{"id":11806,"date":"2015-02-28T10:07:29","date_gmt":"2015-02-28T15:07:29","guid":{"rendered":"http:\/\/multiplier-effect.org\/?p=11806"},"modified":"2015-02-28T10:11:02","modified_gmt":"2015-02-28T15:11:02","slug":"galbraith-and-krugman-on-the-greek-deal","status":"publish","type":"post","link":"https:\/\/blogs.bard.edu\/multiplier-effect\/galbraith-and-krugman-on-the-greek-deal\/","title":{"rendered":"Galbraith and Krugman on the Greek Deal"},"content":{"rendered":"

If you haven’t read it already, Senior Scholar James Galbraith shared\u00a0his take on the four-month Greek deal in Social Europe<\/a>:<\/p>\n

there was never any chance for a loan agreement that would have wholly freed Greece\u2019s hands. Loan agreements come with conditions. The only choices were an agreement with conditions, or no agreement and no conditions. The choice had to be made by February 28, beyond which date ECB support for the Greek banks would end. No agreement would have meant capital controls, or else bank failures, debt default, and early exit from the Euro. SYRIZA was not elected to take Greece out of Europe. Hence, in order to meet electoral commitments,<\/em> the relationship between Athens and Europe had to be \u201cextended\u201d in some way acceptable to both.<\/p>\n

But extend what, exactly? There were two phrases at play, and neither was the vague \u201cextend the bailout.\u201d The phrase \u201cextend the current programme\u201d appeared in troika documents, implying acceptance of the existing terms and conditions. To the Greeks this was unacceptable, but the technically-more-correct \u201cextend the loan agreement\u201d was less problematic. The final document extends the \u201cMaster Financial Assistance Facility Agreement\u201d which was better still. The MFFA is \u201cunderpinned by a set of commitments\u201d but these are \u2013 technically \u2013 distinct. In short, the MFFA is extended but the commitments are to be reviewed.<\/p>\n

[…]<\/p>\n

If you think you can find an unwavering commitment to the exact terms and conditions of the \u201ccurrent programme\u201d in that language, good luck to you. It isn\u2019t there. So, no, the troika can\u2019t come to Athens and complain about the rehiring of cleaning ladies.<\/p>\n

[…]<\/p>\n

Greece won a battle \u2013 perhaps a skirmish \u2013 and the war continues. But the political sea-change that SYRIZA\u2019s victory has sparked goes on.<\/p><\/blockquote>\n

Galbraith was recently interviewed by RNN’s Sharmini Peries on the same topic:<\/p>\n

 <\/p>\n\n\n