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The two scenarios now facing Greece

Alexis Tsipras, GreeceThe victory of ‘no’ opens two scenarios. The most likely is the further effort by the Syriza-led government to reach a new agreement with the Troika, but it is not clear why it should be given something that had not been given before. The financial upheaval of recent days may be such as to induce the Troika to grant Syriza an agreement to save the face of all. But the substance would be the continuation of austerity.

Instead, a decisive choice to leave the euro and the EU would put Greece in a situation that would be unique in Europe, a country that decides to regain their economic and democratic independence. This requires enormous political courage and determination. The country would enter into a kind of war economy, or more precisely in an economy of controls, those that the influential Italian economist Federico Caffè saw as necessary to ensure full employment.

Controlling the movement of capital is the most obvious measure; import controls are its complement. This means that the (scarce) hard currency in the country, is allocated by the state to import the most important  things – medicines, industrial goods and energy etc. – and by blocking imports of superfluous luxury goods. In this framework, the restored monetary sovereignty will enable a revival in domestic demand, while a limited devaluation of the drachma will make the country even more attractive to tourism.  Price controls (and wages) will also be necessary, as will the use resources to relaunch industrial policy. No miracles, for certain, but and end to austerity. Greece would need allies with which to seal international economic agreements, and there are some out there. This will also create enemies, who will try to destabilize it – needless to mention names.

Freeing Greece of European constraints and neo-liberalism would be a momentous lesson for the European left (the Latin American left is well ahead on this front). The European left should accept that between condescension toward Europe (there is only one of them) and political and intellectual recovery, there are options that were in the armoury of economics up to 40 years ago. We should begin discuss them. Let’s not miss this opportunity.

This article originally appeared on Revolting Europe


  1. swatantra says:

    here is a 3rd, and that is to become a satellite of Russia. In the past there have always been links with the USSR, indeed the communist party was once quite strong I Greece. But those days have been replaced by Social Democracy sort of sweeping across the Balkans, and yer some still yearn for the days of order and stability and peace when anybody could go shopping on the street shopping for a pitta and a litre of milk. Stability Peace and Plenty. That is what ordinary people want most of the time out of life. They had it once in Iraq and Syria and Libya; and then some smart alec had an idea about introducing ‘social democracy’; now all is in ruins.

  2. Robert says:

    Your forgetting the one they are doing, we give in,

  3. Mervyn Hyde says:

    I agree the second choice is the only real option, the Neo-Liberal agenda is wide open with those willing to look, Greece has been systematically dismantled, until Syriza arrived on the scene.

    To give in now would only be kicking the can down the road and Syriza would be the losers, It really is time to tell Europe’s leaders to stop lying and do the right thing or Greece will default, we here in Britain can show our solidarity, as can others around Europe.

    This senator, Bernie Sanders said this back in 2011 see if you can a similarity to the position Merkel and her friends are putting Greece in.

  4. Robert says:

    Germany are winning the third world war with ease, but it’s own people are demanding change and Merkel has just accepted the lowering of the retirement age for the public sector to 63 with a view to it becoming 60 while demanding others put up retirement to near 70.

    SO I would say now that Greece has agreed to stop people retiring until they are 68 with a view of it being 70 as Germany demand.

    Greece without doubt has issue when hairdressers are classed as being a dangerous profession allowed to retire at 50 .

    OK this ended some years ago but still so many people can retire at fifty, police fire officers and others who use chemicals like hairdressers.

    But with a strong trade Union in Greece I can see the labour movement in Greece disagreeing with the sell out.

    According to the government they have no choice so then why did they stand for power, why have they caused all these problems only to capitulate.

  5. gerry says:

    You have to laugh – the supposedly “far-left” anti- austerity Syriza has, along with a majority of MPs, voted to ratify the austerity programme offered at the last minute to the EU!

    And that programme – tax hikes, privatisations, pension age hikes – is actually more austerity than the previous centre-right and centre-Left governments were offering.

    Syriza is in effect saying: there is no alternative to neoliberalism and austerity, because above all else we want to stay in the Eurozone and be part of the EU. And big majorities of Greeks seem to agree, if grudgingly.

    To have so u-turned their politics so quickly is staggering! And how the EU, Tories, neoliberals of every kind must be celebrating – the forces of conservatism win again(and again)…

  6. Barry Ewart says:

    Germany was given a free haircut in 1953 when half of its Pre-War debts were written off, to win it politically to the capitalist sphere.
    The Right wing CDU Govt in Germany sees itself as currently the top dog in Europe, but it is not as strong economically as it makes out- it is basically its engineering exports to the likes of China that is sustaining it (whilst for the rest of the working class and progressive middle class in Germany it has been years of wage suppression).
    With the current financial crisis in China if the Govt there doesn’t sort this out then China may be about to give the Right wing Germany Govt a short back and sides with reduced orders.
    Germany going to the EC for a bailout in a few years?
    It is heartbreaking what the Greek people have been going through in recent years and I stand with Greece (and Syriza) and the other struggling EC economies.
    The EC needs to think big – write of all the debts of struggling countries (and remember many of the major EC countries including the UK have bailed themselves out with quantitative easing – denied to Greece) and start afresh with state led public investment.
    The key question really is, is the EC about European solidarity first, or are we all just the servants of Neo-Liberalism? Yours in solidarity!

  7. swatantra says:

    The Germans got their ‘haircut ‘ back in ’53 because they put their noses to the grindstone and rolled up their sleeves and made the Economy work. Whereas the Greeks took a holiday and rolled up their trouser and went paddling on the beaches. And now the kebabs have come home to pot.
    The ‘Settlement ‘ will be harsh but in another 5 years the Greeks might well be laughing to their Banks getting more than60 Euros a day out. its tough, but it has to be done.
    Its all about solidarity Barry, we don’t want another Franco-Prussian War thank you and the Brits then having to sort Europe out bringing peace and security back again.
    Incidently, its just occurred to me that this Greek PM looks remarkably like Andy Burnham.

    1. Mervyn Hyde says:

      Look Swat, why do you have a nom de plume instead of your real name, I’m proud to admit that I am a socialist, or are you just a right wing MP that does not want to be recognised.

      1. swatantra says:

        I’m also proud to be a democratic socialist, but I’m not a ‘bleeding heart socialist’, thank you. We’ve had too many of those in the past and they’ve cost the Party, and Country, dearly.

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