The Grexit. How real is the threat of Greece leaving the euro currency bloc?
Astronomers tell us that a black hole is not what most people imagine it to be – ie, empty space-time. A black hole is an object, or a point in space, sucking things in with its powerful gravity that not even light can escape. However, Stephen Hawking sort of dismisses this idea, suggesting instead that we conceive of a black hole as an “apparent horizon”, which only temporarily holds light and matter before releasing them back in “garbled form”.
The closest thing on earth resembling a black hole is the economic mass known as the euro area. It is a physically deformed economic and monetary union where the centre of gravity is a currency (the euro) that sucks economies into a downward spiral of recession, deflation and debt. Its apparent horizon boundary condition is derived by the enforcement of neoliberal policies and the implementation of expansionary fiscal austerity.
However, unlike black holes in space, the euro area is not an irreversible process even if the masters of the euro universe treat it as such. If one of its sucked up satellites is released back into normal economic space-time, the entire object may disintegrate in air.
New Greek government
The new Greek government that swept to power in late January is making a betting proposition that Greece’s exit could force the collapse of the entire eurozone by exerting a gravitational pull on other economies in the eurozone.
Mind you, this is not the reason Greece’s radical left leaders are challenging eurozone’s laws of motion. They are not interested in blackmailing Europe or destroying the euro. They simply want an end to the bailout terms that have produced an economic catastrophe for their country, unheard of in peacetime.
Greece has lost nearly one quarter of its output, the official unemployment rate reached stratospheric levels, standing currently at nearly 26 percent, and one out of three Greeks live near or below the poverty line since the austerity medicine has been so curelessly administered as part of the bailout plan granted to the country back in May 2010.
The new Greek government refuses to allow the continuation of the same disastrous policies by the country’s lenders – the so-called troika of the European Commission, the European Central Bank, and the International Monetary Fund – that have led to what it describes to be an outright humanitarian crisis.
Instead, it seeks a new agreement that would provide a bridge funding programme without strings attached; ie, without the troika’s presence in the country. In exchange, it promises to maintain a primary budget surplus of up to 1.5 percent and embark on real reforms regarding tax evasion and public sector corruption. It also promises to go after the oligarchs that have turned the economy into their own fiefdom.
Not back down easily
This is what Greece hoped to achieve at the emergence eurogroup meeting on February 11, although no decision was made at this meeting. Greece’s bailout programme expires at the end of February, but a decision could still be delayed by weeks or even months.
What is clear, though, is that the Greek government will not back down easily. It has already shown that it will not be intimidated by the German bully. And it is not standing alone. After five years of brutal austerity measures and national humiliation at the hands of the euro masters, the Greek people have launched a semi-rebellion.
The eurozone is a dead end street. Not only for financially battered Greece but for the rest of the eurozone's satellites who have also been sucked into the euro black hole.
They are offering solid support to their government’s strategy vis-a-vis the eurozone’s masters, and expect nothing less than at least an “honourable compromise”.
If not, they seem to have reached the realisation that their country’s future may very well lie outside the euro. And unlike previous governments, the current one is not about to betray the citizens’ entrusted power.
For all practical intents and purposes, the eurozone is a dead end street. Not only for financially battered Greece but for the rest of the eurozone’s satellites (Cyprus, Italy, Ireland, Portugal and Spain) who have also been sucked into the euro black hole.
Without a radical change in the euro area’s own architecture, which would permit the design and implementation of policies favouring not only banks and the interests of core states and Germany in particular, but the well-being of average citizens, the euro has no future.
A turbulent start
Once a Grexit has occurred, which after a turbulent start will allow the national economy to pick up steam on account of returning to its own sovereign currency and the introduction of a proper substitution strategy under a left government.
The unbearable debt burdens, the massive unemployment problems and the clear absence of sustainable growth prospects may soon compel citizens in the other peripheries of the euro black hole to follow Greece’s example.
And when that happens, the euro black hole will surely explode like the dead star it already is, causing the deadliest disaster ever in the capitalist universe.
This is not an unimaginable or unlikely scenario, and one that the new government in Greece does not wish to see happen. But if it does happen, the real culprits are those powers that keep nations in debt bondage and prefer to have people in perpetual poverty than bring about changes that might be beneficial to all eurozone member countries instead of a few.
C J Polychroniou is a research associate and policy fellow at the Levy Economics Institute of Bard College and a contributor to Truthout.org.
The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial policy.