Alternative Visions – Greece’s Challenge to Euro Neoliberalism – 07.04.15

Jack Rasmus explains the northern Europe Neoliberal origins of the current Greek Debt crisis, and why the Troika cannot and will not accept Greece’s proposals which would upset the Euro-wide Neoliberal consensus. Greece’s proposals represent a return to traditional, pre-Neoliberal, European social democracy—which has been replaced with a new Neoliberal regime Europe-wide since 2000 with the creation of the Euro currency. Jack explains if the Troika agreed to Greece’s quite reasonable proposals, it would open a ‘pandora’s box’ that would undermine the Euro neoliberal regime and the Euro elites’ strategy for economic growth based on exports stimulus via QE plus labor cost reduction.  Ironically, allowing a Greek exit may destabilize Greece and the Eurozone in the longer run as well. Jack reviews the growing centrifugal forces within Europe that are building toward an eventual Europe breakup down the road: the inability to engineer a sustained economic recovery, the long run contagion effects from the Greek debt crisis, the Ukraine and sanctions against Russia, the massive immigration inflows into Europe from failed states in the middle east and Africa caused by US policies that Europe has joined as well, the rise of parties on the left and right in Europe advocating exit from the Euro and the European customs union as well. Rasmus explains how Euro monetary policies—central to all Neoliberal policies—are failing in Europe as well as in Japan. The failure, along with financial bubbles now bursting in China and the continuing crisis of Greek debt, may lead to global investors everywhere ‘taking their money and running’, according to Jack, thus precipitating a new global financial crisis.  Jack concludes by predicting the IMF’s July 3 report suggests a way out for Greece: extending Greek debt from 20 to 40 years, reducing principal payments and interest, in exchange for Greece accepting the Troika’s demand for more concessions. Jack predicts Greeks will accept the trade off, perhaps even before the July 5 referendum which will then be called off.

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