A Response to Krugman on Greece and the Euro

The Greek government (as well as those of Portugal, Ireland, and Spain) needs to shift this narrative toward the truth. One way to do this in practice is to confront the punishers. That is what the Argentine government did, and that is one reason it had popular support to take the big risks that it did, and ultimately to succeed. The more accurate narrative today is that Greece is bargaining with creditors, as well as the European authorities, who are pursuing their own interests in opposition to the interests and well-being of the vast majority of Greeks.  They have over a trillion dollars at their disposal and could easily “bail out” Greece with interest-free loans, and even a real (not Jamaican-style, as is currently being discussed) debt restructuring, that would allow for counter-cyclical fiscal policy and growth. But they have opted to punish Greece – for various reasons, including the creditors’ own interests in punishment, their ideology, imaginary fears of inflation, and to prevent other countries from also demanding a “growth option.”  They are sticking to this route even if it means an indefinite recession, and to force 50 billion Euros of privatizations that will very likely enrich some Europeans at the expense of Greek taxpayers.