Many people are unaware of the monetary and currency roots of the American Revolution. Most know about the revolt over unfair taxation without representation that inspired the American tea party incident in Boston harbour. But the revolt was also about the unwillingness of the British colonial authorities to permit the thirteen colonies to print their own currency and by forcing them to use the British pound which was in short supply and in any case controlled from London extract additional revenues from the colonies through monetary policy and restricted trade. These 18th century events have considerable lessons to teach the Europeans involved in the Greek crisis about how not to try and resolve the conflict over the euro and the needs for the Greek economy to escape from suffocating austerity and an overvalued currency. We shall know late on Sunday or early Monday the final results of the referendum that the Greek government has called on the final offer proposed by the EU to them with respect to the austerity measures and tax increases demanded in order to free up bail out funds for Greece. We already know that despite their excessive demands for continued austerity, neocon inspired market liberalization measures and tax rises the IMF’s own economists believe that the Greek debt situation is unresolvable without debt relief and a lengthening of the terms of repayment.
But the IMF refuses further negotiations without knowing the results of the referendum and in any case senior EU politicians seem very hostile to further negotiations and have stated that the referendum is a straight yes or no to Greece staying in the euro. If they vote no this is interpreted as a rejection of the euro and the immediate need for Greece to issue its own currency.Because of a bank run and the EU imposed ceiling on the supply of euros to the Greek commercial banks there is now an acute shortage of euros in circulation in the Greek economy . Clients are only allowed to withdraw 60 euros a day from ATMs and the banks are shut until after the referendum. This has exacerbated the aura of crisis in Greece and is clearly designed by the EU and ECB authorities to influence the vote in their favour. But just as in 18th century America there was a solution which Benjamin Franklin took advantage of by printing an American dollar currency approved by the continental congress the Greek government if necessary can escape the trap set for it by the European conservative leadership by re-establishing its own currency with the backing of its people and it must be said the considerable gold reserves which Greece possesses and the value of its country as a mecca for tourism and culture.
In any case the very large majority of about 61 % that appears to have voted no in the Greek referendum today may give the Greeks an alternative but only if the European leadership moves away from its hardline austerity position.