It Was #Socialism, Not #Austerity or Alexis Tsipras, That Wrecked #Greece

Matt Purple writes: The stock market is getting walloped today and the reason is grave: Greece, dogged by enormous debt and an anemic economy, may be about to walk away
from its German creditors.

“Thanks to Greece’s socialist policies, its economy has long been creaking under the weight of crushing debt. It only endured in the debt-averse European Union because, with the help of Wall Street honchos like Goldman Sachs, it cunningly concealed its red ink for over a decade.”

Greek Prime Minister Alexis Tsipras has called for a referendum over the latest concessions demanded by Germany and the European Commission. Votes will be cast on Sunday and Tspiras is actively campaigning against Greek cooperation. Four days earlier comes Tuesday, which is the deadline for Greece forking over an additional 1.6 billion euros to the International Monetary Fund. It’s now unknown whether Tspiras intends to default.

What is known is that the uncertainty is causing Greeks to party like it’s 1930. NBC News reports:

Greece imposed restrictions on money withdrawals and banking transactions to keep its financial system from collapsing due to a run on the banks.

Anxious Greeks rushed to ATMs to withdraw cash after Prime Minister Alexis Tsipras called late Friday for a referendum on the creditors’ reform proposals. …

Meanwhile, retirees lined up just after dawn at bank branches hoping they would be able to receive their pensions, which were due to be paid Monday. The finance ministry said the manner in which pensions would be disbursed would be announced later in the afternoon.

The president of the European Commission has declared that Greece’s departure from the euro is not an option, but even the most impenetrable of Eurocrats must comprehend that their little science project is falling apart.

[Read the full text here, at Rare]

This weekend’s referendum isn’t just about the current bailout package; a “no” vote will effectively jettison Greece from the euro and resurrect their old drachma currency. A “Grexit,” the prospect of which has long triggered dramatic sting music in the minds of European financial ministers, is looming over the Continent.

“That debt is often attributed to the fact that ‘Greeks don’t pay their taxes,’ which has now reached near-aphorism status among economic writers. But rarely does anyone explore the reasons for all this tax dodging.”

And why not? The referendum is likely a leverage tactic by Tspiras—who’s resorted to such risibly desperate measures in the past as calling on Germany to pay Greece Nazi war reparations—but it intersects with one of the seminal themes of his election campaign last year: giving the Greek people a choice. Why should Athens, fuzzily remembered as the “birthplace of democracy,” have its finances determined in the back room of a foreign accounting office?

Those finances were wrecked in the first place by the Greeks and can only be fixed by the Greeks. A befuddled Jean-Claude Juncker, head of the European Commission, said today that Tspiras’ hardball negotiating tactics were “not worthy of the great Greek nation.” He’s thinking too much of Menelaus and not enough of Marx….(read more)

Rare

Related articles

• Greek debt crisis: Tsipras offer is welcomed as ‘good basis for progress’ (theguardian.com)
• Creditor powers convene emergency Berlin summit as Greek endgame approaches (the-greek-tragedy.blogspot.com)
• Greek debt crisis: Tsipras makes new proposals to EU leaders (sott.net)
• Is EC Juncker undermining the negotiations by misleading Greece with own proposals that IMF & ECB reject? (keeptalkinggreece.com)
• Creditor powers convene emergency summit to decide Greek fate (telegraph.co.uk)
• The Greek Negotiations: Many Angry Words And No Way Forward (forbes.com)