Shelve the Greece Moment; Greeks are Pro-Austerity After All

We had been repeatedly told (if not lied to) by media and neoliberals that Greeks has been anti-bailout.

The election nears conclusion and the results run opposite to what has been bruited.

From Bloomberg,

New Democracy won 130 seats in the 300-seat parliament, according to Interior Ministry projections with almost 90 percent of the vote counted. Pasok, which has alternated in power with New Democracy over the past four decades, won 33 seats, enough to forge a coalition that backs the creditors’ austerity demands.

Syriza Demands

Syriza matched its second-place ranking of last month by stepping up demands to abandon the fiscal-tightening program.

Alexis Tsipras, the head of eight-year-old Syriza, had vowed to keep Greece in the euro while winning concessions on the rescue terms from European leaders including German Chancellor Angela Merkel. He said New Democracy and Pasok, which united last year to back further fiscal tightening by a caretaker government, had “lowered the Greek flag and surrendered it to Angela Merkel.”

Tsipras signaled yesterday that Syriza won’t join a government with New Democracy and Pasok, saying his faction “will be present in all developments as the main voice of the anti-bailout vote in Greece.”

With 166 out of 300 or a 55% vote (New Democracy and Pasok) for the pro-austerity camp, reality finally trumped fiction. The victory cannot be considered as marginal in race among about 8 political parties, namely, New Democracy, Syriza, Pasok Party, Independent Greeks, Golden Dawn, Democratic Left, Communist Party and Ecologist Greens

This squares with accounts of capital flight and resistance to pay taxes (mostly in reaction fears over a Greece exit) which implied that Greeks did not want to exit the EU. This has also been consistent with earlier polls which indicated that a vast majority of Greeks wanted to remain part of the EU.

Demonstrated preference prevails over statist canard.

Only in the eyes of neoliberals and rabid inflationistas, who salivate for massive devaluation as panacea to social ills, has reality been skewed. So there is no Greece moment for now.

The Greece pro-austerity victory does not diminish the crisis. As earlier explained, Greece in or out of the EU will mean inflationism. The difference lies on who will do the inflating. What the pro-austerity victory does is to simply buy off time with the ECB functioning as the main bridge financier, but whose costs will be borne mostly by the Germans overtime. For as long as strong parasitical relationships remain in place, and without real reforms, this crisis will continue.

Greece will now form a government. The ECB should be expected to unveil another region-wide monetary rescue program and perhaps cut interest rates. One thorn has been temporarily taken out. The next is to wait for the announcement of concrete measures from major central banks not limited to the ECB.

With fears of an exit diminished, capital flight in the crisis affected EU nations will likely ease. This would have an impact on the monetary systems of many economies who functioned as shock absorbers. Volatility remains.

Greece’s real reform must be made through economic freedom, not from the illusion of having to turn economic knobs and shower money to the public from helicopters as elixir to economic woes as recommended by experts trying to get social plaudits.