Which Way Out of the Greek Nightmare and the Crisis of Europe?

By Marjolein van der Veen

May 30, 2013  |  The Greek economy has crashed, and now lies broken on the ground. The causes of the crisis are pretty well understood, but there hasn’t been enough attention to the different possible ways out. Our flight crew has shown us only one emergency exit—one that is just making things worse. But there is more than one way out of the crisis, not just the austerity being pushed by the so-called “Troika” (the International Monetary Fund (IMF), European Commission, and European Central Bank (ECB)). We need to look around a bit more, since—as they say on every flight—the nearest exit may not be right in front of us. Can an alternative catch hold? And, if so, will it be Keynesian or socialist?

The origins of Greece’s economic crisis are manifold: trade imbalances between Germany and Greece, the previous Greek government’s secret debts (hidden with the connivance of Wall Street banks), the 2007 global economic crisis, and the flawed construction of the eurozone. As the crisis has continued to deepen, it has created a social disaster: Drastic declines in public health, a rise in suicides, surging child hunger, a massive exodus of young adults, an intensification of exploitation (longer work hours and more work days per week), and the rise of the far right and its attacks on immigrants and the LGBT community. Each new austerity package brokered between the Greek government and the Troika stipulates still more government spending cuts, tax increases, or “economic reforms”—privatization, increases in the retirement age, layoffs of public-sector workers, and wage cuts for those who remain.