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By Ignacio Tirado (UAM)

On the merits, the Greek Government is –partially- right: the solution does not lie with the type of measures proposed by the creditors. Limiting expenditure and increasing revenues by way of higher taxes has proven not to work. Greece needs a massive investment plan that boosts the private sector and helps economy thrive. Without it, the rest is futile. A new line of credit would only serve to perpetuate the negative loop the economy is already in, and new negotiations and credit lines would be needed in the future. Further, it is rather evident that the size of Greek debt is unsustainable. A restructuring of the debt needs to happen. This would be much more painful now, since the creditors are institutions of the official sector, which entails, all institutional shells removed, the European citizens. Writing down the Greek debt implies an automatic loss by the citizens of Germany and the Netherlands, but also –and proportionally more- by the citizens of Spain, Italy, Portugal and Ireland. So perhaps, for the sake of political balance, write downs ought to be avoided and substituted by rolling maturities longer in time, making the debt repayable in full but in the further future.

Having said this, one can only disagree with the behaviour of the Greek Government. Accusing your creditors of criminal behaviour and of attempting to humiliate the Greek people is not only unfair, but a terrible negotiation tactic; so bad that it can only be explained either by stupidity (ie, not understanding its consequences), by bigotry (ie, extreme nationalism), or by selfishness (ie, Tsipras caring more about his own voting results than for the interest of his country). What lies ahead of Greece now is terrible. The big and most urgent question is whether the ECB will renew the urgent credit lines to Greek banks on Monday. If it does not (and there are many reasons that point this way), capital controls will need to be implemented. The Greek government will default on the IMF on Tuesday. CDS will be triggered. Turmoil sparked. Social unrest may be incontrollable. And from there on, an exit from the euro would seem all but inevitable.

If the ECB renews its support to the banking sector, more time will be provided for negotiations. Perhaps Syriza ought to cross some of the red lines it should have never drawn: end with the early retirements of the public sector; or cut on military expenses. Because neither of those lines represent inalienable social justice. But Syriza should in exchange demand investment and a growth plan. And a credit line for the most vulnerable ought to be out of the negotiation. That is the real red line. And, of course, no more insults in public to those whose support you are asking for. They also represent democratically elected Governments; they, too, have constituents to defend and to account to; and now –unlike 5 years ago- it is those European constituents (rectius, citizens) that are going to help the Greek people revive. Not any Brussels/Frankfurt bureaucrat.

The referendum is a shams. It can only place the Greek Government in a worse position when they return to the negotiation. Because they will. The alternative is decades of misery.

Suelo leer a Brendan Simms, un historiador de la Universidad de Cambridge, porque tiene ideas claras y provocadoras sobre Europa. En una artículo publicado ayer en el NYT, llamado The Ghosts of Europe Past, Simms compara la situación actual de la Unión Europea con el Sacro Imperio Romano y conecta sus ideas con las opciones que tomaron los fundadores de Estados Unidos de América. Para él, ahora como entonces, el problema es cómo superar formas desacreditadas de confederación. Su solución para salir de esta trampa histórica es dejar de poner a los procedimientos y la legalidad por encima de la participación y la efectividad mediante la creación de una unión completa y poderosa fundada sobre bases angloamericanas, con una presidencia fuerte elegida por voto popular a lo largo y ancho de Europa, con un congreso de representación popular y un senado para la representación de las regiones, y la federalización de la deuda mediante un bono europeo con restricciones de endeudamiento estrictos, un ejército europeo y el inglés como lenguaje de la política y el gobierno. Aquí está su propuesta:

Rather than digging themselves into a deeper recession and democratic deficit through austerity measures, the states in the common currency need to form a full and mighty union on Anglo-American lines. They must create a strong executive presidency elected by popular vote across the euro zone, a truly empowered house of citizens elected according to population and a senate representing the regions.

The existing sovereign debts should be federalized through a “Union Bond,” with a strict subsequent debt ceiling for the member state governments. There will have to be a single European military and one language of government and politics: English.