Later he said troubled Eurozone countries can’t cut their way to recovery.
Austerity is hairbrained, he stressed. “So is the “malignant lunacy of monetary union.”
“Combining 17 dissimilar countries (now 19 with Latvia and Lithuania added) under one monetary/fiscal system.”
As nonsensical as mixing fire and ice, Connolly said. As well as believing more debt cures economic woes.
In 1998, Connolly predicted one or more weak European countries would face rising budget deficits, economic trouble, and a “downward spiral from which there is no escape unaided.”
“When that happens, the country concerned will be faced with a risk of sovereign default.”
Troubled Greece is the Eurozone’s poster child. Zombie-like. Effectively bankrupt.
Euro straightjacket rules destroyed it. Day of reckoning eventually looms.
In December 2001, Argentina faced its moment of truth. Halted all debt payments to domestic and foreign creditors.
Restructured nearly $100 billion in debt on a take-it-or-leave-it basis.
Imposed stiff haircuts on bondholders. From 2003 through 2007, sustained economic growth followed.
Helped by debt restructuring and currency devaluation. Greece can go a long way toward resolving its debt problems the same way.
Provided it abandon Eurozone straightjacket rules. Regain its sovereign independence.
Reclaim what never should have been sacrificed in the first place. Govern responsibly.
Restructure debt on its own terms. Prioritize economic growth, job creation and social justice.
Don’t bet on SYRIZA doing the right thing. It bears repeating. Business as usual wrapped in populist rhetoric looks most likely.
A Final Comment
Reports around early January 26 confirm that Tsipras and Independent Greeks leader Panos Kammenos formed “a new (coalition) government.”
“The prime minister today will see the president for his swearing in and will announce the composition of the government in which the Independent Greeks will participate,” said Kammenos.
It’ll officially begin governing today. Greece’s electoral outcome will be the main topic at Monday’s Eurozone finance ministers meeting. Expect agreement on demanding business as usual.
Stephen Lendman lives in Chicago. He can be reached at firstname.lastname@example.org. His new book as editor and contributor is titled “Flashpoint in Ukraine: US Drive for Hegemony Risks WW III.” http://www.claritypress.com/LendmanIII.html Visit his blog site at sjlendman.blogspot.com. Listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network. It airs three times weekly: live on Sundays at 1PM Central time plus two prerecorded archived programs.