Ending Greece’s bleeding →

July 06, 2015 |

Paul Krugman, writing for The New York Times on the outcome of the historic referendum that took place in Greece yesterday:

But the campaign of bullying — the attempt to terrify Greeks by cutting off bank financing and threatening general chaos, all with the almost open goal of pushing the current leftist government out of office — was a shameful moment in a Europe that claims to believe in democratic principles. It would have set a terrible precedent if that campaign had succeeded, even if the creditors were making sense.

What’s more, they weren’t. The truth is that Europe’s self-styled technocrats are like medieval doctors who insisted on bleeding their patients — and when their treatment made the patients sicker, demanded even more bleeding. A “yes” vote in Greece would have condemned the country to years more of suffering under policies that haven’t worked and in fact, given the arithmetic, can’t work: austerity probably shrinks the economy faster than it reduces debt, so that all the suffering serves no purpose. The landslide victory of the “no” side offers at least a chance for an escape from this trap.

Yesterday, the Greek people overwhelmingly said no to fear, and no to the failed austerity policies of the Eurogroup. This was a historic decision with the potential to alter the course of the entire EU, and its first consequences are already being felt.

That said, I don’t necessarily agree with Krugman’s opinion that Greece leaving the Euro would be “the best of bad options”. In my opinion — and I’m admittedly no expert — there’s plenty of wiggle room to negotiate a viable deal within the confines of the Eurozone, but in order for that to happen, Greece’s creditors must shoulder their fair share of responsibility for what’s happened.

Alexis Tsipras’s government seems keen on reaching an agreement that would secure Greece’s future in the Eurozone, even going so far as to sacrifice their own finance minister, Yanis Varoufakis, in order to facilitate negotiations despite having won the referendum. The Greeks have done their part, now it’s time for the rest of the Eurogroup to pick up the ball.