Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze

The Fund’s worries about sustainability were soothed by requiring Athens to force through tough reforms of its labor markets and business regulations. That would allow the creditors to make optimistic assumptions about future growth and relieve them of the need to make any immediate commitment to future debt forgiveness.55 As far as Athens was concerned, it was the worst possible outcome.56 Economists in the City of London estimated that under the creditors’ plan, the Greek economy would plunge by a further 12.6 percent by 2019 and the Greek debt ratio would soar to a staggering 200 percent. As Wolfgang Munchau put it in the Financial Times, Greece had nothing to lose by saying no. “[A]cceptance of the troika’s programme would constitute a dual suicide—for the Greek economy, and for the political career of the Greek prime minister.”57 Was it suicide or assassination? When Athens refused to yield, European efforts to delegitimize the Syriza government in the eyes of its own population were overt. Jean-Claude Juncker and Slovak finance minister Peter Kažimír publicly declared that their disagreements were only with Mr. Tsipras’s government and not with the Greek people.58 Taking the hint, on June 18 a rally of pro-Euro anti-Syriza Greeks was called on Facebook. The riot police were pulled back; the government avoided any public confrontation with the pro-EU crowd. But Syriza’s confidence was rattled. The demonstration made clear that the Left were not the only ones who could...