#ThisIsACoup - Paul Krugman & Joseph Stiglitz about Germany's Killing of the European Project

Prominent economist and Nobel laureate Joseph Stiglitz accused Germany on Sunday of displaying a "lack of solidarity" with debt-laden Greece that has badly undermined the vision of Europe.

"What has been demonstrated is a lack of solidarity by Germany. You cannot run a eurozone without a basic modicum of solidarity. It is really undermining the common sense of vision, the sense of common solidarity in Europe," the Colombia University professor and former World Bank chief economist told AFP.

"I think it's been a disaster. Clearly Germany has done a serious blow, undermining Europe," he said.

"Asking even more from Greece would be unconscionable. If the ECB allows Greek banks to open up and they renegotiate whatever agreement, then wounds can heal. But if they succeed in using this as a trick to get Greece out, I think the damage is going to be very very deep."

Stiglitz is in the Ethiopian capital Addis Ababa for this week's international development financing summit, which is presented as crucial for United Nations efforts to end global poverty and manage climate change by 2030.

He is supporting the creation of an international tax organization within the UN to fight against tax evasion by multinationals, although this has yet to win Western agreement.

International tax rules that allow large companies to avoid tax end up costing developing countries $100 billion every year, according to Oxfam.

"European leaders and the West in general are criticizing Greece for failure to collect taxes," Stiglitz said.

"The West has created a framework for global tax avoidance... Here you have the advanced countries trying to undermine a global effort to stop tax avoidance. Can you have a better image of hypocrisy?"

Paul Krugman's article:

"Suppose you consider Tsipras an incompetent twerp. Suppose you dearly want to see Syriza out of power. Suppose, even, that you welcome the prospect of pushing those annoying Greeks out of the euro.

Even if all of that is true, this Eurogroup list of demands is madness. The trending hashtag ThisIsACoup is exactly right. This goes beyond harsh into pure vindictiveness, complete destruction of national sovereignty, and no hope of relief. It is, presumably, meant to be an offer Greece can’t accept; but even so, it’s a grotesque betrayal of everything the European project was supposed to stand for.

Can anything pull Europe back from the brink? Word is that Mario Draghi is trying to reintroduce some sanity, that Hollande is finally showing a bit of the pushback against German morality-play economics that he so signally failed to supply in the past. But much of the damage has already been done. Who will ever trust Germany’s good intentions after this?

In a way, the economics have almost become secondary. But still, let’s be clear: what we’ve learned these past couple of weeks is that being a member of the eurozone means that the creditors can destroy your economy if you step out of line. This has no bearing at all on the underlying economics of austerity. It’s as true as ever that imposing harsh austerity without debt relief is a doomed policy no matter how willing the country is to accept suffering. And this in turn means that even a complete Greek capitulation would be a dead end.

Can Greece pull off a successful exit? Will Germany try to block a recovery? (Sorry, but that’s the kind of thing we must now ask.)

The European project — a project I have always praised and supported — has just been dealt a terrible, perhaps fatal blow. And whatever you think of Syriza, or Greece, it wasn’t the Greeks who did it."

Sources: New York Times - AFP

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