3 Greek myths  

By Vincente Navarro

Dominant economic thinking, that is, neoliberalism, constantly uses lines of argument to create moods that make its proposals –  always involving sacrifices by the masses – more tolerable and acceptable. These arguments are repeated in the mass media to the point they become the conventional wisdom. That is, the “platitudes” promoted by the dominant economic thinking are accepted without question, marginalizing those who challenge them. These “truisms” are repeated thousands of times by media’s favourite economists whose confidence aims to demonstrate competence. For each of their truisms, the supporting evidence is thin, if not negligible. In fact, what evidence there is (easily accessible, btw) reveals the falsity of their truisms. Let’s look at several of them, starting with what conventional wisdom says and then contrasting it with the evidence that contradicts it.

1. The problem is that the eurozone lacks leadership. There is no figure or political power that leads the project. I can cite a large number of “media gurus” who, with in deadly earnest highlight this lack of leadership as a major problem. Yet any analyst of public policy that are being implemented by most European institutions (the European Council, the European Commission and the European Central Bank) and the governments of the eurozone would note they very largely coincide, from cuts in public spending and structural reforms to lower wages. And directing all of this is the German government led by Mrs. Merkel, who is leading policies in the Eurozone. Despite the enormous evidence that these policies are causing enormous damage to the masses, these are being carried out under the supervision and mandate of the Merkel government. What other proof do they want in order to see that leadership does exist? Not a single country has rebelled against these policies, even if occasionally one hears timid voices of protest.
2. The “irresponsible” policies of peripheral eurozone countries are leading the Eurozone to a disaster, paving the way to the euro’s collapse. It will be recalled that the collapse of the euro has been in recent years a fear promoted by neoliberal economists (and their allies, the social-liberals economists), who constantly warn that unless the peripheral countries act more responsibly (ie, slash public spending and wages even more), the euro will fall. Again, I can cite many media pundits who were already calculating the date and time at which the euro will fall. Well, the euro is still here, hand it is not in any danger of disappearing, as I have previously indicated amid the hysteria of the alleged collapse. And the reason that there was no danger of it collapsing was very easy to see. German financial capital, the axis of European financial (and political) power, has been doing just fine with the euro, with this power imbalance within the Eurozone. Actually, it couldn’t have been doing any better for the Single Currency’s largest member. Because money has been flowing from the periphery to the centre, benefiting the German financial and economic establishment. The euro, far from dying, is in very robust health.
3. The victory of SYRIZA in Greece could lead to the expulsion of Greece from the Eurozone. SYRIZA’s programme, which threatens to restructure debt, and even cancel a component of it, will cause Greece’s expulsion. This is what you have read in the Big Media thousand times in recent days. All media gurus, including the guru of El País, Mr. JC Díez, has been predicting it. And the conservative and liberal voices (including social-liberals) among the dominant elite are now predicting that Greece will end up being expelled. And as proof, one can look to the statements by the German Finance Minister, the IMF and a large number of spokespeople of conventional wisdom. It’s the media’s new media political dogma. Well, I assure you that the last thing the German banks wish for is Greece leaving the euro. And if not, they will wait and see. And the reason why they don’t want Greece cast out the Eurozone is that, should this occur, German banks would have a huge problem. Germany has invested 700 billion euros in the PIGS – Portugal, Ireland, Greece and Spain (200 billion in the latter). This is a lot of money. If Greece were to be expelled, it is logical that Greece will not pay this debt. And then the serious problem is not for Greece but Germany. In fact, the rescue of Spanish banks (for which the EU offered 100 billion euros) was purely designed to pay the debt to German banks (as proven in debates in the German Parliament when it had to approve the ‘rescue’ funds).

A SYRIZA victory would signify a step towards redefining the South / North dynamic within the Eurozone, which by definition entails redefining relations of power within the Eurozone. Greece and Spain, in fact, have more power than they have had the courage to use. And that power is that they owe a lot of money to Germany that the latter cannot afford to lose, but which would happen if these countries do not pay. If you, the reader, owe 100,000 euros to a bank and cannot pay, you have a problem. But if you owe 100 billion to the bank and you cannot pay, the bank has a big problem. And Germany is fully aware of this. Needless to say that now all neoliberals and social-liberals have mobilized to ensure Syriza does not win. They use all kinds of arguments. But this is part of a narrative that, as a number of people have already denounced, lacks credibility.

El Publico

Translation by Revolting Europe