Eurozone summit meeting regarding Greece is underway

The European finance ministers have agreed to punt the Greek question to the Eurozone leaders who began their meeting in Brussels a little over 30 minutes ago. By Greek question, I am referring to whether they decide to loan Greece as much as 74 billion euros ($82.6 billion) or show them to the Grexit. France and Italy oppose a Grexit; Germany favors it.

The dispute is not so much about the money as it is about resolving two competing considerations: (1) whether Greek officials will make a good faith effort to comply with the terms of the loan and (2) whether the eurozone will begin unraveling and eventually collapse if the leaders of the eurozone decide not to loan the money. There is no easy answer.

Paul Krugman said Friday in the New York Times, the unitary currency and hard money loans (i.e., austerity) constitute a major structural impediment to an improving economy.

What turned Greek debt troubles into catastrophe was Greece’s inability, thanks to the euro, to do what countries with large debts usually do: impose fiscal austerity, yes, but offset it with easy money.


The main point, however, is that the ratio of debt to G.D.P. is up because G.D.P. is down by more than 20 percent. And why is GDP down? Largely because of the austerity measures Greece’s creditors forced it to impose.


Greece, unfortunately, no longer had its own currency when it was forced into drastic fiscal retrenchment. The result was an economic implosion that ended up making the debt problem even worse. Greece’s formula for disaster, in other words, didn’t just involve austerity; it involved the toxic combination of austerity with hard money.

As I’ve said before, I think Greece would be better off in the long run, if it were to print its own currency and reject the austerity measures.

The Guardian is providing live coverage of the summit meeting of the leaders of the Eurozone. You can follow it here.


For Background: Articles I have written about the Greek debt crisis at Firedoglake:

Greeks vote to reject Eurozone bailouts conditioned on austerity measures

Loss of democracy is the real cost of membership in the Eurozone

8 Responses to Eurozone summit meeting regarding Greece is underway

  1. Lynn Brown says:

    I know I haven’t dropped in here in ages but thought I’d share…

    • Malisha says:

      Well, I read, in one of the articles about this investigation:

      What could be worse than having infamous Hollywood filmmaker Michael Moore target you with one of his faux documentaries?

      And immediately I realized the answer:

      “having somebody beat you to death and stuff your body in a gym mat.” 👿

      • gblock says:

        Has Michael Moore, the filmmaker, gotten involved in this at all? The Michael Moore who was named in the articles is a U.S. Attorney who, just coincidentally, has the same name as the filmmaker.

        I am happy to see that some effort is being made to investigate this.

        • Malisha says:

          The Michael Moore involved is indeed the US Attorney. The reason that sentence was quoted in my comment was that it was the first sentence of one of the articles attacking the US Atty (by the same name) for investigating. They’re crying boo hoo that there is an INVESTIGATION and that the person of interest had his career damaged. That’s why the snarky “what could be worse…” comment.

  2. Malisha says:

    Of course, Germany wants to be the decider in terms of what is to be done in Greece, and of course, the decision is to cheat the old, infirm, poor, and powerless. My my my — where’ve I heard that tune before?

    • LeaNder says:

      Look Malisha, we have been deciders from WWI over WWII and Holocaust, why do you want us to suddenly give up on wanting to reign the world. That’s pretty mean, isn’t it?

      Thus no, that you have heard this tune before is not the least surprising.

      • Malisha says:

        so good to see you again LeaNder! ❗

        Write to me (I probably have lost some time — catch me up).

        A friend of mine is a real expert on 20th Century politics; points out that it was a real toss-up whether the US was going to join the Second WW on the side of Axis or not! This, we do not learn in school here. (We don’t learn the ins and outs of the run-up to Pearl Harbor either, and how the advocates for this and that side were shaking out during that period. It’s an eye-opener!)

        • LeaNder says:

          there is not so much to know really, Malisha. All there is to know is this: it was absolutely necessary that the US of A entered the war. That’s the one thing I am very, very grateful for. Although, I am aware how hard it was for Americans to escape the draft, got you in jail. I am also very, very aware that many of them died for me to grow up free. Been to many US army cemeteries here.

          I am too tired now to explain, Paul Krugman’s latest articles are a bit irritating, but those of Janis Varoufakis are much more.

          This is Dec. 2010 speech by Varoufakis, this is the most crazy and twisted argument I have read for a long time, and its not because I am insensitive to the 2008 financial crisis.

          He didn’t have Paul’s austerity expertise at the time, but knew a lot about bad US – and it’s Global Hoover Wallstreet and the German surpluses and money. Another pop academic with many fans I guess. People love these tales. Although, I guess no one seriously dissects them.

          I borrow a quote from a blog, seems quite clairvoyant in hindsight.

          “In 1997, Arnulf Baring (of the German-British family of Baring bankers) unleashed the following ‘Nostradamus’-like prediction of how the euro would end (from a German perspective)…

          “They will be subsidizing scroungers, lounging in cafes on the Mediterranean beaches.

          Monetary union, in the end, will result in a gigantic blackmailing operation.

          When we Germans demand monetary discipline, other countries will blame their financial woes on that same discipline, and by extension, on us. More they will perceive us as a kind of economic policeman.

          We risk once again becoming the most hated people in Europe.”

          It appears that Arnulf pretty much ‘nailed it’.”

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