James Galbraith on the consequences of a Greek capitulation

Excerpted from an interview conducted before the news of the agreement was know, but still relevant.

James Galbraith is interviewed by Lynn Parramore.

* LP: What are the alternatives for Greece at this point?

JG: “Capitulation or exit. It really depends upon a political judgment in the Greek government, which is opaque to me. There is definitely, let’s say, a concession caucus in the circle around Alexis Tsipras. That is a problem because that is obviously not what the Greek people want.

* LP: What does it mean to the rest of the world if Greece capitulates or exits? What’s at stake?

JG: What is at stake is a rather heroic rebellion by a very beleaguered people against a doctrine which has been destroying their lives — the austerity doctrine and the whole neoliberal project. For the rest of us, what is at stake is whether we have the moral courage in the sense of ethical responsibility to stand up to it.

* LP: Is the austerity doctrine — which has been widely discredited by economists — under serious threat?

JG: It is definitely under threat from an increasingly emboldened political movement across Europe — certainly in Spain, certainly in Ireland, probably in Portugal, Italy, and France. So the answer is yes. This is what terrifies the European elites about the Greek situation. What Syriza did was to wipe out — and the referendum completed the job — the leadership of the previous sort of condominium of governing parties, which were a neoliberal conservative party and a neoliberlized social party. Now what do you find in the rest of Europe? Look at Germany, look at France. You find exactly the same thing. And of course, the elites in those countries fear the same phenomenon. So what we’re seeing is an allergic reaction to what they regard as a political threat of the first order.”

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