Transcript Elena Papadopoulou

Party of the European Left –transform! europe
“Together we can put an end to the problems of debt and austerity in Europe
!”
“Connecting the debt crisis with the question of the crisis in the financial system and neoliberal
policies. The Troika intervention. The ECB and the Banking Union”
Elena Papadopoulou, NPI
Brussels, 10 April 2014
Selected indicators of the Greek economy 2007-2013
Selected indicators of the Greek Economy 2007-2013
2013
GDP growth (%), in
constant prices
GDP current prices
Private consumption
(2005 constant prices)
Public consumption
(constant prices 2005)
Current account balance
(% of GDP)
Exports of goods and
services
Imports of goods and
services
General Government
Balance
General Government
Primary Balance
2012
2011
2010
2009
2008
2007
-2,6
181.710
Q4
Q4
-6,4
193,7
-7,1
208,5
-4,9
222,2
-3,1
231,1
-0,2
233,2
3,6
223,2
-8,7
Q1
-9,1
-7,7
-6,2
-1,6
4,3
3,6
-7
Q1
-4,2
-5,2
-8,7
4,9
-2,6
7,1
-5,3
-11,7
-12,8
-14,4
-2,3
2,5
Q1
-2,4
0,3
5,2
-19,4
1,7
7,1
-7,8
Q1
-13,8
-7,3
-6,2
-20,2
0,9
14,5
-
-
-10
-9,6
-10,8
-15,6
-9,9
-6,8
[0.4]
(321,5
bn €)
M11
2013
-5
-2,4
-4,9
-10,5
-4,8
-2
156,9
170,3
148,3
129,7
112,9
107,2
26,4
21
14,8
10,2
8,9
8,9
Gross sovereign debt (%
of GDP)
175,2
Unempoyment (%)
28,0
Evolution of Greek sovereign debt – MoU scenario
Public debt (% of GDP)
Targets according to the MoU (July 2013- March 2014)
General Government Balance
2013
2014
2015
2016
%of GDP
0.0
1.5
3.0
4.5
Bn €
0
2.7
5.7
8.9
GDP growth rate
-3.9
0.6
2.9
3.7
FAILURE OF THE THREE MAIN
Kicking the can down the road
Could the problem of the Greek debt be resolved earlier?



Debt crisis is not an isolated event.
Strongly connected to the systemic crisis of the capitalist system and more
specifically
Facet of the global financial crisis in the conditions of the architecture of the
Eurozone and in the context of the neoliberal transformation of the European
economies after ‘70s.
But


Debt as an excuse to tighten the neo-liberal economic order within a
conservative federalist framework
Greek debt still not viable: further write-off only after primary surpluses and the
completion of "structural reforms"
Contesting the “Greek exceptionality”
Main arguments of the “exceptionality” narrative about the Greek fiscal crisis:

Government profligacy and populist politics

Lived too long beyond our means

Oversized public sector

Rent-seeking redistribution coalitions marginalize “productive”
entrepreneurs
So
Austerity response to the crisis as an opportunity to carry out the reforms that
should have been implemented long ago to recalibrate the economy in
order to marginalize the former groups and enhance the latter.
Economic consequences (L-shaped recovery)




Flows are going the wrong way
Problems accentuated by the architecture of the EU and the eurozone
(no fiscal transfers, breakdown of monetary transmission mechanism, role
and scope of the ECB, Banking Union not moving forward)
Danger of disinflation
German strategy of keeping surpluses while the South must keep in
balance

Jobless growth (equilibrium with high unemployment)

Markets can't kick start the economy with automatic mechanisms

Neoliberal project destroys the capacities and institutional tools for policy
Conclusions
1.
The debt crisis as part of the systemic crisis of the capitalist system in the
context of the neoliberal European integration

New restructuring inevitable

Cancel big part, repay the remaining with growth clause

Debt Conference ala London 1953
2. The problem of production reconstruction and rethinking about industrial
policy in the context of the challenges of our time