A letter by independent economist Boris Papa to Christian Takushi on Monday July 6 2015, Zurich – Switzerland
Dear Christian (and readers around the globe)
Much has been said on the EU-Greece impasse, so I’ll be very brief with sharing my thoughts and request as we await the political outcome of the Greek “no” vote, which I anticipated from the start. What I cannot anticipate though is what will happen now! It seems to me, that nobody has a clear picture any more. And this is also the main feature that stock exchanges are reflecting around the world right now.
My point is pretty simple: with this “no vote” by the Greek population the crisis has entered a new dimension, which no one can control anymore.
The new dimension of this formerly economic-political Greek Crisis is the core expertise of your research firm: geopolitics! This is why – being aware of your global research network – I kindly ask you to shed some light on this complex crisis with potentially global ramifications.
I summarize the chronology and morphing nature of the G-Crisis the following way:
1. First dimension: liquidity and monetary concerns: addressed with monetary policy measures. It worked OK.
2. Second dimension: fiscal policy, market contagion and political concerns: addressed with monetary policy and political measures to shield other EU states and keep Southern EU members from copying Athens’ strategy. The short term effect is fading away (like giving a cancer patient some morphine…)
3. Third dimension: geopolitical factors are being considered. There is no clarity about final outcome and consequences yet
Let us recap: The Euro Zone is a monetary union, whose centralized government has extended from the monetary into fiscal territory – so far with no positive result. Fiscal policy involvement has affected national politics to some extent. But now the Eurozone is entering the dimension of geopolitics, which per definition is a supra-national realm, i.e. politics at its most complex and riskiest!
But how can a Monetary Union with so many different opinion and interests effectively enter such unchartered waters and solve a complex crisis? In this context I’d like to remind you that the “migrants issue” alone is already testing the EU’s cohesion and exposing its limits. Could this end up in a Russian roulette?
I’d be delighted if you could could give us an update of your June 2nd report on this economic-policy-geopolitical crisis. I am sorry to be a little bit demanding during summer time, but “the poker party is more than hot”,
Boris Felice Papa
MAS Finance UZH-ETHZH / MA UZH / CEFA
Zurich – Switzerland
( from the editor: we thank Mr. Boris Papa for sharing with us his thoughts on the Greece Crisis. We value his thoughts as Mr. Papa is an outstanding independent economist with strong econometric & quantitative skills. He studied at the University of Zurich and the ETH )