The showdown between the EU and the Greek government has temporarily ended in July 2015 with a new bailout program. This program is symptomatic of the shortcomings of the euro project. That is why TSCF disapproves the EU handling of Greek crisis.
EU is responsible, along with the IMF, for the Greek debt problem and the downturn of the Greek economy.
Blind austerity reduces demand, and reduced demand diminishes in turn government fiscal income. If Greek banks were on the brink of collapse, it was due because the ECB was threatening to cut off its assistance lifeline. If the ECB was able to do so, it was because the Greek government had renounced its monetary sovereignty in the hands of the ECB. Otherwise, Greece could have printed as much money as it needed to refloat its banks.
If Greece had kept its national currency, trade deficits would have declined, as the Greek currency would have depreciated and the cost of imports soared. It would not have needed to borrow that much. Lenders would not have based their loans on the illusory guarantee of eurozone membership.
Greece’s creditors do not need the money that they are demanding. The money they receive, they just lend out again to Greece. Greece pays its creditors with the money that the same creditors lend to Greece. This circular system is meant to keep Greece in the eurozone. Thus, EU can continue building a supranational state in Europe.
The Greek government did not seize the opportunity to take Greece out of the euro because it did not have the courage and competence to carry on such process. The ‘disorderly bankruptcy” that the Greek government feared was able to be avoided with appropriate preparations.
For TSCF, the most positive prospect is that Greece eventually leaves the euro. An orderly exit from the eurozone remains the most favorable scenario for the Greek people.