Must-Read: Francesco Saraceno: It’s the Politics, Stupid!

Must-Read: Francesco Saraceno: It’s the Politics, Stupid!: “Contrary to what is heard in European circles…

…most of the concessions came from the Greek government. On retirement age, on the size of budget surplus… on VAT, on privatizations, we are today much closer to the Troika initial positions than to the initial Greek position…. The point that the Greek government made repeatedly is that some reforms, like improving the tax collection capacity, actually demanded an increase of resources, and hence of public spending. Reforms need to be disconnected from austerity…. Syriza, precisely like the Papandreou government in 2010 asked for time and possibly money. It got neither….

This has been since the beginning about politics. Creditors cannot afford that an alternative to policies followed since 2010 in Greece and in the rest of the Eurozone materializes. Austerity and structural reforms need to be the only way to go. Otherwise people could start asking questions; a risk you don’t want to run a few months before Spanish elections. Syriza needed to be made an example. You cannot  survive in Europe, if you don’t embrace the Brussels-Berlin Consensus…. Those of us who were discussing pros and cons of the different options on the table, well, we were wasting our time. And if Greece needs to go down to prove it, so be it. If we transform the euro in a club in which countries come and go, so be it. The darkest moment for the EU.

June 28, 2015

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