Europe is in the clasps of the deflationary forces that resulted directly from its inane handling of the Eurozone crisis. In this interview, I discuss deflation and low-flation and suggest a particular form of quantitative easing that, unlike the Fed’s or the Bank of England’s QE, will not reinflate the bubbles of the financial sector but, instead, will help recycle idle savings into productive investments in Europe’s real economy. Continue reading
Eurobank is an apt example of Greek ingenuity. Its name is a coup in itself. Beyond semantics, however, and coming to recent developments, Eurobank is a wonderful example of the Greek establishment’s ingenious efforts to defraud Greek and European taxpayers, and then to proclaim a glorious Greek Success Story, weeks before the European Parliament elections. (You have already seen, here, the other plank of this campaign, also known as the Greek primary ‘surplus’…) Continue reading
Over the past year I have argued that Europe needs a jolt. Continue reading
A group of noted international economists (including Joseph Stiglitz, Peter Bofinger and Stefanie Griffith-Jones), known as the European Progressive Policy Initiative (EPPI), has issued a policy paper that endorses the main planks of our Modest Proposal for Resolving the Euro Crisis 4.0.
EPPI was assembled in 2013 by Europe’s social democratic alliance in the European Parliament. This is significant, given the social democrats acquiescence to the Merkel-led toxic policies, which are causing Europe to fragment. Coming, as it does, a few weeks before the European Parliament Election, this policy document flags the potential for breaking the stranglehold over European politics of the indefensible ‘official EU position’, i.e. the toxic trio of claims that: Europe is on the mend – Austerity is working – Europe has taken important steps in shoring up the Eurozone’s institutions).
ELSTAT, the official Greek statistical service, has put out a document in response to my post unveiling, what I call, their New Greek Statistics over the calculation of the Greek government’s primary budget outcome for 2013. In addition, Eurostat gave an informal response to various journalists who took the matter to them. Full marks for defending the indefensible. Continue reading
It is official! The Greek government now confirms that the much lauded Greek government primary surplus for 2013 was a mirage created by the return of Greek Statistics (see this recent post). And also that the statistical trickery involved had the full approval of Eurostat, of the troika, of Berlin etc. The ‘confession’ has come in the form of the deafening silence in response to the revelation that approximately €5 .4 billion was taken off government expenditure through the discovery of a non-existent ‘white hole’ in the government’s revenues. Yesterday, a tweet from a spoof account in the name of a Finance Ministry official reminded me that the New Greek Statistics are highly reminiscent of the Old Greek Statistics… Continue reading
In his latest Financial Times column Wolfgang Münchau concurs with much of what I have written here (on the Greek social economy’s deep coma) and here (on the reasons why investors are piling in) but goes on to suggest that Greece should seriously consider exiting the Eurozone. In today’s post I offer an evaluation of his argument. In brief, I argue that, while Münchau’s assessment of the situation on the ground is spot on, the use of the ‘nuclear option’ (i.e. threatening to exit the Eurozone) is neither desirable nor necessary as a means of forcing Europe to change its ways. Continue reading
Greece is about to issue 5 year bonds again. Berlin, Brussels, Frankfurt and Athens are celebrating Greece’s recovery. For my part, I think (and tell the BBC World Service) that this is a sad day for Greece and it is a sad day for Europe. Why do I refuse to be impressed and join in the celebrations? It is because the Greek state and the Greek banks remain deeply insolvent. And, their return to the money markets is a harbinger of the next terrible phase of Greece’s crisis, rather than a cause for celebration. Continue reading
The Irish and the Greeks are, in many ways, very different people. And yet, caught up in the Euro Crisis, our fortunes have become too close for comfort. Recently, European authorities have devised a creative new method for damaging the people of Ireland and of Greece further. The new method involved imposed changes on the public financing of bank recapitalisations that shift even greater burdens on taxpayers and on the weaker members of our societies. This article examines the changes and answers the pertinent question: Why is Europe doing this?
- James Galbraith, Lloyd M. Bentsen Jr. Chair in Government/Business Relations and Professor of Government, University of Texas – Austin
- Yanis Varoufakis, Visiting Professor at the Lyndon B. Johnson School of Public Affairs, University of Texas – Austin, and
- Jeffrey Sommers, Senior Fellow, Institute of World Affairs
- Moderator: Doug Savage, Institute of World Affairs
Bengt-Ake Lundvall is a co-signatory of the petition by 74 of us in favour of an immediate restructuring of Portugal’s public debt. Here are his reasons for signing the petition. (And, for readers who missed them, here are the reasons I gave for signing the same petition.)
The Centre for Labour and Social Studies (CLASS) kindly invited me to draft a possible Manifesto for the European Left, in view of the May 2014 European Parliament election. Here is the final document I produced entitled THINK BIG, THINK BOLD: Why the European Left must aim for a radical, Pan-European, Green New Deal.
Jorge Rodrigues, of Portuguese daily Expresso, asked me to explain why it is that I signed the petition of 74 economists calling for an immediate debt restructuring of Portugal’s public debt, how this ‘call’ squares up with our Modest Proposal and what type of debt restructuring I had in mind. Click here for the interview as published in Expresso. My original answers in English follow… (See also this piece on lessons for Portugal from the Greek PSI – click here for the Portuguese published version) Continue reading
While Frankfurt-Berlin-Brussels are in full spin mode on Portugal, pretending that the fiscal consolidation program was successful and the country is about to exit its bailout (a little like exiting the frying pan to land in the fire itself), the bitter reality is that Portugal’s public debt is out of control, its labour market in shambles, its real economy moribund. Against the grain of Europe’s shameless propagandists, 70 of us have signed a petition calling for an immediate debt restructure that might give Portugal a chance to escape its debt-deflationary spiral. Click here for a pdf of our letter/petition as published in a Portuguese newspaper.
In June 2012, at a time when central banks had pushed interest rates to almost zero, Italy had to borrow at 8% to re-finance its gargantuan $3 trillion debt. Spain was in even direr straits. With national income falling by 2% annually, these interest rates meant that the national debt mountain was rising by 10% every year. In one word, insolvency! This was the spectre hanging over major European nations in the summer of 2012, guaranteeing that the Eurozone was finished. Today, Italy’s and Spain’s interest rates have fallen to a more manageable 3% to 4% and national income has stabilised. There is even fast money that flows into the crippled European banks, even into the dismembered Greek stock exchange, seeking bargain-basement prices for certain woefully depressed shares. These observations can easily be mistaken for signs of light at the end of the tunnel. But ‘mistaken’ is the operative word. Continue reading
Jorge Rodrigues, of Portuguese daily Expresso, wrote to me with a question: “What lessons can countries like Portugal learn from the Greek PSI of 2012, now that their post-bailout debts have also become unsustainable?” My answers were published in Expresso on 17th March 2014. My original answers in English follow: Continue reading