<div dir="ltr"><br><div class="gmail_quote">---------- Forwarded message ----------<br>From: <b class="gmail_sendername">peter waterman</b> <span dir="ltr"><<a href="mailto:peterwaterman1936@gmail.com">peterwaterman1936@gmail.com</a>></span><br>Date: Sat, Feb 28, 2015 at 12:20 AM<br>Subject: [NetworkedLabour] Fwd: Other News - What Greece Won<br>To: "<<a href="mailto:networkedlabour@lists.contrast.org">networkedlabour@lists.contrast.org</a>>" <<a href="mailto:networkedlabour@lists.contrast.org">networkedlabour@lists.contrast.org</a>><br><br><div dir="ltr"><div class="gmail_quote"><div dir="ltr"><div dir="ltr"><div style="FONT-SIZE:12pt;FONT-FAMILY:'Calibri';COLOR:#000000"><div><div style="FONT-SIZE:small;TEXT-DECORATION:none;FONT-FAMILY:"Calibri";FONT-WEIGHT:normal;COLOR:#000000;FONT-STYLE:normal;DISPLAY:inline"><div style="FONT-SIZE:small;TEXT-DECORATION:none;FONT-FAMILY:'Calibri';FONT-WEIGHT:normal;COLOR:#000000;FONT-STYLE:normal;DISPLAY:inline"><div style="FONT-SIZE:small;TEXT-DECORATION:none;FONT-FAMILY:'Calibri';FONT-WEIGHT:normal;COLOR:#000000;FONT-STYLE:normal;DISPLAY:inline"><div style="FONT-SIZE:small;TEXT-DECORATION:none;FONT-FAMILY:'Calibri';FONT-WEIGHT:normal;COLOR:#000000;FONT-STYLE:normal;DISPLAY:inline"><div style="FONT-SIZE:small;TEXT-DECORATION:none;FONT-FAMILY:'Calibri';FONT-WEIGHT:normal;COLOR:#000000;FONT-STYLE:normal;DISPLAY:inline"> <br><br><br></div>
<div><b>What Greece Won</b></div>
<div><b></b> </div>
<div><b><i><font>Paul Krugman* - The New York
Times</font></i></b></div>
<div> </div>
<div>Last week, after much drama, the new Greek government reached a deal with
its creditors. Earlier this week, the Greeks filled in some details on how they
intend to meet the terms. So how did it go?</div>
<div> </div>
<div>Well, if you were to believe many of the news reports and opinion pieces of
the past few days, you’d think that it was a disaster — that it was a
“surrender” on the part of Syriza, the new ruling coalition in Athens. Some
factions within Syriza apparently think so, too. But it wasn’t. On the contrary,
Greece came out of the negotiations pretty well, although the big fights are
still to come. And by doing O.K., Greece has done the rest of Europe a
favor.</div>
<div> </div>
<div>To make sense of what happened, you need to understand that the main issue
of contention involves just one number: the size of the Greek primary surplus,
the difference between government revenues and government expenditures not
counting interest on the debt. The primary surplus measures the resources that
Greece is actually transferring to its creditors. </div>
<div> </div>
<div>Everything else, including the notional size of the debt — which is a more
or less arbitrary number at this point, with little bearing on the amount anyone
expects Greece to pay — matters only to the extent that it affects the primary
surplus Greece is forced to run.</div>
<div> </div>
<div>For Greece to run any surplus at all — given the depression-level slump
that it’s in and the effect of that depression on revenues — is a remarkable
achievement, the result of incredible sacrifices. Nonetheless, Syriza has always
been clear that it intends to keep running a modest primary surplus. If you are
angry that the negotiations didn’t make room for a full reversal of austerity, a
turn toward Keynesian fiscal stimulus, you weren’t paying attention.</div>
<div> </div>
<div>The question instead was whether Greece would be forced to impose still
more austerity. The previous Greek government had agreed to a program under
which the primary surplus would triple over the next few years, at immense cost
to the nation’s economy and people.</div>
<div> </div>
<div>Why would any government agree to such a thing? Fear. Essentially,
successive leaders in Greece and other debtor nations haven’t dared to challenge
extreme creditor demands, for fear that they would be punished — that the
creditors would cut off their cash flow or, worse yet, implode their banking
system if they balked at ever-harsher budget cuts.</div>
<div> </div>
<div>So did the current Greek government back down and agree to aim for those
economy-busting surpluses? No, it didn’t. In fact, Greece won new flexibility
for this year, and the language about future surpluses was obscure. It could
mean anything or nothing.</div>
<div> </div>
<div>And the creditors did not pull the plug. Instead, they made financing
available to carry Greece through the next few months. That is, if you like,
putting Greece on a short leash, and it means that the big fight over the future
is yet to come. But the Greek government didn’t succumb to the bum’s rush, and
that in itself is a kind of victory.</div>
<div> </div>
<div>Why, then, all the negative reporting? To be fair, fiscal policy isn’t the
only issue. There were and are also arguments about things like privatization of
public assets, where Syriza has agreed not to reverse deals already made, and
labor market regulation, where some of the “structural reform” of the austerity
era will apparently stand. Syriza also agreed to crack down on tax evasion,
although why collecting taxes is supposed to be a defeat for a leftist
government is a mystery to me. </div>
<div> </div>
<div>Still, nothing that just happened justifies the pervasive rhetoric of
failure. Actually, my sense is that we’re seeing an unholy alliance here between
left-leaning writers with unrealistic expectations and the business press, which
likes the story of Greek debacle because that’s what is supposed to happen to
uppity debtors. But there was no debacle. Provisionally, at least, Greece seems
to have ended the cycle of ever-more-savage austerity.</div>
<div> </div>
<div>And, as I said, in so doing, Greece has done the rest of Europe a favor.
Remember, in the background of the Greek drama is a European economy that,
despite some positive numbers lately, still seems to be sliding into a
deflationary trap. Europe as a whole desperately needs to end austerity madness,
and this week there have been some slightly positive signs. Notably, the
European Commission has decided not to fine France and Italy for exceeding their
deficit targets.</div>
<div> </div>
<div>Levying these fines would have been insane given market realities; France
can borrow for five years at an interest rate of 0.002 percent. That’s right,
0.002 percent. But we’ve seen a lot of similar insanity in recent years. And you
have to wonder whether the Greek story played a role in this outbreak of
reasonableness.</div>
<div> </div>
<div>Meanwhile, the first real debtor revolt against austerity is off to a
decent start, even if nobody believes it. What’s the Greek for “Keep calm and
carry on”? FEB. 27, 2015 </div>
<div> </div>
<div><i><b><font size="1">*American economist, Professor of Economics and
International Affairs at the Woodrow Wilson School of Public and International
Affairs at Princeton University, Centenary Professor at the London School of
Economics, and an op-ed columnist for The New York Times . He was awarded the
Nobel Memorial Prize in Economic Science in 2008.</font></b></i></div>
<div><b><i></i></b> </div>
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<br></div><br><br clear="all"><div><br></div>-- <br><div class="gmail_signature"><div dir="ltr"><div><div dir="ltr"><div>Check out the Commons Transition Plan here at: <a href="http://commonstransition.org" target="_blank">http://commonstransition.org</a> </div><div><br></div>P2P Foundation: <a href="http://p2pfoundation.net" target="_blank">http://p2pfoundation.net</a> - <a href="http://blog.p2pfoundation.net" target="_blank">http://blog.p2pfoundation.net</a> <br><br><a href="http://lists.ourproject.org/cgi-bin/mailman/listinfo/p2p-foundation" target="_blank"></a>Updates: <a href="http://twitter.com/mbauwens" target="_blank">http://twitter.com/mbauwens</a>; <a href="http://www.facebook.com/mbauwens" target="_blank">http://www.facebook.com/mbauwens</a><br><br>#82 on the (En)Rich list: <a href="http://enrichlist.org/the-complete-list/" target="_blank">http://enrichlist.org/the-complete-list/</a> <br></div></div></div></div>
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