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A Change is Gonna Come: Costas Lapavitsas on the Escalation of the Crisis in Greece

Matthew Cole 7 September 2012

Costas Lapavitsas, author of Crisis in the Eurozone—a controversial call to break up the Eurozone and stop the debt crisis—has just written in the Guardian about the destructive new austerity measures in Greece.

"At the root of this bad economics is a misreading of the causes of the crisis. Greece's problem is the same as Portugal's and Spain's: a flawed monetary union that has split Europe into core and periphery. Peripheral competitiveness has been destroyed, and the periphery has accumulated vast private and public debts – owed to eurozone banks – which will probably never be repaid."

He notes that it is not the states, but rather the banks that are at the epicenter of the crisis. The Eurozone banking system has been fragmented over the past three years as national bankis have increasingly relied on their own states to rescue them and states on their own banks to borrow, creating a vortex of debt. As Lapavitsas notes, "The monetary union is collapsing from within."

Costas was also recently interviewed for on Greece:

"I want to stress the complete absurdity of this in economic terms. This is a country that is in its fifth year of recession. This recession is probably the most severe recession in the history of Greece. ...It's definitely a depression. National income, from the beginning of the crisis, has contracted about 20%. Greeks have seen their livelihood devastated. Everything is on a downward path."

"In the midst of this depression, the European Union is forcing the Greek government to implement vast cuts, additional cuts, in order to achieve a primary surplus by 2014. This is nonsense economics."

"The election of Holland was trumpeted as a major step that would change the outlook of the European union. No such thing was in the offering for those who understood what Holland was all about. And that's how it's turning out. There is no change of policy with regard to Greece."

"What is going to happen now, is that everything is going to get even worse. Unemployment...will break the 25% mark. Unemployment among the youth will go to incredible figure. The country is being devastated...and will continue to be if these measure are actually applied."

What happens next? The tensions will escalate.  It seems that austerity is most effective accelerationist of all. As Costas concludes in his Guardian piece, "Profound political change will follow."

Visit the Guardian to read the article in full.  

Visit the watch the interview in full.

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