Papandreou to resign and new coalition government involving Pasok, New Democracy and two conservative minor parties to take his place under new PM

The latest news from Greece suggests that a new coalition government involving the Greek socialist party, Pasok, the principal opposition party New Democracy led by Antonis Samoras, and two conservative minor parties  is to replace the Government of George Papandreou. (One of these parties , the LAOS party is apparently led by an ultra right wing politician who has been accused of anti-semitism in the past see the article in the German paper BILD  by Paul Ronzheimer on this. His views and possible inclusion in the new Government have aroused concern in Germany. )

This cross party alliance will implement the austerity  and privatization program demanded of Greece by the European union and also receive the bail-out monies that have been promised. The government is likely to be short lived with new elections expected in the spring. It is not clear who the new Prime Minister will be but the Athens press is rumoring that it is likely to be a technocrat, Lucas Papademos a former Vice president of the ECB and former head of the  Bank of Greece. So Mr. Papandreou is the principal victim of the European dictat. We shall see if this ends the crisis. Because of the excessive nature of the austerity being demanded in exchange for help I remain a sceptic.

Europe has forgotten or deliberately suppressed the original Keynes plan to rescue countries that suffered exchange deficits. The idea was that surplus countries who had built up their surpluses at the expense of deficit countries in the trade exchange would be obliged to help out the debtor countries by providing low interest loans out of a common currency fund, bancor,, not imposing draconian austerity which Keynes correctly argued would only worsen the situation and diminish trade. This wise counsel has been turned upside down in Greece and the consequences are quite clear.


About haroldchorneyeconomist

I am Professor of political economy at Concordia university in Montréal, Québec, Canada. I received my B.A.Hons (econ.&poli sci) from the University of Manitoba. I also completed my M.A. degree in economics there. Went on to spend two years at the London School of Economics as a Ph.D. student in economics and then completed my Ph.D. in political economy at the University of Toronto. Was named a John W.Dafoe fellow, a CMHC fellow and a Canada Council fellow. I also was named a Woodrow Wilson fellow in 1968 after completing my first class honours undergraduate degree. Worked as an economist in the area of education, labour economics and as the senior economist with the Manitoba Housing and Renewal Corporation for the Government of Manitoba from 1972 to 1978. I also have worked as an economic consultant for MDT socio-economic consultants and have been consulted on urban planning, health policy, linguistic duality and public sector finance questions by the governments of Manitoba, Saskatchewan,the cities of Regina and Saskatoon, Ontario and the Federal government of Canada. I have also been consulted by senior leaders of the British Labour party, MPs from the Progressive Conservative party, the Liberal party and the New Democrats on economic policy questions. Members of the Government of France under the Presidency of Francois Mitterand discussed my work on public sector deficits. I have also run for elected office at the municipal level. I first began to write about quantitative easing as a useful policy option during the early 1980s.
This entry was posted in austerity, classical economics, deficit hysteria, European debt crisis, Greek sovereign debt crisis, J.M.Keynes, Uncategorized. Bookmark the permalink.

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