Jun 302016
 

By Pierre Gottiniaux for CADTM, 99GetSmart

Street art in loiza, Puerto Rico - photo by Denise Rowlands (CC)

Street art in loiza, Puerto Rico – photo by Denise Rowlands (CC)

The island of Puerto Rico, which is part of the Commonwealth of the United States, is staggering under the weight of an unsustainable debt of nearly $73 billion. Its neo-colonial legal structure prevents it from restructuring its debt and protecting itself from the rapacious creditors who have already begun to secure their positions, working in the shadows to get Washington to make the “right decisions”– meaning those that will bring the island’s population to their knees. And yet, a debt audit commission is now revealing that a large part of Puerto Rico’s public debt was issued unconstitutionally and could be considered illegal under US law.

Causes of the indebtedness

The USA has made Puerto Rico into a tax haven for its companies, who also use the island as a pool of cheap labour. Puerto Rico provides a full tax exemption for US companies that are based there, and also the possibility of returning revenue to their parent companies without paying taxes. But that tax advantage, which a large number of companies were profiting from, ended in 2006 by decision of the federal government. That led to a large number of companies and investors – and therefore employers – leaving the island.

Puerto Rico provides another advantage to investors, and it is still in force: a tax exemption on revenues from public debt securities. That exemption is in force for all American public entities, but in the case of Puerto Rico it provides a unique, threefold advantage: exemption from federal taxes, state taxes, and local taxes, even for non-residents of Puerto Rico (whereas for US states – Puerto Rico being a territory and not a state – the exemption from state and local taxes is only applicable to residents of the state and/or municipality where the investment is made). That’s what we mean by a threefold exemption. And it amounts to threefold losses for the government of Puerto Rico. US investment funds have taken full advantage of this system.

Another major cause of the growth of Puerto Rico’s debt is the difference in treatment between the social-security systems: The Puerto Rican government receives significantly less from the federal government, proportionally, than the 50 states, for a population who are much poorer on average and therefore much more in need of such support. And this is despite the fact that the island’s population pays the same taxes as “continentals.” The compensatory outlay the government has been forced to make in recent decades accounts for over a third of Puerto Rico’s current debt ($25 billion out of $73 billion) |1|. Many cuts have already been made to public and private social-security programmes (cuts in wages, increased payroll taxes, lower coverage rates, etc.), with devastating consequences, because behind those programmes there are women and men who can no longer afford to receive care (see the “People are literally dying because of Wall Street greed” video campaign) |2|.

Another factor is the crisis in 2007, which made investors wary of anything that might involve risk; Puerto Rico’s situation, a year after the end of the tax advantage mentioned above, was not an encouraging one. The sudden recession in 2009, which followed the crisis of 2007, also heavily impacted Puerto Rico’s tourist industry, further shrinking an already strangling economy. Lastly, the failure of Detroit in 2013 prompted many investors to shun public debt securities, because they were suddenly no longer considered “untouchable” – that is, exempt from restructuring and payment default.

For all these reasons – and the list is not exhaustive – Puerto Rico’s budget has been in deficit for 16 consecutive years and the government has been borrowing to compensate. In exchange for the loans, it has imposed austerity measures aimed at reducing the deficit, with the sole result of plunging the population into ever-increasing poverty, forcing an ever-increasing number of people to emigrate. Puerto Ricans have US citizenship and can therefore travel and take up residence freely throughout the country. The result is that the island’s population is inexorably dwindling, year after year, aggravating the situation further; Puerto Rico’s demographic balance is now negative. And needless to say, the first ones to leave are university graduates, since there are no longer any employment opportunities for them on the island. That only accelerates the deterioration of the situation and is dragging the government – and the population who suffer the consequences – into a deepening spiral of indebtedness and austerity.

The sovereignty problem 

Puerto Rico is a semi-colony of the United States, and its sovereignty is extremely limited. Those limitations are particularly flagrant regarding management of her debt. The federal government has excluded Puerto Rico from filing under Chapter 9, the law that applies to insolvent local governments, which Detroit made use of in 2013. The island’s government tried to pass a law in 2014 called the Recovery Act which would have allowed it to restructure its debt, but the US Supreme Court struck down the law on 13 June 2016. |3|

The question of Puerto Rico’s sovereignty is debated regularly, but there are many obstacles to implementing it. In a referendum held in 2012, a majority of the population voted in favour of statehood – full incorporation into the USA – as opposed to the current status of unincorporated territory or Commonwealth. Most Puerto Ricans have family in the USA and are attached to the country, and therefore massively reject the option of becoming an independent nation. But the federal government, and the American population in general, reject the idea on the grounds that statehood for the island would cost them too much – refusing to deal with the issue of who is responsible for Puerto Rico’s economic situation. And indeed, just days before it struck down the Recovery Act, in early June 2016 the Supreme Court of the US’s rejection of a petition |4| by Puerto Rico’s government reaffirmed the island’s subordinate status.

PNG - 78.9 kb
(results of the 2012 referendum – source Wikipedia)


The threat of default

Concretely, the government of Puerto Rico has already been in default of payment since 2015, but on bonds that are not senior debt since they are not guaranteed by the constitution. On 1 July, if nothing changes, Puerto Rico will default on a senior debt of $2 billion – a default which could set off a wave of judicial reprisals on the part of the creditors, who will inevitably go to court to force repayment of their debts. And, even if Puerto Rico manages to scrape up the money to repay that debt by 1 July, which is highly unlikely, it would automatically result in non-payment of wages and pensions and the shutdown of hospitals and public services, because the government doesn’t have the cash necessary to cover that amount, and could only do it by robbing other budget items.

Who holds Puerto Rico’s debt?

The system of threefold tax exemptions on Puerto Rico’s debt securities made them extremely attractive for US investors, beginning with the numerous investment funds that operate almost exclusively by purchasing municipal bonds and have a large impact on the local economy. There are also a large number of pension funds throughout the USA.

But since the Puerto Rico debt crisis deepened, in 2014, and the ratings assigned by the bond rating agencies began to slip, new participants have gotten into the game – the “vulture funds,” who purchase Puerto Rican debt securities on the secondary market at a fraction of their value (on average 30 cents on the dollar, or 30% of face value), demanding exorbitant interest rates (up to 34%). These funds have a very specific goal: They wait until Puerto Rico defaults on its debt, and then file suit to demand payment of the face value of the securities (the “dollar” they acquired for 30 cents). It’s what they specialise in. They’ve done it with Argentina, with Greece… with all countries who experience over-indebtedness, and it’s made them billions.

The main solution currently being proposed

Currently, the “solution” that has the most chance of actually being adopted is a bill passed by the House of the Representatives of the USA on 9 June 2016, known under the name PROMESA (for Puerto Rico Oversight, Management and Economic Stability Act), which means “promise” in Spanish. The bill has had wide bipartisan support — as much from Republicans as from Democrats —, and in particular from presumed presidential candidate Hillary Clinton. And for good reason, since the bill, which still needs approval from the Senate, is aimed at restructuring only a part of the Puerto Rican bonds in circulation, and the vulture funds are obviously concentrating on another part, which will not be restructured but has the same guarantees under Puerto Rico’s constitution. That is one of the criticisms raised by its detractors, who include Bernie Sanders |5|, the Democrat Senator from Vermont and candidate for the Democratic presidential nomination in 2016, numerous trade unions, and small investors in Puerto Rico, who rightly feel that there is a prejudice towards big investors. But that’s not the only reason.

The PROMESA bill, if does not undergo modifications when it goes before the US Senate, will impose a “fiscal oversight board” made up of seven members, four of whom will be appointed by the Republican Party, two by the Democratic Party, and one by the President, and only one of whose members will be required to be a resident of Puerto Rico. This board will have greater powers than those of the island’s government, in the economic sphere but also in terms of general governance – which harks back to the colonial period, when the governor of the island was an officer of the United States army appointed by the President. It is also reminiscent of the international financial commissions set up in Tunisia in 1869 |6| and in Greece in 1898. |7|

The fiscal oversight board would have the task of negotiating the restructuring of a portion of Puerto Rico’s debt and taking the measures demanded by the creditors to “clean up” the island’s economy, which would mean deepening and extending the austerity measures taken in recent years and which have already caused the closing of 150 schools, the loss of 20% of the jobs on the island, the emigration of nearly 50,000 persons per year, the explosion of inequalities, etc. |8| Currently, more than one out of two children in Puerto Rico already lives below the poverty threshold. The board would fire even more schoolteachers, close more schools, and reduce the minimum wage (there is talk of reducing it to $4.25 an hour for people under age 25) or even eliminate it outright, etc.

Alternatives

There is a coalition in Puerto Rico, bringing together trade unions, community organisations, and activists, which defends the idea of an audit of the debt, on the grounds that a large part of Puerto Rico’s public debt may well be illegal. The coalition, called Vamos4PR (“Let’s Move 4 PR”), has the ear of the government of Puerto Rico, which decided in July 2015 to set up a debt audit commission with the task of analyzing the issuance of Puerto Rican bonds over the last 45 years. Unfortunately, due to a lack of funds, the commission — made up of 17 persons (elected officials, representatives of financial institutions, trade-union representatives, and researchers) — was only able to begin its work in January 2016. It has just filed an initial “pre-audit” report which will serve as the basis for future work, but already provides serious evidence of the illegality of a portion of Puerto Rico’s debt. The audit analyzes the two most recent issuances of Puerto Rican debt securities, in 2014 and 2015 (see the report below this article).

This report comprises extremely important items of information and provides strong arguments in favour of repudiation of a large part of Puerto Rico’s public debt. One can only regret that it is not receiving more discussion and media attention. In any case, the report reveals that a large portion of Puerto Rico’s debt was contracted in flagrant violation of the Commonwealth’s constitution and can therefore be considered illegal.

  • - Puerto Rico issued multimarket bonds in 2014 in order to finance its deficit, but the constitution requires that the Commonwealth maintain a balanced budget and prohibits the government’s using credit to compensate for a budget deficit. Yet Puerto Rico has borrowed more than $30 billion to finance its deficit since 1979. That debt might well be considered illegal by a court.
  • - The constitution requires that Puerto Rico spend no more than 15% of its revenues on debt service; the government devotes between 14% and 25% of its budget to debt repayment. If the final audit demonstrates that Puerto Rico devotes more than 15% of its budget to debt, then the debt could be declared illegal by a court. At that point a determination would have to be made as to what portion of the debt exceeds the limit.
  • - The constitution prohibits the issuance of securities with a maturity greater than 30 years. However the government of Puerto Rico, like most countries, “rolls over” its debt – that is, when a debt reaches maturity, instead of the repaying it, the government contracts another debt to finance the preceding one. The commission gives the example of a debt issued in 2014 to repay a debt issued in 2003, which had itself been issued to refinance a debt from 1987. So the commission will have to determine whether the practice in question is constitutional or not.

The commission will also examine possible illegitimate aspects of the debt, even though it doesn’t identify them as such in its report. Puerto Rico holds approximately 37 billion in CABs – Capital Appreciation Bonds –, which are bonds of a particular type, for which the issuer pays the interest and repays the capital only when the security reaches maturity. For example, one of the bonds Puerto Rico must repay on 1 July is a CAB issued in 1998 with a nominal value of $14 million, for which the estimated total payout is $38 million once the interest is included. The commission will examine this practice in its final report.

A final question the commission will attempt to answer has to do with productivity and the debt’s contribution to economic growth. Puerto Rico has a GDP/debt ratio of 96%. Since the recent increase in the debt has had no positive effect on the economy whatsoever, the commission will analyze the economic impact of the successive debt issues in detail.

Conclusion

It is clear that the PROMESA law will not improve the situation of Puerto Rico’s people, but will worsen it. The federal government is making no attempt to determine the reasons for the island’s over-indebtedness, instead arguing that poor management by a government that overspends requires that the situation be taken firmly in hand, without concessions. And yet there are many reasons why repudiation of the debt may well be justified, and they have been revealed by the audit commission which has in fact only begun a serious analysis of the debt. However the private interests hiding behind this “debt crisis” are powerful and know how to make themselves heard in Washington, which is why there appears to be no possibility of moving beyond the crisis in a positive way without strong popular mobilisation and real political determination.

Translated by Snake Arbusto

Footnotes

|1http://www.nytimes.com/2015/08/03/u…

|2https://www.thenation.com/article/e…

|3| See AFP wire of 13 June, 2016, “USA: Porto Rico débouté en justice sur sa dette”, available (in French) at: http://www.romandie.com/news/USA-Po…

|4http://www.theatlantic.com/politics…

|5| See in particular http://cadtm.org/Un-candidat-aux-presidentielles-US (in French) and also http://cadtm.org/Sen-Bernie-Sanders-From-Greece-to
Concerning the situation in Puerto Rico, Bernie Sanders argues for an audit of the debt that would determine which debts were contracted in violation of the constitution and for extending Chapter 9 to Puerto Rico to enable the island to restructure its debt while being protected from legal action by its creditors.

|6| See http://cadtm.org/Debt-how-France-appropriated

|7| See http://cadtm.org/Greece-Continued-debt-slavery-from

|8| See in particular http://cadtm.org/Puerto-Rico-en-lutte-contre-la (in French) and also http://cadtm.org/Puerto-Rico-must-escape-the-debt

Author

Pierre Gottiniaux CADTM Belgium

 

Jun 152016
 

By James Petras, 99GetSmart

88b7b0975f0a4818ad2a0328534989e9_18

Introduction

Rational Voters and Irrational Experts

Large swaths of the US electorate are voting for rational choices against a system controlled by an economic and political oligarchy.

Rational choice is based on their experience with political leaders who have pursued policies leading to a trillion dollar financial crisis and bank bailouts while impoverishing millions of mortgage holders and working families – the US tax payers.

Their rejection of the established leadership of both major parties is rational. It reflects  an understanding that campaign promises are worthless.

They want rational commitments to address growing inequality and end the series of overseas wars which have weakened America. They identify with the slogan to ‘make America strong again’, emphasizing a dramatic transformation of the domestic economy and security system.

An army of political pundits have ignored the rational socio-economic and political choices exercised by the American electorate and repeatedly turn to psycho-babble, pontificating that contemporary voters are really reacting out of ‘anger’ and ‘irrational emotionalism’ or even ‘racism’ in their preference for non-establishment political figures like Bernie Sanders and Donald Trump. The experts deny the objective bases for popular voter choice.

Sanders and Trump: Appeals to the New Rationality?

The woeful and wilful blindness of political experts is a product of their own arrogance and hostility to the emergence of two Presidential candidates: Bernie Sanders and Donald Trump, who challenge the established party and economic leadership.

The Sanders campaign has proceeded along the lines of a political polarization between big business and the working class; demanding higher taxes for the wealthy and greater social spending for public health and education for the working class.

Sanders has sought to unify racial and ethnic minorities and majoritarian workers with progressive gender, religious and environmental movements.

The Trump campaign, on the other hand, has sought to mobilize the white American majority among workers, small businesspeople and professionals, who have seen their living standards decline over the decades and have been marginalized by globalization and the ‘politics of identity’.

Sanders emphasizes a refurbished class identity. Trump promotes new nationalist symbols. Yet in many ways the establishment opposition, the parties, mass media and the economic elite, are far more hostile to Trump’s ‘nationalist politics’ than Sanders’ democratic socialist program and class appeal, which they view as weak and easily manipulated – like the huge anti-war movement was manipulated during the Bush and Obama Administrations.

Sanders apparent willingness to come to terms with the Democratic Party elite and back Clinton’s candidacy when he loses the nomination is far more acceptable to the establishment than Trump. As in all previous presidential campaigns, the Democratic Party will allow progressive candidates to propose advanced socio-economic campaign platforms in order to secure working class and middle class votes, and drop the progressive façade in favor of  corporate-warmonger policies once in office.

Trump’s initial nationalist-anti-globalist rhetoric has aroused greater animosity from business, liberal and militarist elites than Sanders occasional critical comments.

Trump’s nationalism was rooted in popular and reactionary sentiments. On the one hand he would speak of relocating multi-national corporations back to the US. On the other hand, he would demand the expulsion of over ten million Mexican immigrants from the US labor market.

His anti-globalization-business relocation strategy is vague and lacks several essential ingredients: He did not specify which multi-nationals would be affected and he did not describe what policies he would implement to force the trillion-dollar corporate return.

In contrast, Trump was brutally clear about which immigrants would be expelled and his methods of expulsion and exclusion leave no ambiguities. ‘Build the Wall!’, has become his rallying cry to keep out migrant workers from the southern border.

Trump’s Electoral Victory and Neoliberal Right Turn 

Trump’s unorthodox, controversial and successful campaign to secure the nomination for the Republican Party’s candidate for president has led him to appeal to the big donors for campaign funding and endorsements from Republican neoliberal establishment leaders like Congressional Speaker of the House Paul Ryan. This quest for ‘respectability’ has caused Trump to shed his anti- globalization rhetoric and economic nationalist politics, and focus on his more chauvinist ethno-racist appeals.

Trump’s current electoral strategy seeks to unify the hard neo-liberal political elite with the ‘patriotic’ white working class.

Trump’s ideological road to the Presidency is no longer paved with economic-nationalist attacks on globalization. Instead he relies on arousing public support by stigmatizing minorities as ‘anti-American’ and targeting Clinton’s personal ‘corruption’ and lies, rather than her domestic and foreign policies.

Trumps’ “Make America Strong” rhetoric ties in neatly with President Obama’s tariff wars against China’s steel exports to US markets.

Trump’s “Make America Strong” proposals mirror Obama’s systematic assault on the World Trade Organization’s role in negotiating trade agreement and the recent imposition of Washington’s dictates of the WTO’s settlement process.

Obama blocked the reappointment of an objectionable (read independent) South Korean lawyer who opposed Washington’s blatant violation of WTO rules. Trump would endorse Obama’s promotion of US business lobbies against the WTO.

Trump also echoes Obama’s policy of favoring globalization only insofar as Washington maintains control of the key international institutions controlling the global economy. Trump would continue Washington’s policy of packing global institutions with its vassals.

Trump in the Footstep of Sanders

Trump’s embrace of the neoliberal business elite mirrors Sanders submission to the Democratic Party bosses. Trump seems to believe that his mass base of supporters will be fooled by his increasing provocations against immigrants accusing them of stealing jobs while spreading crimes and drugs … and not notice his new embrace of the establishment economic elites.

Trump’s mass meetings are composed almost exclusively of white working and middle class voters – especially in parts of California and the Southwest with huge Hispanic and immigrant populations. These are clearly designed to provoke violent protests.

Trump gains nationalist support by circulating videos of NBC, CNN and ABC reports depicting his peaceful white supporters being ‘terrorized and beaten up by mobs of (Mexican-American) protestors waving Mexican flags and sporting gang insignia.’

Trump calls on his American supporters to ‘stand strong’ against demonstrators who grab and burn the Stars and Stripes and stomp on his “Make America Great” campaign hats.

Conclusion

Trump’s turn to the neoliberal Republican elite means he will intensify his repressive and anti-immigrant rhetoric. Trump’s appeal will be aided by mindless violent protestors and provocateurs as they conveniently “overwhelm the police” at anti-Trump rallies. He effectively promotes in the “propaganda of the deed”: linking disloyal immigrants who wave the Mexican and not the US flag.

The recent realignment of the Republican Party will bring Trump into the arms of the hardline neoliberal Congressional-Wall Street elite. This shift means Trump’s ideological and mass base will focus on ‘domestic enemies’ – Mexicans, Muslims, women and ecologists rather than the economic elite and the devastating foreign policies of previous administrations.

Trump expects a wholesale incorporation of the Sanders support machine into the Clinton campaign. In this scenario, marginalized white workers and downwardly mobile middle class voters will confront the real face of Wall Street’s darling warmonger Mme. Clinton and be less likely to reject Trump’s opportunism with the rightwing Congressional business alliance.

Any working class opposition to his embrace of the neoliberal Congressional Republicans will be deflected by revelations of Clinton’s big business dealings and covert operations with foreign leaders. If pursued by the FBI, Clinton’s blatant violation of federal security regulations, her ‘private’ and illegal system of communication and liaison with foreign officials while Secretary of State could blow up her campaign and hand the presidency to Donald Trump.

Trump has gained working class voter support in West Virginia, Ohio and many other rust-belt states because of Clinton’s free trade and anti-working class history, which has shattered any residual illusions about the Democratic Party.

Trump’s electoral victory will hinge on his capacity to mask his turn to the neoliberal elite and to focus voter attention on Clinton’s militarist, pro-Wall Street politics, her corrupt conspiratorial behavior and her anti-working class policies.

Jun 072016
 

By James Petras, 99GetSmart

hillary-clinton-for-war

Introduction

During her 4 years as Secretary of State of the United States (2009-2014), Hillary Clinton controlled US foreign policy. She had access to the most confidential information and state documents, numbering in the tens of thousands, from all of the major government departments and agencies, Intelligence, FBI, the Pentagon, Treasury and the office of the President. She had unfettered access to vital and secret information affecting US policy in all the key regions of the empire.

Today, Mme. Clinton’s critics have focused on the technical aspects of her violations of State Department procedures and guidelines regarding handling of official correspondences and her outright lies on the use of her own private e-mail server for official state business, including the handling of highly classified material in violation of Federal Records laws, as well as her hiding official documents from the Freedom of Information Act and concocting her own system exempt from the official oversight which all other government officials accept.

For many analysts, therefore, the issue is procedural, moral and ethical. Mme. Clinton had placed herself above and beyond the norms of State Department discipline. This evidence of her arrogance, dishonesty and blatant disregard for rules should disqualify her from becoming the President of the United States. While revelations of Clinton’s misuse of official documents, her private system of communication and correspondence and the shredding of tens of thousands of her official interchanges, including top secret documents, are important issues to investigate, these do not address the paramount political question: On whose behalf was Secretary Clinton carrying out the business of US foreign policy, out of the review of government oversight?

The Political Meaning and Motivation of Clinton’s High Crimes Against the State

Secretary Clinton’s private, illegal handling of official US documents has aroused a major FBI investigation into the nature of her activities. This is separate from the investigation by the Office of the Inspector General and implies national security violations.

There are several lines of inquiry against Mme. Clinton:

(1)  Did she work with, as yet unnamed, foreign governments and intelligence services to strengthen their positions and against the interest of the United States?

(2)  Did she provide information on the operations and policy positions of various key US policymakers to competitors, adversaries or allies undermining the activities of military, intelligence and State Department officials?

(3)  Did she seek to enhance her personal power within the US administration to push her aggressive policy of serial pre-emptive wars over and against veteran State Department and Pentagon officials who favored traditional diplomacy and less violent confrontation?

(4)  Did she prepare a ‘covert team’, using foreign or dual national operative, to lay the groundwork for her bid for the presidency and her ultimate goal of supreme military and political power?

Contextualizing Clinton’s Clandestine Operations

There is no doubt that Mme. Clinton exchanged minor as well as major official documents and letters via her private e-mail system. Personal, family and even intimate communications may have been carried on the same server. But the key issue is that a large volume of highly confidential government information flowed to Clinton via an unsecured private ‘back channel’ allowing her to conduct state business secretly with her correspondents.

Just who were Secretary Clinton’s most enduring, persistent and influential correspondents? What types of exchanges were going on, which required avoiding normal oversight and a wanton disregard for security?

Clinton’s covert war policies, which included the violent overthrow of the elected Ukraine government, were carried out by her ‘Lieutenant’ Under-Secretary of State Victoria Nuland, a virulent neoconservative holdover from the previous Bush Administration and someone committed to provoking Russia and to enhancing Israel’s power in the Middle East. Clinton’s highly dangerous and economically destabilizing ‘brainchild’ of militarily encircling China, the so-called ‘pivot to Asia’, would have required clandestine exchanges with elements in the Pentagon – out of the State Department and possibly Executive oversight.

In other words, within the Washington political circuit, Secretary Clinton’s escalation of nuclear war policies toward Russia and China required secretive correspondences which would not necessarily abide with the policies and intelligence estimates of other US government agencies and with private business interests.

Clinton was deeply engaged in private exchanges with several unsavory overseas political regimes, including Saudi Arabia, Israel, Honduras and Turkey involving covert violent and illegal activities. She worked with the grotesquely corrupt opposition parties in Venezuela, Argentina and Brazil

Clinton’s correspondence with the Honduran armed forces and brutal oligarchs led to the military coup against the elected President Zelaya, its violent aftermath and the phony election of a pliable puppet. Given the government-death squad campaign against Honduran civil society activists, Clinton would certainly want to cover up her direct role in organizing the coup. Likewise, Mme. Clinton would have destroyed her communications with Turkish President Erdogan’s intelligence operations in support of Islamist terrorist-mercenaries in Syria and Iraq.

Secretary Clinton’s e-mail would have shown her commitment to the Saudis when they brutally invaded Bahrain and Yemen to suppress independent civil society organizations and regional political rivals.

But it is Clinton’s long-term, large-scale commitment to Israel that goes far beyond her public speeches of loyalty and fealty to the Jewish state. Hillary Clinton’s entire political career has been intimately dependent on Zionist money, Zionist mass media propaganda and Zionist Democratic Party operations.

In exchange for Clinton’s dependence on political support from the Zionist power configuration in the US, she would have become the major conduit of confidential information from the US to Israel and the transmission belt promoting Israel-centric policies within the US government.

The entire complex of Clinton-Israel linkages and correspondences has compromised the US intelligence services, the State Department and Pentagon.

Secretary Clinton went to extraordinary lengths to serve Israel, even undermining the interests of the United States. It is bizarre that she would resort to such a crude measure, setting up a private e-mail server to conduct state business. She blithely ignored official State Department policy and oversight and forwarded over 1,300 confidential documents and 22 highly sensitive top-secret documents related to the ‘Special Access Program’. She detailed US military and intelligence documents on US strategic policies on Syria, Iraq, Palestine and other vital regimes. The Inspector General’s report indicates that ‘she was warned’ about her practice. It is only because of the unusual stranglehold Tel Aviv and Israel’s US Fifth Column have over the US government and judiciary that her actions have not been prosecuted as high treason. It is the height of hypocrisy that government whistleblowers have been persecuted and jailed by the Obama Administration for raising concerns within the Inspector General system of oversight, while Secretary Clinton is on her way to the Presidency of the United States!

Conclusion

Many of Clinton’s leading critics, among them two dozen former CIA agents, have presented a myth that Hillary’s main offence is her ‘carelessness’ in handling official documents and her deliberate deceptions and lies to the government.

These critics have trivializedpersonalized and moralized what is really deliberate, highly politicized state behavior. Mme. Secretary of State Hillary Clinton was not ‘careless in managing an insecure mail server’.  If Clinton was engaged in political liaison with foreign officials she deliberately used a private email server to avoid political detection by security elements within the US government. She lied to the US government on the use and destruction of official state documents because the documents were political exchanges between a traitor and its host.

The 22 top secret reports on ‘Special Access Programs’ which Clinton handled via her private computer provided foreign governments with the names and dates of US operatives and proxies; allowed for counter-responses inflicting losses of billions of dollars in program damages and possibly lost lives.

The Inspector General Report (IGP) deals only with the surface misdeeds. The Federal Bureau of Investigations (FBI) has gone a step further in identifying the political linkages, but faces enormous obstacles from Hillary’s domestic allies in pursuing a criminal investigation. The FBI, whose director is a political appointee, has suffered a series of defeats in its attempts to investigate and prosecute spying to Israel, including the AIPAC espionage case of Rosen and Weismann and in their long held opposition to the release of the notorious US-Israeli spy, Jonathan Pollard. The power of the Zionists within the government halted their investigation of a dozen Israeli spies captured in the US right after the attacks of September 11, 2001.

Clinton’s choice of conducting secret private communications, despite  several years of State Department warnings to abide by their strict security regulations, is an indication of her Zionist power base, and not a mere reflection of her personal hubris or individual arrogance.

Clinton has circulated more vital top-secret documents and classified material than Jonathan Pollard.

President Obama and other top Cabinet officials share her political alliances, but they operate through ‘legitimate’ channels and without compromising personnel, missions, funding or programs.

The executive leadership now faces the problem of how to deal with a traitor, who may be the Democratic Party nominee for US President, without undermining the US quest for global power. How do the executive leadership and intelligence agencies back a foreign spy for president, who has been deeply compromised and can be blackmailed? This may explain why the FBI, NSA, and CIA hesitate to press charges; hesitate to even seriously investigate, despite the obvious nature of her offenses. Most of all it explains why there is no indication of the identity of Secretary Clinton’s correspondents in the various reports so far available.

As Sherlock Holmes would say, “We are entering in deep waters, Watson”.

Jun 022016
 

By Mihalis Nevradakis, 99GetSmart

maxresdefault

 

 

palast2

Dear listeners and friends,

This week, the Dialogos Interview Series will feature an exclusive interview with bestselling author, filmmaker, investigative journalist, and economist Greg Palast, who will speak about his latest film project on election fraud in the United States, economic and political developments in Latin America, and on the latest set of austerity measures in Greece and the need for Greece to leave the Eurozone.

In addition, we will air our commentary of the week segment, plus some great Greek music. 

This is the season finale of Dialogos Radio. For more details and our full broadcast schedule, visit http://dialogosmedia.org/?p=6317 - where you can also find our podcasts, articles and written work, program archives, and online radio station Dialogos Radio 24/7.

Best,

Dialogos Radio & Media

 
************************
 
Αγαπητοί ακροατές και φίλοι,
 
Αυτή την εβδομάδα στο «Διάλογος», αποκλειστική συνέντευξη με τον συγγραφέα, ερευνητικό δημοσιογράφο, και οικονομολόγο Greg Palast, ο οποίος θα μας μιλήσει για την νοθεία των εκλογών στις ΗΠΑ, τις πολιτικές και οικονομικές εξελίξεις στην Λατινική Αμερική, για τα νέα μέτρα λιτότητας που έχουν εφαρμοστεί στην Ελλάδα, και για τους λόγους γιατί πιστεύει ότι η Ελλάδα πρέπει να αποχωρήσει άμεσα από την Ευρωζώνη.
 
Επίσης, ο Palast θα μιλήσει για το καινούριο του βιβλίο, “Πικνίκ για Γύπες,” που έχει κυκλοφορήσει στην Ελλάδα με Ελληνική μετάφραση, και όπου γράφει, μεταξύ άλλων, για τον ρόλο των μεγάλων τραπεζών και των αρπακτικών fund στην δημιουργία της οικονομικής κρίσης στην Ελλάδα
 
Θα μεταδώσουμε επίσης τον καθιερωμένο μας σχολιασμό της επικαιρότητας. Αυτή θα είναι η τελευταία εκπομπή της ραδιοφωνικής σεζόν 2015-2016.
 
Συντονιστείτε ΣΗΜΕΡΑ και όλη την εβδομάδα στο παγκόσμιο δίκτυο μας. Για περισσότερες πληροφορίες, μπείτε στο http://dialogosmedia.org/?p=6319. Στην ιστοσελίδα μας μπορείτε επίσης να βρείτε το αρχείο εκπομπών και συνεντεύξεων μας, την αρθρογραφία μας, και το διαδικτυακό μας ραδιόφωνο Διάλογος Radio 24/7.
 
Φιλικά,
Διάλογος Radio & Media
Jun 012016
 

By James Petras, 99GetSmart

anglo-american50

Introduction

What does it mean when the US and British financial systems launder hundreds of billions of dollars of illicit funds stolen by world leaders while their governments turn a ‘blind eye’, and yet the very same Anglo-American officials investigate, prosecute, fine and arrest officials from rival governments, rival banks and political leaders for corruption?

What does it mean when the US government expands a world-wide network of nuclear missiles on bases stretching from Poland, Bulgaria, Romania, the Gulf States to Japan, surrounding Russia, Iran and China, while the very same US and NATO officials investigate and condemn rival defense officials from Russia, China and Iran, as military threats to peace and stability?

What does it mean when Anglo-American economic officials devote decades to raising the age of retirement, reducing working and middle class household income, cutting workers compensation, expanding part-time work, setting the stage for mass layoffs slashing unemployment and health benefits and reducing social spending by the hundreds of billions of dollars and then turn around and investigate and threaten rival countries, like China and Argentina with loss of markets, investment and employment for not doing the same thing ?

The meaning of Anglo-America’s long-term, large-scale structural regression is clearly evident across the world. From Europe to Latin America and from Asia to Africa, socio-economic and politico-military agendas have been reversed.

Since the end of the Second World War there had been incremental gains in labor rights, stable employment, poverty reduction and working conditions.

Recently, these have all been reversed: Longer working days and weeks with reduced salaries and benefits; unstable temporary work replaces stable employment; employer-funded pensions are eliminated and replaced by multi-billion dollar corporate tax cuts and off-shore tax evasion.

Systematic structural swindles by the leading financial institutions have forced employees to delay retirement for years in order to ‘self-finance’ their own meager ‘pensions’, some expecting to ‘die at the job’.

Capitalist regression has been implemented by arbitrary state dictates and authoritarian decrees, erasing any pretense of democratic procedures and constitutional laws.

The regressive and retrograde leader-states from the imperial centers impose their conditions on follower regimes like Mexico and Russia forcing them to reverse their legacy of social progress while blackmailing these regimes’ oligarchs with the loss of lucrative markets, access to tax and money-laundering havens and impunity for their crimes and swindles.

Anglo-America: Historic Reversion

For the past three decades, the US and Great Britain have led the global drive to undermine labor’s advances. First, the economic structure sustaining labor organizations were dismantled and fragmented. Then organized labor was decimated, co-opted and corporatized.

Capital proceeded to reverse labor and social welfare legislation and lower wages, in order to impose longer workdays and destabilize employment.

The mass media re-packaged the regression cycle as ‘economic reform’, a euphemism, which disguised the re-concentration of power, wealth and income over the last three decades.

The growth of inequality and the concentration of wealth and assets to the 1% became ‘the standard’ for the Anglo-American era. However, class organization and the vicissitudes of class struggles continued to constrain efforts to impose unchallenged Anglo-American capitalist rulership throughout the world.

The first decisive blow against social reform resulted from the systematic Anglo-American breakdown of the former USSR and allied nations of the Warsaw Pact in East Europe. This was followed by the endogenous dissolution of Communist Party rule in China, Russia, Eastern Europe, the Baltic and Balkan states and their conversion into capitalist satellites. Social welfare, full employment, public pensions and health systems were shredded; labor lost all its rights except one – the right to emigrate to the West as cheap labor.

From Russia to Latvia and Poland to Bulgaria and Romania, there were massive layoffs, plant closures and the total dissolution of social security networks driven by the Anglo-America neo-liberal onslaught. The Atlantic Alliance brought their new Eastern satellites to social submission.

Until the second decade of the 21st century, Western Europe’s centers for the defense of the progressive social agenda were in France, Italy, Spain, Greece and Portugal. The social agenda in Latin America and China faced the Anglo-America offensive even earlier.

France: The Strategic Key to Anglo-American Social Regression

France has been the center where the Anglo-American regressive attack on socio-economic policy and Southern Europe’s resistance has been playing out.

By 2015 the regressive alliance had overturned all progressive social policy in the former communist bloc countries. Their alliance with Germany’s finance sector give them tight control of the EU and they successfully decimated the progressive social programs and labor legislation in Greece, Spain and Portugal.

France became the centerpiece for Western capitalism’s drive to incorporate Italy into the regressive orbit. The conquest of France and Italy would completely reverse 70 years of incremental labor gains after the defeat of fascist capitalism.

The assault on  France’s progressive social agenda is spearheaded by the retro-Socialist President Francois Holland and his troika of authoritarian hyper-capitalist ministers: Financial Minister Michel Sapin, Prime Minister Manuel Valls and Economy Minister Emmanuel Macron.

The strategy of relying on a ‘nominal socialist’ to destroy the social welfare state is a classic ‘Trojan Horse’ operation. Hollande’s virulent anti-labor policy is implemented by decree under a joint plan developed in association with France’s leading industrialists.

The imposition of the regressive policy in France began in stages. It first established the retrograde political leadership with Valls, a notorious authoritarian police-state official willing to over-ride any democratic niceties. The Economy Minister, Emanuel Macron, a millionaire investment banker, is a direct associate of the financial elite, with no qualms in slashing labor programs. The Finance Minister Michel Sapin, a long-time accomplice of the French bureaucratic-capitalist elite, is prepared to slash pensions and public services while reducing job security in order to lower the cost of labor to capital.

Once the Hollande and his troika took control of the centers of political power, (and after militarizing French society in response to the terrorist attacks), the regime launched its anti-labor offensive to shred the progressive social agenda. Its first target was its most formidable – the mass of the French working class.

Declaring ‘anti-ISIS’ martial law powers, Hollande adopted an outright authoritarian strategy, bypassing the elected French Parliament in the legislatureand imposed ‘rule by decree’ with the announcement of a highly regressive labor law against the French people.

The dictatorial labor decree was a first step to weaken organized labor’s capacity to protect wages and job security in order to give a powerful impetus to employer control over the French labor force.

Once Hollande’s labor decree established capitalist supremacy, his Troika would be in a decisive position to reverse seventy of incremental social advances.

The joint Hollande-Troika-capitalist bloc emasculated the legislature, leaving a weak, bleating chorus of so-called ‘left Socialists’ to bemoan their political impotence. Then an entirely new business anti-labor code was rolled out, which  included the right of bosses to hire and fire workers at will, extend the workday, lengthen the work week, undermine labor’s bargaining power and restrain strikes and job actions. This would open the way for a wave of irregular and contingent jobs for new workers . . . Using the pretext of terrorist attacks, the French capitalist class had begun to rule by decree to further expand and deepen their long planned assault on labor.

Hollande’s troika and France’s capitalists are lowering corporate taxes and employer contribution to social payments. Regulations that restrained the concentration of elite power were eliminated.

With curfews and ‘anti-terrorist’ militarized police in the streets, French business elite could now freely begin to to imitate the Anglo-American capitalist elite and impose an iron-fisted New Order.

Without labor constraints on French capital, the bosses are free to relocate factories and investments any and everywhere, under the most favorable wage, tax, employment and environmental conditions.

No longer required to invest in French industry, the business elite can transfer capital from industry to financial sectors, allowing hundreds of billions of euros to be laundered in off shore tax havens.

The Hollande troika will now also establish its own version of ‘Security and Exchange investigators’ to prosecute and fine its rival Anglo-American financial swindlers, just as the Anglo-Americans pursue their French competitors today.

The Hollande regime’s regressive social agenda has opened the door for an even more extreme Presidential prototype to follow and Alain Juppe is waiting.

The rabid Republican Party presidential candidate, Alain Juppe, promises to go ‘whole hog’ in utterly destroying the French welfare state, as it has existed since the fall of fascism. If elected president, Juppe promised to slash 100 billion euros from the budget – double the amount that the Hollande regime currently seeks to cut. Juppe has pledged to eliminate 250,000 civil service jobs in all vital social sectors; to delay the retirement age from 62 to 65; eliminate the 35-hour workweek; facilitate worker layoffs and decimate unemployment benefits. Finally, Juppe has promised French capital that he would implement their entire business agenda, cut taxes for business and bankers and eliminate the tax on inheritance implemented nearly four decades ago.

In other words, the Hollande regime’s assault on labor and embrace of business has opened the door for the rise of the extreme right. Moreover, Hollande has manipulated the incidents of Islamist terrorism to assume arbitrary decree powers wiping out any pretense of a democratic government. The terrorist incidents are arguably related to Hollande’s colonialist embrace of the ‘regime change’ assaults against the secular nationalist governments of Libya and Syria and his policy of sending (or tolerating the recruitment of) marginalized French youth of North African ancestry to fight in the ensuing civil wars. This has further strengthened the rise of the extreme right in France.

As the Socialist and Republicans compete for dictatorial powers to serve business’ regressive agenda, the nationalist, protectionist and social reformist policies of the National Front are emerging as the populist alternative in the coming presidential race. Anti-fascist rhetoric has worn thin and important sectors of the working class will turn to the National Front in defense of their jobs and social legislation. The anti-immigration rhetoric of the National Front is now part of the political vocabulary of the Republicans as well as Prime Minister Valls.

The only alternative to a power grab by the French hard right is a mass general strike and sustained street battles in order to resist the reaction by decree.

As throughout history, popular struggles in France begin in the streets – among the trade unions and young workers angrily facing low wages, austerity and the grim prospect of ‘permanently’ temporary jobs.

The outcome of the intensifying French labor-capital conflict will have a decisive impact on the future of labor throughout Europe, especially among all Left unionists.

Latin America: The Labor-Capital Showdown

Beyond Europe, the Anglo-American onslaught against labor and the working class resonates most directly in Latin America and to a lesser extent in Asia and Africa.

The first country to fall victim to capital’s attack was Mexico with the implementation of the North America Free Trade Agreement (NAFTA). By the early 1990’s NAFTA had demolished the independent Mexican trade unions, crippled social legislation, eliminated subsidies to small corn farmers, forced peasants into debt, reduced minimum wage, doubled poverty levels and turned the majority of the labor force into landless, indebted, casual workers. On the other hand, NAFTA has been a bottomless source of wealth as capitalists accumulate double and triple digit profits and absolute power to hire and fire employees. Mexico’s government, under Anglo-American capital, has allowed the illicit transfer of hundreds of billions of dollars of Mexican assets to US, English and other overseas banks, which have become immense money-laundering operations. The proximity of Mexican drug cartels to the US banks has facilitated the extension of their networks into the US market. The horrific expansion of drug cartel death squads, linked to Mexico’s political leaders, dates from the 1990’s and the signing of NAFTA. This bloody nexus has consolidated neoliberal political power in Mexico and weakened the possibility of a viable mass electoral alternative.

Anglo-American dominance in Latin America in the 1990’s led to an entire panoply of regressive policies: privatizing and denationalizing the most lucrative natural and state resources, banks and industries; reducing wages and social spending for labor while increasing the concentration of capital. By 2001 however the Anglo-American edifice collapsed throughout South America with the demise of its neo-liberal political leadership.

From Venezuela in 1999, to Argentina in 2002, Brazil 2003, Bolivia 2006 and Ecuador 2007, left and center-left parties capitalized on their mass support and were elected into power. They took advantage of global economic conditions with the rising commodity prices, booming Chinese markets and new regional alliances to fund a variety of progressive social agendas, including increased social expenditures, guaranteed pensions, family allowances, minimum wages, wage increases for public sector and expanded labor rights.

The Anglo-American power elite was in retreat and isolated, but it was far from defeated. They retrenched and prepared to re-mobilize their strategic business, banking and political allies when the opportunity arose. They counter-attacked when global and regional conditions turned unfavorable to the social regimes.

The assault on Latin America was preceded by the Anglo-American neoliberal take-over of Northern Europe from the 1990’s to the first decade of the 21st century. This was followed by the sweep and grab of the Balkans and Southern Europe. The combined Anglo-American-EU-NATO offensive now seeks to reverse the last social-welfare regimes in Europe: France and Italy with the help of President Hollande and Prime Minister Renzi.

Simultaneously the Anglo-American offensive has been launched throughout Latin America. Their goal is to recover the imperial prerogatives, political power and economic privileges lost during the previous decade. The primary Euro-American target is the ‘golden triangle’, Argentina, Brazil and Venezuela. These countries constitute a global center of immense oil and agro-mineral wealth.

The Argentine neoliberal restoration took off in December 2015 with the election of  far-right President Mauricio Macri. His junta wasted no time in stripping the state of its social legislation, dismantling job security through large-scale layoffs and assuming authoritarian rule by decree to devalue Argentina’s currency by 40% and to eliminate state subsidies and raising the price for gas, electricity, transport, and water between 300 and 800 %.

The regressive offensive was in full force. Next, Brazil’s twice elected President Dilma Rousseff was ‘impeached’ and essentially overthrown by a bizarre legislative right-wing coup-d’état, designed to reverse a generation of progressive regulatory, labor and employment legislation. It was also secretly designed to halt corruption investigations against many right-wing politicians.

Venezuela is next. It will be the scene of a full-scale-elite coup-d’état with imperial backing, to overthrow the government of President Maduro and end decades of progressive social advances under the Chavista governments.

While in France and Italy, the great social reversal is being implemented by internal enemies from the ‘progressive’ political parties (“Trojan Horses”), in Latin America the reversal is led by openly hostile class enemies who depend on the arbitrary exercise of executive power. The drive to put a definitive end to the ‘welfare state’ in Europe and Latin America is marked by the use of dictatorial decrees, (in the style of Mussolini in the 1920’s) as exercised by Argentina’s elected President Marci in January 2016 and Brazil’s ‘Interim (Coup) President’ Temer in April 2016. Meanwhile capitalist lockouts, hoarding and sabotage are being used to crush Venezuela’s elected government.

This epochal confrontation has spread across Africa and Asia. China’s capitalist offensive has seen a four-fold increase in the number of new billionaires in less than a decade, at the expense of hundreds of millions of workers stripped of their rights and social programs.

South Africa, under the ANC government, turned its back on social gains promised by the liberation struggle and has imposed regressive social legislation and repressive anti-labor decrees. A corrupt class of black and white billionaires now rule by guns and clubs over the black working class.

In Africa and the Middle East, the social welfare states of the nationalist regimes in Iraq and Libya have been completely shredded through imperialist military intervention and civil war. Their once advanced societies have been thrown back into ethno-tribal warfare with no remaining modern social institutions in those two blighted, resource-rich nations.

Wither the Class Struggle: Historical Reversal and Class Revolt?

The Anglo-American offensive to reverse decades of social advance has captured most of Europe. They have incorporated or coopted the Social Democratic parties and are moving swiftly toward dismantling the decade-long center-left welfare states in Latin America.

In Africa, the centerpiece of Anglo-Americanization is South Africa, the continent’s most advanced bastion of international capitalism.

In Asia, China, the second most important capitalist economy in the world, has been leading the struggle to overturn the social agenda of the revolutionary past.

Large-scale, prolonged class resistance in several decisive centers is emerging to confront this Anglo-American process of reversion. The class confrontation however takes specific characteristics in each country.

In France, the major protagonists of street fighting and marches are young unemployed or casual workers, members of the strategic transport and oil unions and student-workers facing a bleak future of marginal employment and a shredded social safety net.

Trade unions and farmers’ association have joined the street struggles on numerous occasions, possibly in preparation for a general strike.

In Latin America, the center of the class struggle is Argentina. Power-mad President Macri immediately imposed regressive policies against all sectors of the working class. His actions managed to unite the four major trade union confederations, multiple retirees associations and small businesspeople bankrupted by exorbitant charges on gas and electrical use and regional neighborhood federations. The widespread growth of job actions among public sector employees points to a general strike.

The regressive assault on long-term social legislation in Brazil immediately followed the thinly disguised capitalist coup. The ousting of President Rousseff has provoked street demonstrations, led by the huge rural landless workers movement (MST), the confederation of industrial and service workers (CUT), social movements of the homeless workers and the recipients of Lula’s poverty programs. New revelations, based on taped conversations among the coup plotters reveal their plans to oust the incumbent President Rousseff in order to derail official investigations into their own corruption scandals. This has enraged the general public.

With the initial take-over, the Brazilian political-financial elite has prepared to launch its full-scale reversal of pensions and employment laws and wage guarantees. The pro-business leadership plans to slash corporate and wealth taxes and to appoint business executives to all leading ministries. The deep corruption scandal and the mass demonstrations suggest the rightwing power grab may not survive.

The regressive offensive in Venezuela has severely crippled the national economy and deeply eroded living standards of the vast majority of the working class. The rightist Congress, backed by the US and allied with international mass media, industry and multinational banks, are trying to force the resignation of Socialist President Maduro.

Maduro has declared a state of emergency and mobilized the armed forces. He  called on the military and popular militia to defend the constitutional order and has threatened to mobilize the workers to “take control of the means of production”. Still, the leftist government vacillates over arming the militias and workers. A wide gap remains before the word and the deed.

In the meantime Venezuela’s right wing and left-wing mass mobilizations face each other in the streets seething with class hatred and waiting to engage in a decisive confrontation. The military thus far remains constitutionalist and on the side of the elected president.

In South Africa, the corrupt pro-business ANC led by President Zuma murdered dozens of striking mine workers. It has impoverished millions of shantytown residents, while increasing the wealth and power of the black-white elite. On April 30, 2016, 1.1.million South African activists, including civil society and community organizations and trade unions covering the mining, manufacturing and service sectors have organized to form a new confederation linked with informal, unemployed and poor workers. The South African Workers Summit replaces the moribund and corrupt labor confederation, COSATU, the ‘labor desk’ for the neoliberal ANC regime. The new confederation will co-ordinate mass struggles and reclaim social programs as a central part of the anti-capitalist revolution.

In China, the growth and consolidation of the world’s second largest concentration of billionaires has led to the proliferation of large-scale industrial workers’ strikes, walkouts and confrontations with factory bosses, company unions and government officials. China is becoming the epicenter of Asia’s working class struggles. Chinese workers have forced the government to investigate and jail over 200,000 corrupt officials, high and low, and to concede substantial wage increases and social compensation to factory workers. Fearing more social upheaval, China’s billionaires and multi-millionaires have transferred hundreds of billions of dollars of stolen assets abroad in a buying spree of high-end property in the ‘safe’ Anglo-American “heartland” of world reaction.

The continued advance of working class struggles against the public and private oligarchs has forced the Chinese Prime Minister to reform elite privileges and prosecute large-scale banking swindles and illegal seizure of farmland. Especially important, millions of workers have successfully secured double-digit wage increases and the right to legally live in urban/industrial and construction centers.

As it gains momentum, class struggle in China can become the centerpiece for a wider Asian social transformation and a great leap forward to socialist values.

Conclusion

The Anglo-American drive to establish a global regressive social order has pushed billions of workers on five continents into destitution, insecurity and lifelong exploitation. The capitalist world rules by fiat and violence, declaring that social regression and worker repression are the ‘wave of the future’. For the elite, the proper order of the universe is being ‘restored’!

In response, new working class organizations have emerged and engage directly to defend their historic social advances and economic rights.

In the course of defending their past progressive social legacy, the new working class militants can clearly see the imperative to challenge and overthrow the entire political and economic order. From France to Latin America, from China to South Africa, class struggle is defining the present and future of class relations.

May 312016
 

By Mihalis Nevradakis99GetSmart

commentaryoftheweek-300x220

Greece’s supposedly “leftist” government of so-called “hope” and “change” did it again! It saved Greece once more! Greece can continue living the European nightmare…excuse me, dream, can remain part of the vaunted “European family” and the Eurozone, and the government once again successfully completed “tough” negotiations with its so-called European “Partners,” with a capital P, as Greece’s deferential journalistic class tends to refer to them.

Let’s take a look at this new “success story” of Greece’s government of “hope” and “change.” It is a success story so big that Greece’s already insane value-added tax of 23% will be bumped up to 24% on June 1st. It is a success story so great that the unified property tax which SYRIZA, at one time, called unconstitutional and illegal and which at one time was said to be “temporary,” will now be raised and made permanent. It is a success story so tremendous that Greece’s already paltry pension and social security payments will be slashed further, despite government lies and propaganda to the contrary. Home foreclosures and auctions will resume, without anything but the flimsiest of temporary protections for the poorest homeowners. These foreclosures and auctions will take place electronically instead of in a courthouse, under cover of darkness and without warning. In the meantime, new privatizations are coming, alongside the development of a new super-fund of sorts which will manage essentially all of Greece’s publicly-owned assets and prepare them to be sold off, at bargain basement prices. And unlike most of the people of Greece, the foreign investors who will be snatching up these assets know very well how valuable a land Greece is.

Of course, all of these privatizations, foreclosures, auctions, as well as the bundling and selling of both prime and subprime loans—where have we heard that before?–will be permitted without any transfer tax or any other taxes being levied. Because when we talk about tax evasion, we are supposed to only talk about the “bad,” “lazy,” “spendthrift” Greeks, but never the “good,” “civilized” foreign saviors in suits. And of course, this was agreed to following those aforementioned “tough” negotiations between the Greek government of “hope” and “change” and the lenders. This result had also been predicted, months in advance, by economist, analyst, and member of Greece’s United Popular Front Dimitris Karousos, but was of course ignored by the international media and of course by the trashy, biased English-language editions of Greece’s media outlets.

So what if people’s homes are foreclosed and thousands of households are thrown out onto the streets? So what if heating oil and gas, already insanely taxed, are taxed some more, along with basic goods and staples through direct and indirect taxation? Who cares if the self-employed and small- and mid-sized businesses will be absolutely slaughtered as a result of these new measures that were voted into law and the avalanche of taxes that they will face? Who cares if there is now zero chance of the minimum wage to be restored to the still-low pre-crisis levels, which at one time the SYRIZA government of supposed “hope” and “change” had promised? And of course, all of this does not even take into account the automatic cuts that will be implemented if Greece does not meet the strict fiscal targets imposed by its so-called saviors. Who cares about all of this? We are talking about a success story here! Of course, though, it’s a success story for the lenders—but not for Greece or for the Greek people. But, the European dream is what everyone wanted, right? So here it is, enjoy it!

And since we are talking about what is surely such a huge, unprecedented success, that must explain why the otherwise “revolutionary” and “radical” and “non gullible” and oh so clever Greek people did not take to the streets. After all, Greece remained in Europe, remained in the Euro, people still have cheese from Holland for their sandwiches (if they can afford the 24% tax, that is), so everything is A-OK, right? That must explain why Greece’s notaries called off their strike protesting the new insurance and pension bill, as soon as that very bill was passed, allowing home foreclosures and auctions to resume. That must also explain why Greece’s lawyers, with their own protracted strike, have inconvenienced ordinary Greek people whose cases have, in some cases, been postponed for years—instead of using their legal knowledge to mobilize the population and protest austerity both old and new.

Ah, but I forgot. We had the usual round of stale, old 3 and 4 and 24 hour so-called “work stoppages,” which of course left enough time for Greece’s “labor leaders”–quotations absolutely necessary—to hit up their favorite tavernas to wine and dine. Work stoppages which have been going on for decades and decades and which not once have made the slightest bit of impact other than inconveniencing people’s lives, which might very well be their real objective, instead of any actual change. For instance, we had the workers on the Athens Metro declare a work stoppage beginning at 9 pm on the night the new measures were to be voted into law. This was enough to discourage many people from coming out to protest, not knowing if they’d have a way to return home. With a low turnout of protesters assured, the work stoppage was then lifted at the last minute, just in time for the usual mass exodus from Syntagma Square once the usual dog-and-pony show between the paid agent provocateurs and the riot police which SYRIZA was at one time going to abolish, was underway.

We of course also had the journalists’ strike as well, which of course just coincidentally happened to fall in the days of final debate before the new measures were to be voted upon by Parliament. Of course, the truth here is that even if there was no strike, there would still have been no actual journalism taking place from these so-called journalists and the media outlets they work for. But just try explaining that to grandma and grandpa in the village and to Greece’s suburban neoliberal class, who still actually think they are being informed by the newscasts that they watch.

All of this is okay though, because there is hope! There is light at the end of the tunnel! We have the “savior” Yanis Varoufakis with his stylish pink t-shirts and his so-called “guerilla interviews,” that is, when he isn’t making “spontaneous” (quotations again necessary) appearances at the protests taking place in France or signing autographs in Spain. The same “heroic” Varoufakis who said that the Greek debt would be repaid in perpetuity, who pillaged the Greek public sector’s cash reserves to pay that debt to the IMF, who imposed capital controls, and who agreed to more austerity and who voted for Greece’s corrupt pro-austerity president Prokopis Pavlopoulos. This same “heroic” Varoufakis is now touting the catastrophic idea of a parallel or dual currency system for Greece as a “solution” while millions of minions lap up his every word. He is joined by the “heroic” Zoe Konstantopoulou, who also knew how to vote “yes to everything” when she was part of the SYRIZA government last year and who continued publicly supporting the government even after it sold out the referendum result of July 5th. She, too, is touting the catastrophic parallel or dual currency solution for Greece, as are fascists such as the far-right Giorgos Karatzaferis and “Sir” (quotations necessary once more) Basil Markezinis, son of a junta prime minister, both of whom have been resurrected from the political graveyard recently.

So since Greece has been saved, has remained in Europe and the vaunted Eurozone, and since there are even more “saviors” in the pipeline who will continue to save Greece well into the future, why bother protesting? The couch is nice and comfortable, is it not? And it’s easier to let the television do the thinking for you, lest you hurt your head. The same television which includes public broadcaster ERT, which is now paying private, oligarch-owned network provider DIGEA to transmit its signal digitally. A company owned by the same oligarchs that the oh so leftist SYRIZA government claims it is going to take down. The same government which will supposedly take down these oligarchs by auctioning off a limited number of television licenses to the highest bidder and the deepest pockets, while Greece’s smaller, independent local television stations are dying off, unable to afford to pay DIGEA exorbitant amounts to carry their signal. This is the same government which, unconstitutionally and in violation of European law, has shut down Greece’s National Radio-Television Committee, leaving the broadcasting landscape entirely unregulated. This is the government which claims it is restoring order to the airwaves, and there are still people who slurp up this propaganda.

Of course, television in Greece knows all about telling people horror stories from countries like Venezuela while telling people that the so-called “leftist” Alexis Tsipras wants to turn Greece just like Venezuela. What they won’t say, of course, is that Venezuela is the victim of both international economic warfare through the sharp decline in oil prices, as well as a victim of its own domestic oligarchs and cartels, who are hoarding goods to create severe market shortages in order to undermine the country’s government. What the media in Greece are also not saying is that many of these horror stories also exist in Greece today as well, in a country that is supposedly being “bailed out” and “saved” day after day by its so-called European friends and partners. What these media outlets in Greece know how to say is that Portugal, Ireland, and Cyprus are supposed “success stories” for concluding their own memorandum agreements. What is not said is that the end of the memorandum agreements has not meant the end of harsh austerity, the end of record numbers of home foreclosures and evictions, or the end of mass migration out of these countries.

And while all of this is happening, I hear many in Greece moaning and groaning about why we can’t be more like the French, who we are told are out on the streets in massive numbers to protest their own anti-labor bills. However, few people, if any, think to ask…how were these supposedly spontaneous demonstrations actually organized, with blogs and websites and hashtags and public assemblies? We saw the savior of not just Greece but apparently the whole world Yanis Varoufakis speak to the protesters in France. Who invited him? Who assured his security? Who paid for his travel and lodging? How did this speech get organized in the first place, logistically and otherwise? And how did these supposedly spontaneous demonstrations spontaneously, as we are supposed to believe, spread to 55 cities in Greece and dozens more in Europe, all on the same day and at the same time? Are we supposed to believe that after such a long period of inactivity and hibernation that everyone suddenly decided that they had enough? And in the meantime, what people in Greece are blissfully unaware of is that while they are whining about their own inactivity, the rest of the world mistakenly believes that it the Greeks who are the ones fighting back, while they are the ones staying inactive! Doesn’t anybody have even the slightest curiosity as to how these perceptions are developed and maintained, and by who?

The answer is that no, most people do not question such things. Instead, in Greece, they run off to again vote for criminals and professional liars like those in SYRIZA, while others, through their abstention from the polls, essentially legitimize the victors in this electoral process instead of giving their votes to the dozens of smaller parties and movements which are struggling to exist. Those same people might participate in yet another lame 3 or 4 hour work stoppage, or by maybe taking a walk down to the center of Athens to “protest” by standing around and drinking beer, before running home to catch Greece’s talking heads on TV again. That’s Greece and that’s the majority of the Greek populace today.

May 252016
 

By Eric Toussaint, CADTM, 99GetSmart

arton13476-467b6

Part Two of the series “Greece and debt: two centuries of interference from creditors”

This series of articles analyses Greece’s major debt crises by placing them in the international economic and political context, an approach that is systematically absent from the dominant narrative and very rarely present in critical analyses. Since 1826, a series of major debt crises have profoundly marked the lives of the Greek people. Each time, European Powers formed a coalition to impose new debts in order to repay the earlier ones. This coalition of Powers dictated policies to Greece that corresponded to their own interests and those of the few big private banks and large fortunes. Each time, those policies were aimed at extracting the tax resources necessary for repayment of the debt and entailed a reduction in social spending as well as decreased public investments. In a variety of ways, Greece and the Greek people were denied the exercise of their own sovereignty. With the complicity of the Greek ruling classes, this kept Greece in a subordinate, peripheral condition.

Recall of Part One, published 12 April 2016 http://cadtm.org/Newly-Independent-Greece-had-an: Newly Independent Greece had an Odious Debt round her Neck

Modern Greece was born shackled to debt from bond issues (in 1824, 1825 and 1833) which together amounted to 245% of her GDP. Three major European Powers (Britain, France and Russia) formed a coalition that amounted to the first Troika, imposed a monarchy, putting a Bavarian prince on the throne, and subjugated the country through debt. The Troika systematically defended the interests of the big banks in London and Paris, ensuring that they would extract maximum profit from the odious debt demanded of Greece. The Greek people, who had to foot the bill for a spendthrift, bellicose monarchy, rebelled on several occasions. While they succeeded in ousting the despot in 1862 and instituting a Constitution granting them certain civil and political rights, they were not able to free themselves of the burden of debt. The major Powers kept Greece in a position of subordination, denying the Greek people the exercise of their sovereignty. The monarchy and the local ruling classes systematically attempted to divert popular discontent towards nationalism and hostilities with the Ottoman Empire.

Introduction to Part Two

According to the dominant version of history, whether untruthful or simply mistaken, during the 1880s Greece was re-admitted onto the financial markets thanks to an 1878 agreement with the creditors who held their 1824-1825 |1| debts and to policies of radical public expenditure reduction. Greece then made heavy use of fresh borrowing and significantly increased its public spending. This, the story goes, was the cause of the 1893debt crisis and suspension of payments. Greece’s inability to manage its borrowing seriously is said to have led the big Powers to impose a financial control commission to oversee the Greek budget. This story is false!

The following translated extract from Le Monde dated 16 July 2015 is an example of what is widely said: “But, as today, the country was rife with clientelism and tax avoidance by the notables. Immediately after Greek independence, the King Otto, the first king of Greece, who was imposed by the European Powers, introduced costly major works projects. The civil service took on any warm body, the army was superbly equipped… It was all paid for by generous loans [sic] from western countries. The government lost control: in 1893, almost half of the country’s tax revenues were devoted to paying the interest on the debt”. |2|

Another example can be found in the 20 June 2015 issue of the Swiss financial magazine Bilan: “Thanks to the agreement that was ratified in 1878, Greece could once again, in 1879, borrow on the financial markets. Over the next fourteen years Greece borrowed the equivalent of almost 530 million French francs from Paris, London and Berlin creditors. Less than 25% of the sums were invested in infrastructures to develop the country. The rest went on military expenditure to finance Greece’s confrontations with its neighbours (with mixed military fortunes)”. |3|

The true part of the story is that the bankers again lent money to Greece. It is also true that the Monarchy spent a lot and waged expensive military campaigns against the Ottoman Empire. Most commentators, always ready to side with the creditors (like the Le Monde journalist who did not hesitate to mention ‘generous loans’, a real oxymoron) |4|, also point out that taxes were inefficiently collected.

Now let’s see what really happened: during the 1880s the bankers of the great Powers (British and French but also German, Belgian, Dutch, etc.) were favourable to lending to countries that were normalising their payments situations. They imposed one condition: the old outstanding debt must be restructured and repaid. Most of the countries who had had repayment defaults accepted these conditions that are very favourable to creditors who then opened their purses to lend money so that countries would have the means to repay old debts. Big capital, then experiencing a new phase of expansion in the dominant countries, was attracted to the new investments and lending possibilities offered by massive capital exports to peripheral countries. This was the beginning of the imperialist phase of world capitalism. |5|

Greek Bond - 1880

Greek Bond – 1880

Other debt restructuring of the same period

Debt restructuring that took place during the 1878-1890 period concerned Greece, Costa Rica, Paraguay, Peru and the Ottoman Empire.

The Greek debts from 1878 onwards. In 1878, the outstanding debts from 1824-1825 were restructured. The creditors obtained that Greece repay the equivalent of the amount she had received in 1824-1825. There was therefore no real debt reduction and Greece recommenced the payments of interest and capital. |6| Between 1879 and 1890 Greece entirely repaid the restructured debt. The debt had not been reduced because new debts were taken on in order to pay the old ones, which meant both series of debts were repaid during the 1880s.

The Costa Rican debt restructuring of 1885. In suspension of payment since 1874, Costa Rica agreed, in 1885, to a debt restructuring satisfactory to its creditors: along with £2 million they gained possession of a part of the railways and 568,000 acres of land.

The Paraguayan debt restructuring of 1885. Paraguay, which was also in suspension of payment since 1874, agreed to pay its creditors £800,000 and to concede to them 2.5 million acres of land.

The Peruvian debt restructuring of 1890. The Peruvian debt restructuring of 1890 was the biggest restructuring of debt for a Latin American country. The terms were very unfavourable for Peru: the creditors repossessed two million tons of guano (a natural fertiliser), gained possession of the whole public railway system, a shipping line on Lake Titicaca, the mines of Cerro de Pasco and, to top it all, a new loan was agreed to fund the repayment of the remainder of the debt in suspension of payment. Finally, it was in 1926 that Peru finished paying the restructuring of 1890 after the suspension of payments that started in 1876.

The restructuring of the Ottoman Empire’s debt. Following a payment default by the Ottoman Empire in 1875, the debt was partially restructured in 1881. The creditors demanded maximum repayment. To achieve this, a financial commission of experts appointed by the “great powers” was established. As Louise Abellard wrote: “An institution was created in 1881, by imperial decree, under the name of ‘The Ottoman Public Debt Administration’. This Administration gained absolute and irrevocable control over several Imperial revenues (customs and excise, taxes on alcoholic beverages, stamp duties, fishing rights, tax on silk, tobacco and salt monopolies, etc.). These revenues were to be allocated by the Administration to the payment of compensation to the creditors holding bonds issued before the default. The Administration was piloted by Europeans (British, Dutch, French, Germans and Italians) directly representing their nations’ creditors. Entirely independent of the Ottoman authorities, they were an instrument of absolute guarantee for the creditors who thus had the assurance that the old and the new investments would be reimbursed. Up to a point, the holders of the bonds, through the Administration, acted directly on Ottoman finances, in their own favour, until perceived prejudice was fully compensated (up to the end of the Empire). The Administration’s prerogatives were progressively extended to the role of guarantor for infrastructure contract payments (particularly railways)”. |7|

Debt restructuring permitted the imperialist countries to launch a new cycle of indebtedness and capital expansion

The debt restructuring that was carried out during the 1880-90s was the means by which the creditors embarked on a new phase of spreading the over-abundant capital available in the central countries (UK, France, Belgium Netherlands, Germany, etc.) all around the world. The granting of new loans was aimed at setting the repayment pump back into motion, since the countries in default needed fresh liquidities in order to repay their defaulted debts. Investments and loans were the vehicles used. In several cases, as we saw earlier with Latin American countries, restructuring took the form, partly, of property exchanged against outstanding loans. The principal criteria of the bankers, and other investors, was not at all the well-being of the debtor country and their ability to manage the funds they were loaned, or even to repay them, but the creation of maximum profitability. Their decisions were based on the necessity to invest all the funds at their disposal in making maximum profit as well as maintaining the country in a state of indebtedness and financial dependence. The creditors were assured that in case of non-payment their own country’s governments would intervene, by military means if necessary, to force the debtor country to keep up repayments and if necessary, colonize it.

In Tunisia, the Ottoman Empire and in Greece, international supervisory bodies with far-reaching authority were created by the creditor Powers (amongst whom France and Britain always occupied important or even highly privileged positions). Greece was in this position from the very beginning, as illustrated by the 1832 convention passed with Britain, France, Russia and the Kingdom of Bavaria, which created the Greek Monarchy and gave absolute priority to debt repayment. |8| An International Financial Control Commission was imposed on Tunisia in 1869 before it went under direct French control in 1881. In the Ottoman Empire the creditor Powers installed twenty local offices throughout the territory (from Yemen to Thessalonika), and employed 5,000 civil servants. Greece’s subordination to the creditor Powers – in fact written into its international “birth certificate” – has changed in form over time but still remains today: from the interference by the British, French and Russian ambassadors in the council of ministers in 1843, |9| to the creation of the International Finance Control Commission in 1898 (which functioned up to the Nazi invasion), not to forget the International Financial Enquiry Commission created in 1857 to watch over the repayment of the 1833 debt.

The impact of the international financial and economic crisis of 1890-1891 on Greece

In November 1890, the City of London was in a situation comparable to that which occurred again in the US in 2008 and which triggered off the failure of Lehman Bros., a credit crunch, an international banking crisis and a worldwide economic recession in 2009. On 8 November 1890 the London bankers held an emergency meeting to plan action, should Baring Bros. fail. On 10 November, the bankers met with the government, who established contacts with the other big Powers in order to coordinate reactions to the crisis. Baring Bros. (unlike Lehman Bros.) was saved, but the financial and economic crisis of 1891-1892 was profound. Among those who took part in saving Baring Bros. was the Rothschild bank (present in London, Paris and other European capitals and an important player in Greek debt), JP Morgan (already the biggest US bank) and JS Morgan (established in London and parent to JP Morgan, with whom they later merged). |10|

Nowhere in the articles on the 2015-2016 Greek debt crisis published by the chief organs of the international press are references to the 1893 Greek debt crisis to be found; nor any link to the international financial and economic situation and the suspension of payments decreed by the Greek Parliament at the time. The crisis that had its origins in London caused an economic recession, a fall in international trade, an international credit squeeze… Greece experienced a serious drop in its exportations and so was deprived of the foreign currency essential to funding its debt repayments. Exports of currants, which represented two thirds of Greek exports, fell by 50% between 1891 and 1893. There were two reasons for this sharp drop: 1. The international crisis and the reduction of demand in the richest countries; 2. The decisions taken in the UK, France and Russia to impose import duties on the currants entering their markets. This was in total contradiction of their own dogma professing free trade and the removal of all import-export duties. |11| The fall in revenue and blocked access to loans from British, French and German banks left Greece no option but to suspend payments. Fifty-six percent of Greece’s revenue was devoted to debt repayments. |12| Another contributing factor was a fall in the value of Greek currency against the pound sterling and other strong currencies. With a devalued currency, the real cost of the foreign debt became unsustainable.

The commentators who accuse Greece of being a country that goes easily into payment default should learn that in the 19th century, Spain suspended payment six times, the Austro-Hungarian Empire five times, Portugal three times, Prussia twice and Russia once. |13|

The military conflict against the Ottoman Empire and the restructuring that followed

The Greek monarchy and the local elite launched a disastrous military conflict against the Ottoman Empire in 1897. Evidently, the great Powers manoeuvred the two parties into war |14| in order to take advantage of their mutual weakening and increase their influence over them, particularly by using their debts. The conflict was costly and the great Powers imposed their will on Greece as much as on the Ottoman Empire. The peace treaty was signed in Constantinople (now Istanbul) on 4 December 1897 under the supervision of the UK, France and Russia (the Troika of the time, in place since 1830), the Austro-Hungarian Empire, Germany and Italy. |15| In 1898 another loan was made to Greece (see Box: The 1898 Bond Issue…) The Troika was again the guarantor of the loan. The loan was granted within the framework of the peace treaty and covered a big indemnity paid by Greece to the Ottoman Empire. The great Powers did good business; as they had control of the Ottoman Empire’s finances, they saw to it that the Ottoman Empire’s creditors were paid. Greece and the Ottoman Empire had the same creditors!

The 1898 Bond Issue and the subjection of Greece to International Financial Control

The Law of Control voted by the Hellenic Parliament on 26 February 1898 is identical to the draft bill drawn up by the International Financial Control Commission (IFC). Greece was obliged to accept all the creditors’ conditions. Under this Law, the IFC controlled all state revenue dedicated to servicing:
- the 1833 loan guaranteed by France, Great Britain and Russia;
- foreign loans incurred by the Greek State between 1881 and 1893;
- the new loan that Greece took on to repay the preceding ones and to pay war reparations to the Ottoman Empire.

The 1898 loan was composed of two parts:

1) A loan for war indemnity to Turkey covering 92 million French francs (4 million Turkish pounds) plus 2.3 million francs (100,000 Turkish pounds) that Greece had to pay for damage to private property.

2) A further loan to cover former debts and the deficit of the year 1897 to enable the debt to be repaid. This came to a total of 55 million francs distributed as follows:
- 26 million francs to cover the Greek State’s budget deficit for the year 1897;
- 2.5 million francs for payments owed by the Greek Government in 1898 to holders of the former foreign debt;
- 26.5 million francs to repay the floating debt or to convert it to gold.

The total new loan taken on by Greece thus came to 123.5 million francs (28.5 + 95), plus the 26.5 million francs of debt conversion. To this amount a further 20 million francs were to be added, in the form of loans as and when required, to cover the total deficit of the following years.

JPEG - 122.7 kb
Extract from the report of the International Finance Commission from 1898
Article 4 of the Law of Control drawn up by the IFC and meekly adopted by the Hellenic Parliament on 26 February 1898 stipulated that the Commission’s administrative costs, fixed at a maximum of 150,000 francs and including a sum of 60,000 francs to cover the fees of the six Delegates, should be deducted from the product of the revenues concerned. The six delegates represented Great Britain, France, Russia, the Austro-Hungarian Empire, Germany and Italy.The IFC obliged Greece to repay 39 million drachma per year while the average total income of the State (barring loans) came to approximately 90 million drachma. That meant that 43% of State revenue went directly to debt payments. Note that no part of the new loan was intended to strengthen the country’s economy, develop its infrastructure or improve public education. The new loan was intended exclusively to pay off former debts, indemnify Turkey (which in turn needed the indemnity to repay her creditors, who happened to be the same as Greece’s) and to pay off Greece’s current deficit.

The IFC members emphasized that on average the total budget of the Ministry of Education and Cults barely attained 3.5 million drachma, while the civil list (or emoluments of the sovereign) came to 1.3 million, the budget for the police 1.7 million and the Defence (war) budget 15 million. In the IFC’s reference budget there was no specific post for public health. The railway budget was a ridiculous 84,350 drachma (7.5% of the civil list). Note that the IFC forced an IOU of more than 4 million drachma upon Greece, for the heirs of King Otto who had been overthrown by the people in 1862. The annual charge that repaying this debt incurred came to 200,260 drachma, or 2.5 times the country’s railway budget!

JPEG - 81.1 kb
Extract from the report of the International Finance Commission from 1898 – administrative costs of Greece 1892 – 1896
The Commission made it quite clear that in the future, the Greek State budget would make no provision for major public works such as improvement of sea-ports and new railway lines. The Commission considered that any undertaking likely to significantly aggravate budget charges should be postponed until such time as the country’s finances had reached stable equilibrium. This is an explicit acknowledgement of the creditor Powers’ intention to maintain Greece in a permanent state of economic underdevelopment.In Article 11 of the Law, the IFC lays claim to the following for debt repayments:
- all revenue from stamp duty, about 10 million drachma;
- all revenue from import duties collected by the Piraeus Customs, i.e. about 10.7 million drachma;
- all revenue from duty on tobacco, i.e. about 6.6 million drachma;
- all revenue from duty from the monopolies on salt, oil, matches, playing cards and cigarette paper, to which were added all revenue from the emery mine at Naxos (an island in the Cyclades), i.e. about 12.3 million drachma in total.
JPEG - 47.6 kb
Extract from the report of the International Finance Commission from 1898
Who did the IFC entrust with the task of collecting revenue from the monopolies? The monopolies over salt, oil, matches, playing cards and Naxos emery were administered by a Greek-registered joint-stock company entitled Société de régie des revenus affectés au service de la dette publique hellénique or Company for the Control of Revenues Assigned to the Service of the Hellenic Public Debt (an ancestor of TAIPED |16|). The creditors obliged Greece to place this company under the direct supervision of the International Financial Commission and to make it a sort of instrument or organ of control. Furthermore, a designated member of the international Commission would be authorized to attend sessions of the Board of Administration and the General Assembly and the Commission would be able to veto any measure it judged illegal or damaging to the interests with which it had been entrusted. |17|Article 24 stated that all monies received by the Company designated in Article 14 should be entirely paid into the Régie’s accounts at least once a week. Should the revenues mentioned above prove insufficient, the IFC had the right to deduct revenue from the Customs at Laurium (whose gross product was estimated at 1.5 million drachma), Patras (2.4 million), Volo (1.7 million), and Corfu (1.6 million), in accordance with Article 12 of the Law.

IFC members could go in person to the various offices and establishments of all the services whose revenue was concerned, to check on the full implementation of the legal and regulatory measures. They were entitled to see on demand all books, accounts and accountancy documents (Article 36). Article 38 asserted that the Law of Control itself could only be modified with the agreement of the six Powers.

The conclusions of the International Financial Control Commission’s report provide a fine example of lies and hypocrisy: “In summary, the Commission was inspired in its work by the benevolent attitudes of the Powers where Greece is concerned. In satisfying the legitimate demands of the current creditors, it has taken fully into account the financial difficulties with which the country is faced. At the same time, while it has endeavoured to surround the collection and the use of the revenues set aside for the service of the debt with such guarantees as may afford every security to capitalists, it has been at pains to conserve, to the extent possible, the independence of the Hellene nation and of her Government. The future of Greece now depends on her own wisdom. If she applies herself to being industrious, calm and peacable, to improving her Administration, to developing her agricultural resources, encouraging her nascent industry and extending her trade relations, her financial situation will rapidly recover; her beneficent influence will gradually extend into the sphere of action which is reserved for her and, aided in this noble task by the sympathies of the Powers, she will succeed, through courageous and patient efforts, in conquering in Europe’s East the rank to which the glorious memories of her past entitle her.” |18|

This is typical of the discourse used by the European Commission and the governments of the creditor countries even now, in the 21st Century.

JPEG - 91.3 kb
Extract from the report of the International Finance Commission from 1898 – Conclusions
Sources:
- the diplomatic document (in French): Arrangement financier avec la Grèce, travaux de la Commission internationale chargée de la préparation du projet / French Ministry of Foreign Affairs – Paris, 1898, 223 pages,
http://gallica.bnf.fr/ark:/12148/bp… consulted on 1 May 2016;
- the text of the Greek law implementing the dictates of the international Financial Commission, consulted on 1 May 2016.

It is to be noted that from 1870 the German bankers and Germany were increasingly involved in the Balkans and the Ottoman Empire. The Greek defeat of 1897 was partly due to the military reinforcements and advice that the Ottomans had received from German officers (including generals) sent by Berlin. Bankers and diplomats were active in Athens and Constantinople. Among the countries keen to increase their influence in Athens after independence, Germany was omnipresent alongside the Troika. |19| No sooner had the peace treaty been signed and new loans granted to Greece, than the IFC imposed a new set of conditions on Greece. The Commission took up residence in Athens and took control of a large part of the Greek budget, which continued to be devoted to debt repayments. The Greek government had no authority to change the use of the income or modify taxation, without the agreement of the IFC. This bears a close resemblance to the present situation. The Commission remained in place up to the Nazi occupation of Greece in 1942! |20|

On top of the indemnity that Greece had to pay to the Ottoman Empire and that was diverted to the Great Powers, a large part of the new loan was to be used to continue repayments to the Troika countries for the 1833 loans. These repayments went on until the 1930s. According to calculations made by the economists Josefin Meyer, Carmen Reinhart and Christoph Trebesch (who are regularly associated with IMF research projects), only 25% of the sums borrowed by Greece between 1894 and 1914 were spent on regular projects (debt repayments apart) and investments. Forty percent went on debt repayments and banking commissions. The remaining 35% became military expenditure (the principal suppliers of armament were also the principal creditors and this situation persists today). |21| My own estimates show a much smaller portion of the borrowing being used for regular spending – no more than 10-15%.

Conclusions on the debt restructurings that took place in 1878 and 1898

These facts indicate that the debt resulting from the restructurings of 1878 and 1898 must be considered odious debt. The restructuring of 1878 required Greece to resume repayment of the debt contracted in 1824-1825, whereas that debt was illegal given that its terms were so overwhelmingly favourable to the creditors. This restructuring made repayment of the debt just as unsustainable and could only lead to a new crisis, which broke out in 1893. The restructuring of 1898 served to increase by several degrees the level of coercion exercised on the Greek government and its people, notably through the creation of the IFC. It enabled the six major Powers to grab a very large share of the government’s revenues while maintaining Greece in a situation of dependence toward its creditors.

An editorial comment published in the French daily Le Figaro in May 1898, describes the creditors’ strategy fairly clearly: “The maxim of the old policies was: Divide and Conquer. It has been partly replaced by the new rule: Lend them money to keep your foot on their necks. It would be interesting to make a study of it, for poor Greece, as we have had occasion to study it in Egypt, of that subtle invention of modern genius: the lender’s stranglehold on the borrower, substituted for brutal conquest using old-fashioned bayonets; judicial counsel imperceptibly becoming a counsel of wardship, of government, at first gentle and collective, then harsh and personal, for the benefit of the richest, the most tenacious, the most adroit members of the directory. We would like to observe, at its origin, the tying and the tightening of this noose of silver, the imperial instrument our century has made into its most effective weapon for political aggrandisement.” |22|

It is also important to conduct a study to determine what portion of foreign debt (debt issued in foreign currencies on the foreign financial markets, which must be distinguished from Greek loans in the local currency) was purchased by wealthy Greeks, whether residing in Greece or part of the wealthy Greek diaspora living in Istanbul, Alexandria, Smyrna and Paris. |23| It is certain that these powerful Greek elites had invested a significant part of their financial wealth in Greek securities. What that implies is that it was not in their interest to encourage their friends who succeeded one another in the Greek government to take a firm attitude with the creditors (see the Conclusions as well as the end of the inset with excerpts from Constantine Tsoucalas’s work).

Excerpt of a voucher issued by Greece in 1914, part of a loan of 500 million francs to repay previous loans

Excerpt of a voucher issued by Greece in 1914, part of a loan of 500 million francs to repay previous loans

A few keys to understanding the social and political evolution in Greece from just before the start of the First World War

Excerpts from the book by Constantine TsoucalasThe Greek Tragedy. |24| The selected excerpts give an idea of the development of social movements and the reforms won during the late emergence of a peripheral capitalist state.

“The successive tax increases on essential goods put the main burden on the workers and the middle classes, who had by now begun to organize in commercial guilds and unions. In March 1909 thousands of shopkeepers had violently demonstrated, in Athens and Piraeus, against the unequally distributed taxation. On 14 September a huge rally of over 50,000 (out of a population of under 200,000) shook Athens. While declaring their full confidence in the ‘revolution’, the Athenians went beyond the officers’ (that is, the new authorities who had just come to power [note by Eric Toussaint]) intentions. The demands for a system of progressive income taxation, the protection of production, the transformation of the civil service into a body of true public servants by the abolition of the spoils system rampant till then, an improvement in the workers’ standard of living, and a ban on usury as a criminal offence expressed the class antagonism that had been politically silent for so long. At the same time, the organization of the workers had been strengthened by the creation of numerous trade unions, and the discontent among the peasants had been growing since 1898, when the crisis in the currant trade, which had constituted a staple export, had reduced large strata of the agrarian population to misery. Unrest was especially strong in Thessaly, where the demand for agrarian reform of the large ‘estate-system’, inherited from the Turks, led to a series of violent peasant revolts, between 1905 and 1910, which had been bloodily repressed.”

(…)

“The elections of 1910 were a triumph for the new Liberal party. Venizelos formed his first cabinet, which consisted almost entirely of new men. A period of intense reconstruction and radical reform thus began.”

(…)

“The prerequisite for the reform programme of the Liberals was a constitutional reform. The constitution of 1864 was fully revised, individual liberties guaranteed, and the foundations of a ‘State of Law’ were laid. However, though some of the formal prerogatives of the monarchy were curtailed, the real powers of the King remained ambiguous, a fact which was to have explosive consequences.

On this institutional framework, Venizelos launched an impressive legislative programme. Land reform was the most urgent and difficult problem. A constitutional amendment (1911) was promulgated authorizing expropriation with compensation–though not without bitter opposition from the still powerful landowner class.”

(…) 

“Low wages were exempted from confiscation in cases of debt (1909), the trade union federations of Athens and Piraeus were recognized (1910), Sunday was made a compulsory rest day (1910), a new and rapid procedure was introduced for the adjudication of disputes between workers and management (1912), joint unions between workers and employers were forbidden (1914), and the newly established unions of workers were permitted to negotiate and sign collective labour contracts. Finally a compulsory general labour insurance scheme was introduced in 1914.”

“The fiscal system was also reorganized on a more equitable basis. Progressive taxation of income was introduced in 1911 and death duties were reorganized and greatly increased in 1914.”

Following the First World War at the end of the Ottoman Empire, Germany and Austria-Hungary were beaten, and the Greek monarchy and ruling classes thought that part of the Great Idea – Greece’s annexation of a part of Turkish Asia Minor – was about to be realised. This led to the disastrous military adventure of 1922, during which the Greek army attacked the Turkish army in its territory in Asia Minor. The result was a human and military disaster.

In 1922, “…the attempt to launch a general offensive against Kemal’s stronghold in Ankara ended in disaster. In August 1922, the Greek Army was smashed and fled in disorder before the Turks, who pursued its remnants into the sea, slaughtered thousands of Greeks, and finally set fire to Smyrna in the midst of indescribable chaos. Hundreds of thousands of Greeks were forced to flee to the neighbouring islands or the Greek mainland.”

(…)

“Ten years of war (1912-1922) had resulted in the creation of a country totally different from what it had been before. Greek territory doubled and the population grew even more spectacularly. The 1,500,000 refugees, whose social and economic integration was to constitute the greatest and most urgent problem of the country, changed the population structure completely. The urban population was greatly augmented, especially in the Athens district and the few large towns, where a numerous urban proletariat was created for the first time. Thus while in 1908 only 24 per cent of the population lived in towns of over 5,000 inhabitants, the percentage had risen to 27 per cent in 1920 and to 33 per cent by 1928. Greater Athens grew from 452,919 inhabitants in 1920 to 801,622 in 1928.”

(…)

“The urban scene had also changed drastically after the war. The long years of fighting, the influence of the Russian Revolution, and especially the tragic conditions of the urban refugees, led the working class to organize on a more radical basis. The General Confederation of Trade Unions was created in November 1918, and the Greek Socialist Party a week later. In 1922 it adhered to the Comintern, and two years later it became the Communist Party of Greece.”

(…)

“The total decay of the Ottoman Empire and the Egyptian Khedivate during the latter half of the nineteenth century enabled the Western powers to impose upon them a quasi-colonial status. It was the Greek merchants and bankers who were the major beneficiaries of this development, and between 1880 and 1910 colossal fortunes were made in the Mediterranean periphery. If the 1922 crisis eradicated the Greek element from Turkey and Bulgaria, their position remained unchallenged in Egypt and to a certain extent in Rumania, where the most influential Greek financiers continued to make their fortunes. Typically, many of the closest advisers of Venizelos in the economic and banking field belonged to this group. This undoubtedly helps to explain Venizelos’s automatic obedience to British and French diplomatic interests. It also provides a deeper understanding of the reluctance of Greek capital to centre its interests upon domestic development.”

Greece - 1832-1947

Greece – 1832-1947

8-5-1042f-1The debts from the 1920s to the Second World War
The defeat of Greece’s military adventure into Turkish territory in 1922 had dramatic effects on the civilian population. Approximately 1.5 million Greeks, the majority of whom had been living in Turkey, were forced to cross the Aegean under catastrophic conditions and return to Greece, which had lost the part of the Ottoman territory she had been granted after the First World War under the Treaty of Sèvres. |25| This massive influx of refugees led the Greek authorities to request aid from the League of Nations (the “ancestor” of the UN), which granted loans to Greece between 1924 and 1928 for a total amount equivalent to 20% of Greece’s GDP at the time. As guarantee, the League required that harsh austerity policies be applied. Both the League of Nations’ representation in Greece and that of the IFC, created in 1898, were dominated by the creditor powers, in particular Britain.

Repayment of the loans granted by the League of Nations was added to a series of other repayment obligations – the continuation of the repayment to Britain and France of the remainder of the debt of 1833 (Russia has received no repayments since the Bolshevik Revolution of 1917), repayment of the debt of 1898, and repayment of the war loans granted during the First World War by Britain, the USA, Canada and France (these war loans amounted it 55% of Greece’s GDP). |26| The total debts owed by Greece were more than 100% of her GDP, and the amount paid each year accounted for more than 30% of the revenues in the Greek budget and approximately 10% of GDP. That gives an idea of the effort imposed on the Greek people and on the country’s economy.

9-4-bc0de

For as long as the international economy was undergoing a phase of growth, as during the period 1898-1913 and the 1920s, Greece was able to post a primary budgetary surplus and cover its debt repayments (that is, under IFC constraints, it managed to generate revenue in excess of expenditures excluding debt service, which meant that it could use the surplus for repayments). Greece also received capital inflows, as during any period of growth of the world economy. The creditors granted Greece new loans so that she could repay the old ones.

Greek Bond - 1925

Greek Bond – 1925

The situation changed radically starting in 1930-1931 when the effects of the new international crisis that broke out on Wall Street in October 1929 began to be felt. Greece’s revenues from exports (mainly tobacco and currants) again collapsed, several Greek banks failed in 1931, and Greece’s currency was devalued by 50% following the British decision to suspend the exchange system based on the gold standard. |27| This devaluation automatically doubled the external debt as expressed in the local currency. The State was forced to double the amount of revenues set aside for repayment of the external debt in foreign currencies. As a result, in 1932, Greece had to partially suspend repayment of the debt.

Once again, if we focus on Greece while isolating her from the international context, we are likely to wrongly interpret what has taken place, just as a great many commentators have done. Yet it needs to be kept in mind that in 1932 the UK, France, Belgium, Italy and other countries also decided to suspend repayment of war debts between themselves and the USA. Germany suspended repayment of its debt to private creditors starting in February 1932 and, in May 1933, announced suspension of payments to all creditors. Hungary, Latvia, Romania and Yugoslavia were also in suspension of payment. Not to mention fourteen Latin American countries. What is systematically ignored by the dominant media is the fact that even after the moratorium decreed by Greece in 1932, she continued to make debt repayments under the tutelage of the IFC.

The International Financial Commission’s effects 

The daily Le Monde, cited earlier, says about the IFC’s actions: “In spite of everything, the result is far from being negative: It assisted a young Greece in taking control over its tax revenues and limiting the misappropriation of foreign capital by the local elite. It also contributed to the establishment of reforms that were indispensable for the country’s modernisation.” How is it possible for someone to write such a thing? The IFC exercised a true, permanent diktat over Greece’s finances for the benefit of the creditors, which prevented Greece from defining a development project and kept the country under the yoke of structural subordination.
According to Meyer, Reinhart and Trebesch, the actual yield obtained by the holders of Greek securities purchased abroad and denominated in foreign currencies and which were in suspension of payment at one time or another is between +1% and +5%. That’s a pretty high yield for the government bonds of a country that has the reputation of being a poor payer! How can this positive yield be explained? The actual interest rates were high, the debt stock was not reduced and, despite the repeated periods of suspension of payment, the country most often continued the repayments. As a matter of fact, even during the Great Depression of the 1930s, Greece, even though officially in partial suspension of payment, devoted a third of her revenues to debt repayment, which corresponds to 9% of Greece’s GDP, while during the same period Romania and Bulgaria were devoting, respectively, 2.3% and 3% of their GDP to debt service.

Conclusions

The analysis conducted in this article is not aimed at exonerating Greece’s governments and dominant class of their responsibilities. Quite to the contrary, the decision made by the successive Greek governments and by the dominant class to cave in to the requirements of the creditors and the major powers had terrible consequences for the Greek people. The Greek capitalist class, who were specialists in the realm of finance and international trade, constituted a bourgeoisie that was largely deterritorialised and never had either a true national project nor the will to promote development based on a real industrial fabric. Due to this very fact, its interests were inextricably linked to the interest of the country’s creditors. At times it even constituted a large percentage of the totality of those creditors, which explains its complicity with the representatives of the creditor powers. This is a constant fact from the 19th century up to today.

During the period we have examined here, Greece has constantly been dominated by foreign European powers. Foreign debt has been a permanent weapon used to exercise that domination. Yet as we see, that debt was clearly illegitimate, odious, illegal and unsustainable.

We’ve also seen that the successive debt crises are very closely linked to the international context and that many other peripheral countries have been subjected to the same treatment. The analysis must therefore be pursued in other areas of the world and justice must be done for all peoples subjected to debt.

Bibliography for Part Two: 
- Beloyannis, Nikos, Foreign Capital in Greecehttp://iskra.gr/index.php?option=co…
- Truth Committee on the Greek Public Debt, Preliminary Report of the Truth Committee on Public Debt, Athens, 2015 http://cadtm.org/Preliminary-Report-of-the-Truth
- Delorme, Olivier. 2013. La Grèce et les Balkans, du Ve siècle à nos jours, 3 volumes, Gallimard, Paris, 2013
- Driault, Edouard and Lhéritier, Michel. 1926. Histoire diplomatique de la Grèce de 1821 à nos jours, 5 volumes, Presses universitaires de France (PUF), Paris, 1926.
- Levandis, John A. 1944. The Greek Foreign Debt and the Great Powers, 1821-1898, New York: Columbia University Press.
- Luxemburg, Rosa. 1913. The Accumulation of Capital, London, Routledge and Kegan Paul Ltd, 1951
- Mandel, Ernest. 1972. Late Capitalism, New Left Books, London 1975
- Mandel, Ernest. 1978. Long Waves of Capitalist Development, The Marxist Interpreta­tion, Based on the Marshall Lectures given at the University of Cambridge, Cambridge University Press and Editions de la Maison des Sciences de l’Homme, Paris, 141 p.
- Marichal, Carlos. 1989. A Century of Debt Crises in Latin America, Prince­ton, Princeton University Press, 283 p.
- Marx-Engels, La crise, col. 10/18, Union générale d’éditions, 1978, 444 p
- French Ministry of Foreign Affairs. Arrangement financier avec la Grèce : travaux de la Commission internationale chargée de la préparation du projet, Paris, 1898, 223 pages. http://gallica.bnf.fr/ark:/12148/bp…
- Pantelakis Nikos, “Crédits et rapports franco-helléniques 1917-1928”, in Actes du colloque tenu en novembre 1989 à Thessalonique, Institut d’histoire des conflits contemporains, Paris 1992
- Reinhardt, Carmen and Rogoff, Kenneth, This Time Is Different: Eight Centuries of Financial Folly, Princeton University Press, 2011.
- Reinhardt, Carmen M., and Sbrancia, M. Belen. 2015 “The Liquidation of Government Debt” Economic Policy, no. 82: 291-333
- Reinhardt, Carmen and Trebesch, Christoph. 2015. The Pitfalls of External Dependence: Greece, 1829-2015
- Sack, Alexander Nahum. 1927. Les effets des transformations des États sur leurs dettes publiques et autres obligations financières, Recueil Sirey, Paris.
- Tsoucalas, Constantine. 1969. The Greek Tragedy, Penguin Books Ltd, Harmondsworth.

Translated by Snake Arbusto, Mike Kolikowski and Vicki Briault Manus

Acknowledgements: The author’s thanks for review and suggestions go to: Thanos Contargyris, Olivier Delorme, Pierre Gottiniaux, Jean-Marie Harribey, Daphne Kioussis, Damien Millet, Nikos Pantelakis, Claude Quémar, Patrick Saurin, Yannis Thanassekos, Eleni Tsekeri.

The author accepts full responsibility for any errors that may occur in this work.

Footnotes

|1| See the first part of this series for an analysis of Greek debts and the 1878 agreements, http://cadtm.org/Newly-Independent-Greece-had-an

|2http://www.lemonde.fr/economie/arti… (in French)

|3http://www.bilan.ch/argent-finances… (in French)

|4| In rhetoric, an oxymoron, from the Greek ὀξύμωρος (oxúmōros – de ὀξύς, “sharp, spiritual, witty” and from μωρός, “silly, stupid”, to signify “clever stupid”) is a stylistic device that brings together two terms (a noun and an adjective) of opposing signification in an apparently contradictory form, such as: a bright obscurity or a murky transparency.

|5| Amongst the classical authors, see on imperialism: Rudolf Hilferding (Finance Capital, 1910), Rosa Luxemburg (The Accumulation of Capital, 1913), Vladimir Lenin (Imperialism, the Highest Stage of Capitalism, 1916), Nicolai Bukharin (Imperialism and World Economy, 1915), Ernest Mandel (Late Capitalism, 1972), Samir Amin (Unequal Development: An Essay on the Social Formations of Peripheral Capitalism) New York: Monthly Review Press.

|6| See Carmen M. Reinhart and Christoph Trebesch: The Pitfalls of External Dependence: Greece, 1829-2015, p. 24. Greece received £1.3 million in 1824-1825; in 1878, she agreed to repay £1.2 million plus interest.

|7| See Louise Abellard, “L’Empire Ottoman face à une ‘Troika’ franco-anglo-allemande : retour sur une relation de dépendance par l’endettement” (The Ottoman Empire and the British-French-German Troika: an enquiry into debt dependency), 17 October 2013, (trans. CADTM) http://cadtm.org/L-Empire-Ottoman-face-a-une-troika(in French)

|8| See: http://cadtm.org/Newly-Independent-Greece-had-an

|9| See: http://cadtm.org/Newly-Independent-Greece-had-an

|10| See Marichal, Carlos. 1989. A Century of Debt Crises in Latin America, Princeton, Princeton University Press, 283 p. Chapter 6.

|11| See Carmen M. Reinhart and Christoph Trebesch: The Pitfalls of External Dependence: Greece, 1829-2015, p. 25.

|12| See Edouard Driault and Michel Lhéritier, Histoire diplomatique de la Grèce de 1821 à nos jours (The Diplomatic History of Greece from 1821 to Today) (in French), Presses universitaires de France (PUF), 1926, 5 tomes. The 56% figure is taken from Tome IV, p. 296. The description of the Greek situation is very interesting.

|13| Idem, Tome IV, p. 301.

|14| This thesis is well-argued by Edouard Driault and Michel Lhéritier, in Tome IV, p. 385 and following. The two authors tell a very detailed version of the conflict and its outcome. cf. chapter VII.

|15| See the peace treaty and numerous annexes (all in French): http://gallica.bnf.fr/ark:/12148/bp…

|16| TAIPED is the Greek acronym of the Hellenic Republic Asset Development Fund created by the Troika in 2010 to organize privatization. The funds thus garnered are to be used entirely for debt repayment.

|17Arrangement financier avec la Grèce, travaux de la Commission internationale chargée de la préparation du projet / French Ministry of Foreign Affairs – Paris, 1898, p. 33. (in French only).

|18| Translation: CADTM

|19| From the end of the 1890s Germany was Greece’s principal export partner.

|20| See Carmen M. Reinhart and Christoph Trebesch, The Pitfalls of External Dependence: Greece, 1829-2015, p. 15.

|21| See Table 9 from Carmen M. Reinhart and Christoph Trebesch, The Pitfalls of External Dependence: Greece, 1829-2015, p. 14

|22| Eugène-Melchior de Vogüé, “Livres Jaunes” in Le Figaro, 2 May 1898

|23| According to Driault and Lhéritier, whose conclusions are based on other serious work, the Greek securities issued in France were purchased almost exclusively by Greeks residing in France and not by the French. See Edouard Driault and Michel Lhéritier, Histoire diplomatique de la Grèce de 1821 à nos jours, Presses universitaires de France (PUF), 1926, tome IV, p. 304, note 1.

|24| All passages in italics are taken from: Constantine Tsoucalas, The Greek Tragedy, Penguin Books Ltd, Harmondsworth, 1969.

|25| This question of what is known as the “Asia Minor catastrophe” is still the subject of intense debate today, both in the public sphere and among historians who have deconstructed the official narrative.

|26| There is not space enough here for a critical analysis of the debts demanded of Greece by the Allied powers following the First World War, but the author feels that a large share of these debts may be considered illegitimate. For an introduction to the problem, see Nikos Pantelakis, “Crédits et rapports franco-helléniques 1917-1928” in Actes du colloque tenu en novembre 1989 à Thessalonique, Institut d’histoire des conflits contemporains, Paris 1992 (in French).

|27| The Gold Standard is a monetary system in which the unit of account or monetary standard corresponds to a fixed quantity of gold. Advocates of the Gold Standard feel that it improves resistance to the expansion of credit and of debt. Unlike a fiat currency, a currency backed by gold cannot be issued arbitrarily by a government. Beginning in 1929 and the start of the Great Depression, British gold reserves were reduced to the point where the liabilities of the Bank of England were well in excess of its gold reserves. In September 1931, it decided to suspend the external convertibility of the pound and allow it it float freely. Germany, Austria and Norway followed shortly after the decision. The United States withdrew from the system in 1933.

Author

94895e0e28aa2fe25dfe55787b762569Eric Toussaint is a historian and political scientist who completed his Ph.D. at the universities of Paris VIII and Liège, is the spokesperson of the CADTM International, and sits on the Scientific Council of ATTAC France. He is the author of Bankocracy (2015); The Life and Crimes of an Exemplary Man (2014); Glance in the Rear View Mirror. Neoliberal Ideology From its Origins to the Present, Haymarket books, Chicago, 2012 (see here), etc. See his bibliography: https://en.wikipedia.org/wiki/%C3%89ric_Toussaint He co-authored World debt figures 2015 with Pierre Gottiniaux, Daniel Munevar and Antonio Sanabria (2015); and with Damien Millet Debt, the IMF, and the World Bank: Sixty Questions, Sixty Answers, Monthly Review Books, New York, 2010. Since the 4th April 2015 he is the scientific coordinator of the Greek Truth Commission on Public Debt.

 

May 192016
 

By Mihalis Nevradakis, 99GetSmart

maxresdefault

Dear listeners and friends,

This week, Dialogos Radio returns after a brief hiatus! On our broadcast this week, the Dialogos Interview Series will feature a timely and relevant interview with Nikos Chatziandreou of the Acropolis of Athens online campaign, for the return of the Acropolis Sculptures from the British Museum in London, to Greece.

In this week’s interview, Chatziandreou will talk about the sculptures and their historic and cultural significance, about the efforts that are taking place to secure their return and the various legal and diplomatic issues that are involved, and about his online campaign and petition calling for the sculptures’ return to Greece.

In addition, we will feature our commentary of the week segment, plus some great Greek music! All this and more, this week exclusively on Dialogos Radio!

For more details, our full broadcast schedule, our podcasts and show archives, and our online radio station Dialogos Radio 24/7, visit http://dialogosmedia.org/?p=6288.

Best,

Dialogos Radio & Media

****************************

Αγαπητοί ακροατές και φίλοι,

Αυτή την εβδομάδα, ο «Διάλογος» επανέρχεται με νέες μεταδόσεις ύστερα από ένα μικρό διάλειμμα, παρουσιάζοντας μια ενδιαφέρουσα και επίκαιρη συνέντευξη με το Νίκο Χατζηανδρέου από την διαδικτυακή καμπάνια «Acropolis of Athens», που διεκδικεί την επιστροφή των γλυπτών της Ακρόπολης από το Βρετανικό Μουσείο του Λονδίνου, στην Ελλάδα.

Στην συνέντευξη μας, ο κ. Χατζηανδρέου θα μας μιλήσει για την καμπάνια που ξεκίνησε, για την πολιτισμική και αρχαιολογική σημασία των γλυπτών, για τις κινήσεις που γίνονται σήμερα σε νομικό και διπλωματικό επίπεδο, για τα επιχειρήματα της Ελληνικής πλευράς και των Βρετανών, και για το νομικό καθεστώς των γλυπτών και άλλων παρόμοιων υποθέσεων.

Επίσης αυτή την εβδομάδα θα παρουσιάσουμε τον σχολιασμό μας για την τρέχουσα επικαιρότητα. Όλα αυτά και πολλά άλλα, αυτή την εβδομάδα αποκλειστικά στο «Διάλογος»!

Για περισσότερες πληροφορίες, το πρόγραμμα μεταδόσεων μας, το αρχείο εκπομπών και συνεντεύξεων μας, και το διαδικτυακό ραδιόφωνο Διάλογος Radio 24/7, μπείτε στο http://dialogosmedia.org/?p=6278.

Φιλικά,

Διάλογος Radio & Media

May 182016
 

By James Petras, 99GetSmart

TrumpHillary

Introduction

Over half the US electorate views the two leading candidates for the 2016 Presidential elections with horror and disdain.

In contrast, the entire corporate mass media, here and abroad, repeat outrageous virtuous claims on behalf of Hillary Clinton and visceral denunciations of Donald Trump.

Media pundits, financial, academic and corporate elites describe the prospects of her presidency as one of responsibility, national security, business prosperity and political normalcy.

In contrast, they paint billionaire Republican candidate, Donald Trump as a grave threat, likely to destroy the global economic and military order, polarize US society and destined to lead an isolated and protectionist US into deep recession.

The super-charged rhetoric, flaunting the virtues of one candidate and vices of the other, ignores the momentous consequences of the election of either candidate. There is a strong chance that the election of ultra-militarist Hillary Clinton will drive the world into catastrophic global nuclear war.

On the other hand, Trump’s ascent to the US Presidency will likely provoke unprecedented global economic opposition from the corporate establishment, which will drive the US economy into a profound depression.

These are not idle claims: The destructive consequences of either candidate’s presidency can best be understood through a systematic analysis of Mme. Clinton’s past and present foreign policies and Trump’s belief that he his the ability to transform the US from an empire to a republic.

Clinton on the Road to Nuclear War

Over the past quarter century, Hillary Clinton has promoted the most savage and destructive wars of our times. Moreover, the more directly she has been engaged in imperial policymaking, the greater her responsibility in implementing  foreign policy, the closer we have come to nuclear war.

To identify Hillary Clinton’s path to global war it is necessary to identify three crucial moments. Hillary’s bloody history can be dated initially to her de facto ‘joint Presidency’ with husband Bill Clinton (1993 – 2001).

Stage One: The Conjugal Militarist Presidency (1993 – 2001)

During Hilary Clinton’s joint presidency with William Clinton (the Billary Regime) the First Lady actively promoted an aggressive militarized takeover of Eastern Europe, the Balkans, the Middle East and Eastern Africa – often under her favorite messianic doctrine of ‘humanitarian intervention and regime change’.

This justified the relentless bombing of Iraq, destroying its infrastructure and blockading its population into starvation while preparing to carve its territory into ethnic and religious divisions. Over 500,000 Iraqi children were murdered as proudly justified by then-Secretary of State Madeline Albright (1997 – 2001) and lauded by the Clintons.

In the same manner, Yugoslavia was bombed by the US humanitarian coalition air forces and cruise missiles over 1,000 times from March 24 to June 11, 2009 in the course of sub-dividing the country into five backward ‘ethnically cleansed’ mini-states. Thousands of factories, public buildings, bridges, passenger trains, radio stations, embassies, apartment complexes and hospitals were devastated; over a million victims became refugees while hundreds of thousands were wounded or killed.

The Conjugal Presidency successfully carried out the bloodiest war of aggression in Europe since the Nazi invasion during WWII, in order to subdivide an ethnically diverse and industrially advanced federation whose independent foreign policies had angered the Western corporate empire.

The Clintons launched the military invasion of Somalia (in East Africa) to impose a vassal regime, leading to the death of many thousands and a regional imperial war. Faced with desperate popular resistance from the Somalis, the Clintons were forced to withdraw US troops and bring in thousands of Sub-Saharan African and Ethiopian mercenaries – whose death would pass unnoticed among the US electorate.

From 1992 through 2001 the Clinton war machine helped set up the Yeltsin kleptocratic vassal state in Russia facilitating the greatest peace-time pillage of state resources in world history.

In the post-Soviet breakup era, over 1 trillion dollars of former public assets were seized especially by US and British-allied Zionist gangsters, Clinton-affiliated officials and ‘academics’ and Wall Street bankers.  Under Clinton’s vassalage the entire Soviet public health system was eliminated and Yeltsin’s Russia experienced a population decline of 4.3 million citizens, mostly due  to diseases, alcohol and drug toxicity, suicide, malnutrition, unemployment and loss of wages, pensions and and an unprecedented epidemic of tuberculosis and infectious diseases once thought wiped out, like syphilis and diphtheria.

Senator Hillary Clinton: War Crimes by Association- January 3, 2001 to January 21, 2009

During the George W. Bush dynastic regime, Mme. Senator Clinton supported the US war machine ‘sowing death and destruction to the four corners of the earth’ (to quote Bush Jr.), millions in Iraq and Afghanistan died or fled in terror. Bush had only deepened and expanded the mayhem that the Clinton Conjugal Presidency had begun a decade earlier.

Mme. Senator Clinton promoted the US direct and unprovoked invasion and occupation of Iraq and the war in Afghanistan. Mme. Senator Clinton embraced crippling economic sanctions against Iran and she blessed Israel’s military assault against Palestinians in the West Bank and Gaza and Israeli massacres in Lebanon.

Mme. Senator Clinton supported President Junior Bush’s aborted coup against Venezuelan President-elect Hugo Chavez (2002), a prelude to the coup attempts in Latin America that she directed later as US Secretary of State.

Hillary Clinton’s Senatorial term served as a transition linking her initial joint presidential period of wars of conquest onto the next period. As US Secretary of State under President Obama she aggressively promoted global military supremacy.

Secretary of State Hillary Clinton: Naked Militarism Unleashed (2009 – 2014)

Whatever restraints Mme. Clinton faced as Senator dissolved as she ran amok during her term as Secretary of State.  Across Europe, Africa, Latin America and the Middle East, Hillary Clinton bombed, massacred and dispossessed millions of families, shredding entire societies and dismantling the institutions of organized civil life for scores of millions. She never balked at the prospect of ethnocide and even joked that NATO might become ‘Al Queda’s Air Force’ as she pushed for a ‘no-fly zone’ over Syria.

A wild-eyed cackle echoed down the marbled corridors as the Foggy Bottom turned into a psycho-ward.

Mme. Secretary promoted the terror mercenary brigades invading Syria in a bid to ‘regime change’ the secular government of Al Assad, driving several million  Syrian refugees into flight. Entire ancient Syrian Christian communities were wiped out under her reign of ‘regime change’.

Mme. Secretary Clinton directed US air force bombers and missiles to buttress the despotic Saudi monarch’s drive to obliterate Yemen.

Clinton unleashed the most savage bombing against Libya destroying the country and leading to the ethnic cleansing of a million and a half of Sub-Sahara workers and Black Libyans of sub-Saharan descent.

Under the aegis of murderous jihadi warlords and tribal chiefs, Mme. Clinton joked over the torture death of the wounded captive President Gaddafi, whose nauseating, almost pornographic murder by anal impalement was documented as a kind of ‘regime-change’ snuff film. Less known is the earlier, almost Old Testament-type slaughter of several of Gadhafi’s non-political children and five small grandchildren by a deliberate US missile strike aimed at ‘teaching the dictator’ that even his smallest grandchild cannot be hidden.

Mme. Clinton, who bragged that her Biblical role-model is the ethnocidal Queen Ester, has declared unconditional support for Israel’s war crimes against Palestinians in Gaza, the West Bank and among the diaspora. Hillary endorsed and defended Israeli torture and prison camps for children, the elderly and the homeless.

Mme. Secretary sent her criminal sub-secretary Victoria Nuland (an unreconstructed Neo-Con holdover from the Bush Administration) to orchestrate the violent putsch in the Ukraine. Millions from Ukraine’s huge ethnic Russian population were dispossessed from the Donbas region. Mme. Clinton had sought to convert Russian strategic military assets in Crimea to US-NATO bases aimed at Moscow, causing the residents of Crimea to overwhelmingly reject the coup and vote to re-join Russia.

The forceful intervention  by Russian President Vladimir Putin prevented Mme. Clinton’s ethnic cleansing power grab in Crimea and the Donbas. The US retaliated by pushing for massive European Union economic sanctions against Russia.

Consistent with her pitiless Biblical role model, Mme. Clinton openly threatened to obliterate Iran with a nuclear war and incinerate 76 million Iranians to please her Uncle Netanyahu – a demented process that would poison a hundred million Arabs and perhaps a few million Israelis. Even the insane Israeli ‘Samson option’ was never dreamt of being ordered from Washington, DC!

During her tenure as Secretary of State, Mme. Clinton actively obstructed any diplomatic moves to achieve a US-Iran agreement on nuclear technology, parroting the Israeli militarist solution against regional rivals!

Mme. Clinton has remained an unrepentant enemy to the emerging independent Latin American governments. In search of vassal states, Clinton promoted successful military coups in Honduras and Paraguay, but was defeated in Venezuela. She proudly touts the death squad regime in Honduras among her foreign policy successes.

Mme. Hillary backed the death squad and narco-regimes in Colombia and Mexico, which killed over a hundred thousand civilians.

On the path to global war, Mme. Militarist has prepared to encircle Russia, stationing nuclear weapons in the Balkans and Poland. She promised that missiles would be placed in south central Europe and Ukraine.

Clinton raised the nuclear ante by hysterically claiming that the elected Russian President Vladimir Putin was ‘worse than ISIS’… ‘worse’ than Hitler.

Repeatedly threatening global war and actually making aggressive regional war should clearly have marked Mme. Hillary Clinton as unfit for the Presidency of the United States. She is politically, intellectually and emotionally unable to deal realistically with an independent Russia and any other independent power, including China and Iran. Her monomania is a course of violent ‘regime changes’, unable to evaluate any of the catastrophes her policymaking has in fact already produced.

Hillary Clinton was the proud author and director of the so-called US ‘pivot to Asia’. Clinton’s ‘pivot’ has led to a massive buildup of the US air and naval forces surrounding China’s maritime routes to its global markets and access to essential raw materials.

Clinton’s hyper-militarism expanded US war zones to cover Australia, Japan and the Philippines, greatly heightening tensions and increasing the possibility of a military provocation leading to nuclear war with China.

No US presidential contender, past or present, has engaged in more offensive wars, in a shorter time, uttering greater nuclear threats than Mme. Hillary Clinton. That she has not yet set off the nuclear holocaust is probably a result of the Administrative constraints imposed on the Mme. Secretary of State by the less blood-thirsty President Obama. These limitations will end if and when Mme. Hillary Clinton is ‘elected’ President of the United States in a process that the electorate increasingly knows is ‘rigged’ toward that outcome.

Donald Trump: the Peaceful Road to Recession

In sharp contrast to the militarist Mme. Clinton, Donald Trump, ‘the Businessman’, has adopted a relatively peaceful approach to international politics for an American presidential candidate in the current era.

Businessman’ Trump envisions productive negotiations with Russian President Putin. Employing his loudly trumpeted deal-making genius to benefit the United States, Trump predicts economic and diplomatic successes with Russia, China and other major powers.

Angered at US military allies enjoying decades of US Treasury largesse, a President Trump promises to withdraw US military bases from Asia and Europe and demanding that overseas allies ‘pony-up’ for their own defense.

What the war mongers in the mass media, academia and Washington bureaucracy, dismiss as ‘Trump’s isolationism’, The Businessman describes as rebuilding America by converting overseas military spending into domestic infrastructure projects and ‘real’ jobs in America.

Trump’s ‘America First’ policy, under his ‘Make America Great Again’ slogan, does not envision wars of conquest against Muslim countries, especially since they have already led to massive floods of Muslim refugees, threatening trade and stability, and Trump opposition to the entry of more Muslim refugees into the US.  Trump’s foreign policy of limited military goals and warfare is diametrically opposed to Clinton’s total war strategy. Trump, ridiculed by his rivals for ‘his small hands’, does not appear to have Hillary’s itchy trigger finger on the nuclear button!

Trump mouths contradictory economic statements, especially his proposals to “rebuild America”, while operating in the framework of an imperial system. As President of the United States, his protectionist policies will come into direct confrontation with US and global ‘finance and monopoly capitalism’ and will likely lead to systematic disinvestment and a disastrous economic collapse or, more likely, the Businessman-President’s capitulation to the status quo.

The problem is not Trump’s pledges to tax the rich (as he occasionally promises), or expand Social Security (as he claims), but his failure to admit that these policies would lead to massive flight by the capitalist elite to avoid taxes. The major threat is that, if Trump follows-up on his America-First policies, there will  be massive capital resistance and a Congressional revolt by both finance-dominated political parties, which will paralyze any hope for his economic agenda.

Without political independence to implement his domestic economic agenda, Trump will have to face a massive investment and lending revolt from capitalists and bankers who would be very willing to drive the fragile economy into a major recession – threatening a kind of ‘domestic economic sabotage’.

Trump’s Republican Party (and certainly the Democrats) will never support a program which will force multi-national capital to sacrifice its reliance on cheap overseas labor and double digit profits in order to create American jobs and employ American workers at living wages.

A President Trump would not even secure a handful of Congressional votes to increase taxes on plutocrats to fund his proposed large-scale public works, infrastructure and job creation projects.

The Businessman President would face the full fury of the powerful military-industrial-high tech complex if and when he attempted to retire US global military forces from Europe, Asia, the Middle East and Africa.

The non-politician Trump’s historic rise to national political prominence has its roots in the ideas and values of the majority of working people who have been marginalized to the fringes by the media moguls and Wall Street riffraff. Today Trump’s themes and ideas resonate with the mainstream of voters.

Several dominant ideas circulate in his speeches and interviews.

First, Trump rejects ‘globalization’ (the watered-down PR term for imperialism) and ‘free trade’ (a euphemism for the transfer of profits extracted from US workers to business investment abroad).

Trump’s narrative resonates with the recent anti-Wall Street ‘Occupy’ movements opposing the power of 0.1% super rich against the vast majority.

Secondly, Trump embraces economic nationalism in his slogan “Make American Great Again”. Too many American workers and their families resent having been exploited, maimed and slaughtered to serve multiple wars in the Middle East, Asia and Europe for the interests of US warlords, bankers, Zionists and other imperial royalties. Trump argues that the entire inflated security and corporate welfare system has led to an untenable debt payments spiral.

The third theme that draws millions is Trump’s notion that the US should reject the policy of serial ‘regime change’. We should not initiate and engage in perpetual overseas wars against Muslim countries as a way to avoid domestic attacks by individual terrorists. During an early foreign policy debate, Trump shocked the political establishment when he accused the Bush Administration of deliberately lying the country into the disastrous invasion of Iraq. This ‘truth-telling’ elicited wild applause from the mass Republican electorate.

Trump’s goal is to strengthen American civilization and avoid provoking more ‘clashes of civilizations’…

The fourth, and probably most attractive, message to most Americans is Trump’s powerful assault on Washington and Wall Street elites and their academic and media apologists.

Millions of Americans have been disgusted with the Bushes, Clintons and Obamas, as well as the Morgans, Goldman Sachs and Paulsons, whose policies have exacerbated class inequalities through multiple banking swindles and financial crashes, all ‘bailed out’ by the American tax payers.

Fifth, Trump’s loud, brash exposure of the mass media’s lies and propaganda has resonated with the same deep distrust felt by the American public. His talent for talking directly and bluntly to the public and on the internet has led to his enormous appeal. He does not engage in ‘conspiracy’ but acknowledges that the Edward Snowden revelations have unmasked the government’s deceptions and its program of espionage against the people, destroying the foundations for democratic discourse.

Trump might win the election based on his ‘five truths’ and his pledge to ‘make America great again’, but more likely he will lose because he has insulted the traditional establishment, the Latinos, Afro-Americans, feminists, trade union bureaucrats and their followers from both parties. Even if he succeeds at the ballot box, his political agenda with relying on Republican elites in Washington and Wall Street, the Pentagon and the ‘international security system’ will lead to a major economic crisis. For the elite, if blocking Trump’s domestic economic agenda requires a financial crash to defend ‘globalization’, serial wars and the 0.1%, then tighten your belts!

This November, the country will face the disagreeable choice between a proven nuclear warmonger and a captive of Wall Street. I will try to keep warm, roast chestnuts and avoid thinking about Mme. President’s Looming Mushroom Cloud.