As the Greek economy continues on its downward trajectory, the policy debate has
degenerated into a re-enactment of the neoclassics versus Keynesians controversy.
Yet, the Greek crisis can be solved neither by more austerity and structural reforms
nor by Keynesian reflation. The core problem lies in a form of integration that has
systematically weakened the Greek economy while stabilizing a clientelistic mode
of interest intermediation. In order to recover, Greece needs a substantial devaluation
plus an interventionist industrial policy. Yet, such a form of integration is not
palatable to the North West European creditor countries, nor is it attractive to the
Greek government as it would require a break with the clientelistic organization of
political power while removing the scapegoat of the EU
