Europe: What the Greek Memorandum Means

[marmar]

from Dissent magazine:


Europe: What the Greek Memorandum Means
James Galbraith and Daniel Munevar ▪ August 24, 2015


It is a lie from the first line. “Greece has requested support from its European partners. . . .” Thus begins the “Memorandum of Understanding for a three-year ESM programme” (MoU), which sets the conditions with which Greece must comply in order to avoid being ruled in default on its debts.

The reality is that the Greek prime minister, Alexis Tsipras, was bludgeoned into accepting the terms that follow in this long and depressing document, under threat that the banking system of his country, entirely controlled by the European Central Bank, would otherwise be demolished, and that he would be forced to manage a disorderly exit from the euro, for which his government did not feel—and for which in fact it wasn’t—decently prepared.

For what purpose, this supposed support? The document continues: “to restore sustainable growth, create jobs, reduce inequalities, and to address the risks to its own financial stability and to that of the euro area.” Let us take these up in turn.

“Restore sustainable growth.” In reality Greece has not enjoyed sustainable growth under the euro, which is to say, not since 1999 at least. Growth in the entire period before 2010 was built on unsustainable debt, followed since then by deep and ongoing decline.

“Create jobs.” Here the record of the previous memorandums, in force since 2010 and highly similar to the present one, is not reassuring. Under their guidance, Greek unemployment has reached 29 percent overall and around 60 percent for the young, with no sign of improvement so far. ......................(more)

http://www.dissentmagazine.org/online_articles/europe-greece-memorandum-understanding-mou-galbraith-munevar