Germany Showing 'Lack of Solidarity' Over Greece: Stiglitz
'It is time for the U.S. to be generous with our friends in Greece'
Prominent economist and Nobel laureate Joseph Stiglitz accused Germany on Sunday of displaying a "lack of solidarity" with debt-laden Greece that has badly undermined the vision of Europe.
"What has been demonstrated is a lack of solidarity by Germany. You cannot run a eurozone without a basic modicum of solidarity. It is really undermining the common sense of vision, the sense of common solidarity in Europe," the Columbia University professor and former World Bank chief economist told Agence France Presse.
"I think it's been a disaster. Clearly Germany has done a serious blow, undermining Europe," he said. "Asking even more from Greece would be unconscionable. If the ECB allows Greek banks to open up and they renegotiate whatever agreement, then wounds can heal. But if they succeed in using this as a trick to get Greece out, I think the damage is going to be very very deep."
* * * * *
Paul Krugman wrote Sunday in the New York Times:
Substantive surrender isn't enough for Germany, which wants regime change and total humiliation -- and there's a substantial faction that just wants to push Greece out, and would more or less welcome a failed state as a caution for the rest...There are only terrible alternatives at this point, thanks to the fecklessness of the Greek government and, far more important, the utterly irresponsible campaign of financial intimidation waged by Germany and its allies.
* * * * *
Stiglitz wrote on July 8th:
As the Greek saga continues, many have marveled at Germany's chutzpah. It received, in real terms, one of the largest bailout and debt reduction in history and unconditional aid from the U.S. in the Marshall Plan. And yet it refuses even to discuss debt relief. Many, too, have marveled at how Germany has done so well in the propaganda game, selling an image of a long-failed state that refuses to go along with the minimal conditions demanded in return for generous aid.
The facts prove otherwise: From the mid-90's to the beginning of the crisis, the Greek economy was growing at a faster rate than the EU average (3.9% vs 2.4%). The Greeks took austerity to heart, slashing expenditures and increasing taxes. They even achieved a primary surplus (that is, tax revenues exceeded expenditures excluding interest payments), and their fiscal position would have been truly impressive had they not gone into depression. Their depression--25% decline in GDP and 25% unemployment, with youth unemployment twice that--is because they did what was demanded of them, not because of their failure to do so. It was the predictable and predicted response to the austerity...
The U.S. was generous with Germany as we defeated it. Now, it is time for the U.S. to be generous with our friends in Greece in their time of need, as they have been crushed for the second time in a century by Germany, this time with the support of the troika. At a technical level, the Federal Reserve needs to create a swap line with Greece's central bank, which--as a result of the default of the ECB in fulfilling its responsibilities--will have to take on once again the role of lender of last resort. Greece needs unconditional humanitarian aid; it needs Americans to buy its products, take vacations there, and show a solidarity with Greece and a humanity that its European partners were not able to display.
Urgent. It's never been this bad.
Dear Common Dreams reader, It’s been nearly 30 years since I co-founded Common Dreams with my late wife, Lina Newhouser. We had the radical notion that journalism should serve the public good, not corporate profits. It was clear to us from the outset what it would take to build such a project. No paid advertisements. No corporate sponsors. No millionaire publisher telling us what to think or do. Many people said we wouldn't last a year, but we proved those doubters wrong. Together with a tremendous team of journalists and dedicated staff, we built an independent media outlet free from the constraints of profits and corporate control. Our mission from the outset was simple. To inform. To inspire. To ignite change for the common good. Building Common Dreams was not easy. Our survival was never guaranteed. When you take on the most powerful forces—Wall Street greed, fossil fuel industry destruction, Big Tech lobbyists, and uber-rich oligarchs who have spent billions upon billions rigging the economy and democracy in their favor—the only bulwark you have is supporters who believe in your work. But here’s the urgent message from me today. It’s never been this bad out there. And it’s never been this hard to keep us going. At the very moment Common Dreams is most needed and doing some of its best and most important work, the threats we face are intensifying. Right now, with just two days to go in our Spring Campaign, we're falling short of our make-or-break goal. When everyone does the little they can afford, we are strong. But if that support retreats or dries up, so do we. Can you make a gift right now to make sure Common Dreams not only survives but thrives? There is no backup plan or rainy day fund. There is only you. —Craig Brown, Co-founder |
Prominent economist and Nobel laureate Joseph Stiglitz accused Germany on Sunday of displaying a "lack of solidarity" with debt-laden Greece that has badly undermined the vision of Europe.
"What has been demonstrated is a lack of solidarity by Germany. You cannot run a eurozone without a basic modicum of solidarity. It is really undermining the common sense of vision, the sense of common solidarity in Europe," the Columbia University professor and former World Bank chief economist told Agence France Presse.
"I think it's been a disaster. Clearly Germany has done a serious blow, undermining Europe," he said. "Asking even more from Greece would be unconscionable. If the ECB allows Greek banks to open up and they renegotiate whatever agreement, then wounds can heal. But if they succeed in using this as a trick to get Greece out, I think the damage is going to be very very deep."
* * * * *
Paul Krugman wrote Sunday in the New York Times:
Substantive surrender isn't enough for Germany, which wants regime change and total humiliation -- and there's a substantial faction that just wants to push Greece out, and would more or less welcome a failed state as a caution for the rest...There are only terrible alternatives at this point, thanks to the fecklessness of the Greek government and, far more important, the utterly irresponsible campaign of financial intimidation waged by Germany and its allies.
* * * * *
Stiglitz wrote on July 8th:
As the Greek saga continues, many have marveled at Germany's chutzpah. It received, in real terms, one of the largest bailout and debt reduction in history and unconditional aid from the U.S. in the Marshall Plan. And yet it refuses even to discuss debt relief. Many, too, have marveled at how Germany has done so well in the propaganda game, selling an image of a long-failed state that refuses to go along with the minimal conditions demanded in return for generous aid.
The facts prove otherwise: From the mid-90's to the beginning of the crisis, the Greek economy was growing at a faster rate than the EU average (3.9% vs 2.4%). The Greeks took austerity to heart, slashing expenditures and increasing taxes. They even achieved a primary surplus (that is, tax revenues exceeded expenditures excluding interest payments), and their fiscal position would have been truly impressive had they not gone into depression. Their depression--25% decline in GDP and 25% unemployment, with youth unemployment twice that--is because they did what was demanded of them, not because of their failure to do so. It was the predictable and predicted response to the austerity...
The U.S. was generous with Germany as we defeated it. Now, it is time for the U.S. to be generous with our friends in Greece in their time of need, as they have been crushed for the second time in a century by Germany, this time with the support of the troika. At a technical level, the Federal Reserve needs to create a swap line with Greece's central bank, which--as a result of the default of the ECB in fulfilling its responsibilities--will have to take on once again the role of lender of last resort. Greece needs unconditional humanitarian aid; it needs Americans to buy its products, take vacations there, and show a solidarity with Greece and a humanity that its European partners were not able to display.
Prominent economist and Nobel laureate Joseph Stiglitz accused Germany on Sunday of displaying a "lack of solidarity" with debt-laden Greece that has badly undermined the vision of Europe.
"What has been demonstrated is a lack of solidarity by Germany. You cannot run a eurozone without a basic modicum of solidarity. It is really undermining the common sense of vision, the sense of common solidarity in Europe," the Columbia University professor and former World Bank chief economist told Agence France Presse.
"I think it's been a disaster. Clearly Germany has done a serious blow, undermining Europe," he said. "Asking even more from Greece would be unconscionable. If the ECB allows Greek banks to open up and they renegotiate whatever agreement, then wounds can heal. But if they succeed in using this as a trick to get Greece out, I think the damage is going to be very very deep."
* * * * *
Paul Krugman wrote Sunday in the New York Times:
Substantive surrender isn't enough for Germany, which wants regime change and total humiliation -- and there's a substantial faction that just wants to push Greece out, and would more or less welcome a failed state as a caution for the rest...There are only terrible alternatives at this point, thanks to the fecklessness of the Greek government and, far more important, the utterly irresponsible campaign of financial intimidation waged by Germany and its allies.
* * * * *
Stiglitz wrote on July 8th:
As the Greek saga continues, many have marveled at Germany's chutzpah. It received, in real terms, one of the largest bailout and debt reduction in history and unconditional aid from the U.S. in the Marshall Plan. And yet it refuses even to discuss debt relief. Many, too, have marveled at how Germany has done so well in the propaganda game, selling an image of a long-failed state that refuses to go along with the minimal conditions demanded in return for generous aid.
The facts prove otherwise: From the mid-90's to the beginning of the crisis, the Greek economy was growing at a faster rate than the EU average (3.9% vs 2.4%). The Greeks took austerity to heart, slashing expenditures and increasing taxes. They even achieved a primary surplus (that is, tax revenues exceeded expenditures excluding interest payments), and their fiscal position would have been truly impressive had they not gone into depression. Their depression--25% decline in GDP and 25% unemployment, with youth unemployment twice that--is because they did what was demanded of them, not because of their failure to do so. It was the predictable and predicted response to the austerity...
The U.S. was generous with Germany as we defeated it. Now, it is time for the U.S. to be generous with our friends in Greece in their time of need, as they have been crushed for the second time in a century by Germany, this time with the support of the troika. At a technical level, the Federal Reserve needs to create a swap line with Greece's central bank, which--as a result of the default of the ECB in fulfilling its responsibilities--will have to take on once again the role of lender of last resort. Greece needs unconditional humanitarian aid; it needs Americans to buy its products, take vacations there, and show a solidarity with Greece and a humanity that its European partners were not able to display.