Greece crisis: The History of Recession Repeats Itself

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July 5, 2015. Greece asserted a resounding ‘NO’ via a referendum, in the face of its creditors’ proposal for the bailout and austerity measures. Since then, there has been a myriad of thoughts expressed across the International community by people subscribing to different ‘-isms’. The subscribers of Capitalism have resorted to allegations that the act of conducting the referendum itself by the PM is mere symbolism; a tactic to hide behind ‘peoples’ decision’ when things have already spiraled out of hands.  On the contrary, some celebrated the move as a win-win situation for democracy. Some say it’s anyway going to be bad for Greece, so it’s a better idea to bring the commoners into the fold.

Now without any reservations and subscriptions, what has repetitive austerity program given to any nation so far? In an already deteriorating economy, the ‘troika’ of the financial institutions viz. International Monetary Fund, European Commission and the European Central Bank seems to be downplaying the effect of proposed austerity. Greece, experiencing the brunt of various austerity packages since 2010 at the hands of its creditors, has only submerged into debt and recession. Economists have repetitively raised concerns about how tighter fiscal policies can negatively impact growth. It has been reported that the Greek economy has shrunk by about 25% since 2010. One such economist that views cost-cutting as a ‘mistake’ is Nobel Laureate Joseph Stiglitz who recently remarked (statement to TIME in a phone interview), “It’s a kind of criminal responsibility for causing a major recession.” Stiglitz, who has served as the chief economist of the World Bank from 1997 to 2000, refuses to predict the consequences, however, lays emphasis that the failure to forgive Greece’s debt would ‘wreck the credibility of Europe’s common currency, the euro, and put the global economy at risk of contagion.’ (Joseph Stiglitz to Greece’s Creditors: Abandon Austerity or Face Global Fallout; TIME magazine, June 29, 2015)

The downward spiral of debts over and over again renders economies in a terrible state of affairs, such as in Greece, and facilitates the oligarchs to undercut independent economic growth. After the commoners declared ‘NO’ to bailout funding and austerity measures, by a good 61% vote; there were apprehensions of Greece leaving the Eurozone. However this would have led other countries to follow suit and hence badly affect the course of Geopolitics. To keep this crisis from further being blown out of proportion, Greece has lately proposed to secure bailout funding and has taken back exactly what it had massively stood for. It, of late, decides to commit to austerity measures in exchange of a three-year loan from Europe’s bailout fund. (The Independent, July 10, 2015)

Syriza Government led by Alexis Tsipras was supposedly up for revolutionary reforms. Has the leftist ideologue given in to Capitalist pressure? One must truly ponder upon this.

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