Sergio Tzotzes: A Short Outlook on the Complex “Debt

 – Austerity Policy – Financialisation – Capitalist Oligarchies – Hegemony – Socio-Ecological Reconstruction/Transformation – and the Especially Dramatic Dimensions of the Greek Case”

The EU’s response to the economic crisis establishes across member states a regime of permanent austerity at considerable damage to the economy, the social fabric and workers. Acting against common sense and avoiding economic policies that could benefit the common good, the worst alternatives are chosen from the arsenal of neoclassical economics. The markets are conceived in a godly fashion as able to solve all problems. The austerity policies, enforced by capitalist oligaries serve as a way of continuing and deepening exploitation while retaining  hegemony and restructuring the economic system in a fully neoliberal basis.

The Europe-wide austerity trap is locked in place by whole-sale neoliberal structural reforms mainly in the labour market that further institutionally disempower working classes.  Despite the dismal failure record of this agenda globally–and in Greece– the new European economic governance structures institutionalise austerity in the EU, including attacks on social rights and standards. The double EU agenda of austerity and structural reforms consolidates across Europe a massive laissez-faire experiment, which has been steadily advanced by the European Commission over the last two decades to promote liberalization, flexibilisation and deregulation particularly in the Central and Eastern European periphery. Thus the implosion of the finance-ridden debt crisis in the Eurozone periphery has set in motion the wholesale expropriation/grabbing of public assets, citizens’ income, pensions, rights and standards starting from the ‘bailout” countries and  expanding in all member states.

Despite the dominant narrative that seeks to depict Greece as an extreme and exceptional case, Greece epitomizes the failure of the EU policy chosen to address the crisis and the ills of finance driven capitalism. Failing on all accounts the shock therapy has derailed Greece’s debt, destabilized the political establishment and damaged the economy at a huge human and social cost. Treating the symptoms and not addressing the causes of the crisis, the EU/IMF/ECB bail-out pack imposed on Greece has trapped the country in a vicious circle where austerity generates recession and unemployment followed by deeper recession that strangles growth and demolishes society. Institutional disempowerment resulting from extensive structural reforms compounds the economic disempowerment of households and workers.

The case of Greece exemplifies the predatory nature of financial capitalism and the profound social transformation brought about by financialisation. Insights from the Greek case are indispensable in rethinking the European project and advancing a progressive left outlook.

On the one hand spiraling unemployment, desperation and deteriorating living conditions for vast masses of people and dismantle any pretense for the European social model and the social ‘acquis’. On the other hand, however, this context fuels sharp contradictions that may offer opportunities for well conceived, viable, but also radical, political strategies capable to lead to a socio-ecological reconstruction/transformation.

Against this vast background, my research is centered around the interrelation of economic science and in particular mainstream economic theory with reality. Two working papers examine the unsuitability of mainstream economics in addressing phenomena of economic crisis and the importance of economics imperialism in the process of institutional change during the economic crisis. The research method includes a sturdy case example of institutional change in Greece involving an empirical account of structural labour “reforms’ and literature analysis with methodological insights.


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