Greg Palast has some very incisive comments regarding the Euro's true purpose:
"
Not a coin, a virus
Tsipras’ claim that Greece can keep the euro while rejecting austerity
is crazy-talk. The fact is that German Chancellor Angela Merkel, the
Cruella De Vil of the Eurozone, will ignore the cries of the bleeding
Greeks and demand we swallow austerity--or lose the euro.
But, so what if we lose the euro? The best thing that can happen to Greece, and should have happened long, long ago, is that Greece flee the Eurozone.
That’s because it is the euro itself that is the virus responsible for Greece’s economic ills.
Indeed, the sadistic commitment to “austerity” was minted into the
coin’s very metal. We’re not guessing. One of us (Palast, an economist
by training) has had long talks with the acknowledged “father” of the
euro, Professor Robert Mundell. It’s important to mention the other
little bastard spawned by the late Prof. Mundell: “supply-side”
economics, otherwise known as “Reaganomics,” “Thatcherism” – or, simply
“voodoo” economics.
The imposition of the euro had one true goal: To end the European welfare state.
For Mundell and the politicians who seized on his currency concept,
the euro itself would be the vector infecting the European body politic
with supply-side Reaganomics. Mundell saw a euro’d Europe as free of
trade unions and government regulations; a Europe in which the votes of
parliaments were meaningless. Each Eurozone nation, unable to control
neither the value of its own currency, nor its own budget, nor its own
fiscal policy, could only compete for business by slashing regulations
and taxes. Mundell said, "[The euro] puts monetary policy out of the
reach of politicians… Without fiscal policy, the only way nations can
keep jobs is by the competitive reduction of rules on business."
Here’s how it works. To join the Eurozone, nations must agree to keep
their deficits to no more than 3% of GDP and total debt to no more than
60% of GDP. In a recession, that’s plain insane. By contrast, President
Obama pulled the USA out of recession by increasing deficit spending to
a staggering 9.8% of GDP, and he raised the nation’s debt to 101% from a pre-recession 62%. Republicans screamed, but it worked. The US has lower unemployment than any Eurozone nation.
As Obama scolded the European tormentors of Greece: “You cannot keep
on squeezing countries that are in the midst of depression.” Cutting
spending power only leads to less spending which leads to further cuts
in spending power – a death spiral we see today in the Eurozone from
Greece to Italy to Spain—but not in Germany.
“Not in Germany.” There’s the rub. Normally, a nation such as Greece
can quickly recover from debt-induced recession by devaluing its
currency. Greece would become a dirt cheap tourist destination once more
and its lower-cost exports would zoom, instantly increasing
competitiveness. And that’s what Germany can’t allow. Germany lured
other European nations into the euro in order to keep them from
undercutting Germany’s prices in export markets.
Restricted by the 3% deficit rule, the only recourse left for Eurozone debtors: pay the piper with “austerity” measures.
Tsipras in Wonderland
So therein lies the lie. Tsipras tells his fellow Greeks that we can
live in a Looking Glass world, where we can have our euro and eat it
too; that we can stay handcuffed to the euro but run free without
austerity.
The nonsense continues: Following the announcement of the official
results of the referendum on Sunday night, Tsipras tweeted that the
Greek electorate voted for a "Europe of solidarity and democracy," while
the now-resigned finance minister Varoufakis tweeted that "Greece's
place in the Eurozone is non-negotiable," claiming that he would not
allow the "only alternative," the old drachma trading alongside the
euro.
SYRIZA's euro-fetish was already evident in its pre-referendum proposals to the IMF and European Bank, a 47-page document
which included 8 billion euros in new austerity measures plus a new
round of sell-offs of state industries, the maintenance of a primary
surplus of 1% this year which would increase in the coming years, the
increase of the retirement age to 67, and making permanent the
previously "temporary" taxes upon an already overtaxed populace. In
Tsipras’ own proposal, there was no word of a debt write-down or
stoppage of payments, despite the fact that the government's own Debt Audit Commission announced on June 17 that the bulk of Greece's debt is illegal, “odious,” and should not be paid.
Instead, Tsipras has come out in support of the IMF's proposal for a
mere 30% "debt haircut" and a 20-year grace period, effectively sweeping
the problem under the rug. Greece is currently running a deficit,
meaning that in order for the 1% surplus to be achieved, SYRIZA must
cut, cut, cut. Exactly as Mundell and the supply-siders intended.
Death by “Reform”
Like Obama, Tsipras knows that cutting pensions, privatizing and closing
industries, slashing wages – in other words, “austerity” -- or, to use
the latest jargon, “reform” – is not just cruel, it’s plain stupid: it
can only push a nation in recession into depression.
That’s not just theory. The Troika (the European Central Bank, IMF
and European Commission) first imposed their vicious austerity measures
on Greece in 2010. Greeks watched their annual salaries plummet
to half of a German’s paycheck. Greece's supposedly generous pensions
have been cut eight times during the crisis, while two-thirds of
pensioners live below the poverty line. Everything from Greece's
airports to harbors, the national lottery to prime publicly-owned real
estate was sold off, while schools and hospitals were shuttered.
And, for the first time since World War II, widespread starvation had
returned. 500,000 children in Greece are said to be malnourished.
Students fainting from hunger in frigid schools which cannot afford
heating oil is now a common phenomenon.
This cruel “belt tightening,” the Troika promised, would restore
Greece’s economy by 2012 (and then 2013, 2014, and 2015). In reality,
unemployment went from a terrible 12.5% in 2010 to a horrendous 25.6%
today."
Now, the Troika demands more of the same, a continuation of this disastrous policy.
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