Billy Mitchell’s various interesting points

In this link from yesterday.

On Syriza: it seems to be clear that Syriza has 149 seats in Parliament, which is two short of an absolute minority. I think Mitchell has a good point about Syriza being contradictory regarding its goals. But there is another issue: Syriza is a kind of coalition of various parties, and although I do not profess to know how the Greek political system works, I’d say it is a challenge to get 149 parliamentarians ready for work, given the party structure and the large number of new politicians needed. For the sake of Greece, I hope Syriza will manage internal as well as external pressures, because if it implodes, then voters will surely move to the Golden Dawn nazis.

Regarding the ‘letter of economists’ he writes:

Why not just explicitly state – the European Commission should abandon fiscal rules specified under the Stability and Growth Pact (SGP) and its antecedents – the Fiscal Compact, the Two- and Six-Packs.

There cannot be a pro-growth framework while these fiscal rules are enforced in any way. The GFC proved that the impact of the cyclical effects on the fiscal balances (that is, the loss of tax revenue etc due to the loss of output and employment) were sufficient to breach the 3 per cent limits. (my bold)

Those ‘breaches’ led to the fiscal austerity being imposed.

Further, most Eurozone nations will not be able to run the necessary magnitudes for their fiscal deficits (to favour ‘pro-growth’) under the current terms that restrict the ECB – the monopoly-issuer of the euro – from funding such deficits.

I think this is a very important thing to say out loud. It needs repeating. But at the same time it also makes you wonder what politicians (starting with those who designed Maastricht) were thinking.

I will continue my own path thinking about competitiveness, labour market relations and the EMU. There is change in the air, and it is quite scary.

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