[lbo-talk] Greek Election Result

[Wojtek S]

Greek voters gave their contradictory verdict: While 55% voted for
parties that stood explicitly against the ‘bailout’ terms and
conditions, a pro-’bailout’ government is about to be formed – such is
the nature of Greece’s electoral system (which rewards the largest
party with a bonus of 50 additional MPs in the 300 seat chamber). The
New Democracy party will lead the government even though it is utterly
clear that at least one in three of the voters who backed it think
very little of the party and its leader but felt they had no option
but to vote for them simple because the alternative, a Syriza
government, might bring upon the nation the combined wrath of Berlin,
Frankfurt and Brussels. This is as inauspicious a beginning for a new
government with a mountain range of challenges as one could have
imagined.
[...]
Greece will be given an additional three to five years to bring its
budget deficit under the magic 3% mark. The Samaras government which
is bound by the Bailout Mk2 ‘rules’ to cut public spending within a
month by a further  11.5 billion, will probably be allowed to ‘get
away’ with a smaller cull (of, say,  5 billion). Greece will probably
be leant another  50 billion and some new announcements about
structural funding of investment projects will be added to the mix. In
my estimation, such a ‘relaxation’ will be the worst possible outcome
for Greece and a calamitous one for Europe too!

Let me explain why I stand convinced that a loosening of Greece’s
bailout’s terms and conditions will be a terrible outcome for
everyone: The Greek economy is well and truly broken. The circuits of
credit are so badly damaged that even efficient, profitable firms have
been cut out of the capital markets but also out of the international
markets (as their suppliers will no longer accept the Greek bank
guarantees without which Greek firms cannot import raw materials).
These credit circuits will remain broken even under new terms and
conditions, as I described them above. Neither the extension of
repayments of the new loans to the insolvent state (which everyone
knows will be defaulting again – this time to official creditors) nor
the new loans will change this. Moreover, the new spending cuts, even
if they are less than what was envisaged under Mk2, will give the
forces of recession another boost. To cut a long story short, there is
no doubt that such loosening up will simply prolong, without averting,
the agonising death of the Greek social economy while, at the same
time, depleting the dwindling stock of patience with the logic of
bailouts in Germany, in the Netherlands, in Finland and in Austria. To
put it differently, when in December, it becomes, yet again, clear
that another, more relaxed, Greek bailout has failed, that realisation
will add to the strains and tensions in Europe, accelerating further
the centrifugal forces tearing the Eurozone apart.

http://yanisvaroufakis.eu/2012/06/18/greek-election-result-an-assessment/

-- 
Wojtek

"An anarchist is a neoliberal without money."