Grexit Daily News – 07 July 2015

grexit daily news

07 July 2015  — Who is Euclid?

I fell into a discussion with Simon Nixon on twitter yesterday about Tsakalotos. Nixon (and a number of other commentators) have been lazily accusing Tsakalotos of being ‘hard-left’.

Simon Nixon

Tsakalotos is pro-EU, anti-Grexit (and a very nice chap on top). I had offered a review of Tsakalotos and Laskos book (Crucible of Resistance) on Amazon in 2013. I had been critical in the past of Syriza, its public pronouncements and positions. This is not because I disagree with a left alternative for Greece, but because I was disappointed with the apparent swap of places between PASOK and Syriza (and the populist, clientist baggage that comes with this). I have indeed accused Syriza of populism in my book Redefining the Market-State Relationship: Responses to the Financial Crisis and the Future of Regulation (Routledge Research in Finance and Banking Law). Tsakalotos book had gone a great way in changing my opinion of Syriza and its programme. The book comes from an authoritative source (Laskos and Tsakalotos are central members of Syriza), but it is a genuine work of scholarship. None of this un-referenced politico-ranting that Greek politicians tend to produce.

The book explains the crisis in general, the Greek crisis in particular, and offers a reflection on future paths in a well documented, convincing and scholarly manner that is still accessible to a general audience. I agree with the vast majority of the argument, and I have used the same literature and statistical data myself. The greatest contribution of the book (for me at least) is its explanation of the Syriza programme as regards Euro membership. The authors proclaim that staying within the Euro is part of a thought-through strategy of engagement with the European left, and they envisage alternative economic programmes within the European institutions, plus a deepening of democracy at the European level. I cannot say I am a great believer in this (references to Habermas aside), but it seems like a credible enough stance. Better than my (to-date) assessment of left pro-euro europeanism as a sort of blackmail strategy.

Interesting as well is the criticism of Lapavitsas and the Euro-exit left (see Crisis in the Eurozone); the authors blame the Grexit proposals for preventing reform with a left direction on the European level, as national policies will inevitably alienate fellow-travellers abroad. I admit I did not think of that, as my concern with a Grexit is the inability to manage it due to the quality of the political and administrative capacity of Greece.

Tsakalotos work has contributed to my understanding of the crisis. Since 2008 the world in general and Europe in particular has existed in a state of continuous crisis. From the collapse of Lehman Brothers, to the credit crunch, to single, double and triple dip recessions, from collapses in production, trade and consumer confidence to the sovereign debt crisis and austerity, it seems like we have lived through 7 years of unending bad news. Reflections on the role of law in the midst of this multifaceted crisis have ranged from viewing law as the source of the problem, to envisaging law as a solution. Perhaps, some even argue, this crisis is post-law, it demonstrates the irrelevance of regulatory frameworks and legal rules in the era of global financialised capitalism. I published a paper in 2014 that sought to explore the role of law in the crisis, envisaging law as occupying the space where economics and politics meet. Law in this regard (the paper hypothesises) is both the source of the problem and a tool for its eventual resolution. In attempting this reflection the paper begun by examining the relationship between law, economics and politics, utilising the Polanyian notion of  economic orders dis-embedded from their social and political backgrounds. It continued by examining more closely an important instance of market disequilibrium, the sovereign debt crisis. This examination (with Greece as a focal point) allows us to test the notion that legal frameworks are to blame for what Laskos and Tsakalotos term ‘a lack of plasticity’ in European policy making. Does law restrict policy and are current European institutional structures unable to provide a solution? In testing the feasibility of solutions to the European debt problem necessitates an evaluation of the legal posibility of the infamous ‘Grexit’. The paper concluded by asking whether can law reform provide an exit from the crisis, or does the lack of institutional flexibility in Europe make ‘Drachmageddon’ inevitable? See here for access.

EJLR cover

Having been burned by my faith in Varoufakis earlier, I am a lot more cautious now of Syriza initiatives and choices. Nonetheless, I think Tsakalotos is a good choice for Finance Minister at the moment.




4 thoughts on “Grexit Daily News – 07 July 2015

  1. I don’t think the framing of “Euclid” as “no change from YV” is accidental or based in ignorance. More of the same media manipulation from the anti-left Grexit advocates to paint Syriza as instransigient and not worth dealng with anymore.


  2. I confess I do not read very many other blogs. Yours is a notable exception. I like the subjects you raise how you treat them. There is always some tension in all functions between what the man or woman brings to the role and what the role inflicts on the man or woman. I find that more often than not the role dominates the person and produces similar outcome irrespective of what the person brings. It does not make much difference who the Fin. Min. except in respect of his competence. Varoufakis was undiplomatic and unnecessarily abrasive. This is not intrinsic but rather reflects what the whole context demanded of him (context being Syriza and its electorate). Euclid will be pragmatic and diplomatic, because the context has changed. The only question is can Euclid be what is required. His past is irrelevant. I believe this is called a social constructionist view of identity.

    The problem for Syriza and other left leaning parties is that EZ has been constructed along fiscal orthodox lines. Fiscal orthodoxy is embedded in the rules and forming laws. It is often spun as sound finance and prudent fiscal policy but it is simply one view of political economy. Fiscal orthodoxy reduces macro economic policy to an inflation target (and an asymmetric target at that). Micro policy is all about completing markets and and ensuring they are efficient. It amounts to making the world look like a neoclassical text book. It is a bad idea and quite unnecessary. However, it is reality for now. Syriza cannot and never good fight this. To succumb goes against what Syriza came into being to do. However, Syriza must also look to what is in the national interest.

    At this point I fear Greece has run out of time and goodwill. A united from from all Greek politicians will help but I will be very surprised, but pleased, if Greece does not end the week with a parallel currency.

    Liked by 1 person

    • “At this point I fear Greece has run out of time and goodwill. A united from from all Greek politicians will help but I will be very surprised, but pleased, if Greece does not end the week with a parallel currency.”

      I do not think so. When Germany says they want Grexit, what they really mean is that they do not want to pay any more for Greece. That is quite an important difference. And surely worth investing some more time and good-will into find a solution..

      If a new deal can be structured, which will allow Germany to have what it thinks is right (austerity) making some concessions on the debt restructuring, while making it seem Greece stands on its own feet again. If Greece continuously reduced its debt to GDP ratio, Germany would be more than pleased and happy to keep Greece in the Eurozone. The trick of course is to keep Greece to its promises, and the carrot can be a debt write-down to ensure that over time.

      It would mean re-framing the discussions a bit, but surely it must be possible to come up with an agreement which is satisfactory to everyone.

      That is what I would propose:


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s