Jul 182017
 

By Michael Nevradakis, 99GetSmart

Originally published at MintPressNews

Ancient Greece is perhaps best known for its contributions to mankind in the areas of philosophy, architecture, and science. But a modern-day economist suggests that some of the economic practices that were used in ancient times could help to solve Greece’s current debt crisis.

A man waves a Greek flag in front of the Greek Parliament during a rally against new austerity measures in Athens, May 18, 2017. (AP/Yorgos Karahalis)

A man waves a Greek flag in front of the Greek Parliament during a rally against new austerity measures in Athens, May 18, 2017. (AP/Yorgos Karahalis)

ATHENS (Interview) — Closing in on a full decade in duration, the Greek economic crisis is unprecedented in the modern history of economically-developed nations. During this period, Greece’s GDP has declined by over a quarter, unemployment has skyrocketed to record levels, salaries and pensions have been decimated and a significant percentage of Greece’s population, particularly its young university graduates, have migrated abroad.

Four separate memorandum packages that allegedly “bailed out” Greece have instead squeezed the economy to its limits through the imposition of harsh austerity measures, cuts, and privatizations even of profitable public assets. Meanwhile, most of the “bailout” funds, which are actually monies that have been loaned to Greece, have been routed right back to European banks, with very little of that money actually entering the Greek economy.

MintPress News recently spoke with economist and author Spiros Lavdiotis in an interview that initially aired on Dialogos Radio in two parts in May and June. Lavdiotis is a former analyst for the Bank of Canada and has written several books and articles on the Greek economic situation during the crisis. He has also extensively researched the economics of ancient Greece and the connections of ancient philosophy with modern-day economic challenges.

In this interview, Lavdiotis discusses austerity, the present-day Greek economic situation, the reasons why he believes Greece must exit the eurozone and the manner in which it can do so, while also explaining what ancient Greece can teach us about dealing with debt today.

MintPress News (MPN): Share with us a few words about austerity as an economic doctrine, and how this doctrine developed.

Spiros Lavdiotis (SL): The modern form of austerity developed in the meeting of Toronto of the G20 [in 2010]. There was a split in the opinion, in that high-level meeting. The Americans espoused the principles of Keynesianism in trying to recover from the financial crisis of 2008, when the whole of the financial system collapsed, particularly after the bankruptcy of Lehman Brothers in September 2008. Together with the United States in espousing the principles of Keynes were India, Russia, and China. At the same time, the Europeans split from this idea. They thought that in order to save their own weak financial system, that austerity is the only way to do it.

The crisis that started in the United States with the subprime loans and developed in a snowball fashion, to a great extent it disseminated its waves to the European system, which was weaker than the U.S. system. [The fact is] that the eurozone does not have and is not built on sound principles. It is a legal construction which is incomplete because there is no political union, banking union, or financial union. There is no such thing, it was simply a “reverse creation,” starting from a legal structure of the monetary union, and then trying to instigate a political union. It’s very unusual, it’s never happened in the history of civilization.

As a result, when the crisis came, everything fell apart. They didn’t know what to do. In a bulletin which was issued by the European Central Bank (ECB) in May 2010, they admitted that they were in a state of complete collapse. They didn’t have any mechanism, nothing. So they tried to save themselves—particularly the Germans, who had the biggest exposure to the system, the German and the French banks. They decided not to apply Keynesian principles and to follow austerity.

Greek Prime Minister George Papandreou, right, welcomes the head of the International Monetary Fund Dominique Strauss-Kahn at his office in Athens on Dec. 7, 2010. Strauss-Kahn was in Greece to negotiate terms of the repayment of the three-year euro110 billion ($150 billion) bailout loan intended to saved the debt-ridden country from default. (AP/Thanassis Stavrakis)

Greek Prime Minister George Papandreou, right, welcomes the head of the International Monetary Fund Dominique Strauss-Kahn at his office in Athens on Dec. 7, 2010. Strauss-Kahn was in Greece to negotiate terms of the repayment of the three-year euro110 billion ($150 billion) bailout loan intended to saved the debt-ridden country from default. (AP/Thanassis Stavrakis)

Austerity is a dangerous policy because it means that a country has financial problems due to the budget and due to deficits in the foreign exchange, in other words in the balance of payments. In order to alleviate itself, it has to impose austerity measures. How does this work? The theory says, through “confidence.” What does “confidence” mean? The theory says that when people and investors see that there is stability and the country can be saved, then “confidence” is going to build. These are unbelievable things. That’s why the measures of austerity were called “friendly to growth” measures. There is no such thing! These things never work.

In Greece, they miscalculated the “multiplier effects” of the policies which they imposed on debt and incomes. As a result, the Greek economy collapsed completely. In the second year of the imposition of the austerity measures, in 2011, GDP collapsed by 7 percent. All these measures were called “reforms,” but were not reforms. They killed the economy, salaries, pensions.

I remind you that in Greece, 50 percent of the national income arises from pensions. It was a total catastrophe. The unemployment rate, from 7.8 percent, shot up to 28 percent, and it is still measured artificially at 23 percent. This is a dismal situation. People have no hope about finding jobs, and they immigrate. The immigration rate has surpassed more than 600,000 people, from which 250,000 are educated people with degrees who are unable to find anything decent [in Greece].

Overall, the GDP from 2008 until now has fallen by 28 percent. This is the longest, in time and magnitude, drop in growth in economic terms of any developed country. This has never happened before. Even in the Great Depression in the United States, unemployment reached 25 percent and it took only three years to start recovering.

MPN: Why is there such a great insistence on economic austerity, such as in the case of Greece, and are there any examples that you can identify where any country was able to emerge from a financial crisis and return to growth as a result of austerity?

SL: Not to my knowledge. Herbert Hoover tried to impose austerity, and in two years the situation was very severe. There is no such example in the history of economics. I do not know how they developed this type of “friendly to growth” austerity. This is unbelievable, this is a myth, there is no such thing. They have tried to save the financial system of Europe, which was collapsing, and at the same time Germany went ahead and accepted this because it wants to keep the European free trade zone intact.

As you know, there are only nine EU countries which do not participate in the eurozone. The main thing was for Germany to maintain the primacy of its export power. In order to do that in this modern era, you have to maintain the financial system following the principles of free trade, the three basic principles of the Maastricht Treaty: freedom of commerce, freedom of services, and freedom of labor, and of course that presupposes the freedom of capital.

The euro is based on irrevocable exchange. In other words, it’s not like the Bretton Woods agreement, [based on] the gold standard. If a country was in a fundamental disequilibrium, they could devalue up to 10 percent and get out more easily from the predicament. Now with the euro, you cannot. As long as you entered with an exchange that was determined then, that’s it, there’s nothing you can do. It’s like an iron chain, and if you cannot fit from the very beginning—as was the case in Greece—but the European Union knew that, that the Greeks were cooking the numbers.

But the Germans wanted to sell frigates and planes to Greece, the same with the French, and therefore they closed their eyes. They wanted to have Greece there, due to the fact that they could expand their own markets to Greece, due to the different economic and industrial development of the country while at the same time not having to be afraid of devaluation. That was the main goal of Germany.

At the beginning, Germany was exporting two-thirds of their products to European countries. Then it shifted and started exporting to Asia, with its biggest market being China. But just remember that even now, exports constitute 46 percent of Germany’s GDP. They had the power to institute this policy, and the Greek politicians decided to protect the banks. This was a mistake. There were always interlocking interests between the politicians and the banking system in Greece, but I think it was also ignorance, they didn’t know the extent of that relationship in passing the losses of the banking system to the Greek taxpayer.

The amounts are tremendous. They involve a sum of 240-plus billion euros. [By comparison], Greece has a GDP of 175 billion euros. You have a small economy producing 175 billion euros [of economic activity] and you transfer 240 billion in banking system losses that have nothing to do with the Greek economy, this is close to 150 percent of GDP. This would be the same as a $25 trillion bank recapitalization in the United States.

The United States can still print money though, but in the eurozone, all the countries have to give up their monetary sovereignty. It was given to the EU, where in effect you had only one institution, the ECB, and therefore you are transferring all the rights of creating money to one institution which then, in order for you to have money, they will [fund] you by charging interest, but not directly to the member-states, only to the banking systems. The state, to finance its expenditures and the coverage of all programs for health and for welfare and whatever expenses were necessary for the state, had to borrow.

And to borrow from whom? Because the ECB does not directly lend to states, it had to borrow from the private sector, and the private sector had to borrow the funds from the ECB, which was charging interest. The commercial banks then had to charge extra interest to lend money to the Greek state. What happened then? The Greek state had to charge taxpayers with higher taxes to cover these expenditures. Greece entered the European Monetary Union in 2002. By 2008 we were already bankrupt, but they simply did not announce it to the public.

Internationally they did not know that the problem of the Greek state was mostly the banking system. They were talking about “corrupt Greeks.” Yes, there were corrupt Greeks, and the politicians are very corrupt in Greece, this is acknowledged, but the politicians never behaved in placing the common good ahead of themselves.

Right now we are faced, according to the latest budget, with more than 563 billion euros—which is the sum of all of the debt that occurred due to all the banking losses which entered the Greek budget—because there is no fiscal union in Europe.

MPN: “Seisachtheia” is a concept that many are not familiar with. It is also the topic of one of your books. Tell us about this ancient Greek concept and what it may teach us about debt today.

SL: There are a lot of similarities with what happened then, in the 6th century BC, in ancient Athens, with what is happening now. Back then, ancient Athens was in a great economic ordeal due to the fact that the wealth of the city was accumulated among the richest people, and the richest people of that period were landowners. They charged interest between 16 and 36 percent for those who did not have money and wanted to borrow money.

If an agrarian wanted to cultivate the fields, which were all owned by the landowners, they either had to pay one-sixth of the gross cultivation to them as a rent, or they had to go and borrow at the aforementioned rates. Eventually, it was impossible. If there was a bad crop one year, how could they give the one-sixth to the landowner? Therefore they had to borrow and they were going bankrupt.

In this Feb. 2, 2016 photo farmers stand behind a makeshift fire in front of tractors, near Kerdilia, Greece. Combine a rapidly aging population, a depleted work force and leaky finances and any country’s pension system would be in trouble. For debt-hobbled, unemployment-plagued Greece, it’s a nightmare.(AP/Giannis Papanikos)

In this Feb. 2, 2016 photo farmers stand behind a makeshift fire in front of tractors, near Kerdilia, Greece. Combine a rapidly aging population, a depleted work force and leaky finances and any country’s pension system would be in trouble. For debt-hobbled, unemployment-plagued Greece, it’s a nightmare.(AP/Giannis Papanikos)

At that time in history, it was not instituted to give land or other items as collateral. You were placing as collateral your own body, your wife, and your children. So if you were unable to pay, the debtor was given the right by law—not only in Greece but in all ancient regions, including Asia Minor, Sumeria, and Iraq—to be captured and sold as a slave. A famous site for slave exchanges at that time was the island of Aegina, just outside the port of Piraeus.

Solon was the highest official elected by the Athenians to solve this problem, because they were evacuating, just like right now the Greeks are evacuating Greece because they cannot find jobs. This is a very serious situation here in Greece because there isn’t even unemployment insurance. They say there is, but right now there are more than 1,200,000 people officially unemployed, and they pay unemployment insurance for less than 10 percent. And what kind of unemployment insurance? Its 260 euros per month, and only 10 percent [of the unemployed], or 117,000 people, get unemployment insurance.

This is the European system, which exists because there is no law or regulation or principle within the EU, particularly in the eurozone, which gives a right to work. While in the United States the Federal Reserve law says that all monetary policy will be in accordance to maximum employment, price stability and low long-term interest rates. The constitution, according to the Maastricht treaty, of the ECB says there is only one goal, and that goal is price stability. That’s it. Nothing about employment, they don’t even care about it.

This is why Greeks have to immigrate because at the same time there is no law to determine the minimum wage rate, which is the level at which a human being can survive decently. There is now a law which determines that the minimum wage rate for unskilled labor is 486 euros per month. Just think about all of you who are living in Canada or in the United States or Australia and you visit Greece. Is it possible, with 486 euros per month, for a person to live decently?

No, they cannot. You’re reduced to a pauper. It is undeclared slavery. And even the salaries, even as a civil servant, the monthly salaries are lower than that in many instances. As the minister of labor in Greece has announced, about 125,000 people are employed with a salary of fewer than 100 euros per month.

I say this because the situation in Greece is really very severe, and it’s not an accident that recently a report released by the Cologne Institute of Economic Research has said that Greece is in last place of all EU nations in terms of its poverty level, which has reached 40 percent. That’s not far from what the International Monetary Fund (IMF) acknowledged with the data of 2015, [showing] the poverty level in Greece then as 36 percent.

However, people think this is not important, particularly academics who completely dismiss all these things and say that we must remain in the eurozone, without taking into consideration the severe economic situation and the predicament that many people are in and the suffering that keeps going.

[In ancient Greece], Solon resolved those problems. The Athenians were deserting Athens and the fields were uncultivated. As a result, even the rich people said that a solution had to be found. The city was on the verge of civil war. So they elected Solon because he was famous for his integrity and knowledge and because he was middle class, not rich and not poor. Therefore, the rich trusted him and the poor also trusted him, because when he was young he showed characteristics of patriotism.

Solon enacted the “seisachtheia,” and this word remained for centuries, and even now as a word it is extremely powerful. It means “I remove the weight of debts.” It was the first macroeconomic plan that was instituted in the history of civilization. The first thing that Solon thing was institute laws which abolished lending by placing your body as collateral. That was the first time such a law was established in the history of humanity. That’s why Solon’s name remains today as such a significant light in the development of human civilization.

The next thing that he did was to devalue the Athenian currency at the time, which was the Greek drachma. He devalued the Greek drachma to make the foreign trade of Athens more competitive. At the same time, he created incentives for people to come and work in Athens, from other cities that were highly developed, promising to issue Athenian citizenship.

He tried to augment or develop foreign trade in the context that the exports of the city had to be equalized with imports. Solon was the person who instituted the principle that, in order for a country to have self-sufficiency and to be an independent nation, the revenues achieved from exports have to be equalized with the revenues given to imports. This was something that no Greek state politicians have achieved since Greece became an independent nation.

Solon was the person who instituted the “church of the demos,” meaning direct democracy. Officials were directly elected by the people, and Solon was elected as an archon of Athens for 21 years continuously because back then you were elected for one year. This was enough time for him to take [Athens] out of its economic morass and to develop its place as one of the highest civilized nations of the ancient period.

MPN: How and in what way could Greece denounce its public debt, and what does international law and international legal precedent foresee for the issue of its debt?

SL: It is very difficult to really try to eliminate the debt legally, because there is no international law which establishes the principles between creditors and debtors when nations are involved. International law, and every state have bankruptcy laws that concern companies and individuals, but in terms of international law, there are no specific principles [for nations]. This is why a national delegation, the debtor, has to sit down with creditors and determine bilaterally how they’re going to resolve this issue, because nobody can benefit by squeezing the other, like what is happening right now to Greece.

Protesting hospital staff sit in front of a wall that they built at the entrance of the Greek Finance Ministry with a banner depicting Greek Prime Minister Alexis Thipras , Deputy Health Minister Pavlos Polakis and Greek Finance Minister Euclid Tsakalotos wearing ties reading in Greek ''Ministry of broken promises" and " We drown in debt and bailouts" in central Athens. (AP/Petros Giannakouris)

Protesting hospital staff sit in front of a wall that they built at the entrance of the Greek Finance Ministry with a banner depicting Greek Prime Minister Alexis Thipras , Deputy Health Minister Pavlos Polakis and Greek Finance Minister Euclid Tsakalotos wearing ties reading in Greek ”Ministry of broken promises” and ” We drown in debt and bailouts” in central Athens, June 16, 2017. (AP/Petros Giannakouris)

Greeks have nothing to do with the losses of the banks. They’re responsible for about 70 billion [euros] due to corrupt politicians, but 70 billion is manageable because it is less than 50 percent of GDP. Why does the Greek taxpayer have to pay because of irregularities and anomalies in the eurozone, due to the fact that this is a legal institution and is not a political or fiscal union? Why do the Greek people have to pay for all these losses?

There is no international law that can resolve this issue, and this is one of the reasons why we have a big advantage, legally and ethically, to tell them that we’re stopping payments because our country is impoverished, we’re in a humanitarian crisis, why should we pay unilaterally? When you make a deal of lending and borrowing, you have two parties. Why do banks get excluded and the borrower has to carry all the weight? It’s unbelievable.

The banks did all this damage because they invested in toxic bonds in various futures markets, in securitized products which they didn’t even understand, and they carried enormous losses, hundreds of billions, and they’ve placed it on the shoulders of a small country with a GDP of 175 billion euros. What type of justice is this? With the Greek situation and the suffering imposed on all Greeks, who are not all crooks, why should they be destroyed economically?

This is going to take more a generation, to put Greece back where it was. And probably not even that because right now, Greece’s national income and GDP growth are below 2003 levels. Greece has lost about 15 years. But in terms of moral values and general values, they’ve been completely demoralized. Only 3 percent of the public now believes in politicians. This is why this situation is not going to go away either. It’s the biggest economic crime that has ever been committed.

How is it possible for all these losses, which involve not just the Greek banks but also the German banks, the French banks, the Dutch banks, to have been passed only to Greece? The international system is connected, through the euro, which creates an international platform for capital to move freely from one country to another. At any time, any money can be transferred from Athens to Berlin, from Berlin to Frankfurt, from Frankfurt to Paris. All of these losses were in the end sustained by the Greeks because the politicians accepted this. This is why it’s going to be an issue that’s going to last, because the sums are huge.

According to the [Greek] national budget, which was voted and passed in December 2016, it has receipts from credit money—in other words, borrowed money—of 563 billion euros. The total budget of the Greek state, in other words, is 614 billion euros, while the revenues of the Greek state are 50 billion euros, of which 46 billion comes from taxes. This is 320 percent more than the GDP of Greece, and it’s signed by the Greek president and by the minister of finance! How is it possible to claim that Greece is benefiting from this money while at the same time the economy has collapsed by more than 28 percent?

You can understand here, the impasse and the unfairness and what has happened to the Greek state. A lot of people outside [Greece] have realized this. They are talking about the looting of Greece, because now in order to [pay the debt], they are saying to Greece that it has to sell all the public assets. Now we have to sell what our fathers and our ancestors tried to create. They fought for this land, now they have to sell it to pay interest upon interest which has already been paid.

Since we have entered the memorandums, we have paid over 60 billion euros [in interest], and they call this “solidarity.” And according to the new calculations, the payments the Greek state [is responsible for] up to 2030 total 160 billion euros just in interest. This is usury! This is one of the most extreme forms of usury. How is it possible to survive? Everything is going to fall apart.

If in the epoch of Solon they were escaping Athens to save their skins and not to be sold as slaves, here [in Greece] no decent person can remain. This is the situation of the eurozone, the legal laws that were passed creating this union which have nothing to do with humanity. It’s simply an interest scheme, a payment scheme for those countries that are richer. And the countries that are richer are the countries of northern Europe. This is why southern Europe has almost collapsed, and we’ll see this year whether Italy can save their own banking system.

MPN: Would it be correct to say that Greece would be able to undertake unilateral action to declare a stoppage of payments or to denounce or write down the debt once it leaves the eurozone and returns to a national domestic currency?

SL: We should remember that we [Greece] are a member of the eurozone. In other words, we cannot take unilateral action. The de jure bankruptcy of the nation will take place while the country is still a member of the eurozone. In other words, the government can declare a moratorium, a temporary stoppage of payments of six months to foreign lenders. At the same time, the government can immediately start negotiations with the European authorities: the European Commission and the ECB.

The main problem of the Greek debt is that the Greek debt that has been accumulated, [placed] in the budget of 2016, having the signature of the Greek state, amounts to 563 billion euros, which are credit receipts. The lenders forced the Greek government to pass all future debt of the Greek state [into the budget], and the problem, the time schedule of the Greek debt [repayment] is stretched to 2060. The ratio of debt to GDP exceeds 320 percent.

This amount, most of it—about 95 percent—has not accumulated due to the extravagance and excesses of the Greek state. Ninety-five percent of it is debt which has been incurred by the banking system as a whole, not just Greek banks, but also the whole eurozone system, involving mainly German and French banks who have lent to the Greek banks. Therefore, these payments are related to the whole eurozone system and not to the Greek state alone. Yet the taxpayers of the Greek state [are on the hook].

For that reason, we [can] expose all of the official records through a task force appointed by experts from other states—an international task force—that will verify what was published recently, one year ago by the Technical University of Berlin, which determined that the two initial memorandums, involving amounts [totaling] 240 billion euros that were given to the Greek state and named “bailouts,” weren’t given to bail out Greece. They were given to bail out the banking system!

According to this study, less than 5 percent has gone to the Greek economy, and the rest, about 95.5 percent, went for the repayment of the debt and losses of the banking system of Europe as a whole. That’s the problem that was created due to the inflexibility of the euro system. Because the euro has an irrevocable exchange rate, and after the global crisis in 2008, which was actually a financial crisis, it was impossible for the eurozone to cope with this.

For some reason, politicians accepted this, for the losses of the entire euro system to be taken by Greece, to be paid by the Greek taxpayers, while these losses involved the whole system, because the eurozone system is a system which is very incomplete, has many faults. It’s a creation where they put the carriage in front and the horse in the back.

MPN: What happens in the event that Greece does not find that the Europeans are willing to negotiate on the issue of the debt?

SL: In my view that would be almost impossible and it would be irresponsible, because Greece represents a huge bomb of debt. If they do not accept [a write-down], they’re going to expose the whole system to great dangers, due to the systemic risk that is involved in the banking system. The European banks are not only connected with the Greek banks, which are bankrupt, but also with the American banks – which according to certain financial analysts are exposed to a tune of more than 3 trillion euros to the European banks. Therefore, some analysts say that the Greek case is like Lehman Brothers squared.

This is why it’s so dangerous. This actually explains the political stance of previous governments in joining hands with the European authorities, for Greeks to bear this huge burden that doesn’t belong to them. As I said, 95 percent of the loans [given to Greece] are to save the banks and not the Greek state.

MPN: Recently, we have again begun to hear murmurs about the possibility of “Grexit,” as well as statements from various sources, such as the Hellenic Federation of Enterprises, and a joint statement by 14 Greek economists who are based outside of Greece, about the many “dangers” and “perils” of a Greek exit from the eurozone, and the economic “catastrophe” that would follow. How do you respond to these claims, and to this fear that is being repeatedly expressed?

SL: That’s why they don’t want Greece to get out from the eurozone, precisely for their own benefit. Greece holds a huge bomb of debt. Most of it, the Greek public was not responsible for. There were losses due to the imperfections in the architecture of the European system, and these losses have to be divided and shared by the other countries, not only by Greece. Greece and the Greek taxpayer are not responsible to pay taxes, a 24-percent value-added tax (VAT) and enormous prices for gasoline. Now we pay more than 1.50 euros for a liter of gasoline. How is it possible for this country to develop? It cannot.

Everybody is terrified of a Greek exit, but Greece has to exit in order to save itself. But Germany doesn’t want that. Why? Because of the domino effect, because of the systemic risk of the banking system. Germany wants to save their own system, a banking system which is also in terrible shape. [Germany] wants to maintain its status and the benefits that it gets from the eurozone.

The eurozone is a platform where all countries give up their monetary sovereignty and there is no convertibility of the euro. It is an irrevocable exchange, and therefore Germany has a uniform platform to export its own goods, to mobilize its great exporting machine, without having to fear a country devaluing. Since, from the very beginning, it was the net exporter, it was obvious that through time, all the wealth would be accumulated [in] Germany.

Right now, Germany sits on hundreds of billions of euros of net surpluses. Germany is following a neo-mercantalist model and has a tremendous benefit by exporting those goods. The other countries that have deficits, eventually they have to borrow the funds from the German surpluses. But Germany doesn’t do that. It makes direct investments in other countries, like Greece.

FILE - In this Sunday, Oct. 18, 2015 file photo, a man walks past street art depicting Greek Prime Minister Alexis Tsipras and German Chancellor Angela Merkel in Athens, Greece. Tsipras' decision to sign off on a bailout led to many in his left-wing Syriza party to quit in protest.

A man walks past street art depicting Greek Prime Minister Alexis Tsipras and German Chancellor Angela Merkel in Athens, Greece. Tsipras’ decision to sign off on a bailout led to many in his left-wing Syriza party to quit in protest.

Right now, OTE [the formerly state-owned telecommunications company of Greece] doesn’t belong to Greece. Greece doesn’t have even 1 percent of shares in OTE. The majority of OTE now belongs to Deutsche Telekom, and the rest belongs to other international funds. Greece has no position there. Can you imagine if [there is a national emergency], what happens?

It is a fact that they call this “privatization,” but Deutsche Telekom is not a private company. It belongs to the German Federation. It’s a public institution. Similarly, [Greece] recently sold 14 airports to a German company [Fraport] that belongs to the German state, it’s not a private company. The [Athens international airport] Eleftherios Venizelos was sold initially to Germans, to Hochtief. Forty percent remains with the Greek state, but this [is also up for privatization]. But we already sold 14 airports. Why were they sold? Because we have to pay interest on the loans that have been imposed on us.

This is a situation where, I think, a decent politician with integrity can go ahead and try to tell the creditors “enough is enough, we have to settle this issue,” not to accept all these conditions just because Germany doesn’t want to resolve the issue because it has [upcoming] elections and because [German finance minister] Schäuble says that “debt is debt” and that it must be repaid. No, debt is not debt in this particular case, because [Greece] did not create that debt! You created it and passed it to us!

That’s why the banks are bankrupt, because the central bank decided, in order to fight the Greek people and to humiliate them, [prior to] the referendum of July 2015, to close the Greek banks. There is not even a legal definition to give the ECB the power to close the banks. Similarly, they closed the banks because they tried to affect the vote of the electorate. It was so obvious to close the banks and destroy all of the accounts, and nothing was said internationally!

The stocks of the banking issues in the Athens Stock Exchange had three “limit downs” consecutively, [a loss of] 30 percent. They lost 90 percent of their value, people were destroyed, firms were closed, and nobody said anything, people were waiting in line at ATMs to get money, [feeling] threatened and [worried] that they would be unable to feed themselves. They internationally humiliated the Greeks. Why did this happen? To frighten [the public] in order to [stay in] the eurozone.

The same tactic [is being used] now. Even though we have defaulted before, such as with the phony “PSI” [a “haircut” on Greek bonds enacted in late 2011 and early 2012] that supposedly “saved” Greece. By doing that, [this brought] the second memorandum, a loan of 130 billion euros. This did not save Greece. This money went, again, to recapitalize banks and to pay the debts that the Greek banks had from borrowed funds from the French and the German banks.

The creditor has a responsibility when lending money and therefore must accept losses from the borrower. But unfortunately this is not the story, and this is why “Grexit” is so important.

MPN: One option that we have been hearing about from analysts is the possibility of introducing a dual or parallel currency in Greece. What is the distinction between a dual or parallel currency on the one hand, and a national domestic currency on the other hand? And what would be the consequences of introducing a dual or parallel currency?

SL: First of all, a dual or parallel currency in Greece doesn’t solve the problem. This is simply a gimmick. The ECB has the monopoly power and according to the laws of the ECB, there is no such law or ordinance which allows nations to create a second currency. That would violate the principles of the treaty. That’s why the ECB [designed this system], to have control over the issue of money. For them, they have only one goal: price stability. Therefore, how would it be possible to give Greece the right to create a parallel currency when, at the same time, Italy is almost ready to default?

The debt-for-GDP [in Italy] now exceeds 132 percent, but at the same time, because Italy is a huge economy—it exceeds 2.3 trillion euros in debt—if something happens to Italy, the whole system is finished. It finishes because this is actually what they have developed in the eurozone with this primary purpose of the ECB to have the absolute control of money. It’s like creating another gold standard, and the gold standard died because it created so many anomalies and irregularities in the international system, and wealth inequalities.

Given this experience and given the fact that the eurozone is built on a gold standard—[one] based on fiat currency, which gives the right to the ECB to create unlimited money, like right now with the quantitative easing, it has already purchased one trillion-plus euros in securities. But Greece is not allowed [to participate in the quantitative easing program]. Why? Because they want to subjugate this nation in the form of “reforms.” These are not reforms! Simply, they didn’t purchase the Greek securities, just to make Greece pay the interest [to the ECB], and to subjugate and demoralize Greece, to not be able to provide resistance.

All this talk of dual currencies, all this is just to create a sundry understanding of the situation, providing false expectations that this can save the situation. It cannot save the situation. Nothing can really be saved or be improved by introducing this type of [dual or parallel currency] system, but I don’t think it will be introduced.

The only solution is the national currency, because then you are going to take back the power of creating your own money, and together with this, taking back the freedom of your country and getting out from this system, like England [with Brexit]. England has established the existing monetary system. That system is called the British model, where at the top of this system is the Bank of England. Now they see that system is collapsing and they’re leaving [the EU], because they created that system.

At that time [when this system was created], England prevailed globally because it established the gold standard. Having an advanced industrial [and shipping] sector, they were able to control other nations economically. At the same time, as with India, taking surplus value from India to England, and establishing the gold standard in a position to control deficit nations and [be paid] interest, because they did not have gold, like Greece.

Remember John Maynard Keynes. Interest reproduces so fast. “Tokos” [the Greek word for “interest”] means “to bring something into existence.” Aristotle said that it was hated by the whole society, because it creates [wealth] with no effort. The same thing has been instituted now. The Greek state gave the power to the ECB, and this ECB, through usury mechanisms, lends to the Greek state, but the Greek state pays double interest to the ECB and to the commercial banks because the ECB is not a lender of last resort! This abolishes the basic principle of central banks. That’s a function of a central bank, to be a provider of last resort funds if something goes wrong in the system. The ECB does the opposite!

The Cyprus situation shows exactly what I’m trying to say. This is why it’s crazy to talk about parallel currencies. What happened in Cyprus? One day, because [the ECB] did not properly supervise the banking system—which is one of the duties of the central bank, to have good supervision—and there were certain irregularities with certain banks, like Marfin Bank and the Bank of Cyprus. Instead of helping [Cyprus] alleviate the problem, the [ECB] went and did the so-called “bail-in.” A “bail-in” means “to capture,” to go and take money out of accounts. Whoever had their money in Cyprus banks, above 100,000 euros, lost money.

This is the situation, the banking institution that Greece wants? This is extraction, an extraction mechanism! This is like the old tyrants of Syracuse, which if you did not obey his order—and I mention this because Plato went there to educate him, and he didn’t like what Plato was saying, so he wanted to kill him. His supervisors intervened and he was sold as a slave in Aegina, and since then he was recovered from an old student and he was saved. The same thing [exists] in the eurozone.

I think all of these plans [for a dual or parallel currency] were publicized more to confuse the public.

MPN: Describe the steps that Greece could follow in order to depart from the eurozone in an orderly fashion, to transition to a national domestic currency and to avoid the dangers that many believe Greece would face, such as devaluation, high inflation or difficulty importing goods.

SL: A number of these things are a creation of imagination. Let me provide the basic steps of the exit of Greece from the eurozone and the adaptation of a national currency, based on two fundamental premises. First, that democratic institutions are maintained, and the constitution of the country, and second, that there is political will. Now, [those] are very important, fundamental assumptions, which right now do not exist. This is the system of exit for Greece, under the assumption that a light finally comes to the brains of the Greek politicians. If that happens, these are the steps that should be taken.

The country is declared in a “state of necessity,” and Article 44 of the Greek constitution is implemented, which means that after the suggestion of the council of ministers, which the prime minister presides over, power is transferred to the president of the nation. This declaration of the “state of necessity” is not required to be passed through the current representative assembly.

Then, the president declares a temporary stoppage of payments, an international moratorium. That moratorium is going to take a period of six months. During these six months, there is a plan for the reconstruction of the country—because it will be a reconstruction, it is economic devastation. So, at the same time when you declare a stoppage of payments—and this is going to be only for the foreign lenders, internally everything is going to be okay—this saves about six billion euros that are being paid in interest at this time, but also we stop payments of capital.

Therefore, we’ll have the ability to feed the nation and also to maintain salaries and pensions at the same level, because at this particular stage there is a slight surplus in the national accounts. Then we’ll have the benefit that we save six billion euros in interest payments, which would go directly to the reconstruction of the country and programs of employment.

This is what’s most important, to alleviate poverty and unemployment. That’s the primary thing, and that requires, of course, great coordination, to employ the people and to stop or to minimize the scourge of [outward] immigration. We need our educated people. This country cannot survive with old people, which continuously this is the case. It’s an aging population in Greece.

Then at the same time, we establish various capital controls, because we need the capital to remain here and not be exported abroad. Those are the major steps that should be taken simultaneously with a declaration of the nation in a “state of necessity.” It should not frighten [anybody], it’s a normal procedure which is [a result of] the extraordinary crisis taking place right now in Greece. Also it gives you the power to [declare] illegal all the measures that were taken through the austerity measures, which were based not on law, not on humanity, not anything, they were just horizontal measures [impacting] everybody without taking into consideration the principles of justice.

By placing the country in a “state of necessity,” immediately you can re-institute laws which would completely determine the unacceptability or the illegality of the existing laws of the memorandums, including the first memorandum of May 2010, the second memorandum of 2012, and the third memorandum of 2015, a total of 236 billion euros. Out of this sum, only 5 percent went to the Greek economy and for reducing poverty. Ninety-five percent went to payments. Those are known facts.

The third step after this is that you [create] a commission. We have to institute an agency which will go on to audit the Greek debt and to be confirmed officially, through the help of a task force of international [experts], to be a completely objective commission to determine which is the lawful debt and which is the unethical, unacceptable and odious debt.

In the meantime, the country, through its own people—Greek officials—start negotiations with the European authorities, whether this is the European Commission, the Eurogroup or the ECB. Of course, all those discussions have to take place when, first, the Bank of Greece is completely nationalized. This is important, because the Bank of Greece is a company and 92 percent of the shareholders are not yet known to the Greek public. This is an offense to the democratic spirit of the Greek people.

At the same time, things are not so straight, they are highly complicated because of the collapse of the Greek banks, the ECB has lent about 73 billion to “save” the banks after the fact, meaning that initially it was not accepting Greek state bonds as collateral. As a result, the banks could not really find funds to finance growth or to finance projects for businesses. [The ECB] did that, again, just to indicate that they are the power and they determine all political consequences in Greece. They decided to do so when the international public was misled that SYRIZA was a “radical left” party.

[Soon after SYRIZA] was elected on Jan. 25, 2015, the ECB, on Feb. 4, went and declared unilaterally that Greek bonds, the bonds of the Greek state, are not acceptable, they are junk bonds. That meant that they were not accepted as collateral. So the banks would not be borrowing money from the ECB, and therefore the loan activity in Greece has fallen apart, going into [negative territory]. That further aggravated the situation.

Therefore, this situation should be taken into consideration, and that’s why the banks, initially, should go to a bank holiday. It’s a necessary thing that has to be done. The banking system is going to be closed, because you need to protect whatever savings there are.

This is the situation, and I’m sure that this is inconceivable to all of you living abroad, that this is the European model of a monetary system, but it’s not a monetary system. It’s an extractive system that lives on the blood of small and [minimally-]industrialized countries.

The next step after the banks are placed on a necessary bank holiday is the nationalization of the Bank of Greece, like the Bank of England, [which was] nationalized in 1946 and the Bank of Canada was nationalized in 1938. It’s to the benefit of all the parties to agree on this, [since] this whole situation is explosive. Why is it explosive? Because that huge amount that is owned by Greece, that exists 560 billion euros, it is something that can trigger like a bomb and the whole monetary system can collapse.

It would be another situation like the great global financial crisis of 2008, and the reason is that the U.S. system is interconnected with the European system. According to the latest reports, the U.S. banks have exposures of more than $3 trillion in European banks.

That’s the situation, that’s why it’s very important, that’s why everybody is talking about the Greek exit, because if Greece decides to pull the trigger then there’s going to be a very dangerous situation around the European, the Italian banking system. Italy has exposure of more than 2.3 trillion euros. If something happened there, then the whole European monetary system is going to collapse. We have power, in other words.

If one considers the benefits of this nation and the people that live in Greece, then we can achieve tremendous results. At the same time, in order to avoid this chaotic situation which a lot of people and particularly the academics are [predicting] but which is not going to be chaotic, but a normal situation after so many years in another currency, simply we will establish a three-month freeze of salaries and prices, so as not to have the problem of inflation.

Let me tell you how we’re going to determine the first exchange rate between the drachma and the euro. The initial exchange rate is introduced at parity, one new drachma equals one euro. This is the conversion [rate] for all accounts. All the loans now would be paid in Greek new drachmas, and whatever accounts remain in the banks, in the form of accounting—in other words, electronic money—those remain in euros, but simply whatever money is [withdrawn] is paid in new drachmas.

In other words, what you do is you stamp the existing euros with an indication that this is a new drachma. All the money, therefore, that is circulating outside the banks, [becomes] new drachmas, until the new currency is ready. So there is no problem with changing the existing banking system in Greece or the ATM system. Everything remains the same, we simply stamp the existing euros into a new currency. So a 10-euro bill becomes 10 drachmas. Salaries, again, are frozen, the same for prices, for a three-month period.

People queue in front of a bank for an ATM as a man lies on the ground begging for change, in Athens. (AP/Thanassis Stavrakis)

People queue in front of a bank for an ATM as a man lies on the ground begging for change, in Athens. (AP/Thanassis Stavrakis)

This is not something new. President Nixon did this in 1971 when he decided to get out of the fixed relationship of the dollar with gold. Then, the relationship was that one ounce of gold equaled 35 dollars. This was the beginning of the collapse of the Bretton Woods agreement, as he let the dollar be exchanged in the free markets. This was very successful, because the U.S. had problems at that time because it lost the Vietnam War and they were experiencing deficits, like Greece.

All these myths that a vacuum will follow, this is nonsense, because at this stage, the Greek trade balance account is balanced, because the imports are equal to the exports. We export 25 billion euros’ worth, we import about 40 [billion euros], but the difference is covered by services, and the services are tourism and the shipping fleet that Greece has, one of the greatest shipping fleets in the world. Knowing from Solon that the expenses of imports are covered by exports, this means that we have currency, foreign currency to pay [for our imports].

Again, we should remember [that during] the bankruptcy, we are still in the eurozone. You don’t go to the drachma [immediately]. This is a six-month period [of transition]. At the same time, you have the money to feed your people and to buy medicine, to buy oil, to buy whatever items are needed and are not produced in Greece.

And in the meantime, you save the six billion euros [in interest payments]. We don’t pay them any capital for the repayment of debt, and according to the Bank of Greece’s latest report, we still have foreign exchange funds right now, which are mostly in gold—about 5 billion euros. Therefore, from where does all this fear arise?

It’s going to take two or three months until the first newly-produced drachmas are placed in the market. Don’t think it’s a huge amount of money, cash, that is floating in the market. It’s about 20 billion euros. It’s enough, this money, to be circulating around, because multiplied by the velocity effect of money, it’s enough to start motivating the Greek economy. Here we do not have that either, everything is collapsing, the velocity is collapsing, because they’re taking out [money] by taxes.

Taxes destroy money, they do not create money. Paying the unfair interest to the Europeans that they call “solidarity,” six billion euros is an enormous amount with the multiplier effect. So simply, it requires guts. Freedom requires to be courageous and to be just, and I would add to this, to really work hard to achieve this objective.

Those are the most important measures. Just to add: in order for the new drachma to get validity, immediately you institute a law through which only the Greek drachma is acceptable as a payment to the Greek tax authorities. This is something that was said by Aristotle, [who] said that money is the creation of the law. That’s why it’s called “nomisma,” from “nomos” [the Greek word for “law”]. Itis a product of law and not of nature.

All these are myths that there’s going to be a collapse, that [the new currency] will not be accepted. Why won’t be accepted if the tax office accepts the money at the same rate as one euro? As long as it’s accepted at [a ratio of] one for one, why is the market not going to accept it?

One of the benefits during this period is that we will be able to lower tax rates. This is very important, to bring out the necessary steps for motivating foreign capital, but also the growth and development of businesses, because you are going to print the money to recapitalize.

All this ideological bias, that the euro is the only solution for Greece, is completely disastrous. It’s no solution. It’s the only catastrophic element for the complete elimination of the Greek state eventually. This is an extraction mechanism and a mechanism where all the loans, if you are not able to pay them, you are going to pay them by selling the public assets of the country.

Those are the basic steps. As long as it’s understood that it’s going to take a couple of months before the new national currency is cut, in Greece from Holargos [location of Greece’s mint], and still has the old machines through which the drachma was circulated. It’s going to take some time, but as long as there is patience and a belief that our freedom and future prosperity is based on reacquiring the capacity to create our own money, then the last necessary thing is that we and the European authorities understand that we have to find, together, a solution. Otherwise, it’s going to be a situation where everybody loses.

I conclude with the hope that finally, a light comes to the brains of the Greek politicians.

michael-120x120ABOUT THE AUTHOR
Michael Nevradakis

Michael Nevradakis is a Ph D candidate in media studies at the University of Texas at Austin and a US Fulbright Scholar presently based in Athens, Greece.

Jun 272017
 

By Michael Nevradakis, 99GetSmart

Originally published at MintPressNews:

A homeless person changes clothes outside a bank in central Athens. Nearly one-in-four Greeks are unemployed and receive no benefits. Poverty rates have surged here since the start of the crisis in late 2009, with nearly 36 percent of the country living in financial distress. (AP/Thanassis Stavrakis)

A homeless person changes clothes outside a bank in central Athens. Nearly one-in-four Greeks are unemployed and receive no benefits. Poverty rates have surged here since the start of the crisis in late 2009, with nearly 36 percent of the country living in financial distress. (AP/Thanassis Stavrakis)

ATHENS (Analysis)– It has become an increasingly common sight on Greek streets, even in formerly prosperous neighborhoods. Elderly—and sometimes not so elderly—individuals rummaging through rubbish bins in search of scraps of food to eat. Beggars are now practically a universal sighting in Athens and other large cities.

More and more young Greeks are migrating abroad by the day, contributing to a “brain drain” that has totaled approximately 500,000 individuals since the onset of the crisis. In my neighborhood in central Athens, several parked cars are filled to the brim with a life’s worth of possessions, packed in boxes by individuals who have likely lost their homes and livelihoods and who now call their automobiles home. Everywhere, abandoned cars and motorcycles rust away on curbsides and sidewalks.

In another universe, the Greek coalition government comprised of the “leftist” SYRIZA and the “patriotic” Independent Greeks political parties is celebrating. Greece has, at the recently-concluded Eurogroup summit, once again been “saved.” In this latest agreement, an 8.6 billion euro tranche of “bailout” funds—a loan (not a “handout”) which had already been promised to Greece in previous agreements—was released and a long-delayed review of Greece’s “progress” under the austerity mechanisms was finally completed. Quite a cause for celebration!

Or is it? Out of the 8.6 billion, 7.7 billion euros will initially be disbursed, out of which 6.9 billion will be immediately paid back to Greece’s lenders: the European Central Bank, the International Monetary Fund and bondholders. In exchange for the release of these funds, which will be funneled right back to those who are releasing them, Greece’s government has agreed to achieve a primary budget surplus of 3.5 percent of its GDP annually through 2023, and thereafter to maintain primary budget surpluses of 2 percent annually from 2023 until 2060.

Until 2023, the Greek government has agreed to pay 27 billion euros (15 percent of Greece’s GDP) in debt service alone, and that figure increases to a 36 billion euro annual sum until 2060.

For the uninitiated: what does a primary budget surplus actually mean? It means that the state spends less than it receives in revenue. While this may sound like a fiscally prudent policy direction for Greece or any country to take, what this actually means in plain language is that in an economy that is shrinking, as with Greece, the amount of money being spent by the state each year on investment, social services, salaries, pensions and other vital services will perpetually decrease, furthering the austerity death spiral.

To provide some perspective, the IMF itself considers a primary budget surplus of 1.5 percent “realistic,” while the Central Bank of Greece, 92 percent of whose shareholders are not known, considers 2 percent a “realistic” target. In a study by economists Barry Eichengreen and Ugo Panizza that examined economic performance across 235 countries, it was found that there were only 36 cases in which countries were able to maintain a primary budget surplus of 3 percent of GDP for a five-year period, and only 17 cases where countries maintained a primary budget surplus of 3 percent of GDP across an eight-year period. Germany, often touted for its fiscal prudence, was not one of these countries.

For the SYRIZA-led regime in Greece, this is a cause for celebration. Prime Minister Alexis Tsipras publicly announced that “we got what we wanted” through this deal, which points the way towards Greece’s exit from the “supervision” of its lenders.

The newspaper Avgi, an official party organ of SYRIZA, announced for the upteenth time Greece’s impending “exit” from the economic crisis. And the Greek government is publicly touting the upcoming return of Greece to the international financial markets, ironically celebrating the prospect of Greece once again being able to attain more debt via borrowing, likely at usurious terms.

Unfortunately for Tsipras and his government, German Finance Minister Wolfgang Schäuble acted as a party pooper, putting a damper on the celebrations. Speaking publicly after the Eurogroup deal was reached, Schäuble stated that the agreement, which followed what were claimed by the Greek government to be fierce negotiations, was reached three weeks prior but was delayed because the Greek government requested additional time for PR reasons—in other words, to claim that hard negotiations took place.

Pensions, salaries see cuts as austerity steamrolls ahead

Indeed, if the rhetoric of the SYRIZA-led government is a guide to go by, then the successes have kept on coming. In February, the SYRIZA government reached yet another deal with its lenders to once again release “bailout” loan funds that already had been pledged to Greece from previous austerity agreements.

In this agreement, the government claimed that “not one euro” of new austerity would be enacted, as any austerity measures and cuts (including interventions to the tax system, which were previously claimed by the government to be “red lines” in its “negotiations” with lenders) would be offset by countermeasures in other areas, euphemistically referred to as “neutral fiscal balance” and “zero-sum fiscal interventions.”

In a “read my lips, no new taxes” moment for the Greek government, these declarations of “zero-sum fiscal interventions” and the “end of austerity” had only just barely been uttered when a host of new austerity measures were unveiled. Initially announced at 3.6 billion euros, these austerity measures now total 14.2 billion euros’ worth of cuts.

These include further reductions of 18 percent to already battered pensions, as well as salary cuts, tax increases, a cut in health expenditures, a further reduction of 50 percent to heating oil subsidies (in a country where the majority of households already cannot afford heating oil and have reverted to fireplaces and makeshift furnaces to keep warm), a reduced tax-free threshold and an increase in tax contributions, and the freeing up of home foreclosures and auctions.

Protesting hospital staff sit in front of a wall that they built at the entrance of the Greek Finance Ministry with a banner depicting Greek Prime Minister Alexis Thipras , Deputy Health Minister Pavlos Polakis and Greek Finance Minister Euclid Tsakalotos wearing ties reading in Greek ''Ministry of broken promises" and " We drown in debt and bailouts" in central Athens. (AP/Petros Giannakouris)

Protesting hospital staff sit in front of a wall that they built at the entrance of the Greek Finance Ministry with a banner depicting Greek Prime Minister Alexis Thipras , Deputy Health Minister Pavlos Polakis and Greek Finance Minister Euclid Tsakalotos wearing ties reading in Greek ”Ministry of broken promises” and ” We drown in debt and bailouts” in central Athens. (AP/Petros Giannakouris)

In exchange, “countermeasures” that will be enacted in 2019 will only take place if Greece meets “fiscal targets” up until then, include minor tax cuts (such as a 70-euro reduction to the “unified property tax” which SYRIZA, prior to ascending to power, denounced as “unconstitutional”) and offering school lunches.

The Greek government, along with its bosses in Brussels and Berlin, continue to insist that tax increases will help, despite all economic evidence to the contrary. While revenues from the value-added tax (VAT) were at 16.3 billion euros when the VAT rate was at 19 percent, those revenues declined to 14.4 billion euros when the VAT was increased to 21 percent, and dropped further to 13.7 billion euros when the VAT was increased again to 23 percent. Today, the VAT for most goods and services is at 24 percent amidst an economic depression that has shown no real signs of abating.

While the SYRIZA-led government is congratulating itself for putting an end to austerity, the aforementioned unified property tax, which according to SYRIZA’s pre-election rhetoric was unconstitutional and to be abolished, will remain in effect at least until 2031. One year ago, in June 2016, a 7,500-page omnibus bill ratified by the Greek government without any debate transferred ownership of all of Greece’s public assets (ranging from water utilities to prime beachfront parcels of land) to a fund controlled by the European Stability Mechanism for the next 99 years.

The same bill also reduced the parliament to playing a rubber-stamp role, as it annulled the ability of the Greek parliament to formulate a national budget or to pass tax legislation, with automatic cuts to be activated if fiscal targets agreed upon with the country’s lenders are not met. Foreign experts working on the implementation of the austerity measures and privatizations in Greece were also, as of 2016, granted immunity from prosecution. If all of this seems exaggerated or far-fetched, consider a recent remark by the European Commissioner for Economic and Financial Affairs, Taxation and Customs Pierre Moscovici, who stated that “[The EU] often decide[s] Greece’s fate, in place of the Greeks.”

Move toward cashlessness benefiting “too big to fail” institutions

As all of this is taking place, Greek businesses—particularly small businesses—are being burdened further, required as of July 27 to install “point of sale” (POS) card readers and to accept payments via credit, debit or prepaid cards. Another law, which came into effect on January 1, pushes consumers towards card payments by setting a minimum threshold of spending at least 10 percent of one’s income via card in order to attain a somewhat higher tax-free threshold.

In a country where capital controls restricting withdrawals from bank accounts and ATMs have been in effect since June 2015, cash is being further withdrawn from the marketplace and is being delivered to a banking system that has already been recapitalized three times and is likely on its way towards a fourth taxpayer-funded “bailout,” keeping with the fine tradition of financial institutions that are said to be “too big to fail.” We are told, of course, that this is for society’s own good, in order to combat “tax evasion” and other terrible things.

As all of this has taken place, 14 profitable Greek regional airports of strategic and economic importance have been privatized—ironically by being sold to Fraport, itself owned by the German public sector. The port of Piraeus, one of the largest in Europe, has been completely privatized; sold for a pittance to Chinese-owned Cosco. Greek water and power utilities, having been transferred to the aforementioned fund controlled by the ESM, are among the next assets slated for privatization.

Foreclosures of homes are slated to be expanded to primary residences, leaving many households at risk of ending up on the streets, while come September, foreclosures are slated to take place electronically, in accordance with the Greek government’s agreements with its lenders. It should be noted that foreclosure auctions that take place in Greek civil courts each Wednesday have become one of the few remaining battlegrounds where citizens are actively, and often quite successfully, pushing back against one of the products of the economic crisis, preventing many foreclosures from occurring. Switching to electronic foreclosures would eliminate this “inconvenience.”

People queue in front of a bank for an ATM as a man lies on the ground begging for change, in Athens. (AP/Thanassis Stavrakis)

People queue in front of a bank for an ATM as a man lies on the ground begging for change, in Athens. (AP/Thanassis Stavrakis)

Other “inconveniences” are also being done away with in swift fashion. In August 2016, police in the city of Katerini arrested a father of three for selling doughnuts without a license, fining him 5,000 euros for the offense. In another case, a vendor selling roasted chestnuts in the city of Thessaloniki was surrounded by 15 police officers and arrested for the high offense of operating without a license. In the meantime, Greek television and radio stations—almost the entirety of which are vehemently pro-EU and pro-austerity and which greatly impact public opinion—operate without valid broadcast licenses.

The SYRIZA government, elected in part on pledges to “nip oligarchs in the bud” (including taking care of the issue of unlicensed broadcasters), has instead allowed oligarchs to shift their money to offshore tax havens, while collectively treating ordinary citizens and small business owners as being guilty of tax evasion. Former finance minister with the center-right New Democracy political party Gikas Hardouvelis was recently acquitted in court for failure to submit a declaration of assets.

In a December 2015 interview, Finance Minister Euclid Tsakalotos stated that the SYRIZA-led government “didn’t have time to go after the rich.” Unlicensed chestnut vendors, apparently, are another matter altogether, as are activists against the environmentally destructive and economically dubious gold mining operations in north Greece’s Skouries that are being conducted by Eldorado Gold with a Greek oligarch, Giorgos Bobolas.

In late May, the physically disabled 77-year-old Thodoros Karavasilikos was issued a 12-month suspended jail sentence for, apparently, physically assaulting 10 riot police officers in a protest against the Skouries mining operations. Furthering this war on the elderly, Dimitris Kammenos, a member of parliament with the “patriotic” Independent Greeks party which is co-governing with SYRIZA, stated in a televised interview in April that 100 euros that were being slashed from pensions were “better off being taken by the state” than to be “given by pensioners to their grandchildren to go out and have coffee.”

Civil unrest on the rise amid economic uncertainty

It can be argued that being a Greek citizen is a great disadvantage in Greece at the present time. In the blighted Athens suburb of Menidi, an 11-year-old Greek child was apparently killed by a stray bullet, said to have been fired from a residence of a Roma family. Civil unrest has followed in the area between the Greek and Roma populations, to which the SYRIZA-led government has somehow responded by proposing that Roma children be allowed to enter Greek universities and the police academy without taking entrance exams.

A protester reacts next to a flare outside the the Interior Ministry as thousands of striking municipal workers demonstrate in central Athens, June 22, 2017. Union officials want the left-led government to grant full-time, permanent state jobs to municipal workers employed on short-term contracts that have expired or are about to expire. (AP/Petros Giannakouris)

A protester reacts next to a flare outside the the Interior Ministry as thousands of striking municipal workers demonstrate in central Athens, June 22, 2017. Union officials want the left-led government to grant full-time, permanent state jobs to municipal workers employed on short-term contracts that have expired or are about to expire. (AP/Petros Giannakouris)

While migrants in Greece are receiving 400 euro monthly subsidies (greater than many salaries and pensions in present-day Greece) and free housing, thanks to assistance from the EU and numerous “well-meaning” non-governmental organizations, the same sensitivity has not been displayed to victims of a recent earthquake that severely impacted the island of Lesvos, one of the primary entry points for migrants. Instead, Kyriakos Mitsotakis, the leader of the center-right New Democracy, the main opposition party in Greece which is favored to win the next national elections whenever they take place, promised those whose homes were destroyed by the quake a two-year waiver of the unified property tax, should his party be elected.

Tourism, however, is said to be saving the day. Greece is said to be receiving record numbers of visitors, and the Eleftherios Venizelos International Airport in Athens is receiving a record number of passengers. These statistics are often repeated by the government and by Tourism Minister Elena Kountoura of the Independent Greeks political party, the minority partner in Greece’s coalition government. What is not said is who these tourists are, or what their real impact on the economy is.

Many of these tourists are visiting the country on package travel deals booked with overseas travel agencies, flying to and from Greece on foreign-owned charter airlines and staying in hotels which themselves are often owned by foreigners. Many of these hotels offer “all-inclusive” hospitality packages, often offering the very lowest-quality imported food and drink products in order to slash costs. While foreigners get to enjoy Greek resorts and sunshine at bargain rates, austerity-hit Greeks, battered by the crisis, cannot afford to—nor are they offered the same low rates provided to foreign visitors.

Most tourists on “all-inclusive” deals rarely venture away from their hotels, and businesses in tourist regions, ranging from convenience stores to restaurants, are seeing business suffer while their tax burden continues to increase. In a recent visit to Rhodes, one of Greece’s pre-eminent tourist destinations, I observed that the Old Town of Rhodes, perhaps the top tourist destination on the island, was almost deserted at 10:30 p.m. on a Friday night in a country that “stays up all night.” Tourists remained largely locked away in their all-inclusive resorts.

Greece’s “boom times” for tourism are evident by the country’s lack of a national air carrier, which has been the case ever since the previously state-owned Olympic Airlines was dismantled at the behest of the EU and purportedly for violating the European Commission’s competition rules. The privately-owned near-monopoly that has replaced it, Aegean Airlines, has somehow managed not to run afoul of such rules.

While Greece, one of Europe’s top destinations, does not possess any wide-body aircraft, countries such as Serbia and Rwanda do and are running nonstop flights to the United States. Aegean Airlines may not have long-haul flights, but it has delivered much-vaunted “foreign investment”—often touted as the cure-all for Greece’s economic ills, despite a major privatization push since the 1990s, which did not stop the crisis—as 25 percent of the airline is reportedly being purchased by Hainan Airlines of China.

Tourism Minister Elena Kountoura, apropos of nothing, recently brought us back to 2015 and to the referendum which took place that year, where 62 percent of voters rejected an EU-proposed austerity plan—only for the result to be overturned within days, as the SYRIZA-led government turned around and agreed to an even harsher austerity package, known as the third memorandum agreement, than the one voters had rejected.

The SYRIZA-led government has since agreed to a fourth memorandum agreement, but according to Kountoura, the negotiation that occurred in 2015 that led to the third memorandum—chock-full of austerity measures and the privatization of profitable assets—prevented 16 billion euros’ worth of austerity measures from being enacted.

No end in sight for bleak austerity

Unfortunately, two years after the “triumphant” referendum and rejection of austerity—which was promptly overturned and replaced with even harsher austerity—there seems to be no light at the end of the tunnel for the beleaguered nation. Nor does a political “savior” appear to exist. The aforementioned New Democracy party is part and parcel of the corrupt political duopoly, along with PASOK, which ruled Greece for 40 years after the fall of the military junta in 1974, and is vehemently pro-EU and pro-austerity (as long as they are the ones implementing the austerity and pro-Europe policies, instead of SYRIZA).

In previous elections, political “renegade” Vasilis Leventis and his Centrists’ Union political party were elected to parliament—likely as a protest vote. Leventis is famous for his supposed crusades against corruption and the two-party system, and for wishing cancer upon former Prime Ministers Kostantinos Mitsotakis (father of the current New Democracy leader) and Andreas Papandreou (father of George Papandreou, prime minister when Greece was led into the IMF-EU “bailout” and austerity regime) on live television in 1993.

A motorcyclist looks on as he drives next to a pile of garbage in Piraeus, near Athens, on Monday, June 26, 2017. Municipality workers have been on strike for almost a week , hindering trash collection across the country. (AP/Petros Giannakouris)

A motorcyclist looks on as he drives next to a pile of garbage in Piraeus, near Athens, on Monday, June 26, 2017. Municipality workers have been on strike for almost a week , hindering trash collection across the country. (AP/Petros Giannakouris)

Today, Leventis is calling for the installation of a “government of technocrats” (much like the non-elected government led by banker Loucas Papademos in late 2011 and 2012, which passed the second memorandum agreement with no popular mandate) and who has also stated recently that Greece “does not deserve to have its debt restructured.”

In reality, the entirety of parliament—despite the eight political parties which comprise it and which create the facade of political pluralism—can be described as being pro-austerity, pro-euro, and pro-EU. The same can be said of smaller political parties, currently outside of parliament and vying to gain public support.

These include parties founded by Panagiotis Lafazanis and Zoe Konstantopoulou—who as part of the first SYRIZA government of January-September 2015 voted in favor of numerous pro-memorandum and pro-austerity pieces of legislation and in favor of the pro-Europe corrupt former government minister Prokopis Pavlopoulos as president of the Hellenic Republic, who recently stated that Greece will remain in the EU “indefinitely and irrevocably.”

Two years after saying “no” to austerity, this is the state of affairs in Greece today. Poverty, fear, unemployment and a continued brain drain, as well as corruption, lies, and above all, an undying attachment to the EU and the Eurozone, at least on the part of the almost complete entirety of the country’s political class. That’s life today in a modern-day EU debt colony.

Jun 222017
 

By Michael Nevradakis, 99GetSmart

Originally published at MintPressNews:

A man makes a transaction at an automated teller machine (ATM) of a Piraeus Bank  branch in Athens, Greece. (AP/Yorgos Karahalis)

A man makes a transaction at an automated teller machine (ATM) of a Piraeus Bank branch in Athens, Greece. (AP/Yorgos Karahalis)

ATHENS (Analysis)– Day by day, we’re moving towards a brave new world where every transaction is tracked, every purchase is recorded, the habits and preferences of everyone noted and analyzed. What I am describing is the “cashless society,” where plastic and electronic money are king, while banknotes and coins are abolished.

“Progress” is, after all, deemed to be a great thing. In a recent discussion, I observed on an online message board regarding gentrification in my former neighborhood of residence in Queens, New York, the closure of yet another longtime local business was met by one user with a virtual shrug: “Who needs stores when you have Amazon?”

This last quote is, of course, indicative of the brick-and-mortar store, at least in its familiar form. In December 2016, Amazon launched a checkout-free convenience store in Seattle — largely free of employees, but also free of cash transactions, as purchases are automatically charged to one’s Amazon account. “Progress” is therefore cast as the abolition of currency, and the elimination of even more jobs, all in the name of technological progress and the “convenience” of saving a few minutes of waiting at the checkout counter.

Still insist on being old-fashioned and stuck behind the times, preferring to visit brick-and-mortar stores and paying in cash? You may very well be a terrorist! Pay for your coffee or your visit to an internet cafe with cash? Potential terrorist, according to the FBI. Indeed, insisting on paying with cash is, according to the United States Department of Homeland Security, “suspicious and weird.”

The European Union, ever a force for positive change and progress, also seems to agree. The non-elected European Commission’s “Inception Impact Assessment” warns that the anonymity of cash transactions facilitates “money laundering” and “terrorist financing activities.” This point of view is shared by such economists as the thoroughly discredited proponent of austerity Kenneth Rogoff, Lawrence Summer (a famed deregulator, as well as eulogizer of the “godfather” of austerity Milton Friedman), and supposed anti-austerity crusader Joseph Stiglitz, who told fawning participants at the World Economic Forum in Davos earlier this year that the United States should do away with all currency.

Logically, of course, the next step is to punish law-abiding citizens for the actions of a very small criminal population and for the failures of law enforcement to curb such activities. The EU plans to accomplish this through the exploration of upper limits on cash payments, while it has already taken the step of abolishing the 500-euro banknote.

The International Monetary Fund (IMF), which day after day is busy “saving” economically suffering countries such as Greece, also happens to agree with this brave new worldview. In a working paper titled “The Macroeconomics of De-Cashing,” which the IMF claims does not necessarily represent its official views, the fund nevertheless provides a blueprint with which governments around the world could begin to phase out cash. This process would commence with “initial and largely uncontested steps” (such as the phasing out of large-denomination bills or the placement of upper limits on cash transactions). This process would then be furthered largely by the private sector, providing cashless payment options for people’s “convenience,” rather than risk popular objections to policy-led decashing. The IMF, which certainly has a sterling track record of sticking up for the poor and vulnerable in society, comforts us by saying that these policies should be implemented in ways that would augment “economic and social benefits.”

The IMF’s Greek experiment in austerity

These suggestions, which of course the IMF does not necessarily officially agree with, have already begun to be implemented to a significant extent in the IMF debt colony known officially as Greece, where the IMF has been implementing “socially fair and just” austerity policies since 2010, which have resulted, during this period, in a GDP decline of over 25 percent, unemployment levels exceeding 28 percent, repeated cuts to what are now poverty-level salaries and pensions, and a “brain drain” of over 500,000 people — largely young and university-educated — migrating out of Greece.

Protesters against new austerity measures hold a placard depicting Labour Minister George Katrougalos as the movie character Edward Scissorhands during a protest outside Zappeion Hall in Athens, Friday, Sept. 16, 2016. The placard reads in Greek"Katrougalos Scissorhands".

Protesters against new austerity measures hold a placard depicting Labour Minister George Katrougalos as the movie character Edward Scissorhands during a protest outside Zappeion Hall in Athens, Friday, Sept. 16, 2016. The placard reads in Greek”Katrougalos Scissorhands”.

Indeed, it could be said that Greece is being used as a guinea pig not just for a grand neoliberal experiment in both austerity, but de-cashing as well. The examples are many, and they have found fertile ground in a country whose populace remains shell-shocked by eight years of economic depression. A new law that came into effect on January 1 incentivizes going cashless by setting a minimum threshold of spending at least 10 percent of one’s income via credit, debit, or prepaid card in order to attain a somewhat higher tax-free threshold.

Beginning July 27, dozens of categories of businesses in Greece will be required to install aptly-acronymized “POS” (point-of-sale) card readers and to accept payments by card. Businesses are also required to post a notice, typically by the entrance or point of sale, stating whether card payments are accepted or not. Another new piece of legislation, in effect as of June 1, requires salaries to be paid via direct electronic transfers to bank accounts. Furthermore, cash transactions of over 500 euros have been outlawed.

In Greece, where in the eyes of the state citizens are guilty even if proven innocent, capital controls have been implemented preventing ATM cash withdrawals of over 840 euros every two weeks. These capital controls, in varying forms, have been in place for two years with no end in sight, choking small businesses that are already suffering.

Citizens have, at various times, been asked to collect every last receipt of their expenditures, in order to prove their income and expenses — otherwise, tax evasion is assumed, just as ownership of a car (even if purchased a decade or two ago) or an apartment (even if inherited) is considered proof of wealth and a “hidden income” that is not being declared. The “heroic” former Finance Minister Yanis Varoufakis had previously proposed a cap of cash transactions at 50 or 70 euros on Greek islands that are popular tourist destinations, while also putting forth an asinine plan to hire tourists to work as “tax snitches,” reporting businesses that “evade taxes” by not providing receipts even for the smallest transactions.

All of these measures, of course, are for the Greeks’ own good and are in the best interest of the country and its economy, combating supposedly rampant “tax evasion” (while letting the biggest tax evaders off the hook), fighting the “black market” (over selling cheese pies without issuing a receipt, apparently), and of course, nipping “terrorism” in the bud.

As with the previous discussion I observed about Amazon being a satisfactory replacement for the endangered brick-and-mortar business, one learns a lot from observing everyday conversations amongst ordinary citizens. A recent conversation I personally overheard while paying a bill at a public utility revealed just how successful the initial and largely uncontested steps enacted in Greece have been.

In the line ahead of me, an elderly man announced that he was paying his water bill by debit card, “in order to build towards the tax-free threshold.” When it was suggested to him that the true purpose of encouraging cashless payments was to track every transaction, even for a stick of gum, and to transfer all money into the banking system, he and one other elderly gentleman threw a fit, claiming “there is no other way to combat tax evasion.”

The irony that they were paying by card to avoid taxation themselves was lost on them—as is the fact that the otherwise fiscally responsible Germany, whose government never misses an opportunity to lecture the “spendthrift” and “irresponsible” Greeks, has the largest black market in Europe (exceeding 100 billion euros annually), ranks first in Europe in financial fraud, is the eighth-largest tax haven worldwide, and one of the top tax-evading countries in Europe.

Also lost on these otherwise elderly gentlemen was a fact not included in the official propaganda campaign: Germans happen to love their cash, as evidenced by the fierce opposition that met a government plan to outlaw cash payments of 5,000 euros or more. In addition, about 80 percent of transactions in Germany are still conducted in cash. The German tabloid Bild went as far as to publish an op-ed titled “Hands off our cash” in response to the proposed measure.

Global powers jumping on cashless bandwagon

Nevertheless, a host of other countries across Europe and worldwide have shunned Germany’s example, instead siding with the IMF and Stiglitz. India, one of the most cash-reliant countries on earth, recently eliminated 86 percent of its currency practically overnight, with the claimed goal, of course, of targeting terrorism and the “black market.” The real objective of this secretly planned measure, however, was to starve the economy of cash and to drive citizens to electronic payments by default.

Indians stand in line to deposit discontinued notes in a bank in Jammu and Kashmir, India,, Dec. 30, 2016. India yanked most of its currency bills from circulation without warning on Nov. 8, delivering a jolt to the country's high-performing economy and leaving countless citizens scrambling for cash. (AP/Channi Anand)

Indians stand in line to deposit discontinued notes in a bank in Jammu and Kashmir, India,, Dec. 30, 2016. India yanked most of its currency bills from circulation without warning on Nov. 8, delivering a jolt to the country’s high-performing economy and leaving countless citizens scrambling for cash. (AP/Channi Anand)

Iceland, a country that stands as an admirable example of standing up to the IMF-global banking cartel in terms of its response to the country’s financial meltdown of 2008, nevertheless has long embraced cashlessness. Practically all transactions, even the most minute, are conducted electronically, while “progressive” tourists extol the benefits of not being inconvenienced by the many seconds it would take to withdraw funds from an ATM or exchange currency upon arrival. Oddly enough, Iceland was already largely cashless prior to its financial collapse in 2008—proving that this move towards “progress” did nothing to prevent an economic meltdown or to stop its perpetrators: the very same banks being entrusted with nearly all of the money supply.

Other examples of cashlessness abound in Europe. Cash transactions in Sweden represent just 3 percent of the national economy, and most banks no longer hold banknotes. Similarly, many Norwegian banks no longer issue cash, while the country’s largest bank, DNB, has called upon the public to cease using cash. Denmark has announced a goal of eliminating banknotes by 2030. Belgium has introduced a 3,000-euro limit on cash transactions and 93 percent of transactions are cashless. In France, the respective percentage is 92 percent, and cash transactions have been limited to 1,000 euros, just as in Spain. Outside of Europe, cash is being eliminated even in countries such as Somalia and Kenya, while South Korea — itself no stranger to IMF intervention in its economy — has, similarly to Greece, implemented preferential tax policies for consumers who make payments using cards.

Aside from policy changes, practical everyday examples also exist in abundance. Just try to purchase an airline ticket with cash, for instance. It remains possible — but is also said to raise red flags. In many cases, renting an automobile or booking a hotel room with cash is simply not possible. The aforementioned Department of Homeland Security manual considers any payment with cash to be “suspicious behavior” — as one clearly has something to hide if they do not wish to be tracked via electronic payment methods. Ownership of gold makes the list of suspicious activities as well.

Just as the irony of Germany being a largely cash-based society while pushing cashless policies in its Greek protectorate is lost on many Greeks, what is lost on seemingly almost everyone is this: something that is new doesn’t necessarily represent progress, nor does something different. Something that is seemingly easier, or more convenient, is not necessarily progress either. But for many, “technological progress,” just like “scientific innovation” in all its forms and without exception, has attained an aura of infallibility, revered with religious-like fervor.

People queue in front of a bank for an ATM as a man lies on the ground begging for change, in Athens. (AP/Thanassis Stavrakis)

People queue in front of a bank for an ATM as a man lies on the ground begging for change, in Athens. (AP/Thanassis Stavrakis)

Combating purported tax evasion is also treated with a religious-like fervor, even while ordinary citizens — such as the two aforementioned gentlemen in Greece — typically seek to minimize their outlays to the tax offices. Moreover, while such measures essentially enact a collective punishment regardless of guilt or innocence, corporations and oligarchs who utilize tax loopholes and offshore havens go unpunished and are wholly unaffected by a switch to a cashless economy in the supposed battle against tax evasion.

This is evident, for instance, in the case of “LuxLeaks,” which revealed the names of dozens of corporations benefiting from favorable tax rulings and tax avoidance schemes in Luxembourg, one of the original founding members of the EU. European Commission President Jean-Claude Juncker, formerly the prime minister of Luxembourg, has faced repeated accusations of impeding EU investigations into corporate tax avoidance scandals during his 18-year term as prime minister. Juncker has defended Luxembourg’s tax arrangements as legal.

At the same time, Juncker has shown no qualms in criticizing Apple’s tax avoidance deal in Ireland as “illegal,” while having been accused himself of helping large multinationals such as Amazon and Pepsi avoid taxes. Moreover, he has openly claimed that Greece’s Ottoman roots are responsible for modern-day tax evasion in the country. He has not hesitated to unabashedly intervene in Greek electoral contests, calling on Greeks to avoid the “wrong outcome” in the January 2015 elections (where the supposedly anti-austerity SYRIZA, which has since proven to be boldly pro-austerity, were elected).

He also urged the Greek electorate to vote “yes” (in favor of more EU-proposed austerity) in the July 2015 referendum — where the overwhelming result in favor of “no” was itself overturned by SYRIZA within a matter of days. In the European Union today, if there’s something that can be counted on, it’s the blatant hypocrisy of its leaders. Nevertheless, proving that old habits of collaborationism die hard in Greece, the rector of the law school of the state-owned Aristotle University in Thessaloniki awarded Juncker with an honorary doctorate for his contribution to European political and legal values.

Cashless policies bode poorly for the future

Where does all this lead though? What does a cashless economy actually mean and why are global elites pushing so fervently for it? Consider the following: in a cashless economy without coins or banknotes, every transaction is tracked. Buying and spending habits are monitored, and it is not unheard of for credit card companies to cancel an individual’s credit or to lower their credit rating based on real or perceived risks ranging from shopping at discount stores to purchasing alcoholic beverages. Indeed, this is understood to be common practice. Other players are entering the game too: in late May, Google announced plans to track credit and debit card transactions.

Claudia Lombana, PayPal's shopping specialist, stamps a guest's passport as he visits the travel section of PayPal's Cashless Utopia in New York (Victoria Will/AP)

Claudia Lombana, PayPal’s shopping specialist, stamps a guest’s passport as he visits the travel section of PayPal’s Cashless Utopia in New York (Victoria Will/AP)

More to the point though, a cashless economy doesn’t just mean that financial institutions, large corporations, or the state itself can monitor all transactions that are occurring. It also means that the entirety of the money supply — itself now existing only in “virtual” form — will belong to the banking system. Not one cent will exist outside of the banking system, as physical currency will simply not be in circulation. The banking system — and others — will be aware not just of every transaction, but will be in possession of all of our society’s money supply, and will even have the ability to receive a percentage of every transaction that is taking place.

So what happens if your spending habits or your choice of travel destinations raises “red flags”? What happens if you run into hard times economically and miss a few payments? What happens if you are deemed to be a political dissident or liability – perhaps an “enemy of the state”? Freezing a bank account or confiscating funds from accounts can take place almost instantaneously. Users of eBay and PayPal, for instance, are quite aware of the ease with which PayPal can confiscate funds from a user’s account based simply on a claim filed against that individual.

Simply forgetting one’s password to an online account can set off an aggravating flurry of calls in order to prove that your money is your own — and that’s without considering the risks of phishing and of online databases being compromised. Many responsible credit card holders found that their credit cards were suddenly canceled in the aftermath of the “Great Recession” simply due to perceived risk. And if you happen to be an individual deemed to be “dangerous,” you can be effectively and easily frozen out of the economy.

Those thinking that the “cashless revolution” will also herald the return of old-style bartering and other communal economic schemes might also wish to reconsider that line of thinking. In the United States, for instance, bartering transactions are considered taxable by the Internal Revenue Service. As more and more economic activity of all sorts takes place online, the tax collector will have an easier time detecting such activity. Thinking of teaching your child to be responsible with finances? That too will have a cost, as even lemonade stands have been targeted for “operating without a permit.” It’s not far-fetched to imagine that particularly overzealous government authorities could also target such activity for “tax evasion.”

In Greece, while oligarchs get to shift their money to offshore tax havens without repercussion and former Finance Minister Gikas Hardouvelis has been acquitted for failure to submit a declaration of assets, where major television and radio stations operate with impunity without a valid license while no new players can enter the marketplace and where ordinary households and small businesses are literally being taxed to death, police in August 2016 arrested a father of three with an unemployed spouse for selling donuts without a license and fined him 5,000 euros. In another incident, an elderly man selling roasted chestnuts in Thessaloniki was surrounded by 15 police officers and arrested for operating without a license.

Amidst this blatant hypocrisy, governments and financial institutions love electronic money for another reason, aside from the sheer control that it affords them. Studies, including one conducted by the American Psychological Association, have shown that paying with plastic (or, by extension, other non-physical forms of payment) encourage greater spending, as the psychological sensation of a loss when making a payment is disconnected from the actual act of purchasing or conducting a transaction.

But ultimately, the elephant in the room is whether the banking system even should be entrusted with the entirety of the monetary supply. The past decade has seen the financial collapse of 2008, the crumbling of financial institutions such as Lehman Brothers in the United States and a continent-wide banking crisis in Europe, which was the true objective behind the “bailouts” of countries such as Greece — saving European and American banks exposed to “toxic” bonds from these nations. Italy’s banking system is currently teetering on dangerous ground, while the Greek banking system, already recapitalized three times since the onset of the country’s economic crisis, may need yet another taxpayer-funded recapitalization. Even the virtual elimination of cash in Iceland did not prevent the country’s banking meltdown in 2008.

Should we entrust the entirety of the money supply to these institutions? What happens if the banking system experiences another systemic failure? Who do you trust more: yourself or institutions that have proven to be wholly irresponsible and unaccountable in their actions? The answer to that question should help guide the debate as to whether society should go cashless.

May 252017
 

By Michael Nevradakis, 99GetSmart

maxresdefault

Dear listeners and friends,

This week on Dialogos Radio, the Dialogos Interview Series will feature part one of a two-part interview with economist and author Spiros Lavdiotis. A former analyst for the Central Bank of Canada, Lavdiotis is the author of three books and numerous articles on the Greek economy.
 
In part one of our interview, Lavdiotis discusses the modern history of austerity as an economic doctrine, what ancient Greece can teach us about how to deal with a debt crisis, and what modern Greece can do today to alleviate its debt burden. This will lead to part two of our interview, on our next English-language broadcast, regarding solutions to Greece’s economic crisis, which according to Lavdiotis, involve a Greek exit from the Eurozone.
 
Tune in for this highly interesting and detailed interview, this week on Dialogos Radio.
 
For more details and our broadcast schedule, visit http://dialogosmedia.org/?p=6937.
 
Best,
Dialogos Radio & Media
May 242017
 

By Michael Nevradakis99GetSmart

Originally published at MintPressNews:

“We had the role of a rubber stamp…” – a former board member of Greece’s national statistical authority has revealed that she and other members were forced to sign off on falsified deficit and debt figures that plunged their country into an ongoing economic depression.

ATHENS (Interview)– On May 18, a new chapter was written in Greece’s economic odyssey, as the Greek parliament, with the votes of the SYRIZA and Independent Greeks coalition government, approved Greece’s fourth memorandum loan package since the onset of the country’s depression. The strings attached to this new deal with the “troika” of Greece’s lenders include 140 new austerity measures, including tax hikes and additional pension cuts.

This comes just weeks after the Greek government triumphantly announced the achievement of a 4.2-percent budget surplus for 2016, exceeding expectations. Greece is in the midst of its eighth full year of economic depression, a crisis that emerged in late 2009 when it was revealed that Greece’s deficit and debt figures were larger than had previously been publicized.

Was this really the case though? Several former board members of the Hellenic Statistical Authority (ELSTAT) have spoken publicly in recent years, revealing evidence that they argue proves that Greece’s debt and deficit figures were indeed falsified in 2009.

But the evidence provided by these whistleblowers shows that the figures were actually falsified in order to appear worse than they were in reality, providing the political impetus to bring Greece under the supervision of the “troika” (consisting of the IMF, European Commission, and European Central Bank) and leading to successive memorandum agreements and the enactment of strict austerity measures.

Further fueling these claims, former IMF chief Dominique Strauss-Kahn has publicly admitted that in April 2009 he met with George Papandreou, who was then campaigning in Greece on a platform of promises of new social services and benefits, claiming on the campaign trail that “we have money” for these programs.

Former ELSTAT board member, Georganta Zoi a

Former ELSTAT board member, Zoe Georganta,

Papandreou, who had not yet been elected, came to power following the Greek elections of Oct. 4, 2009. A few months later, the new government publicly announced that the deficit and debt figures for 2009 were higher than originally claimed by the outgoing government.

One of the whistleblowers involved is University of Macedonia professor of applied econometrics and productivity Zoe Georganta. A former member of the board of ELSTAT and former visiting professor at Harvard University’s National Bureau of Economic Research, Georganta was the first whistleblower to publicly contradict the previous government’s claims.

These accusations have resulted in a succession of judicial cases centered around former president of ELSTAT Andreas Georgiou, who is also a former IMF official. MintPress News recently spoke with Georganta in an interview that was first broadcast on Dialogos Radio in May 2017. In this interview, Georganta discusses the evidence she presented and the status of the legal cases that followed as a result of these accusations, as well as shares her thoughts regarding the economic figures currently being publicized by the Greek government, including the recently announced primary budget surplus.

MintPress News (MPN): Share with us an overview of the information that you revealed against the Hellenic Statistical Authority regarding how the Greek deficit and debt figures for 2009 were falsified and inflated.

Zoe Georganta (ZG): As an econometrician and economic statistician appointed in August 2010 by the Greek Parliament to be a member of the seven-member Hellenic Statistical Authority, I had the responsibility by law to express my scientific opinion – first within the meetings of ELSTAT, in which all seven members, the president (or chairman) included, were supposed to discuss the statistical issues of the agenda and make a decision by majority rule.

What actually happened from the first meeting of ELSTAT on August 3, 2010 was very strange and seemed extremely peculiar to all six of us, since the president, Andreas Georgiou, supposedly an ex-vice president of the Statistics Department of the IMF—this was declared as his position in the IMF—insisted that he had to be the only person who could speak and decide, while the remaining six of us had to agree and sign his proposals without questions.

According to him, we had the role of a rubber stamp. He said that openly to us. He also insisted that we should not keep minutes of the meetings, and when we all threatened to resign and publicize the issue, he agreed to keep minutes but he added that the minutes would report only his opinion and nobody else’s. So as you can imagine, there were minutes [of these meetings] but they were not signed by any of us.

ELSTAT, as a seven-member board, had only four meetings, because the president [maintained] extremely strange attitudes. As the main issue was the measurement of the final estimate of the public, or general government debt and deficit for 2009, Mr. Georgiou kept presenting to us ad hoc numbers and he refused to answer our questions about how he came to those numbers.

Consequently, all six of us then insisted that the director of the national accounts division of ELSTAT, Nick Stroblos, come to our meeting and explain to us those numbers. Mr. Stroblos’ comments were a catapult. He said that those numbers were wrong and they were fixed by violating Eurostat regulations and methodology, which are described in the ESA manual. ESA [refers to the] European System of Accounts, and this is legally constituted under European Commission regulation 2223/1996.

By investigating the issue, we found out that Mr. Stroblos was right. I must report here the fact that Mr. Stroblos was sacked from his position the very next day after he expressed his reservations about the 2009 debt and deficit numbers that were fixed by Mr. Georgiou and by the general director of Eurostat, as we found out later.

After he sacked Mr. Stroblos, Mr. Georgiou went on to neutralize all six members of the ELSTAT board, with the help of the IMF representative in the troika Poul Thomsen, who, according to evidence, asked ECOFIN, the group of the finance ministers of the EU, to force the Greek government to change the statistical law so that ELSTAT would [fall under] Mr. Georgiou’s rule without a board of directors. This was finally done in 2011 and all six of us were sacked without explanation, just [as a result of] a clause within a law of economic austerity measures.

As you said, I was the first one to report in the press evidence of [falsely] augmenting the debt and deficit of 2009. Not mere allegations, but by indicating the exact violation of the Eurostat regulations and by referring to particular sections of the European methodology which were violated. I did that for the first time in October 2010. Then, I tried to inform the parliament and the government, but as they said to me, they had to obey orders by the IMF and the European Commission, who seemed to be covering for Georgiou.

Apparently, as we found out later, [this was] in order to justify their unnecessary loans to Greece according to the memorandums of understanding that they had signed with the Greek government, and also to justify the second memorandum of understanding, after the augmentation of the deficit figure to 15.6 percent of GDP.

My criticisms were subsequently supported by former Vice President of the ELSTAT board Nikos Logothetis, [plus] another member of the board. The whole issue as it became public, was ex officio investigated by the economic prosecutors, who after one year of [investigating] came to the decision to press charges against Mr. Georgiou for two crimes.

[The first charge] regards breach of duty for three instances: first, by lying to the Greek state that he had resigned from the IMF, while the truth was that he continued being an IMF employee. Second, by not inviting meetings of the board according to law, and third, transmitting falsified debt and deficit data to Eurostat without even discussing it with the board, as he should have done according to law. The second [charge refers to] the felony of forging data on the 2009 public debt and deficit.

The economic prosecutors decided that Mr. Georgiou committed all his criminal actions intentionally for personal benefit and for the benefit of others. Mr. Georgiou is [facing] these accusations today, and on May 29, we have a court case in the second degree regarding his breach of duty. We hope that the truth will show, because these are simple and exact accusations.

He lied to the Greek state in order to gain the post of ELSTAT president, and second, he stopped [convening] board meetings because all six members of the board were “bothering” him, as he stated in his letter to the Greek Parliament, and because he transmitted the augmented [debt and deficit] data that was actually dictated to him, as we found later, in correspondence between him and Eurostat’s general director Walter Radermacher.

He [did this] without even discussing this data with the board, even though he had an obligation, under the law, to have a vote on that data, a majority vote. So he transmitted [this data] illegally. These three instances of his breach of duty will be tried in court on May 29.


(Editor’s note: Zoe Georganta describes the evidence she presented in an earlier interview, recorded in December 2012, that aired on Dialogos Radio).

MPN: Who is Andreas Georgiou, and what was his background prior to becoming the president of the Hellenic Statistical Authority?

ZG: After his strange behavior, I started [investigating his background] and I found out that his post at the IMF was not vice chairman of the statistics department, as he declared and as the former minister of finance declared, but [that] he was a simple employee of the IMF in the financial institutions division. His duty was to supervise the implementation of IMF terms by underdeveloped countries receiving IMF financial assistance.

I also found out he was very rarely in Washington, [spending most of his time] in Africa. I know people, real statisticians at the IMF, and I contacted them as part of my job as an applied econometrician, and I also found out that he is not a statistician and his only publication is a book about martial arts!

Andreas Georgiou, stands outside the headquarters of the Statistics agency, in Athens, Greece. (AP/Petros Giannakouris)

Andreas Georgiou, stands outside the headquarters of the Statistics agency, in Athens, Greece. (AP/Petros Giannakouris)

He has no scientific publications, only a discussion paper [co-authored] by another three people, and he is not the first name, at first. So far, he has no scientific publication in any field, and in particular in the fields of economics, finance and statistics. Obviously, he was imposed on Greece because the IMF and the European Commission knew, in my opinion, that he could be their man, I mean a puppet of his bosses. This is his character, as far as I understood him from his “collaboration” with us.

By my opinion and not only my own opinion, he was the most unsuitable person for the Greek case. He did not even write in Greek, and he had not been in Greece for 25 years after completing high school at the American Community Schools, not even for holidays.

Now, at the age of 53 or 54, as I read in a recent article in The Wall Street Journal, he escaped from Greece [to his Maryland mansion] when he [faced prosecution]. And now, at an early age, he is an IMF pensioner while everyone in Greece and in Europe [receives their] pension at the age of 67 and not before that.

I want to say at this point that the IMF calculated wrong multipliers for Greece, [but this does not come as a surprise] because the statistics were based on incorrect data. It was not only the debt and deficit data that were wrong, but also the data on expenditures and production that Mr. Georgiou manufactured, together with Eurostat.

The result was unnecessary loans to Greece and the deep recession we [have been] experiencing for seven years now. You know, correct economic policies are based on correct data, and this was not the case for Greece.

Was the selection of this particular man an IMF mistake? All Greeks are wondering about that. Or [maybe] it was a plan to save the French and German banks by loading debt upon debt on the Greek people. It is a real Ponzi scheme, what has been done to Greece, and this is a shame on the part of the IMF, the European Commission and the ECB. After so many loans, the Greek debt has tripled between 2009 and 2016. Is this justice [that is being] shown by our supposed partners, with whom we have fought together in world wars?

MPN: Share with us some additional details about the forthcoming court case against Mr. Georgiou, for which from what I understand you and fellow whistleblower Nick Logothetis from ELSTAT will appear as witnesses.

ZG: After so many unacceptable interventions with letters threatening the Greek government from the European Commission, under the guise of the International Statistical Institute or the administrative personnel of the American Statistical Association, asking the Greek government to intervene in the Greek court system and to stop the court cases against Georgiou, there were three proposals by three individual judicial representatives who asked for Georgiou’s exoneration. All three were turned down by the court committees.

He was not exonerated, as some foreign and Greek newspapers wrote. Those “exonerations” were just proposals by three judicial representatives, but they were turned down by the official court committees.

Now, we have the May 29 court case against him for breach of duty. We are also expecting the actionable date for the felony [charges]. I would like to mention that Georgiou has been sentenced twice to one year of imprisonment for libel against the ex-director of the national accounts division of ELSTAT, Nikos Stroblos, who was [fired] when he simply expressed his scientific opinion and reservations about the numbers, which were coming as if they were falling down from the sky, without any explanation.

It is not only me and Logothetis as witnesses against him. We are three out of the six members of the ELSTAT board who were brave enough to be witnesses. The other three members include two representatives of the ex-minister of finance [Giorgos Papakonstantinou] because he committed other crimes, fraud, against Greece, and the other was a representative of the Bank of Greece [and former governor] George Provopoulos.

Those people were afraid to come out, although within the meetings, we were all together against Georgiou, asking questions about the ad hoc numbers that he was bringing to us. There are also other witnesses, other officials from ELSTAT and other statisticians. Regarding the breach of duty, all six members of the board have come out against [Georgiou] as witnesses, not only in court, but in the Greek parliament.

I would like to say at this point that the European Commission keeps accusing Greece’s judicial system of intervening in [Greece’s handling of] financial data. This is ridiculous and outrageous. It is clear that Georgiou broke the law and he has to be brought to court.

He broke the law, it is very simple, and all the rest is to cover up the IMF’s and Eurostat’s responsibility for Greece’s deep recession, because of the unnecessary laws that they gave to Greece due to the wrong and untruly augmented numbers for Greece.

MPN: Georgiou is no longer the president of the Hellenic Statistical Authority, having been replaced by Athanasios Thanopoulos. However, in your estimation, is the Hellenic Statistical Authority today continuing the same practices as before, through the falsification or alteration of Greece’s economic figures?

ZG: Tell me which statistical authority or statistical office in Europe, or [in the rest of the world], is under one person’s rule, as has been imposed on Greece. Thanopoulos was actually appointed not by the Greek parliament, but by the European Commission, and they forced the Greek parliament to sign off on their decision to appoint Thanopoulos as the head of ELSTAT, without a board [of directors]. So ELSTAT today is under one person’s rule. How unbiased and independent can the numbers be? That’s why there are all these arguments between the IMF and the Europeans—not between the IMF and Greece or the Europeans and Greece—because Greece has no say. Eurostat manufactures the data about the debt, and they claim that the debt is viable. But the debt is not viable.

Thanopoulos, in my opinion, has shown…[that] he has to obey the orders of the Eurostat and the European Commission regarding the numbers, and especially numbers regarding Greece’s debt and deficit. And of course, he has to support the deep depression policies for Greece.

Are these policies [implemented] due to the incompetence of the Europeans and Thanopoulos? No. Our German pseudo-partners have said it openly, that Greek people are undisciplined and must be broken. Because of this, I think that the Eurozone is going to be doomed.

Greece’s economic history has been forged, first by Georgiou, and Thanopoulos continues in the same way because they have changed the data. Since 1995, the data has been changed in a completely ad hoc manner. I have all the old data, and they wanted to show a smooth increase in Greece’s indebtedness, which is wrong. I have evidence because I have worked for 42 years as an applied statistician, as an economic researcher, as a professor at the University of Macedonia, and as a visiting professor at Harvard’s National Bureau of Economic Research.

I have not managed [to publish] yet because of my court cases, but very soon my bombshell book will be out in English. However, Thanopoulos’ behavior, I must admit, is not as absurd or stupid or nonsensical as Georgiou’s behavior was towards everybody, even towards the MPs of the parliament, the prime minister and the ministers. Thanopoulos seems smarter but more secretly cunning, so he can survive better than Georgiou.

MPN: The current SYRIZA and Independent Greeks coalition government is claiming to have achieved a primary budget surplus, initially 3.9 percent and now 4.2 percent, well above the targets Greece’s lenders had initially set for 2016. Does this surplus exist in reality or is it a product of creative accounting?

ZG: This is a very good question. It is for sure creative accounting. It’s not the people, the statisticians of ELSTAT who measure the numbers, according to the European methodology. But Thanopoulos employs a lot of Eurostat experts, some Eurostat pensioners and European Commission pensioners who come to Greece, within ELSTAT to manufacture the data, distant from the statisticians of ELSTAT.

And of course, when there is sunshine, they go to the nearby island of Aegina, where they have good fresh fish and enjoy themselves with their wives. But they do their job and they are paid very generously. Well, in questioning them, Eurostat says that it pays them, but that Greece provides a portion of Eurostat revenues.

Those surpluses are not healthy, if they exist. How can a country whose GDP has shrunk by 28 percent have primary surpluses? If it does, of course those surpluses are not healthy. They do not come from growth, but from squeezing public expenditures for health and education, from stealing the revenues of the research organizations of Greece, changing them into public servants and public corporations so that [the state takes] their revenue that they make out of collaborating with foreign institutions.

Also, those surpluses come, of course, from taxes that are choking any private entrepreneurial initiatives made by Greeks, and of course by giving nothing for growth. The Greek debt has come to a point that it cannot be served anymore, because as I said, the troika, or “institutions,” load Greece with debt in order to pay previous debt. Isn’t it crazy? All of this is creative accounting, unfortunately.

MPN: In 2015, you presented evidence to the Greek Parliamentary Debt Audit Commission, which had been convened at that time. What did the evidence that you presented contain, and what was the outcome of this commission’s proceedings?

ZG: The Greek parliament has actual correspondence between the former European commissioner of economic affairs, the general director of Eurostat, the IMF representative Poul Thomsen, and Georgiou, as well as the former minister of finance of Greece, showing the involvement of the European Commission and Eurostat in untruly augmenting the Greek debt and deficit for 2009.

This correspondence exists because Logothetis pressed charges against Georgiou for wrongly accusing [Logothetis] of “hacking” [Georgiou’s] personal email. I want to say here that all charges against Logothetis have been dropped, although the Wall Street Journal had a recent article by Marcus Walker which completely distorts the facts, showing his outrageous bias in favor of Georgiou. It is a pity, but it has happened. I am saying that to be clear, because Logothetis was not hacking anybody. His [proficiency with] computers is not at that level. How could he break passwords and all this that Georgiou accused him of?

Regarding the parliamentary debt audit commission, its work was interrupted because the prime minister [Alexis Tsipras] sacked Zoe Konstantopoulou as president of the parliament and also as member of the governing party [SYRIZA].


(Editor’s note: Georganta added, in a Greek-language version of this interview, her belief that Konstantopoulou was insincerely adopting a populist pose).


However, although my name is not mentioned in the final report, I gave data to that committee in parliament, but not all of it was publicized. Still, the outcome is that a sizable portion of the Greek debt is illegal and odious. I want to say at this point that the restructuring of the Greek debt that is under discussion now is completely nonsensical because it means a time extension of its repayment schedule, which is unfair for the future generations of Greece. Now, it is in the next 50 years that the Greek debt is to be repaid, but they want to extend it to 80 or 100 years. Actually, [the institutions] have set a number: 99 years.

The Supreme Court of Greece came to the conclusion, in August 2016, that 210 billion euros is the measured damage done to Greece by the false augmentation of the public deficit of 2009. This damage to the Greek state has to be paid back to Greece, because the European Commission and Eurostat are among the partners in Georgiou’s crimes, with evidence which has been kept in parliament and in the Greek justice system.

MPN: Indeed, at the same time that this parliamentary debt audit commission was convening, a number of Greek government ministers of that time, including then-finance minister Yanis Varoufakis and even Prime Minister Alexis Tsipras, were making public statements claiming that Greece’s debt would be repaid in perpetuity.

ZG: Yes, you’re right. Well, the Greek government, we all know, has a gun to its head. I mean, [the institutions say] that you will pay all debt, otherwise we destroy you in the next minute, by completely turning off the taps of your banks. Of course, I think that a patriotic government would have publicized such threats without being afraid, but unfortunately, our government has not done so.

I believe that [the institutions] are aware of fraud committed by [members of the Greek government], and they tell them, if you go on to publicize the threats, we are going to reveal to the Greek people your actual fraudulent behavior, the bribes you receive from German companies like Siemens, which has come out actually, and then a lot of other organizations in Europe.

For example, the Greek government has purchased submarines, spending a huge amount of money for submarines that go down to the bottom of the sea and never come back up. The Greek people have paid all this money, in addition to huge bribes on the side for particular [government] ministers, for “well-working” submarines and a lot of other weapons actually, planes which fall down and all these kinds of things. All of these European governing [authorities] know of this fraud [that has been perpetrated] by Greek politicians, so they actually tell them, “go on, publicize our threats, we’ll reveal everything you’ve done so that you will not be re-elected by the stupid Greek people.”

MPN: Could you share with us your opinion regarding the role of foreign banks and financial firms in the development and outbreak of the Greek economic crisis?

ZG: There is evidence that the German and French banks were bankrupt in 2008, because they had a lot of toxic American debt. Also, they owned a sizable quantity of Greek state bonds. Falsely augmenting the Greek deficit [was done] in order to load us with unnecessary loans which go back to their banks, so that Greece buys back [its] bonds, so that the German and French banks can refinance their debts. This was a very appetizing idea [for the banks]. This has been actually said by people like [Paul] Krugman and a lot of other researchers and scientists, American and European.

MPN: In your estimation, what should be done and what can be done in order for Greece to turn the page and change direction?

ZG: This is a very difficult question. Greece has through the centuries been under [the thumb of] foreign invaders, first military and now economic, but we have always survived. Greece is a rich country in terms of physical and human resources. However, our politicians have systematically been generously bribed by Western foreigners in order to be able to rob Greece’s wealth.

Also, our geopolitical situation is very attractive to world powers in their struggle to govern the world. These days, Germany is trying its last, and I hope unsuccessful, attempt to rule Europe and the world, using our long-suffering little country as a guinea pig to [conquer] the rest of the European countries.

In my opinion, in Greece, a patriotic and caring government has to get out of the Eurozone. We have to have our own monetary policy to control our banks and to have our own currency. This will be difficult, of course, because we have sold such a great portion of our wealth, but a good government can reverse this. We have to have our own monetary policy and our own central bank that we control, in order to go on to growth.

Also, we have to ask the United Nations to implement the human rights clauses of international law, because Greece has a large portion of people who are very hungry. I live in a rich suburb of Athens [and also] in Thessaloniki, and I see, in the night, old people in these suburbs, previously good-standing people who worked until 65 or 67 years of age—and all claims to the contrary are nonsense and lies—and they are searching in the waste bins in the street to find vegetables thrown out by other people.

The supermarkets in Greece ask customers to buy rice and milk for children of families who are in absolute hunger and poverty. I have seen people, families with two and three children in Thessaloniki, who live in their own cars, they don’t live in a house. They come to the university, where there are rooms for the visiting scholars and professors to have a place to stay, and they come there to take a bath. This situation is a shame for Europe.

Also, they have loaded us with lots, with millions of refugees. The Syrian people are suffering and we have to accept them and we are caring for them, but also there are people who are not refugees. They come to Greece from a lot of other places in the world, from Africa, from Asia, from Bangladesh, from India and from a lot of other places. We don’t hate these people, we are actually helping them and we are famously, from antiquity, people with good intentions towards foreigners and visitors.

But you can’t have so many young people in Greece who have no work. The unemployment among young people in Greece, from 25 to 45 years of age [is very high]. We have all these young people who have a lot of energy, and what are they going to do? It’s natural and logical. We have a lot of crime here, by Greeks, they will steal even one euro or ten euros. All this is known to the United States government and the European Commission and the governing parties, the European Parliament, officials who receive such high salaries, 25,000 euros per month with all the privileges. It’s a shame.

At the same time, the Greek people are suffering here. Very few people are those, the politicians and their friends, who are doing well. Also, people who have married [foreigners] and who have some other sources of income, like myself. I have married an Englishman, and he helps me with my 99-year-old mother. I have worked for 42 years, and my salary is not enough to support the medicine and all the care for my mother. There are other people in much worse situations than me.

A patriotic Greek government should go to the United Nations and ask for the implementation of the humanistic clauses of international law [so that it can] stop paying the debt [immediately]. Later, when we start growing we can pay the debt, but [only] debt which is legal, not the odious debt. We have to find out which is the odious debt with a real accounting committee.

[I would like to add] that Greek people can go on with only bread and olives to feed themselves if they have hope that we are going to get our country back and we are going to have some growth. They can suffer some sacrifices and be happy about it, but now they have lost hope and they are desperate, a lot of them commit suicide. We can survive if we get out of the terrible euro, which is a disguised German Deutschmark that serves only German interests and nothing else.

Greece may be small and governed by corrupt and unpatriotic governments, but it [is reluctant to] die. The Germans and whoever else will learn this the hard way, I believe.

Apr 282017
 

By Michael Nevradakis99GetSmart

Originally published at MintPressNews:

According to economist Roger Bootle, the EU has grown unsustainable and due to various factors, is about to burst. (AP/Francisco Seco)

According to economist Roger Bootle, the EU has grown unsustainable and due to various factors, is about to burst. (AP/Francisco Seco)

Britain’s departure from the EU, a process that will take about two years, has formally gone into motion. MintPress News had the opportunity to speak with prize-winning economist Roger Bootle about what Brexit will ultimately mean for the country’s economy, as well as the European Union as a whole.

LONDON– The recent triggering of Article 50 of the European Union’s Lisbon Treaty by the United Kingdom has formally set into motion the process of Britain’s departure from the EU, an action that is in line with the result of last June’s referendum, where 52 percent of British voters chose to leave the union.

Europe is now faced with the prospect of a turbulent period ahead, with the upcoming French presidential elections and the possibility of a victory for populist candidate Marine Le Pen, as well as snap parliamentary elections declared in the UK, German elections in September, a rising tide of Euroscepticism across the continent and the process of Brexit now formally put into motion.

Economist Roger Bootle, chairman of Capital Economics in London and specialist adviser to the British House of Commons Treasury Committee, is the lead author of the report “Leaving the euro: a practical guide,” which was awarded the prestigious Wolfson Prize in Economics in 2012. The report presents a comprehensive proposal for how any eurozone member could depart the zone in an orderly fashion. Bootle discussed his findings extensively in a March 2015 interview with Dialogos Radio.

MintPress News recently had the opportunity to speak with Bootle, in an interview that also aired on Dialogos Radio, about the prospects of the British economy following Brexit and the future of the EU and eurozone following Britain’s upcoming departure.

MintPress News (MPN): The British government has recently gone ahead and invoked Article 50, formally triggering the process for Great Britain’s departure from the European Union. Many doom-and-gloom scenarios have been voiced, particularly by media pundits, regarding the adverse impacts of “Brexit” on Great Britain’s economy. In reality, how has the British economy performed since the referendum vote and, more recently, since Article 50 was invoked, and what are its prospects going forward?

Roger Bootle (RB): The British economy has done extremely well since the referendum. In fact, you can’t really see any adverse effects at all. It’s just bowled along much as before. In the immediate weeks and months after the referendum, there was some hesitation and some business sectors undoubtedly felt a bit of a slowdown, but that didn’t last long.

As things are at the moment, they’re looking really very strong. Surveys suggest that economic growth will continue roughly at the level we’ve seen recently. Of course, the pound has dropped quite considerably, and that’s helped British exports. They are looking very strong. Even if there’s a bit of a squeeze on consumers, which there may well be, I think all the signs are that the British economy is going to sail through this period.

MPN: From an economic point of view, what are the next steps in the Brexit process for Great Britain? For instance, do you believe that Great Britain will still maintain access to the European common market, and more so, do you believe that Great Britain should maintain access to the European common market?

RB: Now of course we are in a difficult phase, which could go on for up to two years because the Lisbon Treaty allows for a period of up to two years for negotiations for a country leaving. Of course, there’s been no country apart from Greenland, a long time before, that’s actually left the European Union, so we’re in uncharted territory really.

I think that what we’re going to see, what I hope we’re going to see, is some sort of free trade deal hammered out between Britain and the EU. Now if that doesn’t happen, it’s very important that this word “access” is nobbled, that Britain needs “access.” I think it really is very misleading, this word.

Every country in the world has got access to the single market – the United States, India, China, Japan, all these countries trade with the single market, they’ve got access to it, it’s just that not being part of the single market, not having a free trade deal with the European Union, they have to pay the

European Union common external tariff, and of course they have to meet all the standards and certificates and so on that the EU demands.

Now, if Britain doesn’t reach some sort of free trade agreement with the EU during this two-year negotiating period, then we’re effectively going to be in the same sort of situation that the United States, China, Japan and India are all in. That doesn’t sound to me to be too bad.

MPN: There have been many rumors and many press reports regarding the pound of flesh, if you will, that the European Union will demand from Great Britain as an exit bill for leaving the EU. Do you view this as a distinct possibility, or does Great Britain have bargaining chips of its own to possibly avoid this as it navigates the exit process?

RB: Various figures have suggested bills as high as 60 billion euros that the UK will have to hand over to the EU. I think the chances of the EU being able to secure anything like that are vanishingly small, next to zero. There was a report by the British House of Lords recently which obtained expert legal opinion, and the result of that expert legal opinion was that Britain was obliged to pay nothing at all. That is to say, the common sense interpretation of this would apply, that once you leave the club you’re no longer asked to carry on paying your membership dues.

Now, I suspect that there might be reasons of political and economic self-interest such that Britain might end up paying rather more than zero, but 60 billion euros, well they’ll have to whistle for that. I think there’s plenty of room for some sort of reasonable deal.

MPN: Part of the exit process, from what I understand, would have to do with Great Britain’s share of the European Central Bank’s cash reserves, which amount to 16 percent of the ECB’s total cash reserves. Can these cash reserves be returned to Great Britain as part of the Brexit process?

RB: I don’t see that as being a factor to be taken on its own. As a shareholder in the ECB, we do have a claim on the ECB’s net assets. The ECB’s got liabilities as well, so it isn’t reasonable to just look at the cash the ECB holds, you have to look at the balance sheet as a whole, and then you’ve got to put that into the context of the whole position of the EU. I can’t see the UK walking away with 16 percent of the ECB’s cash holdings. I think there’s going to be some overall totting-up of assets and liabilities and whatever the EU thinks are the UK’s continuing obligations after it’s actually left the club, and that’s something that’s going to be a major argument. These ECB cash reserves will be just one factor among very many that will affect this question of how much the UK has to hand over.

MPN: What are the possibilities that Great Britain has on the table as it prepares to depart the European Union, in terms of new trade deals or other beneficial agreements outside of the European Union?

RB: We’ve heard President [Donald] Trump say that he’s keen on a prospective U.S.-UK trade deal, and he’s made it pretty clear that he thinks that can be accomplished very quickly. There’s a whole series of other countries that are interested, including former members of the British Empire that are now members of the British Commonwealth: Canada, Australia, New Zealand, India. Countries outside, such as Japan and China, I think will be able to secure some sort of agreement pretty soon.

I think it’s very important not to overplay the significance of trade deals. Britain trades all around the world with all sorts of countries with which it does not have a trade deal, the United States being one of them, Britain’s biggest single export market. The UK does not have a trade agreement with the United States, and the reason it doesn’t have one is because at the moment it can’t make its own trade policy! It’s the EU that has to do that, and the EU hasn’t been able to make a trade deal with the United States!

I think very much [that as] a result of “euro-brainwashing,” in the European Union most people seem to think that prosperity emerges at the end of the fountain pens of these wonderful official trade negotiators in Brussels and elsewhere, and that all our futures depend on these people. This is complete hogwash. It’s a fairy tale. Around the world, all sorts of countries do extremely well and trade with each other without having anything to do with these panjandrums in Brussels. Britain could be in exactly the same position.

MPN: How does the City of London and the business community in Great Britain view the prospects of the British economy following Brexit?

RB: In the run-up to the referendum, there was a majority of the leaders of big business in Britain, including in the City of London, the financial interests, in favor of Britain staying in. That hasn’t changed very much, and accordingly there’s a preponderance of voices, although it’s less strident than before, worried about exactly what sort of arrangement Britain is going to put in place.

But even before the referendum vote, this description of the state of business opinion was far from uniform. There were a lot of businesspeople who were in favor of Britain leaving. A lot of people in the City were in favor of Britain leaving. On the whole, it was the more entrepreneurial City firms that were in favor of Britain leaving, as opposed to the big established banks and brokerage houses and so forth, who on balance were in favor of Britain staying.

I think that now the debate has moved on a lot. It’s been helped by some of Mrs. [British Prime Minister Theresa] May’s speeches and by the triggering of Article 50. It’s now pretty clear that we are leaving; accordingly, business opinion has switched from trying to operate as some sort of rear-guard action to realizing that it’s going to happen. Obviously, there’s a difference of opinion.

There are still some business leaders, including some in the City, who are a bit concerned and they want to make sure that we get the softest of soft Brexits. But a lot of business leaders are more optimistic than that. I think the mood, though, has changed. It’s changed towards, as I thought it would and hoped it would, towards making the most of Brexit, getting on with it, getting on with the job, getting the job of leaving the EU done and then making sure that Britain is best placed in the world that follows.

MPN: A recent survey of reserve managers at 80 central banks around the world found that there is a recent tendency for central banks to cut their euro exposure, while viewing British currency as a safer prospect for their banks’ portfolios. Is this a trend that you have observed in the markets and is this likely to continue?

RB: I don’t find it surprising that central bank reserve managers should find the prospect of having substantial amounts of their reserves in euros alarming. I don’t find that surprising at all, because there is a mega-crisis in the European Union. For the last year or so, the media has been obsessing about the so-called “British crisis” triggered by the fact that we voted to leave the European Union.

But fundamentally, putting aside for a moment the possible question of a second Scottish referendum — that is a big worry for the UK — that aside, the UK is a pretty stable place, and I think all the signs are that although there might be a few wobbles over Brexit, it can continue to be both successful and stable in the years ahead. And of course, famously it’s got extremely liquid financial markets. So I can see why international money managers, including central bank reserve managers, would find the UK fairly attractive.

By contrast, you can paint a scenario that’s deeply alarming for the countries of the EU. It’s still, I think, more than possible that another country is going to leave the euro over the next few years. The Italians remain very weak, the Greek economy is in a very, very serious state. Either one or both of those countries can leave. You’ve got a political crisis in France, with the possibility of far-right leader Marine Le Pen becoming president.

Even if that doesn’t happen, there’s no doubt over what way France is going over the next couple of years. So there are really fundamental questions about the integrity of the EU as a political unit, and the euro currency alongside that. Why would you want to expose substantial amounts of your reserves to that?

From a British point of view, there is a danger, I think, in all of this. I happen to think that the lower pound brought on by Brexit is a great boon for the British economy. I wanted the pound to be weaker for a long time. I think we needed it, it’s improved our competitiveness, so the last thing I would want to see is international capital holders becoming really worried about the euro and the EU, moving money into the pound with the result of the pound rising a lot in the exchanges. I think that would be extremely unhelpful for Britain.

MPN: Even though Great Britain was not in the eurozone, many people forget that it had been a part of the European Exchange Rate Mechanism, the ERM, before departing in 1992. This departure had, like Brexit, been accompanied by doom-and-gloom scenarios for what the impact on the British economy would be. In reality, how did exiting the ERM impact the British economy at the time?

RB: It’s very funny, this, because I remember extremely well that before Britain left — ”left” is too dignified a word, it sort of fell out of the ERM. What happened in September 1992, the UK Treasury was telling anyone who wanted to listen, and quite a few who didn’t, that we absolutely had to stay in the ERM, because otherwise inflation would soar, interest rates would soar and the economy would go down the tubes.

Various economists, myself included, said this was rubbish and that the opposite would happen, and dare I say it, after Sept. 16, 1992, the Treasury was proven wrong. That’s to say, the currency fell a long way, and exactly as a few of us had said, interest rates would not have to go up. Indeed they fell, inflation carried on falling too, and the economy recovered. After that, there were five years of very strong growth under the Conservatives before Labour won the election in 1997. So that was an earlier occasion where the Treasury forecasts of doom and gloom were proved comprehensively wrong.

MPN: Looking at economic and political developments in Europe, with an emphasis on the upcoming presidential elections in France and the candidacy of Marine Le Pen, who has delivered her own strong Eurosceptic message to French voters, do you believe we are seeing the beginning process of the breakup of the eurozone or the European Union, and how can Brexit serve as a catalyst for this process?

RB: I think we are seeing probably the beginnings of the breakup of the EU. The beginnings of the breakup of the euro were seen some time ago. Of course it hasn’t happened, but the signs are, I think, pretty clear, of the strains, very clear of course in Greece, but also I think more significantly in Italy. Less dramatic, of course, in Italy, but Italy is a much bigger economy, and I think this is more significant for the EU because Italy, of course, was a founding member of the EU. Greece didn’t join until much later.

If Greece ends up leaving the euro, then that is a hammerblow not just to the euro but, I think, to the institutions of the EU itself. Now, it may well be that one of these events, a country leaving the euro or the election of Marine Le Pen, could happen fairly soon, and that would still be early on in the Brexit process, because it will be almost two years until Britain leaves the EU.

But if Italy doesn’t leave the euro, and/or we don’t get Marine Le Pen as president of France, and both the euro and the EU hold together, then I think Brexit is going to play a major role, because then all eyes are going to be on seeing how the UK does outside the EU. Now of course, it’s going to take quite some time for this to be testable. We’ve got the up to two years of negotiations, and I suspect there will be some wobbles and difficulties and short-term problems associated with the business of exit, so it might be a year or two after exit before we can see how the UK is doing.

But if the UK is doing really pretty well after that period, we’re going to see a lot of pressure within the EU for other countries to leave, because then the UK will have gotten out of the free movement of labor, gotten out of the jurisdiction of the European courts without having to pay Brussels these huge annual subventions, and I think a lot of countries will look at this deal and think “oh gosh, I think I rather like that setup.”

MPN: A few years back, you were awarded the Wolfson Prize in Economics for your analysis that showed that any eurozone member state could safely depart the eurozone in an orderly fashion. Could you recap some of the highlights of this proposal for our listeners, and has anything changed in your analysis since then?

RB: I don’t think the essence of the situation or indeed my recommendations for what a country should do have changed at all, but there is a particular relevance to the French situation. What we said was, first of all, don’t be afraid of the fact that the exchange rate for the new currency falls, that the currency is weak immediately after the exit. That is part of the solution, not the problem. You shouldn’t try to stop it, indeed you should encourage it. It’s how you get the combination of reduced burden of debt and increased competitiveness.

We recommended that preparations for this exit should be conducted in secret. If this is not possible, then you have to impose capital controls. You might have to close the banks, which would be a serious worry. You don’t need to be able to issue new currency in order to leave. It takes quite some time for notes to be printed. You can do it without doing that in these days of electronic money. You could do without notes for a while, and indeed you could carry on using euros in the interim before your new notes are available.

You probably will need, in some sense, to default on some of your debt. The aim should be redenominate your national debt into the new currency, the one that’s depreciated, and depending on whether you can do that, it’s going to depend on the precise legal position of the debt. But insofar as you can, that’s what you should do, and the aim should be, through a combination of a reduced debt burden as a share of GDP, and the increased competitiveness, to get a period of economic growth, and from that of course, all sorts of good things will follow.

The connection with the French election is that Marine Le Pen has talked about having a referendum on ditching the euro and bringing back the franc, which is completely different from what we suggested in our Wolfson Prize-winning study. The significance of this is that Marine Le Pen’s proposal is going to cause an awful lot of financial instability. The financial markets aren’t going to wait for the result of the vote, they’re going to act with their feet straight away!

If Marine Le Pen wins, I think you’re going to see substantial capital flight from France even before she announces the referendum, and a lot of money leaving France. I could see a real banking crisis following from that, as people try to get their money out and to put it in, as it were, safer members of the eurozone, principally Germany. There might have to be some sort of capital controls imposed to stop that capital flight and to stop the French banking system from collapsing.

MPN: Looking at economic conditions in Europe today, and specifically in countries such as Greece that continue to enforce a regime of strict economic austerity as prescribed by its lenders, do you believe that exiting the eurozone is still an option for these countries?

RB: I don’t see how Greece can escape from its current situation without a much-devalued exchange rate. Spain is a country that is now recovering, and I think would probably be able to stay in the euro system, although not if Italy leaves and devalues. Italy, especially, and Greece, I don’t see any chance of emerging from their current economic torpor that doesn’t involve leaving the euro.

MPN: In Greece, there are various arguments that are heard against Grexit, ranging from claims that it’s too late and that it is something Greece should have done seven or eight years ago at the onset of the crisis, to arguments that a catastrophic devaluation of the new currency would follow, or that hyperinflation would result, or that Greece would be unable to import vital necessities. How do you respond to these arguments?

RB: There’s no doubt that it would be possible to do Grexit badly, and in the same vein, it’s possible to do Brexit badly. You could make a complete mess of it. There’s no doubt that’s possible. It’s very important, I think, not to let the perfect be the enemy of the good. Yes, there will be difficulties as a result of Grexit, but the most important thing is, it gives hope.

You have to ask yourself what you’re comparing your option with. A country that’s lost something like 25 percent of its GDP, that has a huge proportion of its workforce unemployed, there doesn’t seem to be much hope under the current situation. So I think it’s a bit extreme to say “oh gosh, if Greece left the euro, there would be hyperinflation.” Well, there wouldn’t be hyperinflation at all. If it’s managed properly, there wouldn’t be an uptick in inflation, and that wouldn’t necessarily be all bad, because it would help to devalue the real value of some of the debt.

You’d have to, though, keep this under control. It would have to be well-managed. You would need the effective management of the Bank of Greece and the Greek government to make sure that this was a fairly benign process. That doesn’t mean to say that you can avoid pain. You can’t avoid pain! You’ve had pain for the last how many years in Greece, and this is a country that’s lost 25 percent of its GDP!

Apr 272017
 

By Michael Nevradakis, 99GetSmart

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Dear listeners and friends,

This week on Dialogos Radio, the Dialogos Interview Series will feature a timely interview with award-winning British economist Roger Bootle. Bootle is the founder and chairman of Capital Economics in London, a specialist adviser to the British House of Commons Treasury Committee, a columnist for The Daily Telegraph, the author of “The Trouble With Europe,” and the winner of the prestigious Wolfson Prize in Economics for his proposal titled “Leaving the Euro: A Practical Guide,” proposing how any Eurozone member could depart from the Eurozone in an orderly fashion. Bootle will speak to us about Brexit and the process which lies ahead for Britain, the prospects for Great Britain’s economy going forward, how Brexit will impact the European Union and Eurozone, and his award-winning plan for how any country can exit from the Eurozone and why he believes countries like Greece should depart.

In addition, this week’s broadcast will feature a special interview with Leonidas Babanis, organizer of this year’s Greek Panorama exhibition, set to take place in New York City’s Grand Central Station on from May 11-13. Dialogos Radio is an international communication sponsor for this exhibition, and Babanis will talk to us about what visitors and attendees can expect to find at this year’s event.

Tune in for these two exclusive interviews, plus some great Greek music, on this week’s English-language broadcast of Dialogos Radio! For more details and our full broadcast schedule, visit http://dialogosmedia.org/?p=6880.

Interview with Turkish Journalist Gürkan Özturan Published in Mint Press News

Our interview with Turkish journalist Gürkan Özturan of dokuz8news has recently been published in Mint Press News. In this timely interview, Özturan discusses the Turkish constitutional referendum and the political changes transpiring in the country, the vision of Tayip Erdogan for Turkey, the ongoing conflict with the Kurds, and the stripping away of rights for opposition political parties and journalists in the country.

Find this interview online here: http://www.mintpressnews.com/the-turkish-referendum-and-descent-towards-absolute-rule-interview-with-journalist-gurkan-ozturan/227015/.

Best,
Dialogos Radio & Media

Apr 022017
 

By Michael Nevradakis, 99GetSmart

karousos3-1-300x207The transcript of Dialogos Radio’s interview with economist and analyst Dimitris Karousos. This interview aired on our broadcasts for the week of March 22-28, 2017. Find the podcast of this interview here.

MN: Joining us today on Dialogos Radio and the Dialogos Interview Series is economist and economic analyst Dimitris Karousos, who is a member of the political directorate of Greece’s United Popular Front, and who has enjoyed a long career working for financial institutions within and outside of Greece. Mr. Karousos, thank you very much for joining us today.

DK: Thank you for your kind invitation.

MN: Let’s begin by discussing the recent deal that was reached between the Greek government and its European lenders. The Greek government has engaged in a big PR show, portraying this new agreement as one that will not deliver even one euro’s worth of new austerity measures, as a result of the so-called “equivalent measures” that will be adopted. This begs the question, if the net sum of these new measures is zero, then why enact them? And continuing along this line of thinking, what does the new agreement actually entail and mean for Greece?

DK: As we now find ourselves in Oscar season, it is clear that the Oscar for best director should go to the communications team of the Greek government, as their new dogma which claims that 1+1=0 is one of the most absurd things that the Greek people have heard yet. Indeed, “professor” Tsipras, by claiming that 1+1=0, seems to be reinventing the rules of mathematics. In other words, the government is attempting to claim that for every euro of austerity measures and cuts that will be enacted, there will be one euro in equivalent measures to offset those cuts. This, of course, is a blatant lie, because if there indeed will be no impact, these measures would not be needed.

The Greek government is lying, and this can be demonstrated in three ways. First, the troika—meaning the European Commission, the European Central Bank, and the International Monetary Fund—is not discussing the possibility of cuts in the special property tax and the value added tax, and indeed is not even allowing these issues to be brought to the negotiating table.

Second, the troika, instead of tax cuts, is insisting on the enactment of the so-called Juncker growth package, named after the president of the European Commission Jean-Claude Juncker. This package is essentially the European Union’s Partnership Agreement, known as ESPA, but this is not a true replacement because Greece already qualifies for funds from this agreement regardless. Therefore, somebody needs to explain how low wage earners who are now faced with a lower tax-free threshold and will be forced to pay taxes, or how pensioners who will face further cuts to their pensions, will benefit from the European Union’s Partnership Agreement, which in the first place has nothing to do with this group of people, since it is concerns only entrepreneurs and supposedly offsets these cuts.

Third, whatever “equivalent” measures are agreed upon will only begin to be enforced if and only when Greece has fully and successfully enacted new cuts to wages and pensions, as foreseen in the new austerity package with 3.6 billion euro worth of cuts.

MN: The deal which was recently reached foresees the achievement of a primary budget surplus of at least 3.5% of the Greek GDP in 2019, while we are also hearing that Greece’s primary surplus for the month of January surpassed targets. Is this a good thing, however? Are primary surpluses a positive thing for a country like Greece, with the economy in the state that it is in?

DK: Here, we should first make it clear that no economy which has found itself in a similar condition to that of Greece has been able to recover through the enforcement of strict austerity and the pursuit of surpluses.

The economists Barry Eichengreen and Ugo Panizza, in a study of theirs, examined 235 countries and found that there were only 36 cases of countries which were able to maintain, for a five year period on average, a primary budget surplus of at least 3 percent of GDP, representing 15 percent of the total sample. In the same study, they found that there were only 17 cases of countries which, over an average of eight years, maintained a primary budget surplus of at least 3 percent of GDP, representing just 9 percent of total cases. There were only 12 cases of countries which, over a ten year period, maintained a primary budget surplus of at least 3 percent of GDP. It should be noted that Germany, the strongest economy in Europe, was not one of these countries!

In other words, they are asking Greece to achieve something that not even an economy at the level of Germany’s has been able to ever achieve! It should also be added that Eichengreen and Panizza note that extraordinarily strict fiscal policies—austerity in other words—with the goal of achieving a high primary budget surplus, may in fact achieve the opposite results, leading to recession and to political and social turmoil. These policies, in other words, may lead to the opposite outcome from that which is intended.

MN: With this new agreement which has been reached, do you believe that the risk of a so-called Schauble-style Grexit has been averted, or does it remain a distinct possibility? And continuing on that frame of thought, what would this German-proposed Grexit, which would include the imposition of a dual or parallel currency, mean for Greece?

DK: Not only has the threat of a Schauble-style Grexit and the imposition of a dual or parallel currency not been surpassed, but I believe it remains the plan that will be put into place. I believe that the following will happen: once the Greek government completes the so-called “troika review” of its finances with an agreement for new austerity measures totaling 3.2 to 3.6 billion euros, the troika will break up the next installment of so-called “bailout” funds into sub-installments. Once the German elections have occurred, then a fake “crisis” between Greece and its creditors will be orchestrated, and that is when the Schauble plan, named of course after the German finance minister, will be imposed. This plan would entail Grexit and the imposition of a dual or parallel currency within Greece.

The circulation of a dual or parallel currency will mean an even more rapid internal devaluation and will signify the immediate impoverishment of the Greek populace. There will be one currency used for internal transactions, such as the payment of salaries and pensions, while whatever euros are still in circulation will be collected and used towards the payment of the national debt, which will continue to be denominated in euros.

This would be a terrible development for Greece, as this dual or parallel currency will face constant devaluation versus the euro, as it will not be hard currency and nobody will want it. If you go to the greengrocer or the bakery, for instance, they might accept the dual currency at an exchange rate far lower than the official peg set by the government. The black market for euros will flourish and the economic catastrophe will be total and complete. The introduction of what will essentially be an IOU, or script, will not only completely destroy the Greek economy but it will also discredit the idea of a national, domestic currency in the eyes of the populace.

MN: Something which, of course, is not frequently discussed by analysts, journalists, and by the mass media in general is the difference between a dual or parallel currency on the one hand, and a national domestic currency on the other hand. What is the distinction and why is one better than the other?

DK: The differences are as follows. By definition, a parallel or dual currency means that there is a different currency in use for domestic transactions, from that which is used for external transactions. A national or domestic currency, on the other hand, is a currency that is issued by a nationalized central bank, such as the Bank of Greece, which would be completely state-owned. With a domestic currency, Greece would not be borrowing the currency that it will put into circulation, it will instead mint the currency itself. It is a wealth instrument, not a debt instrument. Furthermore, a national or domestic currency means that the state itself, because it mints its own currency, does not borrow it from any other central bank.

MN: Explain for us the steps which Greece could follow in order to undertake an orderly departure from the Eurozone and return to a true domestic currency. How could the various dangers that we keep hearing about, such as the risk of hyperinflation or a catastrophic devaluation of the new currency or a difficulty in importing goods, be averted?

DK: The political party which I am a part of, the United Popular Front, also known as EPAM, has described, in detail, 15 necessary steps which are required in order for a smooth transition to take place to a new national, domestic currency.

Every step in this process is absolutely necessary, and no steps can be skipped, as it will impact the entire transition to a domestic currency. The most important of these steps are as follows:

First, disputing the legality of the debt and declaring an immediate stoppage of payments.

Second, declaring the immediate cancelation of all of the memorandums and associated legislation which completely altered the legal and political status of the Greek state and imposed the troika-led occupation.

Third, departure from the European Union and the Eurozone.

Fourth, the imposition of a national, domestic currency.

Fifth, the nationalization of the Bank of Greece, the country’s central bank.

Sixth, the imposition of capital controls in order to prevent money from leaving the country.

Seventh, the liquidation of Greece’s four major banks, while these banks remain in operation.

Eighth, enacting measures to ensure that transactions are able to take place smoothly during the period of transition to the new currency.

Ninth, ensuring the adequate supply of goods in the marketplace.

Tenth, protecting consumers and vigorously policing the marketplace and the prices of goods.

Eleventh, immediately restoring wages and pensions to pre-memorandum levels.

Finally, implementation of “seisachtheia,” an ancient Greek precedent which refers to the forgiveness of the debts of households, as well as small- and medium-sized businesses.

MN: Let’s tackle these issues one at a time… How has Greece’s membership in the European Union since 1981 and in the Eurozone since 2002 impacted Greece’s productive and industrial capacity? And, as a second part to this question, is there any possibility of Greece’s agricultural or productive or industrial capacity increasing within the European Union and within the Eurozone?

DK: There is absolutely no chance of recovery for the Greek productive sector and Greek industry as long as the country remains within the European Union and the Eurozone, especially when harsh austerity and the memorandums are being imposed. How can industry recover when taxes and pension fund contributions surpass 60 percent of a corporation’s revenue? How can the Greek economy recover when its biggest industry, tourism, is saddled with the highest tax rate in the Mediterranean region? How can the Greek economy recover when there is so much bureaucracy and political uncertainty?

The end result of all of this is that Greece’s competitiveness has dropped to 86th place worldwide, despite all of the austerity measures, the memorandums, the economic “growth” which repeatedly has been promised, and the constant “fiscal adjustment” policies and “reforms” that have been enacted. Despite all of this, Greece now ranks lower in competitiveness than countries such as Namibia, Tajikistan, Albania, and Guatemala.

MN: You have spoken about the balance of goods and services in Greece and about Greece’s foreign currency reserves. What do these statistics show and what would they mean for Greece in terms of a potential departure from the Eurozone and the EU and return to a domestic currency?

DK: There is no possibility that there will be shortages of imported goods, and this is the case because Greece’s balance of goods and services, after so many years of economic depression and as a result of the internal devaluation that has taken place, is close to being balanced. In very simple terms, this means that Greece, from its exports, tourism, and shipping sectors earns all of the necessary foreign currency which it needs to pay for all of its imports. Therefore, it follows that there will be no shortage of imported goods.

In addition, according to the most recent figures available from the Bank of Greece from the third quarter of 2016, the central bank has in its reserves foreign currency totaling approximately 31.5 billion euros. At the same time, Greece’s banking system has, among its assets, a long-term foreign bond portfolio totaling 55.7 billion euro. Together, this totals almost 87 billion euros, which could be used as foreign currency reserves in the immediate aftermath of the departure from the Eurozone. Therefore, it is easy to understand that there is no chance of there being any shortages in the marketplace and that Greece’s needs would be met for several years to come.

MN: There is, of course, also the Greek public debt to contend with. Is this debt sustainable, to begin with? What would you propose regarding dealing with the debt, and what does international law and international legal precedent have to say, with regards to actions Greece could implement regarding its debt?

DK: Very much on purpose, the Greek people have been led to believe that an “unsustainable” debt is one which is very difficult to repay, but which can, at some point and after the enactment of very strict measures, be repaid. This is absolutely false! We have been led to believe this because, first of all, it has been necessary to maintain the hope that Greece, by enforcing these harsh austerity measures, will be able to repay its debt and will, as a result, accept these difficult measures.

In reality, an unsustainable debt is a debt which, no matter what a country does, cannot ever be repaid or even reduced, no matter how many measures are enforced. With mathematical certainty, such a debt will simply increase over time. This is the case in Greece. When Greece received its first so-called “bailout” the public debt was 122 percent of GDP. From 122 percent it increased to 129 percent, then 148 percent, then 170 percent, it has reached 177 percent, and is projected to increase to 188 percent and later 200 percent of GDP if we continue down this path!

The first loan agreement which Greece signed in 2010 and which, it should be stressed, was not ratified by the Greek Parliament, was a product of fraud and coercion. Articles 48 through 52 of the UN’s Vienna Convention on the Law of Treaties allow for the cancelation of a treaty or agreement when it is a product of deceit or threats. This would permit Greece, with a written statement delivered to the UN General Assembly via the UN’s Secretary General, to announce to the international community that it is denouncing its illegal public debt.

In addition, the official report of the United Nations Commission on Human Rights (UNCHR) which was published on its website on the 7th of March 2014, harshly criticizes the Greek government for its methodical and repeated violations of human rights, and specifically the individual, political, economic, social, and cultural rights of Greece’s people.

MN: In our previous interview, in January 2016, we spoke about the recapitalization of the Greek banking system which had just been completed. In what condition does the Greek banking sector find itself in today? Are we headed to yet another recapitalization, and what would such a development mean?

DK: I would argue that the Greek banking system now finds itself in worse shape than in the beginning of 2016, if we take into consideration something which the mass media and most analysts typically neglect to tell us, namely, that the deferred tax accounts for 40 percent of the equity of Alpha Bank, 71 percent of the equity of the National Bank of Greece, 75 percent of the equity of Eurobank, and 58 percent of the equity of Piraeus Bank. This alone means that a new recapitalization is coming.

Moreover, another negative and indeed tragic aspect is that, from the beginning of this year, 1.5 to 1.7 billion euros’ worth of new high-risk loans have been added to the banking system. These loans include mortgages, consumer loans, and business loans, and 80 percent of these loans have been refinanced.

In addition, 2.7 million loans, totaling almost 100 billion euros, are at the risk of default, as payments towards those loans have not been made in over three months. This is a ticking time bomb for the financial system. While this is happening, the deposits of households and individual depositors in Greece have dipped below 100 billion euro for the first time since 2003!

It is therefore clear to me that we will soon see a new recapitalization of the Greek banking system, totaling 7 to 10 billion euros.

MN: How has the British economy performed ever since the referendum result in favor of Brexit this past summer, and how do you believe the British economy will perform if and when the process of exiting the European Union is completed? Do you believe the widely-held fears of adverse economic impacts will be proven to be correct, or do you believe the opposite will be true?

DK: Even though it is surely too soon to draw a definite conclusion, what we can say from now is that in contrast with the various “Cassandras” who foresaw the total collapse of the economy of Great Britain, what we are seeing is that the British economy grew by 0.6 percent in the final quarter of 2016, exceeding expectations.

In fact, the Bank of England once again revised upward its growth projections for the British economy for 2017, raising its projection from 1.4 percent of GDP, initially forecast in November 2016, to a growth rate of almost 2 percent of GDP. The higher projection is largely a result of increased consumer spending, which has occurred despite the fear mongering that the British public faced as a result of the Brexit vote.

Two additional aspects that are important and which should also be noted is the reduction of the public deficit by 400 million Pounds and the increase in average weekly wages of British workers by 2.8 percent on a year-to-year basis.

MN: The new president of the United States, Donald Trump, seems to have taken a position in favor of Brexit and against the Eurozone, displaying an evident preference for reaching bilateral trade agreements with individual countries, rather than large-scale trade deals with the Eurozone as a whole. On a domestic basis, Trump has promised the return of domestic jobs, of factories and corporations and businesses that have left the country. How do you view the economic policies and promises of the Trump administration and what would they mean for the European and global economies?

DK: The turn inward being undertaken by the United States will gradually lead to the repatriation of U.S. dollars. As a result, it is likely that countries whose national debt is in large part denominated in U.S. dollars, as is the case with Turkey, where 65 percent of its debt as a percentage of GDP is in dollars, as well as developing countries whose major public- and privately-owned industries have outstanding loans in U.S. dollars, will face increased difficulties from the upward pressures on the dollar in the international financial markets.

In addition to all of this, we need to take into consideration the ongoing trade battle between the United States and China, and the efforts of the United States to achieve energy autonomy, and in particular, the elimination of dependence on the OPEC nations. This means the replacement of approximately three million barrels of oil per day which are currently imported, replaced by domestic energy sources. It is easy to understand that this will hurt countries like Saudi Arabia and Venezuela in particular.

As for Trump’s domestic economic policy, the jury is still out. We will just have to wait and see.

MN: Well Mr. Karousos, thank you very much for taking the time to speak with us today here on Dialogos Radio and the Dialogos Interview Series, and for your thoughtful analysis.

DK: Thank you very much for having me.

Mar 242017
 

By Michael Nevradakis, 99GetSmart

20110629_Moutza_demonstrations_Greek_parliament_Athens_GreeceThe votes for Brexit and for Donald Trump are the result of some Russian plot but are a necessary rebellion against a corrupt neoliberal globalist order amongst just of of whose crimes is the economic strangulation of Greece.

It’s a typical winter’s evening in Athens. This has been a cold winter, and the air is brisk. And wherever I go, the sweet smell of “success” is in the air. By “success” I am referring to none other than the vaunted “European dream,” and the “success story” of the Greek economy, as described by Greece’s former prime minister Antonis Samaras in late 2014, and as often repeated—even if not in those exact terms—by Greece’s “first time left” prime minister, Alexis Tsipras, far more recently. That scent of success comes from the noxious fumes of the fireplaces and makeshift furnaces which newly impoverished Greeks have lit to keep warm, since well over 80 percent of households are said to be unable to afford absurdly taxed heating oil for their homes.
Elderly woman scavenging for food in a rubbish bin in the middle class Athens suburb of Elliniko. In January, a high-level SYRIZA government minister stated that “he no longer sees people searching the garbage for food.” Photo Credit: Antonis Pothitos

Elderly woman scavenging for food in a rubbish bin in the middle class Athens suburb of Elliniko. In January, a high-level SYRIZA government minister stated that “he no longer sees people searching the garbage for food.” Photo Credit: Antonis Pothitos

This piece though is not meant to be about Greece, but about the United States, the anti-Russian hysteria that has taken hold, and the attacks that the newly inaugurated Trump administration is facing from protesters, the media, and the “deep state.” What does all of this have to do with Greece though? Everything. Crisis-stricken Greece represents a microcosm of what is transpiring in the United States and much of Europe today, and offers a useful lens through which to analyse current developments.

Living in Greece over the past four-plus years, I’ve had the opportunity to view politics and economics from a different lens, one far removed from warm-and-fuzzy claims about the “European dream” or the utopian vision of “open borders” and “freedom of movement.” Greece is a country which has been ravaged by EU and IMF-imposed austerity, its economy and domestic production decimated by EU rules and regulations such as the common agricultural policy, and a country which has been inundated with far more migrants than it could realistically absorb, even during more prosperous economic times.

Indeed, the hypocrisy has been astounding. Greece and the Greek people have been blamed for being “racist” and “xenophobic” to migrants that have entered the country simply due to its geographical location and as a result of wars and conflicts which other countries have fuelled. Greece has been accused of “living beyond its means” when its welfare state was never as well-developed or generous as those of Northern Europe and where average incomes have perpetually lagged behind most countries of Northern and Western Europe. The Greek governments of the post-junta period were accused (correctly) of being corrupt, but the EU openly supports those same political parties (New Democracy, PASOK, and the current governing coalition of SYRIZA and the Independent Greeks, which are home to many ex-PASOK and ex-New Democracy MPs) due to their unabashed pro-EU, pro-Eurozone stance. Greece is accused of not producing anything, when it is during the years of EU and Eurozone membership that Greece’s domestic industry and agricultural production were decimated, as Greece’s market was flooded with German imports and Brussels bureaucrats told Greek farmers what to grow, what not to grow, and where they could or could not export their produce.

On a visit to EU and NATO headquarters in 2013 as part of an official academic program, the contempt  with which Brussels technocrats viewed Greece and the other countries of the “European south” could barely be contained. We were told that Mario Monti—Italy’s prime minister at the time, who was not elected but instead appointed at the behest of the EU—was the “best thing that ever happened for Italy.” We were told that Mussolini “got the job done.” We were told, in these exact words, that the reasons for the European financial crisis were “Bad design. Bad luck. Bad decisions. Greece.” Or as EU trade commissioner Cecilia Malmström is alleged to have said she “does not receive her mandate from the European people,” and as Dutch finance minister and Eurogroup head Jeroen Dijsselbloem said more recently, the people of southern Europe blew their cash on women and booze and are therefore not deserving of help. Such is democracy and solidarity in the Nobel Prize-winning EU.

Therefore, when the referendum result in favour of “Brexit” prevailed in Britain, I was overjoyed. The European Union that I had seen, lived, and experienced was undemocratic, authoritarian, and brutal. In Greece, however, a historical inferiority complex vis-à-vis the “west” fostered an attitude of learned helplessness and dependence on the EU, without which Greece could supposedly not survive. Hence, it was refreshing to see voters in another EU member-state stand up to Brussels.

This, however, was not the prevalent view in the European or North American news media, which reacted in contempt, horror, and disgust at the referendum result. In the United States, snarky late-night television comedians, pandering to the supposedly “progressive” and “hipster” crowd, joined the news media’s chorus in describing the Brexit referendum result as the product of racism and xenophobia. No mention about austerity, about incomes and pensions that had been slashed in half in Greece, of previously middle class households unable to heat their homes and burning whatever they could find instead. The EU was, and continues to be, widely described as a “force for peace,” its open borders touted as a sign of “progress.” On her recent visit to Washington, German Chancellor Angela Merkel, one of Europe’s harshest pro-austerity hard liners, was referred to by the pro-Hillary, pro-globalist Politico as “the leader of the free world.” Unabashedly displaying its globalist world view, the popular feminist website Jezebel previously referred to Merkel as the “last pillar of liberal democracy in Europe.”

For those keeping score, websites like Politico and Jezebel are touting the European Union, and the chancellor of Europe’s strongest economy, Germany, as the last bastions of democracy and freedom not just in Europe, but worldwide. The same Germany which has inflexibly insisted on the continued, harsh imposition of inhuman austerity measures in Greece and the other countries of the European South, measures which have been found, repeatedly, to violate the basic human rights of the citizens of Greece and other countries. All the while, Germany has benefited handsomely from an economic point of view—both from the returns it is receiving on the loans it has imposed on Greece and from the brain drain of the European south, with many educated young people from Southern Europe finding their way to Germany. The same Germany whose finance minister Wolfgang Schäuble, who apparently is also the finance minister of Greece and Spain and Portugal and Italy, has said “[e]lections change nothing. There are rules.” This is same Germany that has remained completely inflexible on the issue of Greece’s debt, and this is the same Germany who we are told is the “leader of the free world.”

So Germany has been whitewashed and thrust into the role of world leader of peace, justice, freedom, and democracy by the same global media empire which openly and unabashedly supported Hillary Clinton in the U.S. presidential elections and insisted, ad nauseam, that she would easily defeat Donald Trump. The United States, of course, can no longer fulfil the role of so-called “leader of the free world,” in the eyes of the media, because the “fascist Russian agent” Trump is president instead of the honourable Secretary Clinton, who once cackled on TV, “we came, we saw, he died.” Oh, but I forgot, when it’s your guy or gal fighting wars and killing sovereign leaders overseas, it’s okay. That must explain why the “antiwar” movement went extinct right around the time that Barack “hope and change” Obama became president. That must also explain why George W. Bush, whose administration invaded Afghanistan and Iraq on false pretences, has, just like Merkel, been whitewashed, as evidenced by his recent appearance on “Ellen” which we were told would make us “warm up” to him. After all, he purportedly hates Trump and Putin—therefore he must not be that bad of a guy!

Similarly, when Obama deported record numbers of illegal immigrants from the United States, when he bailed out banks responsible for the economic collapse of 2007-2008 and refused to prosecute even one of banker but instead prosecuted whistleblowers, when he waged seven wars and dropped over 20,000 bombs from drones and failed to shutter the detention camp at Guantanamo Bay, he too was whitewashed. Indeed, he was awarded the Nobel Peace Prize and gets to dine with celebrity social justice warriors such as Bono, whilst receiving star treatment wherever he goes. When he referred to the “57 states” of the U.S., just like when representative Maxine Waters referred to Putin’s invasion of “Korea,” the media gave a free pass—no “Bowling Green” treatment for them!

For those with their eyes open all these years, it is easy to realise that not only were the U.S. and international media subservient and compliant during the eight years of the Obama administration, but they also never hit the Bush administration nearly as hard as they hit Trump. At best, Bush’s “bushisms” served as late night TV comedy fodder, downplaying their seriousness. I clearly remember the same media in lockstep with the Bush administration on the Afghanistan and Iraq war marches, while voices who dared to oppose these invasions were canned in short order, even by the purportedly “liberal” MSNBC. Remember Phil Donahue? Me either.

At that time, not only was there a (supposed) “antiwar movement,” but there were also many activists decrying the media’s hawkish slant and the concentration of media outlets in the hands of a few huge corporations. Just like the “antiwar movement,” those voices of dissent against the “corporate media” have shut up now. With the media attacking Trump 24/7, fearmongering non-stop over the “Russian menace” and the “tyrant” Vladimir Putin—whom we are told rivals only Trump in his resemblance to Hitler—and with anyone who dares to support Brexit or the elimination of “free trade” agreements such as TPP and TTIP which would place multinational corporations above any domestic law denounced as a “fascist” and “racist” and “xenophobe,” the very same ex-activists have become the biggest shills and cheerleaders for the very same corporate media which they once loudly decried. 

Take Brexit as a case in point. Those who chose to take back the sovereignty of their country and to speak out against the unelected supranational German-dominated behemoth in Brussels have been branded as “racists” and “nationalists” and “xenophobes.” These are the “scarlet letters” of today’s “progressive” and globalist age. No one cares that many of these voters are not racist, but are very much concerned about the fact that they do not have jobs or are unable to support themselves and their families with their current dead-end employment, that the economy and infrastructure of their country is crumbling, and that there is additional downward pressure being placed on their wages and on the social state through the importation of cheap, “flexible” labor from countries who have been torn apart as a result of western-imposed war and conflict, such as in Syria. Countries that are, in other words, war-torn and impoverished with the support of the very same people who are clamouring for “open borders” and who are, without a hint of irony, branding their opponents as “racists” and “xenophobes.” Because that’s what it’s all about: foster crisis, force people to flee, and use their desperation to pit them against the poorer classes in your society, to drive wages down and profits up. That’s what the whole idea behind “open borders” and “refugees welcome” and creating the conditions which lead to refugees and the brain drain is all about, in case you haven’t realised it.

There are protests, of course. Protests in favour of uprooting populations, creating migrants and refugees, providing them special privileges and decimating the working class and the middle class some more. Protests in favour of the austerity-driven Eurozone and EU. Protests which sprung up like magic the moment Donald Trump became president, when for the past eight years, there was hardly any protest against austerity in Europe, or war and drone strikes in the Middle East, or the record numbers of deportations under Obama’s watch. We’re supposed to believe that tens of thousands of protesters in all corners of the United States, for instance, were able to obtain pink hats in short order and were able to coordinate and to “send a message” to Trump—before he even entered the Oval Office.

Here, it is important to remember that there are three components to every protest: what is being protested against, what is being advocated for as an alternative, and who is organising the protest (and what their ulterior motives may be). It’s no coincidence, therefore, that antiwar protests during the eight years of Obama’s reign barely registered a blip on the radar—and were thoroughly ignored by the mass media—but protests during the two months of Trump’s presidency have enjoyed abundant and positive media coverage. To share an example from Greece, rallies that were organised in the lead up to the country’s July 2015 referendum on accepting an EU-proposed austerity package and which were in favour of a “no” vote drew hundreds of thousands of people, despite having only a few days’ notice of the referendum. Following the referendum, when the “no” vote which prevailed was thoroughly betrayed by the SYRIZA-led coalition government, participation at protests against this betrayal numbered a few hundred people, tops. The reasons should be obvious to anybody with their eyes open. And to add to this, the “leftist” SYRIZA government gets a pass, its betrayal excused away as the result of being “blackmailed” by the EU. In the same breath, SYRIZA’s globalist apologists then tell us that Greece must remain in the EU “at all costs” and what a great, noble thing the EU’s “open borders” and “free movement of peoples” is, and how Greece will collapse and die if it leaves the euro. Political schizophrenia at its finest.

If you’re protesting something because you wish to return to the previous status quo, where you turned a blind eye to everything you now claim to be protesting, then you are disingenuous and hypocritical (at best). One should also never forget to also ask, where’s the money and logistical support and the perfectly crafted slogans and hashtags and the massive amounts of pink hats coming from. Answer that and you also answer what is actually being advocated and who is organising these protests.

Personally, I’ll never forget the disappearance of the “antiwar” movement after Obama was elected, the support of Democrats and many alleged “progressives” for the bombing and destruction of Serbia and the dismantling of the Balkans (under the watch of Bill Clinton), their blind support of the grossly undemocratic EU and the despicable branding of anyone opposed to it as a “racist” and “xenophobe,” and the silence when “hope and change” was bailing out major banks while ordinary people of all colours were losing their homes and 20,000 bombs were being dropped across seven wars that were being waged. All of this while the media and while most “activist” groups remained silent. Now suddenly Trump is the problem?

Anyone who truly is concerned about human rights, instead of blindly parroting the “open borders” and “refugees welcome” agenda, should ask themselves why there are refugees in the first place, and who started and who is perpetuating the conflict that is forcing them to flee. And anyone who is truly concerned about democracy should ask themselves if majorities of people in several countries suddenly became fascists overnight, or if there are other, legitimate reasons why they do not support “free trade” or “open borders” or supranational institutional behemoths such as the EU.

To be clear, this isn’t an endorsement of Donald Trump. But it also is not an endorsement of the McCarthyite witch hunt, the media hysteria and scaremongering against Russia, or their pro-Hillary and pro-Obama and pro-EU propaganda. Moreover, it is not an endorsement of the incumbent establishment. What more evidence is needed to see that there’s no such thing as Democrats and Republicans, for instance? There’s an incumbent neoliberal establishment, defended by the corporate mass media and its “presstitutes,” by the military-industrial complex, and by elite billionaires, and there are those who stand in its way, or who are perceived as standing in its way. 

Which side are you on?

Mar 102017
 

By Michael Nevradakis99GetSmart

mercouris2-300x201This week on Dialogos Radio, we will be featuring, as part of the Dialogos Interview Seriestwo special interviews!

First, we will have the opportunity to speak with journalist, analyst, and longtime lawyer in the Royal Court of the United Kingdom Alexander Mercouris, co-founder of TheDuran.com. Joining us from London, Mercouris will provide his insights for us on a number of current issues, including the latest actions of the Trump administration, the path towards Brexit in Great Britain, anti-Russia hysteria and the establishment media’s agenda, developments in the Ukraine and Syria, and a view on the Greek government’s latest deal with its creditors and what continued austerity means for Greece.bellows

This interview will be followed up by a special feature with young Greek spoken word artist Dylan Wolfram, who will speak to us about his latest spoken word release, titled “Bellows.” In addition to this interview, we will hear two cuts from Wolfram’s recent spoken word project.

Two great interviews, all this week exclusively on Dialogos Radio and the Dialogos Interview Series!