Greece is being blackmailed. Exiting the eurozone is its way out | Costas Lapavitsas
Instead of acceding to the troika’s devastating demands, Syriza should free the country from the trap of the common currency – if the Greek people agree
A few days ago the Greek government submitted a list of proposals hoping to break the deadlock with the “institutions” – the European Commission, the International Monetary Fund and the European Central Bank. The government basically agreed to tough primary surpluses: 1% in 2015 and 2% in 2016. To achieve these targets it proposed to raise VAT on a range of widely consumed goods as well as imposing a host of taxes on enterprises and families of “high” income. It also proposed substantial savings on pensions. The measures added up to roughly €8bn over 2015-16, and would be immediately implemented.
The package is certainly deflationary at a moment when the Greek economy is again on the threshold of recession. There is little doubt that it would contribute to output contraction and higher unemployment in 2015-16, particularly as there is little prospect of being offset by an investment programme funded by the EU. It is a major retreat by the government of Syriza.
For those who look at the EU without rose-tinted glasses, there is no surprise regarding the attitude of the lendersContinue reading...