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.

Read more: Greece Exposes The Flaws Of A Wrong Europe » Social Europe

The EU: Our manifesto for Europe - by Thomas Piketty

The European Union is experiencing an existential crisis, as the European elections will soon brutally remind us. This mainly involves the eurozone countries, which are mired in a climate of distrust and a debt crisis that is very far from over: unemployment persists and deflation threatens. Nothing could be further from the truth than imagining that the worst is behind us.

This is why we welcome with great interest the proposals made at the end of 2013 by our German friends from the Glienicke group for strengthening the political and fiscal union of the eurozone countries. Alone, our two countries will soon not weigh much in the world economy. If we do not unite in time to bring our model of society into the process of globalisation, then the temptation to retreat into our national borders will eventually prevail and give rise to tensions that will make the difficulties of union pale in comparison.

In some ways, the European debate is much more advanced in Germany than in France. As economists, political scientists, journalists and, above all, citizens of France and Europe, we do not accept the sense of resignation that is paralysing our country. Through this manifesto, we would like to contribute to the debate on the democratic future of Europe and take the proposals of the Glienicke group still further.

It is time to recognise that Europe's existing institutions are dysfunctional and need to be rebuilt. The central issue is simple: democracy and the public authorities must be enabled to regain control of and effectively regulate 21st century globalised financial capitalism.

A single currency with 18 different public debts on which the markets can freely speculate, and 18 tax and benefit systems in unbridled rivalry with each other, is not working, and will never work.

The eurozone countries have chosen to share their monetary sovereignty, and hence to give up the weapon of unilateral devaluation, but without developing new common economic, fiscal and budgetary instruments. This no man's land is the worst of all worlds.

Read more: Our manifesto for Europe | Thomas Piketty | Comment is free | The Guardian

The fiscal cliff deal: America’s European moment

For the past three years America’s leaders have looked on Europe’s management of the euro crisis with barely disguised contempt. In the White House and on Capitol Hill there has been incredulity that Europe’s politicians could be so incompetent at handling an economic problem; so addicted to last-minute, short-term fixes; and so incapable of agreeing on a long-term strategy for the single currency.

Those criticisms were all valid, but now those who made them should take the planks from their own eyes. America’s economy may not be in as bad a state as Europe’s, but the failures of its politicians—epitomised by this week’s 11th-hour deal to avoid the calamity of the “fiscal cliff”—suggest that Washington’s pattern of dysfunction is disturbingly similar to the euro zone’s in three depressing ways.

The first is an inability to get beyond patching up. Two: the temporary fix ignored America’s underlying fiscal problems and the third parallel is that politicians have failed to be honest with voters. Just as Chancellor Angela Merkel and President François Hollande have avoided coming clean to the Germans and the French about what it will take to save the single currency, so neither Mr Obama nor the Republican leaders have been brave enough to tell Americans what it will really take to fix the fiscal mess.

Read more: The fiscal cliff deal: America’s European moment | The Economist