KRUGMAN: ‘The European project … has just been dealt a terrible, perhaps fatal blow.

Talks between Greece and its European creditors are going nowhere. Backwards, in fact. 

REUTERS/Brendan McDermid

And New York Times columnist and Nobel Laureate Paul Krugman thinks we could be watching the “European project” dissolve before our eyes. 

In a blog post on Sunday afternoon, Krugman writes that, “The European project — a project I have always praised and supported — has just been dealt a terrible, perhaps fatal blow.”

As Krugman sees it, the European project was something designed to ensure success and stability among its members. 

But the latest set of conditions Greece is being asked to meet in order just to restart negotiations on a new bailout, “goes beyond harsh into pure vindictiveness,” Krugman writes. “It is, presumably, meant to be an offer Greece can’t accept; but even so, it’s a grotesque betrayal of everything the European project was supposed to stand for.”

Krugman continues:

Can anything pull Europe back from the brink? Word is that [European Central Bank president] Mario Draghi is trying to reintroduce some sanity, that [French president Francois] Hollande is finally showing a bit of the pushback against German morality-play economics that he so signally failed to supply in the past. But much of the damage has already been done. Who will ever trust Germany’s good intentions after this?

Earlier on Sunday we noted that a Greek government official saw the offer made by its European creditors as “very bad.” Which was at once an expected comment but at the same discouraging: as the time for a deal draws nearer it seems Greece and its creditors are moving even further away from anything resembling deal. 

The proposal offered by Greece late last week more or less undid the results of its referendum last week that saw the Greek people vote against accepting the latest bailout they were offered. 

And so politically, Greek prime minister Alexis Tsipras is in line to get less than nothing: he is taking a step back. All of the work of the last 6 months appear to be coming undone, or worse. 

But for Krugman, the responsibility falls on the shoulders not of the Greek government, but the rest of Europe. And mostly, Germany. 

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