the answer is not pleasant: it is about power and democracy much more than money and economics.

Of course, the economics behind the program that the “troika” (the European Commission, the European Central Bank, and the International Monetary Fund) foisted on Greece five years ago has been abysmal, resulting in a 25% decline in the country’s GDP. I can think of no depression, ever, that has been so deliberate and had such catastrophic consequences: Greece’s rate of youth unemployment, for example, now exceeds 60%.

It is startling that the troika has refused to accept responsibility for any of this or admit how bad its forecasts and models have been. But what is even more surprising is that Europe’s leaders have not even learned. The troika is still demanding that Greece achieve a primary budget surplus (excluding interest payments) of 3.5% of GDP by 2018.

Economists around the world have condemned that target as punitive, because aiming for it will inevitably result in a deeper downturn. Indeed, even if Greece’s debt is restructured beyond anything imaginable, the country will remain in depression if voters there commit to the troika’s target in the snap referendum to be held this weekend. [Continue reading…]

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France prepares sanctions against Israeli settlement policy

Uri Savir writes: Inside the European Union there is an ongoing debate regarding the desirability and scope of sanctions and punitive resources in relation to the Israeli government’s settlement policies. According to a senior source in the French Foreign Ministry who spoke with Al-Monitor on condition of anonymity, France is considering sharp economic measures against Israeli goods and businesses east of the Green Line. Settlements, the French official argued, are illegal according to international law and the EU should not apply its agreements with Israel to them. Sharp economic measures would translate into labeling of goods exported from the settlements as such (and not as ”made in Israel”), and excluding Israeli academic, research and development and cultural institutions that are active in the West Bank from any European funds or grants. Brussels, according to this source, has toughened its stance on implementing these policies following Israel’s March 17 elections.

The French, the official added, are considering taking even more severe measures if a peace process on the two-state solution is not launched by the end of 2015. France intends to coordinate these policies with other EU countries.

In the meantime, the French themselves intend to rigidly ensure that all exported Israeli goods emanating from Israeli settlements are indeed labeled accordingly, and that any EU funding to Israeli entities will be dependent on the submission of a declaration stating that the entity in question has no direct or indirect links to the West Bank or East Jerusalem. Concretely, the first to be hurt by these measures would probably be Israeli banks with branches east of the Green Line. [Continue reading…]

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Greek destiny, the future of the EU and of democracy is on the line

Costas Douzinas writes: A man visits the Australian consulate in Athens and asks for a work visa. ‘Why do you want to leave Greece?’ asks the official. ‘I am worried that Greece will leave the euro’ answers the man. ‘Don’t worry’ responds the consul ‘I was talking to my German colleague yesterday who assured me that Greece will stay in the euro.’ ‘This is the second reason why I want to emigrate.’

The story expresses the impossible dilemma facing the Greeks. On one side, a continuation of the catastrophic austerity that has destroyed the country. On the other Grexit, a prospect that will further hit, for an unpredictably long period, the living standards of a people who have seen their income halved. Premier Alexis Tsipras’ announcement, early on Sunday, that the people will be asked to vote on the final proposals of the Europeans and the IMF is an attempt to divert this typical aporia (lack of passage) towards a more manageable question: Do the people back the government’s rejection of the worst effects of austerity while accepting its commitment to keep the country in the Eurozone? The stakes are high: besides the Greek destiny, the future of the European Union and of democracy is on the line.

The immediate context of the referendum is the behaviour of the European partners in the last few months. The Syriza government was elected with a clear mandate to put an end to austerity policies. These policies were carried out on two fronts, fiscal austerity and internal devaluation. Fiscal austerity was pursued through the reduction of public spending, the privatisation of key state assets and the increase of tax revenues. Large numbers of civil servants were dismissed, the social services were slashed with the health service in particular unable to meet basic needs. The humanitarian crisis that followed is well documented and there is no point in detailing it again. The creditors’ logic aimed to generate primary budget surpluses, which would not be used to restart the stalled economy but to repay the escalating debt. The previous governments had accepted the obligation to create annual surpluses of up to 5% of GDP in the next seven years, something that no government since Ceaușescu’s Romania has either attempted or achieved.

The internal devaluation was carried out through the repeated reduction of private sector wages and the abolition of the bulk of labour law protections, such a collective bargaining. At the same time, the repeated increase of taxes, including the regressive tax on real estate, meant that the bleeding of the economy reached unprecedented levels. The pauperisation of the working people, the IMF argument goes, would improve competitiveness and help economic growth. But the result was abject economic failure. The economy shrank by 26%, unemployment jumped to 27%, youth unemployment went up to 60% and more than 3 million people on or below the poverty line. The IMF admitted a couple of years ago that it had under-calculated the adverse effect of austerity on the economy – the so-called fiscal multiplier – by a factor of three.

It is against this background that the Greeks elected in January 2015 the Syriza government committed to reverse these policies. A period of negotiations followed. But these were not proper negotiations. The huge gap between the two parties in power resources and ideology made the talks brutally asymmetrical. I have called these ‘negotiations’ a European coup, an attempt at ‘regime change’ using banks and not tanks. The economic stakes for the lenders are relatively small – the Greek economy is only 2% of European GDP – and does not justify the risk of a breakdown in relations. The precautionary principle of risk theory, inscribed in the European DNA, demands that the unpredictable effects of Grexit on the European and world economy should be avoided. If the collapse of Lehman Brothers created such a huge crisis, even the consideration of Grexit is more dangerous. [Continue reading…]

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The euro is an experiment in making a currency without a government. That’s why it’s in trouble

Kathleen R. McNamara writes: The European Union appears to be on the brink of an unprecedented rupture. After months of meetings between the 19 E.U. states that use the euro, Greece broke off talks ahead of a June 30 deadline for continued financing of their vast debts and is likely to default and leave the euro.

Negotiations have dragged on for months. Facing harsh demands from Greece’s E.U. and IMF creditors for deep cuts in public spending and increased taxes, Prime Minister Alexis Tspiras abruptly announced on Friday that instead of continuing the talks, he would put the “humiliating” and “unbearable” bailout terms to a nationwide referendum on July 5. Critical stopgap financing from the European Central Bank (ECB) is also in jeopardy, and even if the referendum were to pass, it would be moot given the June 30 expiration of the credit line. Greeks prepared for the banks to be closed this coming week and capital controls instituted.

After 16 years of expanding membership, the euro zone now faces the real possibility that one of its core members, Greece, may spiral out of the currency and into economic chaos. [Continue reading…]

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Greece woes show how the politics of debt failed Europe

By Theo Papadopoulos, University of Bath

In the world of brinkmanship, endgames and last minute concessions that have come to define Greece’s relationship with Europe, we can see the blueprint of an abusive relationship.

In his book Governing by Debt, Maurizio Lazzarato argues that the creditor-debtor centred politics of contemporary capitalism is substantially different from the capital-labour centred politics of post-war capitalism. In fact, to understand what is at stake in contemporary Europe we need to approach debt in its totality – government, corporate, financial and household debt. We have to recognise that the debt relationship is not merely an economic relationship of money owed and collected, but a deeply political relationship of power exercised by one person or institution over another.

Consider the following graph. It shows the total debt by sector in selected EU countries at the end of 2014.


Data from McKinseyGlobal Institute (2015)

A continent sinking under debt

When debt is seen in its totality a different picture emerges from the one usually portrayed by the media. The total debts of the Netherlands and Ireland are nearly seven times their GDP, Denmark’s is 5.5 times and the UK’s more than four times. How sustainable in the long run are the levels of non-government debt in these countries? Is the exceptionally low exposure of the Greek financial sector to debt an indicator that its liabilities have been disguised as Greek government debt? And how sustainable is household debt?

Years of austerity have resulted in European families sinking under debt while experiencing increasing job insecurity, reductions in pensions and the gradual privatisation of welfare services and education.

These different types of debt are not independent from one other. They are mutually constitutive. Behind them are numerous creditor-debtor relations between actors with often diametrically opposed interests and unequal power: states, corporations, banks, financial institutions, small businesses, voters.

This “system” of European debt interacts with a global financial architecture, dominated by the demands of the financial sector. Far from being prudent, this sector is itself exposed to colossal amounts of debt-related risk, endangering all other sectors.

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