Failure of anti austerity narrative and the political fallout of the ‘Greek Diktat’ in Ireland?

“There is nothing so practical as a good theory…”

– Kurt Lewin (1890-1947)

So here’s the pattern. You protest that the lot who are in power are corrupt and are letting the people down, and have not asked for what they would inevitably be given, if only they had asked for it.

In the case of Greece, despite a long hard haul out from under an impossible burden, the Greek economy eventually clocked up a 2% rate. Not bad for a country with a unbearable debt ratio of nearly 200%, and painfully high youth unemployment.

In January when Syriza won power (shattering PASOK in the process) it sailed to victory on a promise it could renegotiate a deal on debt. It was widely welcomed as good common sense by some very smart economists and influential commentators.

Seven months on, and it all looks a bit different. The fundamentals were rough on Syriza. Not least because most of its debt is the responsibility of  democratically elected colleagues in other EU states, and not the original bondholders or the banks (which had been running relatively freely).

In the last week alone Ireland’s contribution has risen from a few hundred million to an estimated three billion Euros in just last week. The deal the Greek people rejected has been superseded by a far more draconian one, not least because of the flamboyant brinkmanship of the last few weeks.

So, Fintan’s teeth grinding aside what are the practical shorter term ramifications in Ireland?

Handily enough, Harry McGee has done a quick run down of the likely effects on the various supporters (and former supporters) of Syriza in Ireland. It’s an interesting exercise, but in the case of the independents and smaller parties it is hard to predict what effect foreign policy has on them directly.

In the case of Sinn Fein, the real pinch point is not its public support (despite the suspicion of a Reverse Ferret after their Ard Fheis) for Syriza’s now backfiring anti austerity strategy, but the deeper sense that their much reputed strategic vision is looking more like tactical fidgeting.

McGee probably nails it best here:

If the party [SF] continues to back Syriza it will be acknowledging – to all intents and purposes – that it in power could have done little to alter the course of history over the past few years.

If it backs away from Syriza it will be accused of back-peddling and of being Tadhg an Dá Thaobh (Tadhg of the two sides). Either way, there is not much upside.

For a party accustomed to riding many horses at the same time the latter is much less of a problem than the former.

Party strategists have been banking on the house owning C1s and C2s of Dublin, who first defected to Labour in 2011 and who subsequently have been drifting inexorably towards Sinn Fein would never go back to voting Fianna Fail after the searing effects of the property crash.

You can expect Syriza’s failure to get its way against Frankfurt to be exploited as a telling counterfactual to Ireland’s recovery both by the governing Fine Gael and Labour parties and the original villains of the piece, Fianna Fail.

Which brings me back to the header quote at the beginning. The real damage is the political failure of the anti austerity narrative.

For all the good actions recommended by macro economists and others, anti austerity has only proven practicable in the US (where swingeing public sector cuts came with the deal). A good theory is actionable. A poor one isn’t.

“Everybody experiences far more than he understands. Yet it is experience, rather than understanding, that influences behaviour….” 

– Understanding Media: The Extensions of Man, Marshall McLuhan

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  • Kevin Breslin

    To be fair to Syriza and their Independent Greek colleagues, they got to choose their level of austerity. The key was Greek self determination of the reaction to austerity.

    In terms of the anti-austerity politics, people do need to offer more than a demagogue no matter how moral the purpose, there’s that Old Burt Bacherach line “I’m not going to stop the rain by complaining”

  • chrisjones2

    When the plain people of Ireland realise they owe an extra €3bn for Greek misconduct the support for the Shiner / Syriza alliance may seem a bit more flaky

  • Nevin

    “The deal the Greek people rejected has been superseded by a far more draconian one, not least because of the flamboyant brinkmanship of the last few weeks.”

    Unsurprisingly, SF’s Matt Carthy points the finger in a different direction:

    “The disrespect shown to the mandate obtained by the Greek government and the wishes of the Greek people will be, for many people across Europe, the clear indication that the EU is no longer a champion of democracy or human rights but has steadily become a set of institutions which protect the powerful vested interests at the expense of ordinary citizens and even member states.

    “The complete lack of solidarity shown by the Irish Government to the Greek people has turned the stomachs of many of our citizens and, in my view, is a betrayal of the spirit of the Irish people.

    “It is clear that the Irish Government, in colluding with the bully boys of Europe, has acted with a narrow domestic political agenda at the expense of democracy, humanity, decency and even the best interests of the Irish people.

    “It is not unreasonable to assume that the treatment of Greece will further increase the growing disillusionment with the EU among citizens across Europe and may increase the likelihood of a British Exit from the EU, which would have devastating consequences for Ireland.

    “I firmly believe that this process will be remembered for generations to come as the day the illusion of a Europe of Equals was shattered once and for all.

    Now that’s a narrative that might go down rather well with southern C1/C2 folks who’ve not had the exposure to the bully boy tactics of the PRM that are more familiar north of the border.

  • Robin Keogh

    The narrative of course will be pushed that had we listened to the ‘looney left’ at the time, Ireland would be in the same situation as Greece found itself in. The point then is whether or not the public will buy into that Lie, we wont know the answer to that for quite sometime, persoanlly I dont think they will. Irish people are by and large bright enough and astute enough to see clearly the difference between Ireland and Greece at the the time of the Irish bailout compared to the position the Greeks were negotiating from over the last fw months.

    Ireland wasnt on its third bailout, it didn’t have sytemic corruption (despite the efforts of Fianna Fail and others for decades), it didnt have a disorganised public public service, it also didnt have a failed and inadequete tax regime. Ireland at the time was negotiating on debt, and on that basis the governemnt at the time could have fought harder for a better deal without the fear of Greek style consequences.

    Ultimately it was all too late for Syriza, Fianna Fail and Fine Gael sister parties in Greece had spent five years messing up their economy through corruption and austerity. The tiny growth that had been seen taken hold had zero effect for the majority of Greek citizens, in fact it was getting worse for them as those in the richer etchelons started to see gains.

    Last Friday the economist Dan O Brien pointed out the bleedin obvious; if you are in a room with 18 other people, all of whom are against you, you will not win the argument. And so it was. Tsipras and the Greek people have been humiliated. But far better to accept huliliation at the point of a sword rather than obliteration as it is driven through your heart.

    It remains to be seen if the new bailout will do the job, and with Europe’s effective annexation of Greece, if it does not work there will be nobody to blame but the governemnts that chose to force a Greek slaughter rather than follow the advice of the IMF and practically every international economist – debt writedown, not just for Greece but across the Union particularly for countries who are still frozen in austerity with little or no growth.

    Ireland will chip in to help greece again, however lets get our facts straight. The money Ireland will pay has already been allocated for the ESM anyway, so it will have zero impact on the countrys budget or growth projections. As for us Shinners and the rest of the ‘Looney Left’, like all other Europeans regardless of political persuasion we now know that we all have to pay our debts even if its impossible, except of course if youy are a bank; then your debts can be written off no problemo. We also know that each country is formally sovereign, as long as each country votes in-line with the dominant politcal paradigm of the time. If we were ever unsure we are now fully aware that the extreme elements of polical conservatism (eg Finalnd, Germany) have np problem sacrificing the lives of millions of people in order to shore up their power base at home.

    This Greek tragedy is far from over, there are many hurdles to overcome over the next few months. We all are united in our hope that Greece will return to Growth and recover. However, no matter how divided Greece might be on their domestic polical situation, one thing we can all bank on, they will probably never forget how Europe abused, bullied and terrified them into sumission. There is nothing as sweet as revenge.

  • Kevin Breslin

    When the alternative was bullying the rest of Europe into submission including the poorer Baltic States there is something to be said at how poor the Syriza game was even after the mandate not to even get one other nation’s sympathy. Even the UK get Hungary to back them from time to time. Why on Earth did they let a highly competent Finance minister resign if Syriza were going to go back to the Eurogroup with even harsher cuts, even before their feedback.

    Is the Greek strategy cut deep, but clot quicker?

    Some of the austerity is effectively voluntarily, without the debt I doubt Syriza would abandon tax collection reform or some levels of higher tax. Even if they were out of the Eurozone they’d have to face living within their means, they are an importing nation. Without the Euro the purchasing power of even the worst off Greek would depreciate for months if not years if not decades.

    Hopefully more austerity, gives Greece more autonomy.

    It’s better to have more control than more comfort.

  • Robin Keogh

    They didnt get any sympathy because the goverments they faced are polar opposites economically. For them it was about holding onto power at home and trying to topple the syriza government. Greece now has no control because they have no power to decide how to make the numbers add up. Of course reform is needed in their public infrastructure, everybody could see that but now they have lost the power of distributive fairness. Any attempt to ease the poverty of the less well off will result in sanctions from europe. Hiwever, we still do not know how the Greek people are going to respond, that in itself could prove to be the biggest hurdle yet.

  • kensei

    You think this has run it’s course Mick? I’d say we are a long way from that.

    The deal still has to pass the Greek Parliament, which I guess should happen if there is a unity government, but it will also have to pass future elections, and there is still a chance the politics could force a Greek election within the year. There is already a row over bridging financing, the IMF also seem primed to release another report stating that the deal is unsustainable without more serious debt reductions, and Mark Carney has just testified to the Commons committee that there are huge implementation risks on both sides.

    The key thing seems to be that Greece really didn’t want to leave under any circumstances. I’m not sure why the “temporary” Grexit wasn’t at least considered. To an extent that reflects the populace, but what happens after another few years of fairly grinding austerity and someone runs on a dump the Euro platform?

    That’s just Greece. Germany and the other hard money states have burned through political capital at an incredible rate. The left has tended to be fairly pro Europe on balance, but after “thisisacoup” it seems like there is a definite section beyond communists and the like that is hardening to an anti-EU position. Who knows how that will play out?

    I’m unsure what you expect the anti-austerity politicians to do here. There is sound economic basis for suggesting that you should avoid cutting until you have sufficient growth. But it’s a complex story, and it requires a certain amount of bravery on the part of the populace. The simple over indulgence followed by hair shirt story is a lot more intuitive and can also be easily woven into well established prejudices. It would challenge more talented politicians than SF to sell it. I’m not sure what you want them to do though? Just agree?

    They could of course promise austerity and then basically avoid doing it. In the UK at least, the Tories nicked that one.

  • james

    Yes, indeed. I think Ruth Dudley Edwards has a few interesting things to say on that topic.

  • james
  • Robin Keogh

    She is certainly a woman on a mission for sure.

  • james

    I think all journalists could be said to be on a mission to shed light on the shadows. I think she’s quite good at cutting through the nonsense and getting to the heart of the matter. You ought to give her a read – indeed I think anyone looking to broaden their understanding of our troubled history here in Northern Ireland might gain from reading some of her pieces.

  • Kevin Breslin

    Again none of the NUG/GLE are providing the Greeks with any real solutions. Diarmuid O’Flynn, Luke Ming’s assistant simply believes Greece should leave the Eurozone, but that’s not the will of the Greek government or people here. At least that is one way to respond. My opinion is that if you think Germany is bad, see how bad things are when exposed to the world and unable to borrow like Argentina after a default. The IMF isn’t going to go away even if the Eurozone takes the hit.

    All I see is sympathy from Podemos, Sinn Féin etc. but the only one from that group who is doing anything here is Syriza. How much Greek debt are Ireland or Spain going to write off if either of those two parties get to power? Are they turning their backs on Tsprias for agreeing to a deal, when previously admiring his leadership?

    What bothers me here is that Tsprias has said he’s won some concessions defended some things the Greeks value from the wrath of the creditors, but rather than cheer small victories for reform those in Podemos and Sinn Féin stick the knife in the back of Syriza’s leaders for accepting everything else the creditors want at this time. After all it’s only more bank bailouts again that Syriza get from all this when you think about it.

  • WindowLean

    Hal David wrote the words!

  • terence patrick hewett

    Yes Minister: The Devil You Know

    Hacker: Europe is a community of nations, dedicated towards one goal.

    Sir Humphrey: Oh, ha ha ha.

  • Robin Keogh

    I have read a couple of her books and found them to be both informative and well written. As a journalist however, i dont hold her in such high regard. Her bias is almost pathological.

  • gendjinn

    And the impact all this has on the Brexit negotiations & vote are…… ?

  • Robin Keogh

    But it should not have to be a choice between a snake or a croc. Whatever happens the debt will remain unsustainable and unpaid unless a miracle occurs. What can any foreign supporters do if tgey are not in power? Can u point to where SF have stuck the knife in?

  • mickfealty

    Robin,

    I suppose the short hand is that thus far FF have been playing it softly, this issue gives them something more relevant to their potential in government to aim at. Here’s Martin yesterday:

    “Over ten days, a crisis has been escalated into a full scale catastrophe, with the Greek banks and economy in an even worse place than they were before. Consequently, the cost of the bailout and the financial consequences for Ireland have also increased.

    “Even as news of the scale of this third bailout begins to sink in, there continue to be those in Ireland who champion the approach taken by Syriza and recommend its repetition here and elsewhere.

    “This is dishonest politics and insults the intelligence of the Irish people. The Greek economy is close to total collapse, the banks are closed and it is the Greek people who are bearing the brunt of this failure of politics.

    “Meanwhile, we have people in positions of political responsibility in this country praising the ideology.”

    It has been clear since before Syriza defenestrated their older rivals not only that their advocated plan of action would not work but would create more damage than good.

    It provides govt parties with a living counterfactual. And FF can argue that the final actions the last FF teamlook a great deal more competent than it has been projected heretofore, and SF’s a great deal less so.

    What they both need to achieve before the next election is not simply how to differentiate from each other, but how to effect a teleological squeeze on SF and press them out of the debate.

    IN case you missed it, here’s my slugger report on what narrative is, and what it isn’t: https://goo.gl/VaSA9U

  • mickfealty

    “You think this has run it’s course Mick?”

    Nope. What should they do? I don’t know. But I would suggest the left generally which is getting serially shafted at a time when there’s no money around for long term investment, and large corporates are running free to do whatever they bloody well like, need to a take a much longer view of these matters.

    Good narrative’s are better unfolded in small stages and over longer time frames. Biting ankles is not necessarily a useful alternative to that.

  • james

    Not sure I can agree with you there. Granted, on first reading it does seem somewhat distracting not to have to wade through the more typical left-leaning vogueries of concern for the feelings of the terrorists, but once one gets over that there is a great deal of substance and compassion in her journalistic writing. I’d say she is biased in favour of victims, however. I agree with you, though, that her books are first rate.

  • kensei

    I’m not sure I agree. If you look at the Right in the US, they will continually hammer the same points again and again and again and recast it regardless of the circumstances. They’ll still pump out books attacking FDR and the New Deal, because they want to undermine the ideas that underpin it. There is certainly an argument that long term, the Left is better keeping a coherent narrative and acting to produce change that is hard to undo when they do get in rather than incremental Third Way style politics.

    It was the inability to see that sort of long view that allowed the Left to get completely blindsided by the housing crash, both in Ireland and the UK. It’s also that sort of view that is leading Harriet Harmon to support benefits cuts that is really going to hurt her base and is slow poison to her party. Pragmatism is important but as a temper to principle, not an end in itself. It’s worth remembering that when you are winning you look like a genius in everything you do and when you are losing you look foolish no matter what. There is no silver bullet.

    At this point it seems like the Tory Eurosceptics of the 1990s were absolutely right, and you’ve no idea how much that sticks in my craw. Not even sure what way I’ll vote come the referendum now. If it wasn’t for the complicating factor of the border and the terrifying mess a divergent Ireland might cause, I’d be voting for anything that loosens Europe’s bonds a bit.

  • mickfealty

    But as you’ll note the US is the one place that anti austerity economics has been made to work, and in part it’s been made to work by applying austerity principle to the public sector.

    The president only has a permanently angry (but only two party) Congress to get things past. Greece’s Parliament is effectly being asked to draw up an agreement with seven other sovereign parliaments.

    The default narrative (and many technocratic commentators) signally failed to take account of such complications…

  • Kevin Breslin

    Many in the NUG/GLE have turned on Syriza or rather its leadership, Podemos as well as many on the Irish left including some within SF. What foreign supporters of Syriza could do is quite simple, they could share confidence in the Greek government leaders who made a compromise with the Eurogroup or alternatively they can back the rebels in the party who felt the leaders moved too soon.

    We know for sure the Paul Murphys, the Richard Boyd Barrets, the Joe Higgins and Clare Dalys of Ireland are backing here and it’s not Tsprias, funnily enough the ones Tsprias gets the backing of for making a difficult move are the Enda Kennys, Joan Brutons, Michael Martins and dare I say it even Peter Robinsons and the other Stormont Executive leaders if I were to hazard a guess.

    If Tsprias is with the Snakes, are Mary Lou and Gerry with the Crocs here, or are they up a tree still looking down on the whole thing, because Syriza on either side no longer has that option.

  • Kevin Breslin

    My bad, I just don’t know what to do with myself. Now.

  • chrisjones2

    They didnt get any sympathy because they lied and misled and played games and along the way destroyed whatever trust in them taht was left

    “For them it was about holding onto power at home and trying to topple the syriza government. ”

    They have no interesting in toppling Syriza.

    “Greece now has no control because they have no power to decide how to make the numbers add up. ”

    They had power to take steps to reform. Instead they lied and blustered.

    “Of course reform is needed in their public infrastructure, everybody could see that but now they have lost the power of distributive fairness.”

    Waffle.

    “Any attempt to ease the poverty of the less well off will result in sanctions from europe”

    They have to pay and the poor will hurt in that because they are a majority in Greece – because of the actions of the Greek Governments

    “However, we still do not know how the Greek people are going to respond, that in itself could prove to be the biggest hurdle yet.”

    I agree that that could be the biggest issue. They have tow choices – stay in and its terrible. Leave the Euro and its worse

  • chrisjones2

    Well you have supported them to the hilt so is it SF policy that Ireland should pay an extra €3bn to support Greece?

  • chrisjones2

    Come on Robin!!! Pot? Kettle? Be fair

  • chrisjones2

    Does SFs solidarity extend to a €3bn bung to Greece or €660 from every person in Ireland

    Hands up all those who want to contribute?

  • chrisjones2

    …if we spin the Brexit out long enough there may not be an EU to leave

  • chrisjones2

    As shown by Hollande’s attempt to weaponise the Greek Crisis to attack Merkel and build his own (desperate) reputation at home

  • Zig70

    Hard ball will only work if you are willing to jump. There are a few options, sucker punch the eu, get the intermediate loan in place, take a breather and then not pay. Get the Russians to keep you afloat while trying to wear down the Germans (might take a cold winter), or my favourite would be go for a Grexit, while holding the line that it isn’t what you want but are forced into it. What Iceland did wasn’t worse but then you can’t compare economies so easily and Ireland’s case is very different in a lot of ways. Germany is a federal state. They are well used to the idea of moving money from rich to poor areas to develop. The pressure on them could soon crack, but I don’t think it is worth the wait. A cynic would say that each engineered crisis proves such a fertile ground for stockbrokers that they’ll enjoy it while it lasts and try to keep it going. I’d have been strongly in favour of the Greeks staying in the eu and of the opinion that the ecb would bend but now I just want to see Greece default and start building with a future rather than a noose.

  • Ross Brown

    Mick the reason why a fiscal stimulus (or anti austerity) was possible in the US was because it had its own currency. Greece could not ease the austerity inflicted as part of its bailout without the agreement of the other eurozone countries. Syriza attempted to renegotiate the debt as it was blatantly evident that for the last 5 years austerity in Greece had failed. More widely the reality is that within the eurozone the fiscal compact prohibits Keynesian economics. The actions by the eurogroup against Greece demonstrates that for those countries in the euro it’s not that the anti austerity narrive that is dead but democracy.

  • Brian Walker

    Mick,

    I’m not sure the anti-austerity narrative is quite dead, for
    instance from this dissident commentator in the FT, Martin Sandbu

    “Austerity was paused in 2014, which allowed growth to
    return. Athens was in a primary surplus and needed no further financial aid —
    only extensions to smooth out the steep repayment cliffs in 2015 and 2016 that the eurozone and the International Monetary Fund recklessly left unchanged in the 2012 restructuring. Would it really have been so hard to simply grant the extensions (without haircuts), let the growth rebound continue (which would have increased the ability to service the debt) and leave Greeks to fight out whether and how to fix their country (or not)?”

    And this from no less than the IMF. Granted to IMF is a stickler
    for timely repayment but debt repayment for Greece could extend over decades say – like the UK’s WW2 debt, not tomention Germany’s post war..

    “Putting into question the fund’s involvement in the bailout, the report paints a far darker picture of Greece’s public finances than that contained in the blueprint released at the end of the marathon eurozone leaders’ summit on Monday. “The dramatic deterioration in debt sustainability points to the need for debt relief on a scale that would need to go well beyond what has been under consideration to date – and what has been proposed by the ESM,” the IMF said, referring to the European stability mechanism bailout fund, which will be used to bankroll the Greek bailout..”

    We very amateur Keynesians call it the desperate need to create aggregate demand. I’m pretty sure though these arguments offer little comfort to Sinn Fein holding out against the Stormont house Agreement

  • mickfealty

    I agree with most of that right up until the end bit Ross.

  • Robin Keogh

    Kev, what is NUG/GLE?

  • SeaanUiNeill

    I’d agree with the lot myself, Mick, so I’m curious to know just how democracy has not been shown to be ineffective in the face of bigger, less accountable interests in this instance. It may not be “dead”, as the referendum showed the world where the Greek people stood in the face of threat, but representative democracy has clearly been shown to be completely powerless here.

  • Reader

    Not powerless, just out of scope.
    For instance, I am sure that the (elected) governments of the Eurozone countries could change the rules under which the ECB operates. The Greeks, acting alone – no.

  • Tochais Siorai

    GUE / NGL. Group SF & Ming belong to in the Euro parliament.

  • SeaanUiNeill

    Oh. backed by those interests of Global capitol that they so slavishly serve, they might be enabled to change the ECB’s remit, but what government acting on behalf of their population’s interest would even be permitted to in todays political and financial climate?

    So, for all practical purposes of anything approaching a genuinely free sovereign democracy, I’d still say “powerless”. But “Ça ira”……….

  • Robin Keogh

    Ya the penny haddropped but many thnks anyway

  • Robin Keogh

    Chris, the money for the greek bailout is coming from the esm. Ireland has already committed paying into that with or without the greek bailout so it has no material affect on our budget.

  • Reader

    I think the 3 billion (Irish Euros) is the difference between what Syriza wants and what Syriza has been offered. However, SF could raise a motion in the Dail for Greece to be given the Irish share of the money anyway (to ease the pain…).
    Or SF could continue with the useless rhetoric.

  • Robin Keogh

    I think you are confused

  • Robin Keogh

    Its the classic trilemma of international relations in action. Democracy, Sovereignty and integration. You can only have two.

  • kensei

    That’s moving the argument a bit. The UK was more than capable of running anti-austerity economics if it had so chosen, and in the event what the coalition did is almost a branding exercise rather than actual austerity in comparison to Greece.
    There were also various points where smaller countries had some leverage, particularly earlier in the crisis. The counterfactual we’ll never get is if Ireland had have refused to guarantee bank bonds. The ECB would have a harder time strangling the country, since it would have threatened German and French banks directly and quite quickly.

    But the the key thing about the US is that it accepts the principle of fiscal transfer within monetary union. New York will pay for Idaho to a significant extent. Europe does not have that solidarity. If the Eurozone doesn’t get that, we are just in an historical bump before it implodes.

    The fundamental problem is Greece was unable to consider a future outside the Euro, so they were done:

    http://www.newstatesman.com/world-affairs/2015/07/exclusive-yanis-varoufakis-opens-about-his-five-month-battle-save-greece

  • SeaanUiNeill

    Thanks Robin, first two please….

    Come to think of it, should you actually define “democracy” as actual popular empowerment, instead of the surrogate system we seem content to subject ourselves to, perhaps we can only have one!

  • Brian Walker

    what a difference a day makes!

    e.g. from the Times

    “The dramatic deterioration in debt sustainability points to the need for debt relief on a scale that would need to go well beyond what has been under consideration to date,” the IMF said in the report. The document hints that the IMF might have to walk away from the bailout agreement if it is deemed to violate its rules.

    The fund is concerned that the eurozone is ducking the issue of Greece’s growing mountain of debt. “If Europe prefers to again provide debt relief through maturity extension, there would have to be a very drastic extension with a grace period of, say, 30 years on the entire stock of European debt including new assistance,” the report said.

    “Other options include explicit annual transfers to the Greek budget or deep upfront haircuts.”

    The options suggested in the report are politically toxic in many eurozone countries where voters were told that they would never have to take responsibility for Greek debts, and were explicitly rejected by the eurozone during talks last weekend.”

  • Reader

    Well, this then:
    http://www.theguardian.com/world/datablog/2015/jun/19/the-greek-debt-what-creditors-may-stand-to-lose
    A mere 2.6 Billion, and Syriza may be willing to consider paying it back, but possibly not in your lifetime.
    That’s if they don’t default, now or later.

  • mickfealty

    And the demagogically simplified anti austerity narrative not only didn’t help Greece it has caused them (and the left) further damage.

    NOt sure what you are saying about the UK. It might have had the capacity, but it had little or no democratically expressed will to choose an anti austerity agenda.

    Again, I refer you to the US anti austerity model which came with swingeing cuts in public sector jobs to pay for investments elsewhere…

  • kensei

    No, the anti austerity narrative not backed by a willingness to follow through on its logic hurt Greece – read that interview, the Finance Minister knew the score but others were unprepared to follow through. After the referendum Syriza probably had the capital to risk an exit, but chose not to.

    At the 2010 election Labour said they would half the deficit in the next Parliament, the Tories said they’d wipe it out and hammered Labour for being spendthrifts. In the event the Tories halved the deficit in the last Parliament and had to ease back when the cuts hurt the economy. They used the crisis to engineer some fairly nasty policies, and it looks like they same plan will be followed in this Parliament. But “Austerity” is practically a branding exercise.

    There is no “US Anti Austerity model”. There was only want Obama could get past a Republican Congress. The switch to austerity came AFTER the stimulus. A Democratic led Congress would have undoubtedly spent more, even with political pressure. There a ton of other complex factors, not least health care. But local government matters a lot in US too, and tends to be missed.

    You also need to comparing across different countries The situation in Greece is almost unparalleled, even with Ireland. I refer you to the following chart: http://nakedkeynesianism.blogspot.co.uk/2015/05/comparative-austerity-does-cameron-re.html.

    I’m not sure I get your point either. At all. The anti austerity logic is a hard sell vs simpler explanations. I think we are both agreed here? So what are you suggesting – don’t make the argument for it, even though the economics are quite supportive? Condemn huge numbers to further poverty without a fight? Allow your opponents to set the terms of debate? What’s the point of the Left then? Do better selling it? I’m sure the social democrats in Europe are lining up to hear it.

  • kensei
  • Ross Brown

    The point I was making was that neither Europe nor the nation state has the democratic ability to vote for economics of fiscal stimulus. When you now go to the polls you have a choice about which political party to vote for and yet the rules of the Euro mean that none of those political parties can offer the voter an alternative economic model than austerity unless that country leaves the euro. The majority of economists regard the policy of austerity as a failure yet European economic policy is set in stone and can be neither changed by individual states nor though any collective mechanism. Perhaps the biggest question in any democracy – how we govern our economy – is no longer a realistic option at the ballot box.

  • mickfealty

    I AGREE that that is the consensus opinion amongst Keynesian macro economists, and I’ve no doubt they are right. But that’s a technocratic view of the solution, not a democratic one.

  • D99

    That’s probably why Cameron’s postponed the referendum until 2017, praying that the problem will have gone away by then.

    If you start tweeting:

    #ifwespinthebrexitoutlongenough

    it could start trending quite quickly in the current climate.

  • Zig70

    Makes me think that 1921 must created a similar mood in Ireland with negotiations turning to desperation.

  • Ross Brown

    I don’t subscribe to the belief that economics is a value free science where we can just ask the experts and let them make the decisions. Economics is inherently political and this is exactly why decisions about the economy must be made at the ballot box and not surrendered to technocrats. I was making the point that most economists (and not just Keynesian economists) do not believe that austerity has worked not as a call for them to take control of our economy but to highlight that there is a credible alternative. The democratic right of individuals to make this choice (regardless of whether they actually do so) is what is important and this is what the people within the eurozone have lost.

  • Kevin Breslin

    The pan European “Nordic Left Green” group that Sryzia and Sinn Féin belong to.