GR Political Economy Digest #14

  1. Greek finance minister says deal with EU will be done, ‘even at eleventh hour’, by Angeliki Koutantou and Karolina Tagaris | Reuters, Feb 14 2015
  2. EU states in unforgiving mood on Greece | The Irish Times, Feb 14 2015
  3. Deepening Ties Between Greece and Russia Sow Concerns in West, by James Marson | The Wall Street Journal, Feb 13 2015
  4. Reforming Greek Reform, by Dani Rodrik | Project Syndicate, Feb 13 2015
  5. White House warns Europe on Greek showdown, by Ambrose Evans-Pritchard | The Telegraph, Feb 13 2015
  6. The agony of Greece, by the Data Team | The Economist (Daily Chart), Feb 13 2015
  7. Yanis Varoufakis: ‘If I weren’t scared, I’d be dangerous’, by Helena Smith | The Guardian, Feb 13 2015
  8. Greece and Europe: No bail-out, no deal | The Economist, Feb 13 2015
  9. Greek Debt Standoff Awaits a Decisive Move, by Landon Thomas Jr. and Jack Ewing | The New York Times (Dealbook), Feb 12 2015
  10. Everybody be cool, by Yiannis Mouzakis | Macropolis, Feb 12 2015
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GR Political Economy Digest #12

eikonaki Once SYRIZA was elected in power (with the help of ultra-nationalist Independent Greeks), the international media were on an ecstatic frenzy. A historic win for the Left, coupled with the fact that it was achieved by a past underdog under the direction of a very young new leader, Alexis Tsipras, seemed like the perfect story for the media. Today, five days after the Greek parliamentary elections, the tone has turned from almost delirious to extremely worrying. It seems that everyone – including SYRIZA’s supporters – were betting on a softening of the party’s stance, once it came into office. But SYRIZA has shown no intention to tone down its rhetoric and move away from its worrisome programmatic pledges. In fact, SYRIZA has remained adamant in its pre-electoral promises. Although this is a fresh feeling for the Greek society, which is very much used to the U-turns of politicians once they get elected, it is also an evident cause for alarm – due to the nature of Syriza’s promises and intentions.

Greece has to fulfill its running obligations with its international lenders within the next few months, it needs to receive the last chunk of bailout money in order to pay salaries and pensions starting this month, and more than anything, it needs to implement the necessary structural reforms in order to open up the state and market within the country, changing the existing clientelistic political system, combatting the oligarchic structure, and tackling the problems arising from the extensive shadow economy and crony capitalism in place. Yet, what we have seen in the first few days of SYRIZA’s rule is not exactly close to ‘promising’ in bringing substantial change to the country. SYRIZA has pledged to re-hire about 10,000 former workers in the public sector (who have been fired due to its downsizing); it has announced that it would block all further privatizations pertaining to the biggest port in Greece, the Peireus Port, and has assumed a similar stance in regards to the country’s multiple regional airports; it has jeopardized the (unusual!) consentual agreement of all member states of the EU in regards to the sanctions against Russia after further aggressions in Ukraine; and it has stated (via the current Minister of Economics, Yanis Varoufakis) that Greece ‘does not need the last 7 billion euros’ coming from the final loan disbursement.

SYRIZA is playing an extreme form of hardball with the TROIKA and the totality of our European family. As things look now, it either has some extraordinary cards under its sleeves (an agreement with our European counterparts about debt-relief of some sort is quite possible. Straightforward debt-reduction seems highly unlikely.), which it will present in a sugarcoated manner to the Greek people in the upcoming weeks; or it is actually more honest than all of us expect, is prepared to collide with Europe, and ready to gamble the fate of the country within the EU/EZ, even if it does not have enough firepower to fuel a ‘heroic exodus.’

My prediction is that SYRIZA will perform a magnificent ‘kolotoumba’ soon (if it has not already, unofficially, under the table with the other Europeans). It is not a matter of where the party stands normatively in their economics or ideologically in their politics. It is a matter of hardcore realism. And when Varoufakis and Tsipras are faced with the fatal question of “how are we going to pay up for the salaries and pensions of millions of people,” the dilemma of playing hardball or joining the chorus of former Greek leaders who performed eloquent ‘kolotoumbes’ in order to save the country’s economy will (hopefully) disappear.

In any case, here is what you need to read about the Greek political economy today:

  1. Greece and its discontents, by the Charlemagne | The Economist, Jan 31 2015
  2. Greece and the euro’s future: Go ahead, Angela, make my day | The Economist, Jan 31 2015
  3. Europe’s Greek Test, by Paul Krugman | The New York Times, Jan 30 2015
  4. Portugal Won’t Join Greece in Debt Renegotiation |  Capital.gr, Jan 30 2015
  5. Greece awaits EU finance meeting; eurozone deflation deepens (With live updates), by Angela Monaghan | The Guardian, Jan 30 2015
  6. Greece really might leave the euro, by Matt O’ Brien | The Washington Post, Jan 30 2015
  7. Greece’s Political Chimera, by Nikos Konstandaras | The New York Times, Jan 30 2015
  8. Fitch: Greece-Troika Deal Still Possible but Risks Are High | Reuters, Jan 30 2015
  9. Greece looking for common ground with European partners, by Stelios Bouras and Alkman Granitsas | The Wall Street Journal, Jan 29 2015
  10. Greece Steps Back Into Line With European Union Policy on Russia Sanctions, by Andrew Higgins | The New York Times, Jan 29 2015
  11. Global Economy: Greece, EMU and democracy, by Antonio Fatas | Fatasmihov.blogspot.com, Jan 28 2015