As I foresaw a few days back, thanks to the January 25 victory by Syriza in the Greek Paliamentary elections and the subsequent birth of the first pro-growth Government in the Economic and Monetary Union (UEM), we finally have the chance to debate the ‘destiny of the Union’. Which is something that we could not have done for years, ever since the austerians sized power and took hold of 19 governments out of 19. Now that the die-hard of austerity, those of the sophisticated thought political and economic, those of the ‘debts must be paid”, are only 18, the dictatorship of the austerian thought can be challanged, because that small ‘1’ makes a difference. Now we can be heard, now there is one Government to whom the unemployed, the intellectuals, the large majority of economists, who reject austerity but whom the politicians to not want to hear, politicla minorieties, etc. can look up to. We can speak. Which may turn ut to be the starting point of a path leading out of the devastation that the austerians are actively promoting since 2009.
Let us see why.
What the austerians suggest should be done (the 18)
Debts must be paid.
What the Greek Government suggest could be done (the 1)
0. “I am the Finance Minister of a bankrupt Country” (Yanis Varoufakis);
1. Restructuring of the existing debt held by Insitututions to take advantage of currently very low market rates. A workable hypothesis could be conversion of existing bonds in perpetual bonds;
2. Restructuring of the existing debt held by the banks swapping it with newly-issued debt whose return could be anchored to the growth of nominal Greece’s GDP (an idea that economists know very welll.. and that could be applied to a whole lot of other countries).
Just two short comments
1.The die hard of the ‘debts must be paid’ did not know, or pretended they did not know, that the Greek economy is virtually dead (like others in the UEM, by the way). Now that they have been told, they know. Let us see whether knowing will help them understand that solutions is what is needed, not slogans;
2. The Greek Government is not at all looking for ‘discounts’, as the austerians would want us to believe.