Greece Exposes The Flaws Of A Wrong Europe - by Mehmet Ugur and Ozlem Onaran

The Greek people, their newly-elected government and many Europeans and non-Europeans with a sense of justice, history and solidarity, have been shouting loud: the “Greek problem” is a consequence of neo-liberal economic and financial policies that have become increasingly dysfunctional and dangerous. The problem has been made worse by the ascendance of sheer inter-governmentalism in Europe.

Both neo-liberalism and inter-governmentalism are the results of collusion between economic, financial and political elites in Europe, aided by economists, political scientists, lawyers, analysts and journalists with a conservative outlook. The symbiotic relationship between these two has been feeding on the spoils of increasingly unequal wealth accumulation. Their narrative about “Greeks living beyond their means” is nothing but an unashamed distortion of facts about both the present and the past.

The distortion of current facts takes the form of preaching to the Greek people on how they should show penance despite the facts on the ground. The origin of Greek debt, like subprime lending in the US and, given the general dysfunctionality of the financial system as laid bare by the Great Recession, is a result of reckless lending by private banks. Accommodating economic policies and perverse financial regulations have facilitated this – just as much as the symbiotic relations between the European arms industry and corrupt politicians in Greece, and tax evaders in Greece and tax havens in Luxembourg and elsewhere in Europe.

This distortion takes the form of misleading public opinion despite evidence that the ruling elite has secreted away. The conservative European elites and their henchmen have been pushing Greece towards destruction despite IMF documents showing that austerity is unlikely to make Greek debt either repayable or sustainable in the medium- to long-term.

The conservative rhetoric distorts the history of Europe too. Europe prospered and avoided repeated crises and wars only when it found collaborative solutions to collective problems. The leading proponent of austerity, Germany, was by far the biggest beneficiary of debt forgiveness. After World War I Keynes argued in the Economic Consequences of the Peace that the Versailles Treaty was a “Carthaginian peace” that would ruin Europe rather than set the conditions for economic recovery. This is very important not only because the demand for solidarity with the German people came from a scholar at the winning side, but also because the demand was made despite the fact reparations were meant to compensate for the human and material costs of more sinister German military actions in the form of war.

Note EU-Digest: Excellent report on the flaws of the European monetary and political structures which can be traced back to European Conservative Political forces copying and linking themselves to the "ruthless and corrupt" US financial system and the general dysfunctionality of that system, as laid bare by the 2007-2009 recession. This in addition to the reckless lending by private banks and accommodating economic policies and perverse financial regulations. When will Europe understand that the future of Europe must depend on our own needs and objectives and not be influenced by "surrogate" decisions on the other side of the Atlantic, as it unfortunately is today.

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