O crescente radicalismo à esquerda e à direita no Sul e Norte da Europa tem demasiadas semelhanças com o que se passou no período 1917-1934 para que os mais esclarecidos fiquem indiferentes.
As suas origens ideológicas são as mesmas – anti capitalismo, nacionalismo, fascismo, nacional-socialismo, comunismo, trotskismo, anarquismo e antissemitismo, embora hoje se apresentem com tonalidades diferentes como libertarianismo moral, ambientalismo, pró-Palestina e anti-imigração.
As condições criadas pela crise financeira de 2008 são semelhantes às da crise de 1929, nomeadamente a falência de instituições bancárias, as desvalorizações competitivas, o protecionismo e o desemprego massivo.
As condições políticas também são semelhantes se considerarmos que a intransigência e o austerismo Alemão em relação aos países do sul é equivalente à indiferença dos vencedores da 1ª Grande Guerra em relação às reparações Alemãs, que a evolução política na Hungria/Áustria e na Grécia de hoje lembram a subida ao poder dos fascistas em Itália e dos Republicanos em Espanha, e que o pacifismo e apaziguamento relativamente ao nazismo crescente nos anos 30 é semelhante ao que hoje existe perante a Rússia e o Irão.
Se estas condições geram movimentos de massas semelhantes (veja-se a manifestação do Podemos em Madrid) então temos de relembrar o que se aprendeu sobre a psicologia de massas nos anos 30. Um dos ensinamentos é que a maneira de controlar uma multidão (eleitorado) irracional não é enfrentá-la mas sim encaminhá-la para um caminho que evite o abismo. Por vezes é mesmo preciso fingir ser mais radical do que os líderes da multidão.
Por isso, nas atuais circunstâncias, os partidos reformistas (em especial o PSD), deviam abandonar a sua retórica pró-austeridade. Sobretudo quando pode invocar que apenas cumpriu 1/3 do programa da Troika e que por isso Portugal não está hoje na situação da Grécia.
Na verdade, com o oportunismo que o caracteriza, António Costa está a fazer isso ao insinuar que é mais Syriza do que Pasok. Porém, aquilo que oferece é apenas incerteza.
O centro-direita em Portugal está hoje perante uma situação semelhante à que Keynes enfrentou quando lhe foi pedido que preparasse programas de rádio para contrapor à propaganda Nazi sobre o investimento público e uma nova ordem económica mundial. Ele optou então por explicar que os aliados fariam uma melhor gestão do investimento público, de forma mais equitativa, pacífica, livre e sustentável.
Em Portugal, mais uma vez, podemos evitar o desastre iniciado na Grécia e bastante provável em Espanha. Para tal, é preciso romper com o discurso e com as caras que o eleitorado associa com os nossos problemas de forma a poder encabeçar o desejo de mudança dos Portugueses.
Showing posts with label Syriza. Show all posts
Showing posts with label Syriza. Show all posts
Sunday, 1 February 2015
Tuesday, 27 January 2015
More on Greece: Krugman’s utopia or folly?
Nobel Laureate Paul Krugman’s case for reducing Greece’s debt service so that she no longer needs to run a large budget surplus is the following: “Suppose that the multiplier is 1.3 — which is what IMF estimates seem to suggest — and that Greece can collect 40 percent of a rise in GDP in revenue (roughly matching its average revenue/GDP). Then an additional billion euros in spending should generate around 0.5 billion euros in revenue, reducing the primary surplus by only 0.5 billion euros”.
However, his back-of-the-envelope calculation is based on an unfounded optimism about the public spending multiplier. I know that he knows that the multiplier effects of spending (public or private) are reduced through import and saving leakages. But, what he (and other optimists) usually miss is that such leakages are extremely dependent on the confidence about the spending policies being implemented.
For instance, if Greek politicians are not credible the multiplier could suddenly reduce to 0.5 and the primary surplus would be reduced by 0.8 billion euros. Or, even worse, if the ruling party is seen as revolutionary, as is the case with Syriza, the leakages may even turn the multiplier into negative values (e.g. -0.5), in which case the primary surplus reduction would be 1.2 billion euros and the current surplus would quickly vanish and destroy any lenders’ willingness to refinance the current debt level ad aeternum.
Indeed, without their own currency, capital controls and the possibility of imposing trade barriers, the leakage through imports is inevitable. Likewise the fear of the radical Syriza policies will accelerate capital flight which is a form of “hoarding”. Moreover, an unexperienced left wing political coalition is usually the most fertile ground for corruption and mismanagement which again act as a form of “hoarding”. In a country already plagued by a culture of corruption, a change towards a “loony left” will only exacerbate the problem.
In conclusion, Krugman’s call to give more importance to debt flows than debt stocks is not a folly, but in Greece’s circumstances it is certainly utopia. So the European countries should only agree to more public spending if Syriza passes a test of political responsibility and can be tied up to a properly designed adjustment program (not the ones implemented in the past by the Troika).
However, his back-of-the-envelope calculation is based on an unfounded optimism about the public spending multiplier. I know that he knows that the multiplier effects of spending (public or private) are reduced through import and saving leakages. But, what he (and other optimists) usually miss is that such leakages are extremely dependent on the confidence about the spending policies being implemented.
For instance, if Greek politicians are not credible the multiplier could suddenly reduce to 0.5 and the primary surplus would be reduced by 0.8 billion euros. Or, even worse, if the ruling party is seen as revolutionary, as is the case with Syriza, the leakages may even turn the multiplier into negative values (e.g. -0.5), in which case the primary surplus reduction would be 1.2 billion euros and the current surplus would quickly vanish and destroy any lenders’ willingness to refinance the current debt level ad aeternum.
Indeed, without their own currency, capital controls and the possibility of imposing trade barriers, the leakage through imports is inevitable. Likewise the fear of the radical Syriza policies will accelerate capital flight which is a form of “hoarding”. Moreover, an unexperienced left wing political coalition is usually the most fertile ground for corruption and mismanagement which again act as a form of “hoarding”. In a country already plagued by a culture of corruption, a change towards a “loony left” will only exacerbate the problem.
In conclusion, Krugman’s call to give more importance to debt flows than debt stocks is not a folly, but in Greece’s circumstances it is certainly utopia. So the European countries should only agree to more public spending if Syriza passes a test of political responsibility and can be tied up to a properly designed adjustment program (not the ones implemented in the past by the Troika).
Monday, 26 January 2015
The lesser evil for Greece and Europe
By electing the Syriza party, the Greeks in despair have turned what was an untenable situation into a nightmare scenario, perhaps hoping to force some kind of way out from the present situation.
What are in fact the Greek options? Using my academic hat I will put them bluntly and leave to others the task of dressing them in politically correct language. The options are basically three.
The first is that once in power, Tsipras and other radical leaders in the coalition will become realists and will not rock the boat. The second is that he will try to implement his political and economic agenda and will end up in mayhem and forced out of the Euro, or, in a worst case scenario, exit the EU and fall back into dictatorship. The third option is that he will declare a moratorium or some other form of debt default and will end up being bailed out again by the Troika.
There are several international experiences we may use as an analogy for each scenario.
The “get real” hypothesis has two versions: a) the FT hope that Tsipras becomes a Lula da Silva rather than a Hugo Chaves; and, b) Krugman’s (socialist) wishful thinking that the sudden abandonment of austerity will revive the Greek economy and the political mess will disappear. Both are very unlikely. The first, because the ideological base of Tsipras is fundamentally different from that of the Lula’s party in Brazil and the financial situation is much worse in Greece. The second ignores that the moderate socialist left has been almost wiped out of the political map and replaced by radicals without previous government experience.
The “mayhem and Euro exit” scenario is the most dangerous for Greece and Europe, if one judges from historical precedents such as the Cuban revolution or the rise of Nazism in Germany. One should not forget that it was economic anarchy, national humiliation, anti-Semitism and the fear of communism that led the Germans to vote Hitler into power. The fact that Syriza has chosen as coalition partner a nationalistic anti-Semite party and left-wing leaders in Southern Europe are increasingly endorsing anti-Semitism under the guise of pro-Palestinian support, creates an environment favorable to the Greek Golden Dawn neo-Nazi party which came third in the election.
The “new debt restructuring and new bailout” is the lesser of the three evils. In practice it means that the Troika needs to develop a new financing mechanism to lend Greece the money they need to repay their debt. This way of preventing a formal write-off of loans from international financial institutions, which enjoy preferred creditor status, has been used by the World Bank through AID lending and by the IMF through the HIPC/MDRI and PRGT Initiatives. Two countries with recently overdue repayments to the IMF were Zimbabwe and Argentina. Both with left-leaning, populist leaders who decided to challenge the international lenders. The results have been years of economic decline and rampant corruption. So, Greece, a country already rigged by alarming levels of corruption, might follow their path. However, for the good of Greece, one should hope that Tsipras will be more like Cristina Kirchner than Robert Mugabe.
To close this rather bleak outlook, I must address the question on whether there are no solutions for the Greek problem. Yes, there are. And I have written about some of them in other posts (e.g. here and here) in 2011, at the start of the Southern European crisis.
However, I do not foresee a possibility that someone will endorse them before the Greek electorates gets disillusioned with the new utopia, votes for more reliable politicians and the EU leaders reconsider their austerity bias. I hope that time will prove me wrong.
What are in fact the Greek options? Using my academic hat I will put them bluntly and leave to others the task of dressing them in politically correct language. The options are basically three.
The first is that once in power, Tsipras and other radical leaders in the coalition will become realists and will not rock the boat. The second is that he will try to implement his political and economic agenda and will end up in mayhem and forced out of the Euro, or, in a worst case scenario, exit the EU and fall back into dictatorship. The third option is that he will declare a moratorium or some other form of debt default and will end up being bailed out again by the Troika.
There are several international experiences we may use as an analogy for each scenario.
The “get real” hypothesis has two versions: a) the FT hope that Tsipras becomes a Lula da Silva rather than a Hugo Chaves; and, b) Krugman’s (socialist) wishful thinking that the sudden abandonment of austerity will revive the Greek economy and the political mess will disappear. Both are very unlikely. The first, because the ideological base of Tsipras is fundamentally different from that of the Lula’s party in Brazil and the financial situation is much worse in Greece. The second ignores that the moderate socialist left has been almost wiped out of the political map and replaced by radicals without previous government experience.
The “mayhem and Euro exit” scenario is the most dangerous for Greece and Europe, if one judges from historical precedents such as the Cuban revolution or the rise of Nazism in Germany. One should not forget that it was economic anarchy, national humiliation, anti-Semitism and the fear of communism that led the Germans to vote Hitler into power. The fact that Syriza has chosen as coalition partner a nationalistic anti-Semite party and left-wing leaders in Southern Europe are increasingly endorsing anti-Semitism under the guise of pro-Palestinian support, creates an environment favorable to the Greek Golden Dawn neo-Nazi party which came third in the election.
The “new debt restructuring and new bailout” is the lesser of the three evils. In practice it means that the Troika needs to develop a new financing mechanism to lend Greece the money they need to repay their debt. This way of preventing a formal write-off of loans from international financial institutions, which enjoy preferred creditor status, has been used by the World Bank through AID lending and by the IMF through the HIPC/MDRI and PRGT Initiatives. Two countries with recently overdue repayments to the IMF were Zimbabwe and Argentina. Both with left-leaning, populist leaders who decided to challenge the international lenders. The results have been years of economic decline and rampant corruption. So, Greece, a country already rigged by alarming levels of corruption, might follow their path. However, for the good of Greece, one should hope that Tsipras will be more like Cristina Kirchner than Robert Mugabe.
To close this rather bleak outlook, I must address the question on whether there are no solutions for the Greek problem. Yes, there are. And I have written about some of them in other posts (e.g. here and here) in 2011, at the start of the Southern European crisis.
However, I do not foresee a possibility that someone will endorse them before the Greek electorates gets disillusioned with the new utopia, votes for more reliable politicians and the EU leaders reconsider their austerity bias. I hope that time will prove me wrong.
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