[Peace-discuss] CEPR: Syriza Victory Could Be a “Historic Turning Point” for Eurozone Economic Policy

[Robert Naiman via Peace-discuss]

Well, the Greek electorate didn't blink. This is going to be very
interesting. At long last, the troika's bluff has been called. What will
happen now? If the troika bends, they admit they were bluffing. If they
don't bend, they admit they are monsters. Which will they choose?

http://www.cepr.net/index.php/press-releases/press-releases/syriza-victory-in-greece-could-be-a-historic-turning-point-for-eurozone-economic-policy-cepr-co-director-says

Syriza Victory in Greece Could Be a “Historic Turning Point” for Eurozone
Economic Policy, CEPR Co-Director Says

Print
January 25, 2015

Contact: Dan Beeton, 202-239-1460

Washington, D.C.- Left-wing party Syriza’s strong victory in Greece’s
elections today marks a “historic turning point” for countries attempting
to emerge from sluggish economic growth, high unemployment and other poor
indicators more than six years after the Global Recession began, Center for
Economic and Policy Research (CEPR) Co-Director Mark Weisbrot said today.
Syriza has promised to enact alternative policy measures to the spending
cuts and other regressive measures that the European authorities have
imposed on Greece. Eurozone policies have left Greece with extremely high
unemployment -- currently at 25.5 percent, with youth unemployment at 49.6
percent – depression levels of output (down by about 26 percent from
pre-recession levels), and a very weak and precarious recovery, as noted in
a new CEPR paper. The IMF has projected that Greek unemployment will still
be at nearly 16 percent in 2018, and almost all of their projections since
2010 have been over-optimistic.

“This is a great example for the rest of the eurozone,” Weisbrot said.
“Voters have rejected prolonged mass unemployment and elected a new
government with a mandate to negotiate a better deal. And this new
government will have bargaining power. A government that is willing to
stand up to the European authorities can really help Europe move away from
economic policies that have been a miserable failure.”

As of 4:00 p.m. EST, media outlets were reporting that Syriza had won 36.5
percent of the vote, according to official projections. Syriza has vowed to
enact a stimulus, including through boosting public investment; to seek
renegotiation of Greece’s debt; to clamp down on tax evasion; and to take
advantage of the new quantitative easing (QE) program announced by the
European Central Bank (ECB) last week. The party has expressed opposition
to the current government’s stated intention to cut the salaries and
pensions of public employees even further, as Syriza leader Alex Tsipras
explained in a January 20 op-ed in the Financial Times.

The CEPR paper noted that “The amounts of money needed to guarantee a
robust Greek recovery are extremely small for the European authorities,
especially given the size of the ECB’s announced 60 billion euro per month
QE.” Since the beginnings of the Global Recession, CEPR has criticized the
austerity policies that European authorities have promoted in the eurozone.

Weisbrot noted in a recent op-ed in U.S. News and World Report that the
German government and other proponents of eurozone austerity have hyped up
fear that Syriza would lead Greece to exit the euro, despite the party’s
statements to the contrary. Weisbrot suggested that these European
authorities may fear the possibility of successful exit, however: “The fear
is not what will happen to financial markets [but] that Greece would, after
an initial crisis, recover so much faster than the rest of the eurozone
that other countries will also want to exit.”

Tsipras and other Syriza politicians were joined in the final days of
campaigning by the leader of the Spanish anti-austerity political party
Podemos, Pablo Iglesias.

“If Syriza succeeds in bolstering recovery, bringing back economic growth
and putting people back to work, then voters in Spain might take notice,”
Weisbrot said. Elections will be held in Spain later this year.

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Robert Naiman
Policy Director
Just Foreign Policy
www.justforeignpolicy.org
naiman at justforeignpolicy.org
(202) 448-2898 x1
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