First, there was the credit crunch, and governments around the world stepped in to bail out the banks. The sequel to that debacle is the sovereign debt crisis, which has hit the eurozone hard. The hour has come to pay the piper, and ordinary citizens across Europe are growing to realize that socialism for the wealthy means punching a few new holes in their already-tightened belts.
Building on his work as a leading member of the renowned Research on Money and Finance group, Costas Lapavitsas argues that European austerity is counterproductive. Cutbacks in public spending will mean a longer, deeper recession, worsen the burden of debt, further imperil banks, and may soon spell the end of monetary union itself.
Crisis in the Eurozone charts a cautious path between political economy and radical economics to envisage a restructuring reliant on the forces of organized labour and civil society. The clear-headed rationalism at the heart of this book conveys a controversial message, unwelcome in many quarters but soon to be echoed across the continent: impoverished states have to quit the euro and cut their losses or worse hardship will ensue.
An economics professor at London’s School of Oriental and African Studies, Costas Lapavitsas (born 1961) visited Barcelona last week to present his latest work, Eurozone Failure, German Policies and a New Path for Greece. In this text he advocates Greece leaving the euro, as an instrument for overcoming the country’s crisis. Critical of Alexis Tsipras, Yanis Varoufakis and Syriza (he had been an MP for the party before the third deal with the Troika), Lapavitsas is conscious that his positions regarding the EU and the euro are still in the minority among European progressives. Nonetheless, he believes that "the first step for the Left is to say that the currency union has to end."
Oriol Solé Altimira's interview with Lapavitsas was first published in El Diario. Translated by David Broder.
A year ago you were in Madrid for the presentation of the Plan B for Europe. How do you think that this initiative has developed?
The Madrid discussions were interesting, because a lot of people came and there was a good atmosphere. Nonetheless, they were politically confused, because various ideas were presented on what the Left ought to do about Europe, without any concreteness. People still think that it is possible to change the European Union. One year later, I think that this position has lost supporters. More people have realised that if we want an alternative, a different path or different strategy, we have to take radical steps also with respect to the institutions and the EU.
First published in Le Monde. Translated by David Broder.
No European sovereign, no real budget; no budget, no viable economic policy. As long as Europe does not break out of this dilemma, the Eurozone will remain mired in the vicious circle of stagnation, resentment, and conflicting responsibilities. If a budgetary federalism is out of reach, it is crucial that we can adjust exchange rates in order to give dynamism to growth and employment. And this requires leaving the currency union.