With 33% general unemployment, 55% youth unemployment with around 50% of the population living below the poverty line, eventually menaces of impending catastrophe become meaningless. Promising more of the same financial constraints, that promise more of the same [and worse], become absurd. 61% of Greeks said no thank you to the technocrats who were not even discussing a solution, just more of the same downward spiral, since as the IMF pointed out, without debt restructuring, there would be no solution.
Remember the results of Austerity in Greece were that the poorest households lost nearly 86% of their income, while the richest lost 17-20%. That is by design in our neoliberal dominated economies, just more obvious than elsewhere.
As Krugman says today:
What’s more, they weren’t. The truth is that Europe’s self-styled technocrats are like medieval doctors who insisted on bleeding their patients — and when their treatment made the patients sicker, demanded even more bleeding. A “yes” vote in Greece would have condemned the country to years more of suffering under policies that haven’t worked and in fact, given the arithmetic, can’t work: austerity probably shrinks the economy faster than it reduces debt, so that all the suffering serves no purpose. The landslide victory of the “no” side offers at least a chance for an escape from this trap.
The ECB has also painted itself into a corner.
The central bank now faces an awkward choice: if it resumes normal financing it will as much as admit that the previous freeze was political, but if it doesn’t it will effectively force Greece into introducing a new currency.
He sums up
And let’s be clear: if Greece ends up leaving the euro, it won’t mean that the Greeks are bad Europeans. Greece’s debt problem reflected irresponsible lending as well as irresponsible borrowing, and in any case the Greeks have paid for their government’s sins many times over. If they can’t make a go of Europe’s common currency, it’s because that common currency offers no respite for countries in trouble. The important thing now is to do whatever it takes to end the bleeding.
Just in, the demands have started
"Soon after the announcement of the referendum results, I was made aware of a certain preference by some Eurogroup participants, and assorted ‘partners’, for my… ‘absence’ from its meetings; an idea that the Prime Minister judged to be potentially helpful to him in reaching an agreement," Varoufakis wrote on his personal blog.
"For this reason I am leaving the Ministry of Finance today.
In the coming days we will see just how much democracy has been respected, the first step is to restructure the debt, it always was the logical first step and would have prevented the Debt to GDP ration blossoming from 102% to 150% after the Great Recession [for which, after all things said Greece was hardly to blame]. Since then GDP has fallen markedly [about 20%] and debt to GDP ratio has remained pretty constant at its high level [150%]. The original debt to GDP ratio was pretty typical of most of the Eurozone which runs at around 98% since the great recession due to Austerity up from around 60-65% previously. Every economy was hit hard by this neoliberal method, it was just magnified in Greece to the point of economic implosion.
Well, in the coming days we will get a good idea if Democracy is valued or not.
Just a thought.