* THE FINAL WORD ON 2011: A YEAR IN REVIEW BY LEE CAMP
* END OF THE PRO-DEMOCRACY PRETENSE
By Glenn Greenwald, Salon
Media coverage of the Arab Spring somehow depicted the U.S. as sympathetic to and supportive of the democratic protesters notwithstanding the nation’s decades-long financial and military support for most of the targeted despots. That’s because a central staple of American domestic propaganda about its foreign policy is that the nation is “pro-democracy” — that’s the banner under which Americans wars are typically prettified — even though “democracy” in this regard really means “a government which serves American interests regardless of how their power is acquired,” while “despot” means “a government which defies American orders even if they’re democratically elected.”
It’s always preferable when pretenses of this sort are dropped — the ugly truth is better than pretty lies — and the events in the Arab world have forced the explicit relinquishment of this pro-democracy conceit. That’s because one of the prime aims of America’s support for Arab dictators has been to ensure that the actual views and beliefs of those nations’ populations remain suppressed, because those views are often so antithetical to the perceived national interests of the U.S. government. The last thing the U.S. government has wanted (or wants now) is actual democracy in the Arab world, in large part because democracy will enable the populations’ beliefs — driven by high levels of anti-American sentiment and opposition to Israeli actions – to be empowered rather than ignored.
So acute is this contradiction — between professed support for Arab democracy and the fear of what it will produce — that America’s Foreign Policy Community is now dropping the pro-freedom charade and talking openly (albeit euphemistically) about the need to oppose Arab democracy. Here is Jon Alterman, the director of the Middle East program at the Center for Strategic and International Studies and a very typical member of the National Security priesthood, writing on Friday in The New York Times about Egyptian elections (via As’ad AbuKhali):
Many in Israel and America, and even some in Egypt, fear that the elections will produce an Islamist-led government that will tear up the Egyptian-Israeli peace treaty, turn hostile to the United States, openly support Hamas and transform Egypt into a theocracy that oppresses women, Christians and secular Muslims. They see little prospect for more liberal voices to prevail, and view military dictatorship as a preferable outcome.
American interests, however, call for a different outcome, one that finds a balance — however uneasy — between the military authorities and Egypt’s new politicians. We do not want any one side to vanquish or silence the other. And with lopsided early election results, it is especially important that the outcome not drive away Egypt’s educated liberal elite, whose economic connections and know-how will be vital for attracting investment and creating jobs.
Our instinct is to search for the clarity we saw in last winter’s televised celebrations. However, what Egyptians, and Americans, need is something murkier — not a victory, but an accommodation.
I love this passage both for its candor and for what it lamely attempts to obfuscate. Why should “American interests” determine the type of government Egypt has? That it should is simply embedded as an implicit, unstated assumption in Alterman’s advocacy. That’s because the right of the U.S. to dictate how other nations are governed is one of the central, unchallenged precepts of the American Foreign Policy Community’s dogma and it thus needs no defense or even explicit acknowledgment. It simply is. It’s an inherent imperial right.
But Alterman here is expressly admitting the reality that most media accounts ignore: that the U.S. does not, in fact, want democracy in Egypt. It fears it. That’s because public opinion polls show overwhelming opposition among the Egyptian populace to the policies which the U.S. (for better or worse) wants to foist on that country: animus toward Iran, preservation of the peace agreement with Israel, ongoing indifference to the plight of the Palestinians, and subservience to U.S. goals. Indeed, according to the 2011 Pew finding, “nearly eight-in-ten Egyptians have an unfavorable opinion of the U.S.” That tracks opinion in the Arab world generally, where the two nations perceived as the biggest threat are — by far — the U.S. and Israel (not Iran), and the three most admired foreign leaders are Turkish Prime Minister Recep Erdogan, followed by Hugo Chavez and Mahmoud Ahmadinijad.
But even more significant is Egyptian public opinion specifically on the issue of greatest concern for American (and Israeli) foreign policy officials: a nuclear Iran. A 2010 Brookings/University of Maryland/Zogby poll found vast, overwhelming Egyptian support for the view that Iran has the right to have a nuclear weapon, and for the view that a nuclear Iran would be a net positive for the region. That, too, tracks general public opinion in the Arab world, which supports Iran’s right to have nuclear weapons. In light of these facts, does anyone believe that the U.S. government and its pool of experts that exist to justify what it does — the Foreign Policy Community — have even a slight interest in actual democracy in Egypt specifically or the Arab world generally?
Of course not. As Noam Chomsky put it recently: “The U.S. and its Western allies are sure to do whatever they can to prevent authentic democracy in the Arab world” because “if public opinion were to influence policy, the U.S. not only would not control the region, but would be expelled from it.” […]
* 2011: THE YEAR OF RESISTANCE TO CONSERVATISM’S “WAR OF WORDS”
By Richard (RJ) Eskow, Nation of Change
Our lives are defined by invisible wars, wars whose theater of combat is the human imagination. These economic and political wars are waged year in and year out, decade after decade, century after century.
Words are the weapons of choice in these wars, and the corporate-backed radical right adds new ones to its arsenal every year. This year was no different. From “entitlement reform” to “triggers,” the corporate oligarchs couched their aggression in decoy language that made it possible for Democrats as well as Republicans to launch them on an unsuspecting public.
But something was different this year. This was the year that the people came up with some words of their own, outside the corporate- and billionaire-funded think tanks of conservatism. For the first time in many years, the right-wing warriors of language ran into heavy resistance. That’s an important development that should be celebrated — and repeated.
War of the Words
The corporatists own the Republican Party, and large swathes of the Democratic Party too. Most Americans disagree with their ambitions, but they’ve been so good at designing and using these linguistic weapons that the public hasn’t had a chance. Major media journalists have used these words as mantras, while too many Democrats have embraced them for their own selfish purposes.
That’s why they keep winning so many battles, no matter who’s in power.
Some people make the mistake of underestimating the importance of these wars, because they’re fought with words and not actions. But people’s actions are shaped by what they believe, and what they believe is shaped by words.
Nobody understands that better than the corporate interests and their minions. That’s why Newt Gingrich wrote a political memo in 1996 entitled, “Language: A Key Mechanism of Control.”
Now there’s a word that should strike fear in the heart: “Control.”
For the past five decades our national dialogue — and therefore our thinking — has been warped by the use of words as weapons of economic war. From “death tax” to “job creators,” the public has been saturated with prefabricated words and phrases that reshape the thinking of millions of people in an Orwellian way.
Teachers, police, bus drivers and firefighters became “special interests” while mega-corporations became “people” who were being “deprived of their rights.” The values that had inspired all of our nation’s leaders for a century, Republican and Democratic, were suddenly “radical,” “extremist” and “treasonous.”
And rather than resist, Democratic leaders like the Clintons and Barack Obama chose to embrace too many of these inversions in order to serve their own ambitions, a Faustian bargain with terrible implications. (And as it turns out, not a very good way to pursue their own ambitions either — unless you have an Internet bubble or housing bubble to sustain the illusion that “centrism” works.)
There are times when compromise is needed. But you don’t need to reinforce your enemy’s false ideas in order to compromise. With every Democratic concession to corporate-designed Orwellianisms the struggle to create a more effective society suffers another defeat.
Weapons of 2011
The language factories of the Right have been working overtime over the last couple of years to destroy public faith in Social Security and Medicare, destroy the government’s ability to stimulate the economy when it’s needed most, and absolve our political leaders of responsibility for their own actions.
What were the Right’s favorite word-weapons of 2011? Here are a few of the big ones:
“Entitlement Reform:” This phrase is used over and over to describe proposals that would “reform” nothing, but instead would gut the highly popular programs that support seniors and the disabled — Social Security and Medicare. The use of the word “entitlement,” along with the formulation that seniors who collect money from a program they’ve contributed to all their lives are “greedy geezers,” is designed to persuade the public that an elderly woman living on $800 per month is a social parasite – but the hedge fund manager who pays 15% tax rate on his billions is not.
It made some people uncomfortable when we wrote that “Entitlement reform” is a euphemism for letting old people die, but we cited extensive studies that support exactly that conclusion. […]
* ARRESTS AT WHITE HOUSE OVER NDAA MILITARY DETENTION OF AMERICANS, OCCUPY WALL STREET JOINS FIGHT
By Ralph Lopez, War Is A Crime
Buried by the television news media but visible on Youtube, at least three days in a row of protests over NDAA law allowing indefinite military detention of American citizens without charge or trial have taken place recently, with at least 11 arrests confirmed so far.
Fox News reported on its website:
WASHINGTON – Several Occupy D.C. protesters will likely face charges after they were arrested in a protest outside the White House.
U.S. Park Police say 11 protesters were arrested Monday night because they ignored police orders to leave the grounds. The protesters included some Occupy D.C. participants, though it wasn’t immediately clear if all those arrested were part of the Occupy movement.
The group was protesting a defense funding bill that would allow the president to detain people indefinitely if they are suspected of terrorist activities.
The Youtube poster of the below video says in the upload information:
Protesters out in front of the white house for the 3rd night in a row. NO news coverage. Arrests taking place every night, 11 last night, 7 tonight so far.
In the video the Occupy Wall Street protesters (this can be determined by use of the “human microphone”) demand Obama veto the bill, as the video was taken before Obama signed it last week.
Language in the NDAA is intended to allow defenders to argue that the provisions do not apply to American citizens, language which Rep. Justin Amash (D-MI) called “carefully crafted to mislead the public.”
The deceptions center around Sections 1021 and 1022. Section 1021 says in substance:
“Congress affirms that the authority of the President to use all necessary and appropriate force …to detain…A person who was a part of or substantially supported al-Qaeda…or associated forces…including any person who has…directly supported such hostilities in aid of such enemy forces…The disposition of a person…may include…Detention under the law of war…without trial until the end of the hostilities…”
This is the language from the final House-Senate Conference Committee report (HR 1540 Conference), which is the language that was passed by the Senate after being passed by the House, on Dec. 15, Bill of Rights Day in an 86 – 14 vote.
20 SEC. 1021. AFFIRMATION OF AUTHORITY OF THE ARMED
21 FORCES OF THE UNITED STATES TO DETAIN
22 COVERED PERSONS PURSUANT TO THE AU-
23 THORIZATION FOR USE OF MILITARY FORCE.
24 (a) IN GENERAL.—Congress affirms that the author-
25 ity of the President to use all necessary and appropriate
1 force pursuant to the Authorization for Use of Military
2 Force (Public Law 107–40; 50 U.S.C. 1541 note) includes
3 the authority for the Armed Forces of the United States
4 to detain covered persons (as defined in subsection (b))
5 pending disposition under the law of war.
6 (b) COVERED PERSONS.—A covered person under
7 this section is any person as follows:
8 (1) A person who planned, authorized, com-
9 mitted, or aided the terrorist attacks that occurred
10 on September 11, 2001, or harbored those respon-
11 sible for those attacks.
12 (2) A person who was a part of or substantially
13 supported al-Qaeda, the Taliban, or associated forces
14 that are engaged in hostilities against the United
15 States or its coalition partners, including any person
16 who has committed a belligerent act or has directly
17 supported such hostilities in aid of such enemy
19 (c) DISPOSITION UNDER LAW OF WAR.—The dis-
20 position of a person under the law of war as described
21 in subsection (a) may include the following:
22 (1) Detention under the law of war without
23 trial until the end of the hostilities authorized by the
24 Authorization for Use of Military Force.
Rep. Tom McClintock opposed the bill on the House floor saying it:
specifically affirms that the President has the authority to deny due process to any American it charges with “substantially supporting al Qaeda, the Taliban or any ‘associated forces’” — whatever that means.
Would “substantial support” of an “associated force,” mean linking a web-site to a web-site that links to a web-site affiliated with al-Qaeda? We don’t know.
“Substantial support” of an “associated force” may imply citizens engaged in innocuous, First Amendment activities. Direct support of such hostilities in aid of enemy forces may be construed as free speech opposition to U.S. government policies, aid to civilians, or acts of civil disobedience.
All accusations of who is “Al Qaeda” rest solely on the word of the government, with no witnesses, evidence, or any other form of due process required.
Section 1021 also reads: “Nothing in this section shall be construed to affect existing law.” But “existing law,” in the words of Sen. Lindsey Graham a key mover of the bill, refers to Padilla v. Rumsfeld in the Fourth Circuit Court of Appeals, which upheld the government’s claim of authority to hold Americans arrested on American soil indefinitely.
Section 1022 “(b) APPLICABILITY TO UNITED STATES CITIZENS AND LAWFUL RESIDENT ALIENS” states:
(1) UNITED STATES CITIZENS.—The requirement to detain a person in military custody
under this section does not extend to citizens of the United States.
However, although the section says it is not “required” that US citizens be held in military detention, it is nevertheless “allowed.” […]
* PENTAGON GETS GREEN LIGHT FOR INTERNET WAR
Translated from the Portuguese version by: Lisa Karpova
U.S. lawmakers officially authorized its army to take up so-called “kinetic military actions,” nothing more than a sad method of literally saying “war” in a manner that is a gross understatement. As always in these cases, the announcement came with no fanfare, but quietly, in a short paragraph that includes the military budget for 2012. It may be much more insidious, but not clearer.
The military budget, which approved the classification of the law, states: “Congress affirms that the Department of Defense has the potential for and, under specific directions, can perform offensive operations in cyberspace to defend our nation, partners and other interests, in accordance with the principles and legal systems that the Department defines for the kinetic action potential, inclusive within armed conflict and the resolution of the powers of war.”
Intentionally obscure, the text above mentions “kinetic capabilities” and “principles and legal systems.” If someone does not remember, the U.S. military intervention in Libya, in the war that sought the downfall of Gaddafi, they said it was not a “war” but a “kinetic military action.”
And why call it kinetic action, and not war? Because the U.S. president has to ask Congress permission to declare war, he has get their authorization for that. This has not occurred with respect to Libya.
Due to the “between the lines” authorization of the above document, the U.S. president and his commander of the Army now have a free way to declare, also, a war on the Internet where they will operate without the need to follow any principles or legal systems that require permission from Congress.
There are also other obscure terms, for example, what do they consider an “offensive action”? Although not specified, the Pentagon’s strategy for “security on the Internet,” is another nice euphemism. They have been occupied in trying to define the meaning of this offensive for months.
It is worth explaining that “offensive actions” may include the release of viruses of all kinds, the destruction of services and the ability to invade the energy control systems in other countries, disabling their power grids and generating complete blackouts.
We stress the fact that the actions “may include” because there are no precedents in relation to net cyber war or war, and these actions can expect to receive similar responses, as with real warfare attacks, keeping in view everything that has been pointed out as offensive in this text
This threat of war is precipitated by cyber-paranoia, prophesying all sorts of cyber-apocalypse scenarios and other cyber-deception to promote fear.
There is no record of any attacks from hackers that have put anyone in real danger, not even at risk, it is “highly dependent on Internet infrastructure
* NOAM CHOMSKY ON THE US-AFGHAN STRATEGIC PARTNERSHIP: ‘PART OF A GLOBAL PROGRAM OF WORLD MILITARIZATION’
“Right now, the United States is militarily engaged in one form or another in almost 100 countries.”
|Editor’s note: This is a transcript of a conversation between members of the Afghan Youth Peace Volunteers and Noam Chomsky, which took place on September 21, 2011. Each question was asked in Dari and translated by Hakim.
Hakim: Thank you, Professor Chomsky, for speaking to us. We are speaking from the highlands of Bamiyan in central Afghanistan, and we wanted to start off by thanking you sincerely for the guidance and wisdom that you have consistently given through your teaching and speeches in many places. We want to start off with a question from Faiz.
Faiz: In an article by Ahmad Rashid in the New York Times recently, he said that “after 10 years, it should be clear that the war in this region cannot be won purely by military force….Pakistanis desperately need a new narrative…but where is the leadership to tell this story as it should be told? The military gets away with its antiquated thinking because nobody is offering an alternative, and without an alternative, nothing will improve for a long time.”
Do you think there is any leadership in the world today that can propose an alternative non-military solution for Afghanistan, and if not, where or from whom would this leadership come from?
Noam Chomsky: I think it is well understood among the military leadership and also the political leadership in the United States and its allies, that they cannot achieve a military solution of the kind that they want. This is putting aside the question of whether that goal was ever justified; now, put that aside. Just in their terms, they know perfectly well they cannot achieve a military solution.
Is there an alternative political force that could work toward some sort of political settlement? Well, you know, that actually the major force that would be effective in bringing about that aim is popular opinion. The public is already very strongly opposed to the war and has been for a long time, but that has not translated itself into an active, committed, dedicated popular movement that is seeking to change policy. And that’s what has to be done here.
My own feeling is that the most important consequence of the very significant peace efforts that are underway inside Afghanistan might well be to stimulate popular movements in the West through just people-to-people contact, which would help impose pressures on the United States, and particularly Britain, to end the military phase of this conflict and move toward what ought to be done: peaceful settlement and honest, realistic economic development.
Abdulai: Dr. Ramazon Bashardost told the Afghan Youth Peace Volunteers once that the people of Afghanistan have no choice because all available options in Afghanistan are bad. So, Afghans have no choice but to choose the least bad of the bad options. In this situation, some Afghans, and in particular many in Kabul, feel that the least bad option is to have the U.S. coalition forces remain in Afghanistan.
Do you think that the continued presence of the U.S. forces in Afghanistan is the least bad option? If not, what are the possible truly good options for ordinary Afghans?
Chomsky: I agree that there don’t appear to be any good options, and that we therefore regrettably have to try to seek the least bad of the bad options. Now, that judgment has to be made by Afghans. You’re on the scene. You’re the people who live with the consequences. You are the people who have the right and responsibility to make these delicate and unfortunate choices. I have my own opinion, but it doesn’t carry any weight. What matters are your opinions.
My opinion is that as long as the military forces are there now, they will probably increase the tensions and undermine the possibilities for a longer term settlement. I think that’s been the record of the past 10 years largely, and that’s the record in other places as well—in Iraq, for example. So, my feeling is that a phased withdrawal of the kind that’s actually contemplated may well be the least bad of the bad options, but combined with other efforts. It’s not enough to just withdraw troops. There have to be alternatives put in place.
One of them, for example, which has repeatedly been recommended, is regional cooperation among the regional powers. That would of course include Pakistan, Iran, India, the countries to the north, all of which, together with Afghan representatives among them, might be able to hammer out a development program that would be meaningful and cooperate in implementing it, shifting the focus of activities from killing to reconstructing and building. But the core of issues are going to have to be settled internal to Afghanistan. […]
* GOLDMAN’S LATEST BOILER-ROOM STOCK: AMERICA
By Matt Taibbi, Rolling Stone
[…] It seems Jim O’Neill, the head of Goldman’s Asset Management department, is predicting that the United States stock market may go up “15 to 20 percent.” O’Neill apparently believes Ben Bernanke and the Federal Reserve will resort to another round of money-printing, and finally green-light the long-awaited “Qe3,” or third round of “Quantitative Easing.”
The QE programs involve the Fed printing hundreds of billions of dollars and pumping them into the marketplace, where they ostensibly stimulate the economy (although recent experience tells us that the money mostly ends up being swallowed by the financial services industry – but that’s another subject for another time). Anyway, Bernanke declined to go ahead with a third QE program in late 2011, but O’Neill apparently thinks we’ll get it in 2012. From Bloomberg:
“If QE2 doesn’t work, then we’ll get QE3,” said O’Neill, who was named chairman of the money manager in September after working as the co-head of global economics research and chief currency economist at New York-based Goldman Sachs Group Inc. since 1995. There’s a “good chance” the S&P 500 will rise 15 percent to 20 percent in the next 12 months, he said.
O’Neill added that he thought a 20 percent bump would be “relatively straightforward” for the U.S. S&P.
Goldman is building an impressive resume of sweepingly bullish predictions that later on, in retrospect, look more like signals to investors that they should run screaming in the opposite direction. A good example might be May of 2008, when Goldman boldly predicted that oil would go to $200 a barrel; oil would go on to peak at $147 less than two months later and crash to the floor soon after.
O’Neill himself famously coined the infamous “BRIC” term (Brazil, Russia, India and China), urging investors to throw their money at those emerging markets, arguing that those markets would eclipse the U.S. and Japan as the world’s biggest economies by 2050. Mutual fund investors responded by pouring $70 billion into BRIC over the last decade, but that run looks over now, as $15 billion flowed out of BRIC funds in this past year alone, and some analysts are predicting a $20 percent drop this year. […]
* NOBODY UNDERSTANDS DEBT
By Paul Krugman, NYTimes
In 2011, as in 2010, America was in a technical recovery but continued to suffer from disastrously high unemployment. And through most of 2011, as in 2010, almost all the conversation in Washington was about something else: the allegedly urgent issue of reducing the budget deficit.
This misplaced focus said a lot about our political culture, in particular about how disconnected Congress is from the suffering of ordinary Americans. But it also revealed something else: when people in D.C. talk about deficits and debt, by and large they have no idea what they’re talking about — and the people who talk the most understand the least.
Perhaps most obviously, the economic “experts” on whom much of Congress relies have been repeatedly, utterly wrong about the short-run effects of budget deficits. People who get their economic analysis from the likes of the Heritage Foundation have been waiting ever since President Obama took office for budget deficits to send interest rates soaring. Any day now!
And while they’ve been waiting, those rates have dropped to historical lows. You might think that this would make politicians question their choice of experts — that is, you might think that if you didn’t know anything about our postmodern, fact-free politics. […]
* THE FALSE PREDICTIONS OF 2011 UNMASKED
By Costas Papachlimintzos, Athens News
|Believe none of what you hear and half of what you see,” Benjamin Franklin, one of the founding fathers of the United States, is thought to have said. This statement couldn’t be more fitting to what has been said and written for Greece this past year.
A quick overview of 2011 brings up the so-called predictions and grandiose statements made on crucial issues regarding the Greek crisis that later on proved to be hugely contradictory.
Since the beginning of the year, a great number of analysts, bankers and academics have stated that a Greek bankruptcy is inevitable and imminent, but the Greek state has not yet defaulted on its debt.
An even greater number have spoken against debt restructuring, while several top members of the Greek government denied that such an issue was even being discussed. Nevertheless, the July 21 EU summit concluded that, for the first time in the eurozone, a haircut would be imposed on the sovereign bonds of a member state.
Greek politicians have made several other major assertions that have never materialised. The most notable examples are the commitment of Prime Minister George Papandreou that national elections would be held in 2013, as well as his call for a referendum on the new bailout deal.
Impressive u-turns were also made by the European Central Bank, which did not cut the lifeline to Greece, and by the country’s creditors, who are about to accept far greater losses as part of the so-called private sector involvement (PSI) in the Greek rescue plan.
If there is one lesson to be learnt from 2011, it is that the political and economic landscape in Greece and the eurozone is changing so rapidly that any prediction on future developments will most likely be overturned, sometimes as soon as the very next day.
GREECE’s imminent bankruptcy was one of the favoured prophecies of pundits and financial institutions alike throughout 2011.
In September, the Royal Bank of Scotland (RBS) predicted that Greece will experience a hard default in December, a move it said would trigger “violent contagion” in global markets.
In a note to clients, RBS European rates strategist Harvinder Sian said Greece will default on, or around, the IMF’s December 11 review of its fiscal reforms. As reported by Investment Week, the note pointed to the country’s inability to implement reforms, over-ambitious austerity targets, an absence of further compromise from the IMF and EU, as well as the growing difficulty of Greece’s parliament passing laws. Sian called the December 11 review “a pivotal one”.
On March 11, eurozone leaders extended Greece’s EU loan maturity from 3 to 7½ years and reduced the interest rate by 100 basis points. In return, Papandreou pledged a renewed privatisation programme worth 50 billion euros, an amount to be raised by 2015, in order to write down part of the massive public debt. The aim for 2011 was to collect the little matter of at least 5 billion by year-end.
Delays in setting up the privatisation fund and the plunging stock market values on the Athens bourse soon forced the government to reduce the target to 4 billion euros. And by the end of December, Greece had collected only a paltry 392 million euros – the proceeds of selling off a 10 percent stake in Hellenic Telecommunications (OTE) to Germany’s Deutsche Telekom.
Truth be told, it came as no surprise to the European Commission, which conceded in its fifth review of the economic adjustment programme for this country that the targets for privatisation proceeds would be missed.
Echoing similar sentiments, the IMF’s Greek debt sustainability analysis of October 21 estimated that by 2020 total privatisation proceeds would amount to 46 billion euros, instead of the 66 billion assumed in the programme – ie the original 50bn target, plus an additional 16bn raised from the sale of additional assets created by bank recapitalisation.
Read my lips: No restructuring
Statements by Greek and EU officials against the restructuring of Greece’s public debt proved way off the mark. On April 28, Servaz Deruz, the European Union’s voice within the so-called troika, argued that restructuring would have dire consequences. He added that such a move wouldn’t offer much by way of easing the country’s debt burden. Nor was he short of support in this assertion. Antonio Borges, the head of the IMF’s European department, and Greek central banker Yiorgos Provopoulos also said that a restructuring could have catastrophic results.
On May 2, Finance Minister Yiorgos Papakonstantinou categorically ruled out debt restructuring, adding that he just “expressed the hope” that the EU and IMF would agree to extending bailout loan repayments. A few weeks later, Prime Minister George Papandreou and senior ECB officials added that Greece must avoid debt restructuring and push on with budget cuts and privatisations to overcome its debt crisis.
Most emphatic of all was European Central Bank (ECB) president Jean-Claude Trichet, who said that Greece must avoid any form of restructuring in tackling its debt crisis.
“We are not in favour of restructuring,” he said. On being pushed by reporters, he added: “I am not embarking on a dialogue with a particular minister here … No credit event, no selective default.”
Trichet added on July 14 that the ECB would have to intervene if Greece was given a default investment rating. “If a country defaults, we will no longer be able to accept its defaulted government bonds as normal eligible collateral,” he said in an interview with Financial Times Deutschland.
On July 21, the restructuring of the Greek debt was signed, sealed and delivered by eurozone leaders.
“National elections will be held in 2013 as scheduled” was the refrain of the Papandreou government for many months, as the opposition parties and much of the press were pushing for snap elections.
Papandreou himself was emphatic on May 27, ahead of a meeting of party leaders chaired by President Karolos Papoulias, stressing: “I will state categorically that national elections will be held in 2013.” He added: “That is when we will be judged, when we will all be judged.”
On October 31, in a bid to stifle tacit calls for snap elections, Papandreou said his government intended to use the two remaining years of its mandate to implement its commitments.
So rapidly did events unfold that not only was Lucas Papademos sworn in as the head of an interim three-party government on November 11, but a deal was also struck between Pasok and New Democracy that national elections would be held on 19 February 2012 or soon thereafter.
The referendum that never was
“We trust citizens, we believe in their judgement, we believe in their decision” was how Papandreou presented to Pasok MPs, on October 31, his now infamous decision to call a national referendum on the latest EU bailout package. Papandreou also explained that he was calling a vote of confidence to secure the support for his policies for the remainder of his four-year term.
Speaking to his parliamentary group, Papandreou said it was the time for citizens “to reply responsibly: Do they want us to implement it or reject it?” He added that he had faith in people to make the right decision. “Let each person decide for his country and for himself,” he declared, adding confidently that the referendum would be held in a few weeks’ time.
What followed was an outpouring of anger and consternation both at home and abroad, with people fearful that a ‘no’ vote would send the country spinning into a whirlpool of disorderly default. Two days later, he called off the referendum and agreed to step down as prime minister.
‘Just a 21 percent trim’
In eurospeak, the EU leaders’ statement after the July 21 summit went something like this: “The financial sector has indicated its willingness to support Greece on a voluntary basis through a menu of options further strengthening overall sustainability. The net contribution of the private sector is estimated at 37 billion euros.”
In simple terms, it meant that the process for a 21 percent haircut of Greek debt had been started.
However, on October 3, Eurogroup chairman Jean-Claude Juncker said that the EU was now reassessing the extent of the private sector’s role in the planned second package for Greece. “As far as the PSI [private sector initiative] is concerned, we have to take into account the fact that we have experienced changes since the decisions we took on the July 21, so we are considering technical revisions,” he told reporters.
The idea gathered pace a month later, when French Finance Minister Francois Baroin said the extent of private sector involvement in bailing out Greece may need to be re-examined after the volatility on financial markets over the summer. The comments marked a public acknowledgment from France – which up until then had argued that an agreement by eurozone heads of state on July 21 should be applied in full – that further participation from private sector creditors may be required as Greece‘s financial crisis deepens. “Given what’s happened over the last three months, we should perhaps look at the extent of the private sector involvement,” Baroin said on French radio station RTL.
Under the new deal struck at the eurozone summit of October 28, the writedown to be suffered by private holders of Greek debt was set at 50 percent. […]
* JP MORGAN-CHASE MIC-CHECKED AT PRINCETON UNIVERSITY
h/t Dan Bellini
Occupy Princeton (www.occupyprinceton.net) students mic-check a JP Morgan-Chase Treasury Services info session on December 7, 2011. This is the first direct action taken up by Occupy Princeton – more to come. Full Script below:
“Princeton’s motto is:
In the nation’s service and service of all nations
JP Morgan-Chase, your actions violate our motto
Your predatory lending practices helped crash our economy
We’ve bailed out your executives’ bonuses
You’ve evicted struggling homeowners while taking their tax money
You support mountaintop removal mining in Appalachia
which destroys our ecological future
In light of these actions,
we protest the campus culture
that whitewashes the crooked dealings of Wall Street
as a prestigious career path.
We are here today
as a voice for the 99%
shut out by a system that punishes them
just for being born without privilege.
What we need is not a university for the 1%,
but a university “In the Nation’s Service,
and in the Service of All Nations.”