The Greek referendum has delivered a stunning victory for Syriza and its anti-austerity message. Despite the banks being closed as a result of the ECB limiting its provision of banknotes, and despite a united chorus of European leaders warning of dire consequences if the No vote succeeded, the Greeks have voted No in overwhelming numbers. The final result looks likely to be a 62% No to 38% Yes rejection of the Troika’s terms. Syriza now has overwhelming support from the Greek people to oppose the Troika (a result that opinion polls got completely wrong).
I was interviewed on the BBC News Channel on Tuesday about the Greek crisis (see below) and I will be part of a CNBC panel “Squawk Box Special – Greece Decides” discussing the referendum results live as they roll in, from 8.30-9pm London time on Sunday.
There is an adage in politics that you should never put anything to the vote unless you are sure of the outcome beforehand. On that front, the referendum Greeks will vote in this Sunday is a mistake, because the vote could go either way. If the majority votes No, as Syriza hopes, then it—hopefully—will strengthen its hand in future negotiations with the Troika. But if the majority votes Yes, then Syriza will have to capitulate to the Troika and accept its unbending policy of austerity.
The most recent of the almost daily “Greek Crises” has made one thing clear: the Troika of the IMF, the EU and the ECB is out to break the government of Greece. There is no other way to interpret their refusal to accept the Greek’s latest proposal, which accepted huge government surpluses of 1% of GDP in 2015 and 2% in 2016, imposed VAT increases, and further cut pensions which are already below the poverty line for almost half of Greece’s pensioners. Instead, though the Greeks offered cuts effectively worth €8 billion, they wanted different cuts worth €11 billion.
England’s Chancellor George Osborne took the Conservative Party’s claim to fiscal responsibility one step higher last week when he announced that they will enact a law which will require British governments to run surpluses “in normal times”:
In a (for me!) brief presentation with 7 slides, I explain why rising private debt necessarily causes increased inequality, and leads to an economic crisis when the rate of growth of debt exceeds the rate of decline of wages as a share of national income. Crucially, the actual breakdown is preceded by an apparent period of tranquility–a “Great Moderation”.
This was a short talk to a public audience at ESCP Europe in Paris, which was presented in English and also translated into French by Gael Giraud, Chief Economist of the French Development Agency and the translator of Debunking Economics (so the soundtrack is in both English and French).
We are hiring two new staff at Kingston University: one permanent position at Associate Professor level, and one short-term contract to cover an absent colleague.
If you’d like to work at one of the few pluralist-friendly economics departments in the world, and you’re suitably qualified, please follow the links below for more details and to submit your application. Or if they don’t work–as a correspondent has told me–send an email to firstname.lastname@example.org asking for details.
I was interviewed by Chris Menon from Every Investor last week and asked to comment on the economic policies of the two major parties in the UK election. Chris’s introduction to the interview is below; click here to see the interview itself.
In an exclusive interview with Every Investor, Professor Steve Keen from Kingston University has warned that politicians who promote austerity economics are naïve.
The economist, who was one of the few who predicted the Great Recession, warned last year that the US and UK economies wouldn’t make a sustainable recovery due to the problem of high levels of private debt – public debt being more a symptom than a cause of this economic malaise.
This site does not give personal financial advice. The focus of this blog is economic analysis, and how you interpret this with respect to your own financial decisions is entirely up to you.
Steve Keen, Debtwatch, and any employees or associates will not be held liable for any losses resulting from decisions taken by any individual or entity as a consequence of reading materials on this blog.
Membership or sponsorship of this blog does not constitute purchasing any product service apart from those listed in the membership and sponsorship conditions.