Adam L. Silverman
As we wait to see the outcome of today's referendum in Greece in regards to how its government should proceed in debt negotiations and responses with the EU, I wanted to point to two of the best pieces I've read on how things got to this point. The first is David Attewell's Putting the Greek Referendum in Context. Attewell clearly and concisely goes through how things have gotten to this point. The second piece is a much longer piece by Steve Randy Waldman at Interfluidity (h/t John Cole at Balloon Juice). Waldman takes a much deeper dive into how things got this way, as well as engaging in the important discussion about whether economics, especially macroeconomics, is supposed to be about efficiently and effectively allocating resources or about morality.
In many ways the instability of a loose federation or confederation within a monetary union framework, which is what the EU really is despite its bureaucratic nature, is clearly showing here. Each member state is supposed to be fully sovereign, yet no member state that is on the Euro controls its own monetary supply. And the supposedly independent European Central Bank has made it clear it will withhold liquidity/cash at the bidding of its economically most powerful members and the financial sector. This would be the equivalent of, during an economic downturn in the US, the US Federal Reserve refusing to make dollars available to the states that make up the US. Imagine if that had happened, even selectively, to force structural budgetary and economic changes at the state and local level during the Great Recession of 2008? That would have been a crisis of both federalism and the Constitution! What the EU member states are now learning, if they're paying attention, is that they are not actually sovereign. They don't control their own money supply, the ECB is not impartial, and it does the bidding of both the most powerful of the European economies and of the European financial sector. The takeaway here is that the EU states on the Euro are not fully sovereign, do not control their own economic, let alone political, systems, and are to do the bidding of those who have the monetary control.