C. J. Polychroniou refers here to the fact that private sector salary cuts are part of the “rescue package” recently approved by the Greek Parliament.  Asked to comment at the Foreign Policy blog, Dimitri Papadimitriou explains why this attempt at internal devaluation won’t work.

In an interview for Bloomberg Radio Papadimitriou also stresses that these measures are politically untenable (although approved by the Parliament, whether they will actually be implemented is another question).  In the interview Papadimitriou goes on to say that European policymakers are merely trying to shield the rest of the eurozone from Greece so that the beleaguered country can eventually be shown the door.  While policymakers’ rhetoric suggests they are unequivocally committed to ensuring that Greece remains in the Union, Papadimitriou argues that their actions suggest otherwise.  Without any serious investment in kickstarting Greek growth—Papadimitriou references what was done with East Germany following reunification—what we’re looking at here are not serious attempts to keep the eurozone intact.

Listen to or download the Bloomberg interview here.