The EU cannot recover before Greece recovers


Here is the Greek crisis as an instructive experience, both economically and politically. Despite being a small country, Greece has a great "specific gravity." In addition to being an EU member, Greece's historical position, as well as its geographical position on the other side of the Aegean Sea, and the fact that its ports connect Mediterranean commercial transits and energy lines coming from Turkey to Europe, exposes the country to discussions that are far beyond its gravity. Indeed, debates over the Greek crisis pose a discussion about economic policy. Although the academic world has not yet put forth a certain position, I think there are three basic blocs that are the addressees of the ongoing debates: The first one is those who blame the Syriza government of Prime Minister Alexis Tsipras and argue for the neoliberal policies instigated by the troika of the International Monetary Fund (IMF), European Commission (EC) and European Central Bank (ECB). The second bloc includes those who argue that Greece should abandon the euro and seek ways of establishing a Keynesian nation-state economic balance once again. The third is those who say the Greek crisis is indeed the EU's crisis and suggest that the EU should be reconstructed economically and politically. Indeed, the third group regards the Greek crisis as a systemic problem and a reflection of the final capitalist crisis. To give an example from the first bloc, Vassilis Monastiriotis, an economics professor at the London School of Economics, said the Greek government has never come to the table with constructive suggestions for the past five months, adding that the Syriza government has no answer to the question of what it's suggestion is while objecting to the IMF and eurozone's request to cut wages and pensions. Monastiriotis also stated that apart from Greece, several EU countries, including Portugal, Spain and Ireland, have borrowed from the IMF since the outbreak of the European debt crisis in 2010. However, they are in much better condition than Greece now, he said, holding the Greek government largely responsible for this, rather than the EU and the IMF. It is sad that an economics professor draws a conclusion by putting Greece in the same pot as Spain and Portugal and by ignoring the basic economic concept of productivity. It is also totally irrational that he says there is no option for Greece. It appears that Monastiriotis did not hear the remarks by Greek Finance Minsiter Yanis Varoufakis. Varoufakis iterated on every occasion that the countries that are members of a monetary union and have a budget surplus should transfer this surplus to the countries that have a budget deficit and need investment, stressing that the eurozone must have an institution to plan for this. If the EU were a union in real terms, there would not be a Greek issue today. The only solution was to activate the European Stability Mechanism (ESM), to head toward a financial union rapidly and to separate the banking system from national economies (governments). This was not done because Germany has never leaned toward a union in the real sense. If it had been, Varoufakis's solution offers would be actualized now. American economist Paul Krugman accuses the troika, which is led by the IMF and Germany, of making a mafia-style offer to Greece. What has been done to Syriza is Contra Corleone, says Krugman, referring to the famous Italian mafia. It is a stratagem to change the Greek government by making an offer that it cannot accept. Krugman also objects to neoliberal policies, dubbed austerity policies, suggesting that institutions that can support a monetary union in the eurozone have never been formed. If we consider the 1990s as the beginning of the years that took the world to the 2008 crisis, Greek governments that have come to power since then present a very meaningful picture. From 1996 to 2011, PASOK governments ruled Greece under Andreas Papandreou and Konstantinos Simitis. These two PASOK governments established neoliberal economic policies on nationalist politics that prioritized armament, laying the foundations of the current bankruptcy. Nothing changed in Greece when Konstantinos Karamanlis came to power in 2004, since he did not digress from the basic path of PASOK and maintained neoliberal policies. This time desperate Greek people brought George Papandreou-led PASOK to power, hoping that he would pursue wiser policies than his father. However, there was nothing new and he stepped down two years later. The global financial capital made Lucas Papademos form a technocratic government. He is a brilliant man who was an adviser to Papandreou, studied physics and economics at the Massachusetts Institute of Technology (MIT) and lectured at Columbia University. Papademos could not endure for long either and public demonstrations and the reaction of desperate Greek people brought the end of the technocratic government. After the one-month government of Panagiotis Pikrammenos, who was in power until the elections, Greek people brought the New Democracy Party of Antonis Samaras in the June 2012 elections. However, Samaras did not have a different path and mind from the "social democrat" PASOK. He maintained the same neoliberal policies and Greece became unable to pay its pensions. As can be seen, it is irrational to seek the roots of the current crisis in Syriza. So, here are the conclusions:1- The argument that there is no option for Greece is wrong.2- The EU is not a union in real terms and this is the root cause of the crisis. 3- Greece's debt is actually the internal debt of the EU. 4- As suggested by Krugman, Greek's secession from the eurozone is not a permanent solution.5- The permanent solution is a new fiscal and political union that can be actualized with a new expansion policy.