Habermas on the EU/Greece debt deal

18 July, 2015 at 14:28 | Posted in Economics | 2 Comments

Guardian: What is your verdict on the deal reached on Monday?

ahabHabermas: The Greek debt deal announced on Monday morning is damaging both in its result and the way in which it was reached. First, the outcome of the talks is ill-advised. Even if one were to consider the strangulating terms of the deal the right course of action, one cannot expect these reforms to be enacted by a government which by its own admission does not believe in the terms of the agreement.

Secondly, the outcome does not make sense in economic terms because of the toxic mixture of necessary structural reforms of state and economy with further neoliberal impositions that will completely discourage an exhausted Greek population and kill any impetus to growth.

Thirdly, the outcome means that a helpless European Council is effectively declaring itself politically bankrupt: the de facto relegation of a member state to the status of a protectorate openly contradicts the democratic principles of the European Union. Finally, the outcome is disgraceful because forcing the Greek government to agree to an economically questionable, predominantly symbolic privatisation fund cannot be understood as anything other than an act of punishment against a left-wing government. It’s hard to see how more damage could be done.

And yet the German government did just this when finance minister Schaeuble threatened Greek exit from the euro, thus unashamedly revealing itself as Europe’s chief disciplinarian. The German government thereby made for the first time a manifest claim for German hegemony in Europe – this, at any rate, is how things are perceived in the rest of Europe, and this perception defines the reality that counts. I fear that the German government, including its social democratic faction, have gambled away in one night all the political capital that a better Germany had accumulated in half a century – and by “better” I mean a Germany characterised by greater political sensitivity and a post-national mentality.

The Guardian

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  1. “…Schaeuble threatened Greek exit from the euro”. Mein Gott. Wicked Herr Schaeuble. Given that countries OUTSIDE the EZ have done better than those inside since 2007 (see link below), “threatening” Greece with Grexit seems to me a bit like “threatening” them with a cheque for ten billion Euros. If anyone wants to “threaten” me with a cheque for that amount, please go right ahead. In fact, out of the kindness of my heart, I won’t object if two or three zeros are knocked off that figure. But I’d prefer the full amount.

    http://marketmonetarist.com/2015/07/14/the-euro-a-monetary-strangulation-mechanism/

  2. A fascinating perspective from one of the great minds of our time. Thanks.


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