Welcome to the Poisoned Chalice: The Destruction of Greece and the Future of Europe
By James K. Galbraith
Review by David Wineberg
James K. Galbraith is a self-described dissident in economics, banished to the University of Texas at Austin. This is somewhat ironic considering his father was the iconic establishment economist of his era. The younger Galbraith is highly respected around the world, just not so much in the USA. It reminds me of Noam Chomsky, who is similarly held in the highest esteem everywhere but at home.
Galbraith was in Athens for the Greek elections that brought Syriza to power. He was an unpaid advisor to the new government all through its negotiations with the Eurozone, the European Bank and the IMF. This book is a collection of his articles, e-mails, speeches and other communications to various players in the State Department, the European Union and the Greek government – from that precise time. It is a blow by blow description of how Europe went wrong and how that path would damage both Greece and the EU. And it’s not over.
Galbraith quickly realized that Europe was not out to save Greece, but to cripple it permanently. They apparently thought this would keep it subservient and prevent it ever rattling their gilded cages again. It was obvious to him that the path of least resistance for Greece was not austerity. Shrinking the GDP, increasing unemployment and loading up on new debt was not the way to reduce debt and restore stability and prosperity. But that is exactly the path demanded Merkel, Schauble and the rest of the Germans, the leading economic power at the table. They even required Greece to run a huge surplus, which is as self-defeating a policy (in a time of 25% unemployment) as could be imagined, Galbraith says.
One thing I had not read before was Galbraith’s ideas if Grexit came to pass. He recommended a 1:1 valuation for the New Drachma at the start, and stamping the 19 billion in paper euros stored at the Bank of Greece to provide cash in the country. This would have had the effect of relaxing the need to hoard euros, while giving the country time to order new currency notes and reprogram ATMs to accept them.
Galbraith dissects the final Brussels memorandum itself in no uncertain terms, showing how each paragraph is a lie, a cynical, hypocritical and misleading contradiction of what would actually happen, and a shameful crippling of a fellow Eurozone country. Like everything he writes, it is clear, cogent, accessible and depressing. This whole affair was handled the precise opposite of the way it should have been. The book documents it realtime.
Editor's note: This review has been published with the permission of David Wineberg. Like what you read? Subscribe to the SFRB's free daily email notice so you can be up-to-date on our latest articles. Scroll up this page to the sign-up field on your right.