Tuesday, February 17, 2015

You Have Nothing To Lose But Your Fast Food Chains

Greece Shows The Way


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MEHR, MIT AROOO:  Paul Krugman, one of the Smartest Humans On Earth™, explains that there's more to the Greek finance drama than meets the eye -- principally, that The Syriza Party's standing up to bullying by EU finance ministers may be the beginning of the end of Austerity programs in the Eurozone. 

From an economist's perspective, Krugman believes Greece has done well in the sort term and is positive about its future. The actors in this drama who aren't happy in the EU are the Austerians, who should just go back to Planet Buzzkill, already.
... the main issue of contention involves just one number: the size of the Greek primary surplus, the difference between government revenues and government expenditures not counting interest on the debt. The primary surplus measures the [amount of money] that Greece is actually [paying] its creditors. Everything else, including the [total amount of Greece's] debt — which is a more or less arbitrary number at this point, with little bearing on the amount anyone expects Greece to pay — matters only to the extent that it affects the primary surplus Greece is forced to run.

For Greece to run any surplus at all — given the depression-level slump that it’s in and the effect of that depression on revenues — is a remarkable achievement, the result of incredible sacrifices. Nonetheless, Syriza has always been clear that it intends to keep running a modest primary surplus. If you are angry that the negotiations didn’t make room for a full reversal of austerity ... you weren’t paying attention.

The question instead was whether Greece would be forced to impose still more austerity. ... So did the current Greek government back down and agree to aim for those economy-busting surpluses? No, it didn’t. In fact, Greece won new flexibility for this year...

And the creditors did not pull the plug. Instead, they made financing available to carry Greece through the next few months. That is, if you like, putting Greece on a short leash, and it means that the big fight over the future is yet to come. But the Greek government didn’t succumb to the bum’s rush, and that in itself is a kind of victory.
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