The Greek Disaster and the Future of the EMU
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Costas Lapavitsas explores the fundamental causes of the Greek debt and public finance crisis since 2009. He shows how closely these causes are related to the functioning and policies of the EMU, particularly to the divergence of nominal unit labor costs, which is due mostly to extraordinary German wage moderation. The competitive advantage gained by Germany is the fundamental cause of the EMU crisis and the associated Greek disaster. The policies of austerity and fiscal stabilization have caused a depression in Greece with no real prospects of sustained growth in the future. Greece needs a different set of policies, including debt forgiveness and exit from the EMU, to begin to recover. Moreover, for Europe as a whole, the EMU needs to be thoroughly reconsidered, including a dismantling of key practices and institutions.
Costas Lapavitsas has taught economics at SOAS – a college specializing in the study of Asia, Africa, and the Near and Middle East – since 1990. He has done research on the political economy of money and finance, the Japanese economy, the history of economic thought, economic history, and the contemporary world economy. Since 2010 he has focused on the Eurozone crisis, and the work he has produced, partly in collaboration with other political economists at Research on Money and Finance at SOAS, has had considerable impact on the European debate and policy making. His longer-term research interests, however, have been on the financialization of capitalism and its characteristic trends, variable forms, and manifold implications for contemporary society. His work on financialization has become a standard reference in the literature. In 2015 he was elected Member of Parliament in Greece. Costas Lapavitsas has published widely in the academic field and writes frequently for the international and Greek press.