Interview with Thomas Piketty on the Euro Zone

… We Have Created a Monster – Published on Spiegel Online International, by Julia Amalia Heyer and Christoph Pauly, March 10, 2015 (Translated from the German by Christopher Sultan).

In an interview with SPIEGEL, celebrated French economist Thomas Piketty speaks about Alexis Tsipras’ election victory in Greece, Europe’s inability to fix its financial woes and what EU leaders can learn from the United States.

SPIEGEL: You publicly rejoiced over Alexis Tsipras’ election victory in Greece. What do you think the chances are that the European Union and Athens will agree on a path to resolve the crisis?  

  • Piketty: The way Europe behaved in the crisis was nothing short of disastrous. Five years ago, the United States and Europe had approximately the same unemployment rate and level of public debt. But now, five years later, it’s a different story: Unemployment has exploded here in Europe, while it has declined in the United States. Our economic output remains below the 2007 level. It has declined by up to 10 percent in Spain and Italy, and by 25 percent in Greece.

SPIEGEL: The new leftist government in Athens hasn’t exactly gotten off to an impressive start. Do you seriously believe that Prime Minister Tsipras can revive the Greek economy?

  • Piketty: Greece alone won’t be able to do anything. It has to come from France, Germany and Brussels. The International Monetary Fund (IMF) already admitted three years ago that the austerity policies had been taken too far. The fact that the affected countries were forced to reduce their deficit in much too short a time had a terrible impact on growth. We Europeans, poorly organized as we are, have used our impenetrable political instruments to turn the financial crisis, which began in the United States, into a debt crisis. This has tragically turned into a crisis of confidence across Europe.

SPIEGEL: European governments have tried to avert the crisis by implementing numerous reforms. What do mean when you refer to impenetrable political instruments? … //

… SPIEGEL: How could Hollande and Merkel inspire voters to support more Europe?

  • Piketty: They need to explain to voters, for example, that even Germany and France can no longer manage to efficiently tax multinational companies, because the companies are playing countries off against each other. To this day, many major corporations from the United States and Europe pay less in taxes than small European companies. A common corporate tax for the euro zone, which would be determined by the new euro-zone parliament, would be helpful and would certainly be popular among voters.

SPIEGEL: At this point, voters don’t seem overly keen to shift more power to Brussels. On the contrary, EU-skeptic parties are becoming popular everywhere.

  • Piketty: No matter what you think of Syriza’s election victory, it could serve as a shock therapy of sorts for those in power. Suddenly they’ll realize that what they’ve been doing isn’t working, and that they have to take a different approach. But a leftist party like Syriza or Spain’s Podemos isn’t nearly as dangerous as the extreme right. The National Front here in France is more popular than ever at the moment. That’s why it’s so dangerous for the established parties to continue fueling these nationalists. Constantly berating the lazy Greeks or Portuguese is irresponsible.

SPIEGEL: Mr. Piketty, we thank you for this interview.

(full long interview text).

(my comment: all this debt arrangements are nice, but the only way to overcome this mess and re-start a real development for all – inclusive the lost ones, real underdogs, nobodies, refugees, analphabets, not-integrated, homeless … would be a CONSCIOUSLY LEAD CRASH (sorry, worldwide) and restart with a total, absolut quittance for every one … and never more pay back to banks any virtual money and its taxes , but putting it into a big bag used for the community … and, if still money is used, there is a minimal income guaranty for every one, together with price regulation … oh yes, capitalist freedom has to be over … and courageously we all decide give our genie to invent, create, achieve a real exchange society … oh, I’m so sorry for the rich ones … but you can sleep some more nights, this humanity (means our rainmakers and their puppets) will not be able to make this step, therefore WE WILL HAVE NEXT A NOT CONTROLLED CRASH – Heidi).

Related Links:

  • Photo Gallery: the Looming Grexit, on Spiegel Online International.
  • SPIEGEL Interview with Greek Prime Minister Tsipras: We Don’t Want to Go on Borrowing Forever, on Spiegel Online International, by Manfred Ertel, Katrin Kuntz and Mathieu von Rohr, March 7, 2015. In a SPIEGEL interview, Greek Prime Minister Alexis Tsipras discusses planned reforms, the polarizing effect his government has had on Europe and the possibility of a “Graccident,” Greece’s accidental exit from the euro zone;
  • Special pages on Spiegel Online International – related articles, background features and opinions about the topic: Euro CrisisDebt CrisisGreeceBanking and FinanceEconomic and Financial Crisis;

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