That austerity is not the way out of economic difficulty has been capitalist economic orthodoxy since at least the time of Keynes, a century ago. Only those who pride themselves on their ‘Common sense’ and imagine that running a country is like running a house but bigger believe otherwise.
So why are Angela Merkel and her government — because make no mistake, they are, as Greeks have been saying, the real villains here — still trying to force austerity on Greece? I’m afraid it’s now painfully clear: vindictiveness. They are punishing Greece — that is to say, the Greek people, who are suffering as they haven’t since the German occupation during the Second World War — for fooling the EEC into letting her in. (Never mind that Europe, for its own reasons, was eager to be ‘fooled’.) Some are going so far as to say that what Germany couldn’t do with tanks it is now doing with banks.
This vindictiveness rose to fury when the Greek people elected a left-wing government which, by popular vote, rejected the conditions Europe — in particular Germany, which had persuaded a reluctant IMF onto its side — wants to impose. Tsipras was summoned, and bullied into accepting even more severe austerity. Unsurprisingly, his own parliament said ‘No; we promised the Greek people we weren’t having this.’
And now, at last, the IMF has come clean and admitted that it too considers the European (mostly German) ‘Final Solution’ to the Greek ‘Crisis’ to be quite unworkable.
The timing of the IMF’s recantation looks suspicious — would it be unduly paranoid to think that this is a deliberate attempt to undermine and discredit Alexis Tsipras?