Much has been said and written about the public debt crisis in Greece. Some of this has been malicious.Most of it however has been an honest attempt to understand what is happening and to propose ways out of a tricky situation, not only for Greece. What should be stressed is that it is necessary to think ‘outside the box’. In other words, orthodox economic theory, as it developed in the past quarter of a century, provides very few, if any, insights.
However, it is such orthodox theory that has so far inspired the policies applied in Greece, under the strict guidance and overseeing of the triumvirate, i.e., the ECB, the European Commission and the IMF. The experience of the past two years provides ample proof that these policies have at best not helped and at worst deepened the crisis.
Greece is as economically, socially and politically complex a country, as any other. Understanding it on its own terms is thus essential. Further, since joining the EU (in 1962 as an associate member and in 1980 as a full member) and the eurozone (in 2001), it has become part of a broader set of relations in all spheres. Lastly, as a small, open economy, it is at all timesinfluenced byglobal trends and developments.It is these different strands that one needs to take apart, even if schematically, in order to gain an insight into the current situation in Greece.
Where do we stand today? The Greek economy is in free fall. Output is declining at a fast rate, unemployment is increasing equally fast, especially among the young – the better educated of which are migrating – poverty and homelessness, especially in the cities, are on the rise, the number of suicides is increasing, as is the crime rate. Even more importantly, the future appears uncertain, if not bleak.
Is there a way out? We believe there is. It involves radically changing social relations in Greece, in the eurozoneand in the EU. It is regulating finance, so that it does not take precedence over governments. It is designing the future with a new vision. One that is based on the cohesion of society, on democracy and on respect for the environment.
Until a few years ago, such a vision was propagated mainly by leftists and romantics. The crisis has however revealed the limits of financialised capitalism. So, the vision has come back. For it to become reality, political will, indeed courage, is needed. And, not just in Greece.