In May last year, James K. Galbraith, a left-leaning American economist, sent an email to Greece’s finance minister, Yanis Varoufakis, in which he argued that an exit from the eurozone would benefit Greece.
Mr. Galbraith, who was advising Mr. Varoufakis at the time, made the case that a new currency would wash away the country’s debts, solve Greece’s competitiveness problem and ultimately create what he called a “good society.” Though the step was opposed by most Greeks, he had drawn up a contingency plan for Greece under Mr. Varoufakis’s direction, in the event the country was forced to leave the currency zone by its creditors.
In the end, there was not a so-called Grexit. One year ago this month, after the polarizing finance minister left his post, Greece agreed to its third bailout with Europe, accepting yet another round of brutal austerity measures as the price for a new round of loans.
Mr. Galbraith’s vision of a sun-kissed utopia of powerful unions, small businesses and cultural exchanges was published in June in his book of essays, speeches and assorted memorandums (“Welcome to the Poisoned Chalice”; Yale University Press) describing the five months he spent as an unofficial member of Mr. Varoufakis’s inner policy circle.
A starry-eyed embrace of all that Mr. Varoufakis said and did, the book also highlights the extent to which unorthodox, if not unrealistic, economic thinking reached the highest levels of the Greek government as it battled with its creditors last summer.
A self-published memoir by George Papaconstantinou, the Greek finance minister at the time, looks at why the I.M.F. had to lend to Greece in the first place in 2010.
Mr. Papaconstantinou bills his chronicle (“Game Over: The Inside Story of the Greek Crisis”) as a political thriller, and for those interested in who was saying what to whom as Greece fell apart, his account is a valuable one.
Mr. Varoufakis also has a book out, which asks: “And the Weak Suffer What They Must?”
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Books on the Greek crisis
Welcome to the Poisoned Chalice: The Destruction of Greece and the Future of Europe by James K. Galbraith
A world-renowned economist offers cogent and powerful reflections on one of the great avoidable economic catastrophes of the modern era
The economic crisis in Greece is a potential international disaster and one of the most extraordinary monetary and political dramas of our time. The financial woes of this relatively small European nation threaten the long-term viability of the Euro while exposing the flaws in the ideal of continental unity. “Solutions” proposed by Europe’s combined leadership have sparked a war of prideful words and stubborn one-upmanship, and they are certain to fail, according to renowned economist James K. Galbraith, because they are designed for failure. It is this hypocrisy that prompted former finance minister Yanis Varoufakis, when Galbraith arrived in Athens as an adviser, to greet him with the words “Welcome to the poisoned chalice.”
In this fascinating, insightful, and thought-provoking collection of essays—which includes letters and private memos to both American and Greek officials, as well as other previously unpublished material—Galbraith examines the crisis, its causes, its course, and its meaning, as well as the viability of the austerity program imposed on the Greek citizenry. It is a trenchant, deeply felt commentary on what the author calls “economic policy as moral abomination,” and an eye-opening analysis of a contemporary Greek tragedy much greater than the tiny economy of the nation itself.
Game Over: The Inside Story of the Greek Crisis by George Papaconstantinou
In this real-life political thriller, former Greek Finance Minister George Papaconstantinou tells the inside story of the six years during which the Greek drama changed Europe and riveted the world. It is the story of a country forced by past mistakes into unprecedented actions with enormously painful consequences. A story about the people who shaped events by trying to respond to rapidly evolving circumstances often beyond their control. About decisions – good and bad, right and wrong – taken in official and behind-the-scenes gatherings in Brussels, Berlin, Frankfurt, Paris, London, New York, Washington and Athens; in Luxembourg châteaux courtyards, Davos kitchens and Bilderberg gatherings; in elegant offices and dreary basement meetings rooms.
The story begins in October 2009 in Athens, when after a landslide victory, the new government shocks the world by announcing a fiscal deficit of an alarming size, until then kept secret. The “accident waiting to happen” since the launch of the Euro is finally here – but there are no contingency plans to deal with it, and the systemic nature of the crisis is initially not fully appreciated. When a bailout mechanism is finally put together, it fails to convince markets that the Eurozone will do whatever it takes to prevent the bankruptcy of one of its members. The bluff is called, and Greece is forced to apply in May 2010 for a massive loan from the Eurozone and the IMF, and accept a harsh austerity program. As the first loan installment arrives one day before the country declares default, the first wage and pension cuts produce riots and social unrest which leave three people dead.
But the crisis is not over – it mutates. Delays in recognizing the problem and mistakes in the way it is dealt with end up opening the gates of hell for the entire Eurozone. Ireland is forced into a bailout – Portugal follows. And in Greece, the initial good program results are soon swept away by the concern in international markets that Greece might exit the Eurozone. Meanwhile the continuing austerity leads to an ever-deeper recession, rapidly rising unemployment, increasing social tensions, and real suffering.
Six years down the road since the crisis erupted, Greece is in its third bailout, still in a severe social and economic crisis, and there are so many questions. Were other solutions available? Should Greece have threatened to default in order to get a better deal? Should there have been debt relief from the beginning? Would Greece have been better off if it had left the Euro? Has Greece saved the Euro but not itself? The book addresses these questions with the eye of someone at the heart of decision-making during the crisis.
A titanic battle is being waged for Europe’s integrity and soul, with the forces of reason and humanism losing out to growing irrationality, authoritarianism, and malice, promoting inequality and austerity. The whole world has a stake in a victory for rationality, liberty, democracy, and humanism.
In January 2015, Yanis Varoufakis, an economics professor teaching in Austin, Texas, was elected to the Greek parliament with more votes than any other member of parliament. He was appointed finance