Thursday, 14 June 2012

Remote scenarios?

Consider the following scenario. After a victory by the left-wing Syriza party, Greece’s new government announces that it wants to renegotiate the terms of its agreement with the International Monetary Fund and the European Union. German Chancellor Angela Merkel sticks to her guns and says that Greece must abide by the existing conditions.

You can read the rest of Dani Rodrick's post on 'The end of the world as we know it' over on Social Europe Journal.


Paul Hunt said...

The economic, financial and banking aspects of the Euro crisis are merely symptoms of a more fundamental crisis in governance. The rift in terms of governance is generally portrayed as Germany versus everyone else – and Germany, by virtue of economic heft and number of voters, is leading the charge, but you will find the better governed northern and central states (Austria, Estonia, Finland, Luxembourg, the Netherlands, Slovenia and Slovakia) not far behind, with Denmark, Sweden and Poland, Lithuania and Latvia (outside the Euro) broadly in support. Having being takens for mugs in the past, they, quite simply, are not prepared to pay for ‘business-as-usual’ in the PIIGS + FR & BE. (The Brits and the Czechs will do their own posturing, but they are broadly in the former camp.)

The banks, the shadow banks and the bond investors will play their self-interested games, but, apart from the usual vultures and disaster capitalists, the majority have no interest in the whole project going down in flames. The governing politicians and policy-makers in the better-governed nations know this. But they can exert only limited pressure on the governing politicians and policy-makers in the misgoverned PIIGS to shape up. It might need a Greek exit to insert what is required in to their skulls.

Martin O'Dea said...

This is an excellent piece that again really needs to be read.
The herd is moving dangerously close to the cliffs, we really need to change course, and what is worse is we can - we are humans. These are problems of our making and we can clearly solve them. The question is how do we begin and manage the rerouting.

In reading Mr Rodrick's excellent piece I feel tempted to go backwards as well, and look at not just Friedman, Regan and Tatcher and the reinforcement from the collapse of the Berlin Wall and the economic disaster of planned economies revealed behind that emboldened free marketers but also to look at the positivity of the last years of the millenium, the peace process in N.Ireland for example and a head of the U.S. who had mobile numbers and working relationship with leaders all over the globe - and to see the election of G.W. Bush as also really pivotal, the signal of confident neo-con control, the attack on World Trade Center solidifying neo-con aggression, the election of center and center right all around the world and particularly in Europe in response; parties for a corresponding 'strong' nationalism and pro-business governance - that are buoyed by the short-term gains of liberated markets, and while clearly not drawing a direct line and being quite heavy with conjecture - I would still love to have had that Florida recount again.
On an aside one wonders about the sense of a mutual target in the last years of centuries and the sense of a lack of purpose in the beginning of new centuries on global psyche