Do Not Fear Austerity: A Public Meeting with Yanis Varoufakis

coinsAlessandro de Arcangelis, UCL PhD student in History, reports on a ‘public meeting’ with Yanis Varoufakis, and his advice to Jeremy Corbyn.

It is shortly after 19.00 when the crowd gathered at the Emmanuel Centre in Westminster bursts into a thunderous applause. Former Greek finance minister Yanis Varoufakis walks on stage with unassuming composure. The event, organised on 14 September 2015 by the anti-austerity movement The People’s Assembly, sold out in a matter of hours and dozens of people are standing at the back of the room, patiently waiting to hear the polarizing and often controversial Greek politician’s address.

Hanging above the speakers’ table is a quotation from John 10:10, whose towering presence is made rather apposite by the vibrant left-leaning atmosphere: “The thief cometh not, but for to steal, and to kill, and to destroy: I am come that they might have life, and that they might have it more abundantly”. Beneath it, the panel is impressive: Paul Mackney, former trade union leader; Romayne Phoenix, the chair of the People’s Assembly; James Meadway, New Economics Foundation chief economist;  Rosa Pavanelli, General Secretary of Public Services International; Diane Abbott, Labour MP; and, obviously, Yanis Varoufakis. Rumour has it that the newly elected Labour leader Jeremy Corbyn may eventually arrive to join the other speakers, but he is at the House of Commons, voting against trade union reforms. Continue reading

What now for the Eurozone? A look at Germany, Grexit and Cameron’s pursuit of EU reform

Nina Trentmann, UK Business Correspondent at Die Welt, takes a look at the EU and the Eurozone in the wake of the most recent Greek bailout. With key German political figures in disagreement about in which direction to move, what might this mean for David Cameron’s chances of successfully negotiating EU reform? 

During the last couple of months, I have been asked quite frequently: what does Germany think? About Greece, about another bailout, about the Euro? I found that funny at times, given that Germany is a country of more then 80 million people who often have contrasting views, especially on topics which have been debated as hotly as the Greek debt crisis.

Although there is now some sort of agreement between Greece and its international creditors – the country remains in the Eurozone, there will be more emergency funds from the European partners, the ECB is continuing to support Greek banks – it has become quite obvious that this is only a solution for a short period of time. This has been amplified in the rift between Chancellor Angela Merkel and her finance minister Wolfgang Schäuble who, despite coming from the same party, the Christian Democratic Union, are now openly disagreeing on how to proceed in general with the Euro and with Greece in particular.

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Greece: a crisis of trust?

Geoffrey Hosking, Emeritus Professor of Russian History at UCL’s School of Slavonic and East European Studies, gives his view of what went wrong before and during the Greek crisis, and of the challenges that now lie ahead. To him the problem is centrally one of a lack of trust.

The Greek crisis goes back a long way, and at several stages demonstrated the dangers of a loss of trust.

The epic began with the creation of the euro, which was set up without several of the trust-generating stabilisers of national currencies: a common fiscal policy, a central ministry of finance and a central bank empowered to act as a lender of last resort.  Without these essentials, the euro lacked the full and credible commitment of all its members, an essential prerequisite of mutual trust. A member nation could no longer cope with serious crises by devaluing its currency, yet no provision was made for a solidarity fund (the euro equivalent of the IMF) to deal with crises collectively.

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Greece, the EU, and the Democratic Conundrum

In this post, Nicola Countouris, Reader at the UCL Faculty of Laws, analyses the reasons why the Greeks may have rejected the creditor institutions’ economic and reform proposals. Arguing that frustration is not the only explanation for Tsipras’  win at the ballot box, and recognising the daunting challenge that lie ahead of the 19 Eurozone democracies, he argues that Europe’s constitutional envelope can be spacious enough to accommodate different versions of democratic economic and human aspirations.

For the second time in six months the Greeks have voted for a political project (which many have and will continue to describe as a ‘political adventure’) that runs against the grain of the unanimous expectations and imperatives of the EU institutions, the IMF, and the bulk of both centre-right and centre-left European governments. Against the odds, against the economic and reform instructions imparted by the lending institutions, and – many will say – against their best interest, the Greeks have refused to conform, and have flatly rejected on two occasions now, the politics of austerity.

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In bad faith

Ashoka Mody, Visiting Professor at Princeton University and former Deputy Director in the IMF’s Research and European Departments, critiques the IMF report published on 2 July, on the eve of Greece’s referendum. This report found that Greek debt was not sustainable and deep debt relief along with substantial new financing was needed to stabilize Greece. This report, according to Mody, reveals that the creditors negotiated with Greece in bad faith. He suggests that the Greek debt burden is much greater than portrayed by the report, and that the policy measures proposed to reduce that burden, including more austerity, will make matters worse. This article was first published on bruegel.

On 2 July, the IMF released its analysis of whether Greek debt was sustainable or not.  The report said that Greek debt was not sustainable and deep debt relief along with substantial new financing were needed to stabilize Greece. In reaching this new assessment, the IMF stated it had learned many lessons. Among them: Greeks would not take adequate structural reforms to spur growth, they would not sell enough of their assets to repay their debt, and they were unable to undertake sufficient fiscal austerity. That left no choice but to grant Greece greater debt relief and to provide new financing to tide Greece over till it could stand on its own feet. The relief, the IMF, says must be provided by European creditors while the IMF is repaid in whole.

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