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Eurozone, Greece

The two scenarios now facing Greece

By Sergio Cesaratto

The victory of ‘no’ opens two scenarios. The most likely is the further effort by the Syriza-led government to reach a new agreement with the Troika, but it is not clear why it should be given something that had not been given before. The financial upheaval of recent days may be such as to induce the Troika to grant Syriza an agreement to save the face of all. But the substance would be the continuation of austerity.

Instead, a decisive choice to leave the euro and the EU would put Greece in a situation that would be unique in Europe, a country that decides to regain their economic and democratic independence. This requires enormous political courage and determination. The country would enter into a kind of war economy, or more precisely in an economy of controls, those that the influential Italian economist Federico Caffè saw as necessary to ensure full employment.

Controlling the movement of capital is the most obvious measure; import controls are its complement. This means that the (scarce) hard currency in the country, is allocated by the state to import the most important  things – medicines, industrial goods and energy etc. – and by blocking imports of superfluous luxury goods. In this framework, the restored monetary sovereignty will enable a revival in domestic demand, while a limited devaluation of the drachma will make the country even more attractive to tourism.  Price controls (and wages) will also be necessary, as will the use resources to relaunch industrial policy. No miracles, for certain, but and end to austerity. Greece would need allies with which to seal international economic agreements, and there are some out there. This will also create enemies, who will try to destabilize it – needless to mention names.

Freeing Greece of European constraints and neo-liberalism would be a momentous lesson for the European left (the Latin American left is well ahead on this front). The European left should accept that between condescension toward Europe (there is only one of them) and political and intellectual recovery, there are options that were in the armoury of economics up to 40 years ago. We should begin discuss them. Let’s not miss this opportunity.

This is a translation/edit of an article published ahead of the referendum on Sunday

Micromega/Il manifesto

About revoltingeurope

Writer on Europe's Left, trade union and social movements @tomgilltweets or @revoltingeurope


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