Titus Stahl

Stiglitz: How I would vote in the Greek referendum

Columbia professor and economics Nobel laureate Joseph Stiglitz is not happy about the developments with regard to Greece:

Of course, the economics behind the programme that the “troika” (the European Commission, the European Central Bank, and the International Monetary Fund) foisted on Greece five years ago has been abysmal, resulting in a 25% decline in the country’s GDP. I can think of no depression, ever, that has been so deliberate and had such catastrophic consequences: Greece’s rate of youth unemployment, for example, now exceeds 60%.

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We should be clear: almost none of the huge amount of money loaned to Greece has actually gone there. It has gone to pay out private-sector creditors – including German and French banks. Greece has gotten but a pittance, but it has paid a high price to preserve these countries’ banking systems. The IMF and the other “official” creditors do not need the money that is being demanded. Under a business-as-usual scenario, the money received would most likely just be lent out again to Greece.

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A yes vote would mean depression almost without end. Perhaps a depleted country – one that has sold off all of its assets, and whose bright young people have emigrated – might finally get debt forgiveness; perhaps, having shrivelled into a middle-income economy, Greece might finally be able to get assistance from the World Bank. All of this might happen in the next decade, or perhaps in the decade after that.

By contrast, a no vote would at least open the possibility that Greece, with its strong democratic tradition, might grasp its destiny in its own hands.

Of course, none of this will make any difference for either the German leaders or the German populace. For the former, the goal was never to make Greece pay its debts, but to create a low-wage economic colony on Europe’s periphery which can be exploited by foreign investors and from which surplus will perpetually flow to the center. By the latter, an attitude of moralizing superiority that retroactively justifies the destruction of social safety nets in Germany (“we gave away the welfare state to allow companies to increase their profits by employing low-wage labor, so why should the Greeks be better off?”) seems still to be preferred over solidarity and a common struggle against neoliberalism. But time will tell.