Negotiations over Greece's bailout turned ugly on Tuesday, with mutual accusations rising fears of a potential Greek exit from the eurozone
Greece's radical-left Syriza government has not gone so far as to endorse an exit from the eurozone as a possible solution. But an element within the party known as the “Left Platform” is open to, and in some cases even pressing for, a departure. Costas Lapavitsas,a professor of economics at the School of Oriental and African Studies in London is one of the Syriza MPs who works closely with the party's “Left Platform”.
Lapavitsas, a longtime academic who gave up a carreer in Britain to join the Greek parliament in Syriza's victory this year, argues that the euro has had a dismal effect on both the Greek economy and psyche, and is even bad for other European Union nations.
"The euro is not a fetish for us - we don't put the euro above all things. The euro is a failed currency," said Lapavitsas.
"If we go back to what was experienced in the last five years then that will be the end of Greece. We cannot accept the proposals of the lenders," Lapavitsas told Reuters. "It's best for Greece to reject them and go down its own path."
It is not new that Costas Lapavitsas has been actively advocating Grexit. Writing in the Guardian, Lapavitsas said:
“We are deluded to think we can achieve real change within the common currency. Syriza should be radical... The government should rapidly implement measures relieving working people from the tremendous pressures of the last few years: forbid house foreclosures, write off domestic debt, reconnect families to the electricity network, raise the minimum wage, stop privatisations. Fiscal targets and monitoring by the “institutions” should take a back seat in our calculations, if we are to maintain our popular support.”
Though many economists warn of chaos for both Greece and global markets, Lapavitsas believes his country would be better off reverting to its national currency, the drachma. “It would free Greece from international pressure and strengthen its economy via exports” Lapavitsas said in an interview with Los Angeles Times.
“The obvious solution for Greece right now would be a negotiated exit. If that were to happen, the first thing that would immediately take place is a default on the debt [which will] open up a process of negotiated debt restructuring. not be a pleasant period, but that’s not sufficient. It’s not enough in and of itself to say that exit should not be countenanced. In the fullness of time, the cost of a few months of difficulty amounts to nothing. And if there is some planning [rationing of goods], that cost can be significantly reduced” Lapavitsas said in an interview with Sebastian Budgen for Jacobin.