Greek Crisis: Paul Krugman on Ending Greece’s Bleeding

Ending Greece’s Bleeding

 –  By Paul Krugman, NYT JULY 5, 2015. Full text here.

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. A “yes” vote in Greece would have condemned the country to years more of suffering under policies that haven’t worked and in fact, given the arithmetic, can’t work: austerity probably shrinks the economy faster than it reduces debt, so that all the suffering serves no purpose. The landslide victory of the “no” side offers at least a chance for an escape from this trap.

But how can such an escape be managed? Is there any way for Greece to remain in the euro? And is this desirable in any case?

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More from this series at:

*   Thinking about Economy and Democracy – here.

*   World Streets on the Greek Crisis – here.

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About the author:

Eric Britton
13, rue Pasteur. Courbevoie 92400 France

Bio: Founding editor of World Streets (1988), Eric Britton is an American political scientist, teacher, occasional consultant, and sustainability activist who has observed, learned, taught and worked on missions and advisory assignments on all continents. In the autumn of 2019, he committed his remaining life work to the challenges of aggressively countering climate change and specifically greenhouse gas emissions emanating from the mobility sector. He is not worried about running out of work. Further background and updates: @ericbritton | http://bit.ly/2Ti8LsX | #fekbritton | https://twitter.com/ericbritton | and | https://www.linkedin.com/in/ericbritton/ Contact: climate@newmobility.org) | +336 508 80787 (Also WhatApp) | Skype: newmobility.)

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