FacebookTwitterRedditEmail

Are European Authorities Trying to Topple the Greek Government?

It is ironic but not surprising that the European Central Bank (ECB) on Sunday decided to limit its credit to Greece by enough to force the Greek banking system to close.

This has pushed Greece closer to a more serious financial crisis than they have had in the past five years of austerity-induced depression. Why did the ECB decide to take this harsh, unnecessary, and dangerous measure now?

It seems clear that this move is in response to the Greek government’s decision to hold a referendum on whether to accept the last offer from the European authorities on conditions for continuing official lending to Greece. The financial problems and inconveniences of this week, caused by the bank holiday, are the European authorities’ way of saying, “Vote as we’ll tell you to, or we can make your lives even more miserable than we have been making them for the past five years.”

This offer included further cuts to Greek pensions, as well as regressive tax increases. As economist Paul Krugman noted, these are conditions that Prime Minister Alexis Tsipras cannot accept. “The purpose must therefore be to drive him from office,” Krugman concluded.

There is considerable evidence that this has been the European authorities’ strategy since Syriza was elected on January 25.  Just 10 days later, on February, the ECB cut off its main line of credit to Greek banks, even though there was no obvious reason to do so. failedweisbrotShortly thereafter, the ECB put a limit on how much Greek banks could lend to the government – a limit that the previous government did not have.

From the European authorities’ point of view, “regime change” is the only logical strategy. They have a nuclear weapon, which is to cut credit to Greece entirely – thus precipitating a Greek financial meltdown that would force the country out of the euro—but German Chancellor Angela Merkel doesn’t want this, and neither does her ally, President Obama. So the European authorities continue to take steps to undermine the Greek economy and government, hoping to get rid of the government and get a new one that will do what they want.

The European authorities had already succeeded in pushing the Greek economy—which was projected to grow by 2.5 percent this year—back into recession. This is due to their credit restrictions and the damaging effect of their game of brinkmanship with the Greek government. Now they have gone further in order to intimidate Greek voters into a “yes” vote.

European officials such as European Commission President Jean-Claude Juncker have tried to convince Greeks that a “no” vote would be a vote to leave the eurozone. But this is not true. It could well be that a “no” vote strengthens the hand of the government to get a better deal, given that the most powerful people in the world don’t want to see an economic collapse that forces Greece out of the euro.

The European authorities are offering no future to Greece – no light at the end of the tunnel, especially for the 60 percent of young people who are already unemployed because of their failed policies. But there are always alternatives to years of economic recession, stagnation, and mass unemployment.

These alternatives are not radical but mostly nothing more than the stimulus policies that dozens of countries, including the United States, implemented in response the world financial crisis and recession of 2008-2009.  But the European authorities will not allow the Greek economy to recover. The first step for Greece must therefore begin with saying “no.”

Mark Weisbrot is co-director of the Center for Economic and Policy Research, in Washington, D.C. and president of Just Foreign Policy. He is also the author of the forthcoming book Failed: What the “Experts” Got Wrong About the Global Economy (Oxford University Press, 2015).

This article originally appeared in The Globe and Mail.

 

More articles by:

Mark Weisbrot is co-director of the Center for Economic and Policy Research, in Washington, D.C. and president of Just Foreign Policy. He is also the author of  Failed: What the “Experts” Got Wrong About the Global Economy (Oxford University Press, 2015).

bernie-the-sandernistas-cover-344x550
November 21, 2019
Patrick Cockburn
Reports of War Crimes in Iraq and Afghanistan Highlight the Failures of Both Wars
Steven Gorelick
Thinking Outside the Grid
William Hartung
America’s Arms Sales Addiction
Michael Welton
Christianity is the Religion of Imperialism
Binoy Kampmark
Letting the Side Down: Prince Andrew, the Royal Family and Jeffrey Epstein
Craig Collins
Open Letter to the People of Planet Earth
David Schultz
The Democratic Party’s Missing Electoral College Game Plan
Norman Solomon
Joe Biden’s AstroTurf Campaign
Bob Lord
Health Care and “Head Taxes”: an Unhealthy Combination
Steve Brown
Why Did MSNBC Spend So Much Time Bashing Gabbard?
Jesse Jackson
The Right to Vote Should not Fall Victim to Partisan Battles
Ted Rall
Billionaires and Corporations Love Anti-SLAPP Laws, Why Does John Oliver?
Priti Gulati Cox
One Pound Capitalism, a Pinch of Democracy, and an Impeachment
Thomas Knapp
Voters Say They Want a Third Party, They Should Vote Accordingly
Jenna Orkin
Overtunring WI v. Yoder: Making Education a Federal Right for All Children (and Bringing the MeToo Movement to Fundamentalist Communities)
November 20, 2019
Vijay Prashad
The Coup in Bolivia Has Everything to Do With the Screen You’re Using to Read This
Kenneth Surin
Labor and the UK General Election
Ron Jacobs
The Trumpists’ Attempts at Snark Define Their Day: Impeachment Day Three
George Ochenski
The Walls are Closing in on Donald Trump
Timothy M. Gill
Towards a Democratic Socialist Foreign Policy
Robert Hunziker
Neoliberalism Backfires
Thomas S. Harrington
Let’s Give Three Cheers for Those “Western Ears” 
Michelle Renee Matisons
Freedom, Valor, Love: On Snowden’s Permanent Record
James C. Nelson
How Trump is Warping the Federal Courts: the Case Against Lawrence VanDyke
Rev. William Alberts
Whistleblowing Religion
Chandra Muzaffar
The Coup That Ousted Morales
Mike Garrity
Trump Administration Ignores Court Order Stopping 85,000 Acre Payette Forest Logging and Burning Project, Conservation Groups Sue
Andrew Moss
Raising the Stakes in the Struggle Over Immigration Detention
Dean Baker
Making Andrew Yang Smarter
Lawrence Wittner
The People of the World
November 19, 2019
Ramzy Baroud
How Western Media Bias Allows Israel to Getaway with Murder in Gaza
Patrick Cockburn
Erdogan’s Ethnic Cleansing of the Kurds is Still Happening
Dave Lindorff
Student Protesters are Walking a Tightrope in Hong Kong
Richard Greeman
French Yellow Vests Celebrate First Birthday, Converge With Planned Labor Strikes
Dean Baker
Impeachment is a Kitchen Table Issue
Walden Bello
Is China an “Imperial Power” in the Image of the West?
Jim Britell
Modern Biology and Ecology: the Roots Of America’s Assertive Illiteracy
Sabri Öncü
Non-Financial Private Debt Overhang
John Steppling
Baby Shark Coup
Binoy Kampmark
Open Guidelines: The Foreign Interference Problem in Australian Universities
Evaggelos Vallianatos
Greece and the Struggle for Freedom
Colin Todhunter
Lab Rats for Corporate Profit: Pesticide Industry’s Poisoned Platter
James Graham
Open Letter to Jeremy Corbyn on the Eve of the Debate
Elliot Sperber
Scrutiny – From Scruta
November 18, 2019
Olivia Arigho-Stiles
Protestors Massacred in Post-Coup Bolivia
FacebookTwitterRedditEmail