After the Greek Referendum: Into Uncharted Waters

The triumph of the “no” vote in the Greek referendum was not a mandate for Grexit, but a new starting-point to talks. But is there room for a compromise any longer? On Sunday, some 62% of Greeks voted against and only 39% for the creditors’ June 25 proposal. It was the official end to austerity […]

Africanization of Greece

In the early 1990s – during the infamous shock without therapy, which resulted in Poland’s national income fall by nearly 20 percent, over 3-million unemployment and budget deficit  6.9 percent of GDP in 1992 – there was a talk about “Latinization” of my country, pointing to the increasing similarities with the then dysfunctional economies of […]

Why a Selective Default Does Not Mean Grexit

Confusion reigned supreme in the euro area over the weekend. The decision of the Greek government to call for a referendum over the terms of the programme, needed to unlock money for the IMF debt repayment due on Tuesday, plunged the euro finance ministers into despair, while they fought a deal was very close. It […]

Two Alternative Plans to Avoid a Grexit

Larry Summers has recently proposed in the Financial Times a plan that could form the basis of an agreement between the Greek government, the European authorities and the International Monetary Fund (IMF). This plan is articulated around three axes: Serious policy adjustment and structural reforms including a pension reforms, an increase in VAT and a […]

Two Alternative Plans to Avoid a Grexit

Larry Summers has recently proposed in the Financial Times a plan that could form the basis of an agreement between the Greek government, the European authorities and the International Monetary Fund (IMF). This plan is articulated around three axes: Serious policy adjustment and structural reforms including a pension reforms, an increase in VAT and a […]

What went wrong in Greece and how to fix it: Lessons for Europe from the Greek crisis

Greece’s problem came from the bursting of a debt-financed growth bubble inflated with the help of EZ membership. This column argues that the inevitable adjustment was more painful than necessary. The fiscal consolidation was too tight and too front-loaded, and, importantly, structural reform wasn’t properly sequenced. By concentrating on labour market rather than product market […]

What went wrong in Greece and how to fix it: Lessons for Europe from the Greek crisis

Greece’s problem came from the bursting of a debt-financed growth bubble inflated with the help of EZ membership. This column argues that the inevitable adjustment was more painful than necessary. The fiscal consolidation was too tight and too front-loaded, and, importantly, structural reform wasn’t properly sequenced. By concentrating on labour market rather than product market […]

Is the Euro Irreversible? Computer Says ‘No’

Here is a logician’s or mathematician’s approach to disprove Draghi’s “the euro is irreversible” assertion, with an astrophysics aside. First question: Do you believe that the euro will exist in 10 billion years from now, with all 18 countries as members? [If yes, multiply by 10 and repeat until credibility is zero (the end of […]

Modern Money Theory: Why the EMU is Designed to Fail (Presentation in Madrid)

Here is a link to a video for one of my presentations in Spain. Streamed live on Mar 7, 2015 La Asociación de Economía Crítica, ATTAC, Econonuestra y FUHEM Ecosocial le invitan a la sesión “Teoría monetaria moderna: ¿Austeridad presupuestaria frente a déficits públicos?” FUHEM: https://www.youtube.com/watch?v=YxGGR62fh3k The title slide of the powerpoint to accompany the talk […]

Fiscal policy coordination: a necessary step for the Euro Zone recovery

On January 21st, 2015, the strict monetary austerity regime of the Euro Zone (EZ) was officially abandoned as the European Central Bank (ECB) launched the Quantitative Easing (QE) programme of State bonds purchases on secondary markets. The European Court of Justice’s attorney general has certified that the QE programme is not in contrast with the […]