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.

Sep 232015
 

Posted by greydogg, 99GetSmart

Michael Nevradakis, scholar and host of Dialogos Radio in Athens, says the low voter turnout of 55% reflects widespread disenchantment with the Greek political system and SYRIZA:

Part 1

Part 2

Michael Nevradakis is a Ph.D. student at The University of Texas and a Fulbright Scholar based in Athens who has conducted extensive research on Greek media and politics. He is the producer and host of Dialogos Radio, a weekly radio program featuring interviews with leading Greek and international figures on matters pertaining to Greece, and is a frequent contributor to several Greek and international media outlets.

Mar 222015
 

By James Petras, 99GetSmart

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Introduction

Over the past year, what appeared as hopeful signs, that Left governments were emerging as powerful alternatives to right-wing pro-US regimes, is turning into a historic rout, which will relegate them to the dustbin of history for many years to come. The rise and rapid decay of left-wing governments in France, Greece and Brazil is not the result of a military coup, nor is it due to the machinations of the CIA. The debacle of left governments is a result of deliberate political decisions, which break decisively with the progressive programs, promises and commitments that political leaders had made to the great mass of working and middle class voters who elected them.

Increasingly, the electorate views the leftist rulers as traitors, who betrayed their supporters at the beck and call of their most egregious class enemies: the bankers, the capitalists and the neo-liberal ideologues.

Left Governments Commit Suicide

The self-destruction of the Left is an unanticipated victory for the most retrograde neo-liberal political forces. These forces have sought to destroy the welfare system, impose their rule via non-elected officials, widen and deepen inequalities, undermine labor rights and privatize and denationalize the most lucrative sectors of the economy.

Three cases of Left regime betrayal serve to highlight this process: The French Socialist regime of President Francois Hollande governing in the second leading power in Europe (2012-2015); Syriza, the left regime in Greece elected on January 25, 2015, portrayed as a sterling proponent of an alternative policy to ‘fiscal austerity’; and The Workers Party of Brazil, governing in the biggest Latin American country (2003-2015) and a leading member of the BRICS.

French ‘Socialism’: The Great Leap Backward

In his Presidential campaign, Francois Hollande promised to raise taxes on the rich up to 75%; lower the retirement age from 62 to 60 years; launch a massive public investment program to reduce unemployment; vastly increase public spending on education (hiring 60,000 new teachers), health and social housing; and withdraw French troops from Afghanistan as a first step toward reducing Paris’ role as an imperialist collaborator.

From 2012, when he was elected, to the present (March 2015), Francois Hollande has betrayed each and every political commitment: Public investments did not materialize and unemployment increased to over 3 million. His newly appointed Economic Minister Emmanuel Macron, a former partner of Rothschild Bank, sharply reduced business taxes by 50 billion euros. His newly appointed Prime Minister Manuel Valls, a neo-liberal zealot, implemented major cuts in social programs, weakened government regulation of business and banking and eroded job security. Hollande appointed Laurence Boone from Bank of America as his top economic adviser.

The French ‘Socialist President’ sent troops to Mali, bombers to Libya, military advisers to the Ukraine junta and aided the so-called Syrian ‘rebels’ (mostly Jihadist mercenaries). He signed off on billion-euro military sales to the Saudi Arabian monarcho-dictatorship and reneged on a contracted sale of warships to Russia.

Hollande joined with Germany in demanding that the Greek government comply with full and prompt debt payments to private bankers and maintain its brutal ‘austerity program’.

As a result of defrauding French voters, betraying labor and embracing bankers, big business and militarists, less than 19% of the electorate has a positive view of the ‘socialist’ government, placing it in third place among the major parties. Hollande’s pro-Israel policies and his hardline on US- Iranian peace negotiations, Minister Vall’s Islamophobic raids in French Muslim suburbs and the support of military interventions against Islamic movements, have increasingly polarized French society and heightened ethno-religious violence in the country.

Greece:  Syriza’s Instant Transformation

From the moment in which Syriza won the Greek elections on January 25, 2015, to the middle of March, Alexis Tsipras, the Prime Minister and Yanis Varoufakis, his appointed Finance Minister, reneged in rapid order on every major and minor electoral program. They embraced the most retrograde measures, procedures and relations with the ‘Troika’, (the IMF, and European Commission at the European Central Bank), which Syriza had denounced in its Thessaloniki program a short time earlier.

Tsipras and Varoufakis repudiated the promise to reject the dictates of the ‘Troika’. In other words, they have accepted colonial rule and continued vassalage.

Typical of their demagogy and deceit, they sought to cover up their submission to the universally hated ‘Troika’ by dubbing it ‘the Institution’ – fooling nobody but themselves– and becoming the butt of cynical cackles from their EU overseers.

During the campaign, Syriza had promised to write off all or most of the Greek debt. In government, Tsipras and Varoufakis immediately assured the Troika that they recognized and promised to meet all of their debt obligations.

Syriza had promised to prioritize humanitarian spending over austerity – raising the minimum wage, rehiring public employees in health and education and raising pension payments. After two weeks of servile groveling, the ‘re-formed’ Tsipras and Varoufakis prioritized austerity – making debt payments and ‘postponing’ even the most meagre anti-poverty spending. When the Troika lent the Syriza regime $2 billion to feed hungry Greeks, Tsipras lauded his overseers and promised to submit a multi-billion euro list of regressive ‘reforms’.

Syriza had promised to re-examine the previous rightwing regime’s dubious privatization of lucrative public enterprises and to stop on-going and future privatizations. In government, Tsipras and Varoufakis quickly disavowed that promise. They approved past, present and future privatizations. In fact, they made overtures to procure new privatization ‘partners’, offering lucrative tax concessions in selling-out more public firms.

Syriza promised to tackle the depression level unemployment (26% national, 55% youth) via public spending and reduced debt payments. Tsipras and Varoufakis dutifully met debt payments and did not allocate any funds to create jobs!

Not only did Syriza continue the policies of its rightwing predecessors, but also it did so in a ludicrous style and substance: adopting ridiculous public postures and demagogic inconsequential gestures:

One day Tsipras would lay a wreath at the gravesite of 200 Greek partisans murdered by the Nazis during WW II. The next day he would grovel before the German bankers and concede to their demands for budget austerity, withholding public funds from 2 million unemployed Greeks.

One afternoon, Finance Minister Varoufakis would pose for a photo spread for Paris Match depicting him, cocktail in hand, on his penthouse terrace overlooking the Acropolis; and several hours later he would claim to speak for the impoverished masses!

Betrayal, deceit and demagogy all during the first two months in office, Syriza has established a record in its conversion from a leftist anti-austerity party to a conformist, servile vassal of the European Union.

Tsipras’ call for Germany to pay reparations for damages to Greece during WW II –a long overdue and righteous demand– is another phony demagogic ploy designed to distract the impoverished Greeks from Tsipras and Varoufakis sellout to German contemporary austerity demands. A cynical European Union official tells the Financial Times (12/3/15, p. 6), “He’s (Tsipras) giving them (Syriza militants) a bone to lick on”.

No one expects German leaders to alter their hardline because of past injustices, least of all because they come from interlocutors on bended knees. No one in the EU takes Tsipras demand at face value. They see it as more empty ‘radical’ rhetoric for domestic consumption.

Talking up 70-year German reparations avoids taking practical action today repudiating or reducing payments on illegitimate debt to German banks and repudiating Merckel’s dictates. The transparent betrayal of their most basic commitments to the impoverished Greek people has already divided Syriza. Over 40% of the central committee, including the President of the Parliament, repudiated the Tsipras –Varoufakis agreements with the Troika.

The vast majority of Greeks, who voted for Syriza, expected some immediate relief and reforms. They are increasingly disenchanted. They did not expect Tsipras to appoint Yanis Varoufakis, a former economic adviser to the corrupt neo-liberal PASOK leader George Papandreou, as Finance Minister. Nor did many voters abandon PASOK, en masse, over the past five years, only to find the same kleptocrats and unscrupulous opportunists occupying top positions in Syriza, thanks to Alexis Tsipras index finger.

Nor could the electorate expect any fight, resistance and willingness to break with the Troika from Tsipras’ appointments of ex-pat Anglo-Greek professors. These armchair leftists (‘Marxist seminarians’) neither engaged in mass struggles nor suffered the consequences of the prolonged depression.

Syriza is a party led by affluent upwardly mobile professionals, academics and intellectuals. They rule over (but in the name of) the impoverished working and salaried lower middle class, but in the interests of the Greek, and especially, German bankers.

They prioritize membership in the EU over an independent national economic policy. They abide by NATO, by backing the Kiev junta in the Ukraine, EU sanctions on Russia, NATO intervention in Syria/Iraq and maintain a loud silence on US military threats to Venezuela!

Brazil: Budget Cuts, Corruption and the Revolt of the Masses

Brazil’s self-styled Workers Party government in power an unlucky 13 years, has been one of the most corruption-ridden regimes in Latin America. Backed by one of the major labor confederations, and several landless rural workers’ organizations, and sharing power with center-left and center-right parties, it was able to attract tens of billions of dollars of foreign extractive, finance and agro-business capital. Thanks to a decade-long commodity boom in agro-mineral commodities, easy credit and low interest rates, it raised income, consumption and the minimum wage while multiplying profits for the economic elite.

Subsequent to the financial crises of 2009, and the decline of commodity prices, the economy stagnated, just as the new President Dilma Rousseff was elected. The Rousseff government, like her predecessor, Lula Da Silva, favored agro-business over the rural landless workers’ demands for land reform. Her regime promoted the timber barons and soya growers encroaching on the Indian communities and the Amazon rain forest.

Elected to a second term, Rousseff faced a major political and economic crises: a deepening economic recession, a fiscal deficit, and the arrest and prosecution of scores of corrupt Workers’ Party and allied congressional deputies and Petrobras oil executives.

Workers’ Party leaders and the Party’s campaign treasury received millions of dollars in kickbacks from construction companies securing contracts with the giant semi-public petroleum company. President Rousseff promised “to continue to support popular social programs”, and “to root out corruption”, during her election campaign. However, immediately after her election she embraced orthodox neo-liberal policies and appointed a cabinet of hard-right neo-liberals including Bradesco banker Joaquin Levy as Finance Minister. Levy proposed to reduce unemployment payments, pensions and public salaries. He argued for greater de-regulation of banks. He proposed to weaken job protection laws to attract capital. He sought to achieve a budget surplus and attract foreign investment at the expense of labor.

Rousseff, consistent with her embrace of neo-liberal orthodoxy, appointed Katia Abreu, a rightwing senator, a life-long leader of agro-business interests and sworn enemy of land reform, as the new Agricultural Minister. Crowned “Miss Deforestation” by Greenpeace, Senator Abreu was vehemently opposed by the Landless Rural Workers’ Movement (MST) and the labor confederation to no avail. With Rousseff’s total backing Abreu set out on a course of ending even the minimal land redistribution carried out in Rousseff’s first term in office (establishing land settlements benefiting less than 10% of the landless squatters). Abreu endorsed regulations facilitating the expansion of genetically modified crops, and promises to forcefully evict Amazonian Indians occupying productive land in favor of large-scale agro-business corporations. Moreover, she promises to vigorously defend landlords from land occupations by landless rural workers.

Rousseff’s incapacity and/or unwillingness to fire and prosecute the Workers Party Treasurer, involved in a decade long billion-dollar kickback and bribery scandal, deepened and widened mass opposition.

On March 15, 2015 over a million Brazilians filled the streets across the country, led by rightist parties, but drawing support from the popular classes demanding immediate anti-corruption trials and stern sentences, and the revocation of Levy’s cuts in social expenditures.

The counter demonstration in support of Rousseff by the CUT labor confederation and the MST drew one-tenth that number – about 100,000 participants.

Rousseff responded by calling for ‘dialogue’ and claimed to be ‘open to proposals’ on the issue of corruption but explicitly rejected any changes in her regressive fiscal policies, neo-liberal cabinet appointmentsand her embrace of their agro-mineral agenda.

In less than two months, the Workers Party and its President has indelibly stained its leaders, policies and backers with the brush of corruption and socially regressive policies.

Popular support has plummeted. The right wing is growing. Even the authoritarian, pro-military coup activists were present in the mass demonstrations, carrying signs calling for ‘impeachment’ and a return of military rule.

As in most of Latin America, the authoritarian right in Brazil is a growing force, positioning itself to take power as the center-left adopts a neo-liberal agenda throughout the region. Parties dubbed ‘center-left’, like the Broad Front in Uruguay, the pro-government Party for Victory in Argentina, are deepening their ties with agro-mineral corporate capitalism.

Uninformed claims by leftist US writers like Noam Chomsky that, “Latin America is the vanguard against neo-liberalism” is at best a decade late, and certainly misleading. They are deceived by populist policy pronouncements and refuse to acknowledge the decay of the center –left regimes and thus fail to recognize how their neoliberal political actions are fostering mass popular discontent. Regimes, which adopt regressive socio-economic policies, do not constitute a vanguard for social emancipation.

Conclusion

What accounts for these abrupt reversals and swiftly broken promises by recently elected supposedly ‘left parties’ in Europe and Latin America?

One has come to expect this kind of behavior in North America from the Obama Democrats or the New Democratic Party in Canada . . . But we were led to believe that in France, with its red republican traditions, a Socialist regime backed (‘critically’) by anti-capitalists leftists; would at least implement progressive social reforms. We were told by an army of progressive bloggers that Syriza, with its charismatic leader, and radical rhetoric, would at least fulfill its most elementary promises by lifting the yoke of Troika domination and begin to end destitution and provide electricity to 300,000 candle-lit households. ‘Progressives’ had repeatedly told us that the Workers Party lifted 30 million out of poverty. They claimed that a former ‘honest auto worker’ (Lula Da Silva) would never allow the Workers Party to revert back to neo-liberal budget cuts and embrace its supposed ‘class enemies’. US leftist professors refused to give credence to the crass billion-dollar robbery of the Brazilian National Treasury under two Workers’ Party Presidents.

Several explanations for these political betrayals come to mind. First, despite their popular or ‘workerist’ claims, these parties were run by middle class lawyers, professionals and trade union bureaucrats, who were organically disconnected from their mass base. During election campaigns, seeking votes, they briefly embraced workers and the poor, and then spent the rest of their time in pricey restaurants working out “deals” with bankers, business bribe granters and overseas investors to finance their next election, their children’s private school and their mistresses luxury apartments.

For a time, when the economy was booming, big corporate profits, payoffs and bribes went hand in hand with wage increases and poverty programs. But when the crisis broke, the ‘popular’ leaders doffed their Party hats and pronounced ‘fiscal austerity was inevitable while going with their begging cups before their international financial overlords.

In all these countries faced with difficult times, the middle class leaders of the Left feared the problem (capitalist crisis) and feared the real solution (radical transformation). Instead they turned to the ‘only solution’: they approached capitalist leaders and sought to convince business associations and, above all their financial overlords, that they were ‘serious and responsible politicians’, willing to forsake social agendas and embrace fiscal discipline. For domestic consumption, they cursed and threatened the elites, providing a little theater to entertain their plebeian followers, before they capitulated!

None of the academics-turned-left-leaders have any deep and abiding links to the mass struggles. Their ‘activism’ involves reading papers at ‘social forums’, and giving papers at conferences on ‘emancipation and equality’. Political sellouts and fiscal austerity will not jeopardize their economic positions. If their Left parties are ousted by angry constituents and radical social movements, the left leaders pack their bags and return to comfortable tenured jobs or rejoin their law office. They do not have to worry about mass firings or reduced subsistence pensions. At their leisure they will find time to sit back and write another paper on the how the  ‘crisis of capitalism’ undermined their well-intentioned social agenda or how they experienced the ‘crisis of the Left’.

Because of their disconnect from the suffering of the impoverished, unemployed voters, the middle class leftists in office are blind to the need to make a break with the system. In reality, they share the worldview of their supposedly conservative adversaries: they too believe that ‘it’s capitalism or chaos’. This borrowed cliché is passed off as a deep insight into the dilemmas of democratic socialists. The middle class leftist officials and advisers always use the alibi of ‘institutional constraints’. They ‘theorize’ their political impotence – they never recognize the power of organized class movements.

Their political cowardice is structural and leads to easy moral betrayals: they plead, ‘Crisis is not a time to tinker with the system’.

For the middle class, ‘time’ becomes a political excuse. Middle class leaders of popular movements, without audacity or programs of struggle, always talk of change . . .  in the future.

Instead of mass struggle, they run to and fro, between the centers of financial power and their Central Committees, confusing ‘dialogues’ that end in submission, with consequential resistance.

In the end the people will re-pay them turning their backs and rejecting their pleas to re-elect them ‘for another chance’.

There will not be another chance. This ‘Left’ will be discredited in the eyes of those whose trust they betrayed.

The tragedy is that the entire left will be tarnished. Who can believe the fine words of ‘liberation’, ‘the will to hope’ and the ‘return of sovereignty’ after experiencing years of the opposite?

Left politics will be lost for an entire generation, at least in Brazil, France and Greece.

The Right will ridicule the open zipper of Hollande; the false humility of Rousseff; the hollow gestures of Tsipras and the clowning of Varoufakis.

The people will curse their memory and their betrayal of a noble cause.

Mar 142015
 

By J Iddhis Bing, 99GetSmart

Greek Prime Minister Tsipras at the Organization for Economic Cooperation and Development, Thursday, March 12, 2015. Photo by Iddhis Bing.

Greek Prime Minister Tsipras at the Organization for Economic Cooperation and Development, Thursday, March 12, 2015. Photo by Iddhis Bing.

 

Alex Tsipras and ministers of his government – among them, the Alternate Minister for International Economic Relations, Euclid Tsakalotos, and a certain Minister of Finance, name of Varoufakis – were in Paris on Thursday for a wide- ranging series of talks with the OECD (Organisation for Economic Co-operation and Development). After the discussions Tsipras gave a short press conference followed by a speech to OECD member nations and the press. The OECD announced a number of joint initiatives with the Greek government in areas such as job creation, public finance and spending, taxation and, intriguingly, “disrupting oligarchies and cartels.” The organization’s Secretary-General, Angel Gurria, was careful to note that “The OECD is not replacing any other institution that the government works with. We are involved because we were asked by one of our founding member countries to offer help and advice on their reform program.”

Regular readers here will pardon the pro-forma above. I snuck in the OECD’s side door and took notes. I looked pretty good, considering that my hands were covered with bloody scratches courtesy of a cat I met the day before. Events at places like the OECD in the opulent 16th are interesting theatre, at least the first time around. They are rigorously controlled affairs, so you have to lean in if you want to glimpse the human beast.

The Greeks need friends in Europe. They’re looking everywhere, and the trip to Paris can be seen as part of the continuing charm offensive. They need public statements of support and not quiet murmurs of assent such as François Hollande dispenses. (Not too loud, Angela might hear.) They have confidence in what looks like a lonely fight but they seem to be still hoping that the tide will turn, that Europe will join them in replacing the Austerity Drones. That’s one explanation for their presence. But it leaves a lot out.

… The plush little theatre where the press conference takes place is crammed with journalists. In the first two rows, a swirling crowd that speaks only Greek and is constantly hopping in and out of their seats, as if they were making policy decisions at the last second. The camera men are set up with their ridiculous foot-long lenses, the facilitators line the aisle, we’re all waiting. Do my co-workers expect anything new to be said? There’s no bar down here in the basement of the OECD – I haven’t found one anyway. Just fruit juice. It’s nice to be healthy but a drink helps when you have to listen to politicians for a few hours, and without a bar there’s no fraternity. Journalists these days are a quiet lot and far too many of them are staring at the portables on their laps like zombies getting the feed.

And then – swoosh. The doors open and one buzz replaces another as Tsipras and cohorts glide in. The photographers order anyone in their way to sit down. What jerks.

Tsipras and Gurria take the platform. Gurria grips the lecturn like he’s maybe going to pull it out of the floor and hurl it at us, or maybe a bit like a sea captain staring off into the mist on a stormy night. Tsipras’s body language is patient, deferential, waiting his cue. He’s willing to play the game. I wonder if he can understand a word Gurria is saying.

He’s a fast talker this Gurria. Six languages or so the official bio claims. Brooklyn is full of guys like him, always on the up and up, everything positive, always shaking people’s hands, aways trying to sell you something – an idea maybe. (People in Brooklyn have ideas.) They come at you fast on the sidewalk and it’s always too late to avoid them. They’re not so bad, it’s just that they’re always brimming. Well, Gurria has the right, he’s head of the OECD, unofficially known as the “world’s club for the richy-rich.” Readers with memories of old columns will recall that Luxembourg is a member too and that they simply choose to “exercise the privilege” of not signing the organization’s tax avoidance mandates, which they had every right to do. It’s called taking care of business properly.

So Gurria is finishing up, he says again and again that “Syriza has only been in power a few weeks,” and underlines that the OECD is not replacing any other organization at least twice. Who could that be refering to, I wonder? Greece will take help anywhere it can. As the poet Roque Dalton observed, “The drowning man doesn’t ask which way the boat is headed.”

Tspiras is not so nice. The Troika is his voodoo doll: if you bring it on stage, you have to stab it – at least twice. And he obliges. Syriza remains committed to its social program in all its aspects, he says, as well as the Memorandum of reform they signed in mid-February. But he stresses that it is reform their way and not what the Central Bank and the IMF think change looks like. Watch a few videos of the Euro group President Jeroen Tijsselbloem, read his body language as he says, “We are still waiting to see evidence of reform by the Greeks.” (My paraphrase.) The two parties are speaking different languages. In a video after Syriza’s election he talks about how much his organization helped Greece with interest delays and other bookkeeping sleights of hand (heroic acts). Tijsselbloem is a human in functionary drag, passenger on a boat going the wrong way. He is the kind of man who says “water” before he lifts the glass to his lips. It’s a policy statement.

Gurria smacks down a journalist who dares to ask a pointed question about Spain and deficits, and the journalist takes it. It’s a regular love-fest in here, Gurria seems to be saying. Let’s not let reality interrupt.

This “only been in power a few weeks” gets on my nerves. Who’s he saying it to? He sounds like he’s trying to convince a judge in some small Texas town that his client shouldn’t hang – right away anyway. He repeats it, staring over our heads into Nowhereland. Is he addressing it to Christine Lagarde at the IMF? Did they have a spat? “Look, Angel, hang with the Greek boys on Thursday. But don’t even dream about pal-ing around over the weekend. What if you give me the disease?”

If I were a professor of institutional semantics, I’d roll it out like this: the OECD is a parallel international organization that wields power behind the scenes. Corporations are always knocking on their door demanding special privileges and they (the OECD) hold sway within the different national bureaucracies, within the mindset. Greece needs breathing room and if the OECD isn’t offering cash, it’s access, which may be more valuable. Of course they’re “enterprise-oriented.” National salvation isn’t in their tool kit. It will be up to Syriza to resist. In any case, the OECD isn’t issuing diktats.

More interesting to speculate on Gurria’s motives. Why has he so forcefully interposed the OECD between Greece and the Troika? Clearly not “replacing any other organization,” but it’s as if that Brooklyn glad-hander stepped between the bully and his victim and yelled, “Hands Off!” Whose side is he on? Impossible to say. His face is a mask, he speaks in soundbites. (Is there a school for that?) Greece in any case will be able to say to Tijsselbloem et Co., “We’re playing by OECD rules. Good enough for you?” when that all-but-inevitable departure from the Euro threatens again. Greece is playing for time. Syriza has to both implement reforms and see some positive results. In four months. Pasok had ten years to shoot their wad and blow the treasury. I don’t remember the European fright wigs complaining then.

But what! – Hey!- What’s that noise! – breaking glass – in this soft little amphitheatre. Here? It can’t be. But it is. Reality is not so nice. Reality is the Syriza snarl. Here they are showing the OECD what attentive fellows they can be – but just a day before – a bit of mayhem before they arrived in Paris. They went before the world and accused Germany of the systemic pillage of their country.

In December 2014 the Greek finance ministry published a report which calculated that Germany “owed” Greece €9.2bn for the first world war, €322bn for the second and €10bn for money Greece was forced to lend the Nazi regime in 1942.

On Wednesday Alex Tsipras weighed in before the Greek Parliament. “After the reunification of Germany in 1990, the legal and political conditions were created for this issue to be resolved. But since then, German governments chose silence, legal tricks and delay.”

Now we get to the good part of the drama, when the upstart Southerners confront the Northern behemouth. They prick them where it hurts. The worst part of it, for the Germans, is that the Greeks are trying to steal their role, that of the Great Reproover, the Clean Liver, the Prosperous. You’re thieves, the Greeks bellow. And the Greeks were being nice about it. They didn’t even mention the gold bricks the Germans took with them at the end of the Second World War, a theft that William Pfaff, the dean of American foreign policy writing, calls “a legitimate issue.”

To their immense credit there are numerous Germans, individuals and political groups, who have stood up and publicly backed the Greeks in raising the issue.

No one can seriously believe that the Syriza-led government is naïve about what the OECD represents. At the same time the fly on the conference room wall knows more than we do about the OECD’s real strategy for Greece. OECD assistance may help to cauterize the wound; looked at another way it brings Greece closer to the business establishment.

There was more to the afternoon. Tspiras had yet to give his speech. His English is nearly incomprehensible and it got worse as the speech went on. He was saying something, it was the kind of speech the OECD likes to hear, full of initiatives and targets. He did say, “We don’t want to reform Greece, we want to transform it.” For that dream, he will meet obstacles on all sides, international and domestic, not least that part of the Greek left who have already decided he’s a sellout.

In the corridors close to the centers of power, where Power takes the shape of human figures gliding down a passageway surrounded by body guards, Sub-Ministers for various offices, journo-hangers-on desperate for a quote, everything is rumor, opinion, hand-held devices pumping out new info, distraction – buzz. Very little is really known and what is known can change instantly into its opposite. That’s what Syriza is banking on.

What’s the probability that the sea of hemmed-in, shoulder to shoulder journalists, administrators and facilitators would somehow part to allow an awkward young German reporter, tall and a little stiff like he was new on the beat, to step forward and block Varoufakis’s path? Not likely in that crowd – but it happened. He had a question. Not about reparations. “Is it true, Mr. Minister, that Greece will run out of money in seven days?” A short freeze in the crowd surge. Varoufakis gives him a quick look up and down. It’s provocation with a German accent. “Can’t Buy Me Love,” Varoufakis replies softly. “Good song. Do you know it?” The crowd moves on, out of the room.

The journalist looks verklempt, augestorben – overcome, lost. Varoufakis played him. That’s game theory: change the terms of the debate. The reporter hobbles back to his computer. He didn’t get his quote, or so he thinks. Humiliated, he looks around for help.

The OECD is an interesting faction of the elite to have on your side. They can’t say you don’t play by the rules, even if you have to bend them. Everybody does, just look at Luxembourg. But I think we are nearly at the end of the epoch when Greece can be regarded as a pariah. What happened there happened with the full knowledge of the EU, the ECB and the IMF, and therefore, one could argue, with their consent. The OECD plans, I suspect, to play the role of mediator, with or without the blessing of the Troika. So far Syriza has shown that it’s one step ahead of the functionaries of Reality As Such.

Feb 242015
 

By William Blum, 99GetSmart

The Greek Tragedy: Some things not to forget, which the new Greek leaders have not.

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American historian D.F. Fleming, writing of the post-World War II period in his eminent history of the Cold War, stated that “Greece was the first of the liberated states to be openly and forcibly compelled to accept the political system of the occupying Great Power. It was Churchill who acted first and Stalin who followed his example, in Bulgaria and then in Rumania, though with less bloodshed.”

The British intervened in Greece while World War II was still raging. His Majesty’s Army waged war against ELAS, the left-wing guerrillas who had played a major role in forcing the Nazi occupiers to flee. Shortly after the war ended, the United States joined the Brits in this great anti-communist crusade, intervening in what was now a civil war, taking the side of the neo-fascists against the Greek left. The neo-fascists won and instituted a highly brutal regime, for which the CIA created a suitably repressive internal security agency (KYP in Greek).

In 1964, the liberal George Papandreou came to power, but in April 1967 a military coup took place, just before elections which appeared certain to bring Papandreou back as prime minister. The coup had been a joint effort of the Royal Court, the Greek military, the KYP, the CIA, and the American military stationed in Greece, and was followed immediately by the traditional martial law, censorship, arrests, beatings, and killings, the victims totaling some 8,000 in the first month. This was accompanied by the equally traditional declaration that this was all being done to save the nation from a “communist takeover”. Torture, inflicted in the most gruesome of ways, often with equipment supplied by the United States, became routine.

George Papandreou was not any kind of radical. He was a liberal anti-communist type. But his son Andreas, the heir-apparent, while only a little to the left of his father, had not disguised his wish to take Greece out of the Cold War, and had questioned remaining in NATO, or at least as a satellite of the United States.

Andreas Papandreou was arrested at the time of the coup and held in prison for eight months. Shortly after his release, he and his wife Margaret visited the American ambassador, Phillips Talbot, in Athens. Papandreou later related the following:

I asked Talbot whether America could have intervened the night of the coup, to prevent the death of democracy in Greece. He denied that they could have done anything about it. Then Margaret asked a critical question: What if the coup had been a Communist or a Leftist coup? Talbot answered without hesitation. Then, of course, they would have intervened, and they would have crushed the coup. 1

Another charming chapter in US-Greek relations occurred in 2001, when Goldman Sachs, the Wall Street Goliath Lowlife, secretly helped Greece keep billions of dollars of debt off their balance sheet through the use of complex financial instruments like credit default swaps. This allowed Greece to meet the baseline requirements to enter the Eurozone in the first place. But it also helped create a debt bubble that would later explode and bring about the current economic crisis that’s drowning the entire continent. Goldman Sachs, however, using its insider knowledge of its Greek client, protected itself from this debt bubble by betting against Greek bonds, expecting that they would eventually fail. 2

Will the United States, Germany, the rest of the European Union, the European Central Bank, and the International Monetary Fund – collectively constituting the International Mafia – allow the new Greek leaders of the Syriza party to dictate the conditions of Greece’s rescue and salvation? The answer at the moment is a decided “No”. The fact that Syriza leaders, for some time, have made no secret of their affinity for Russia is reason enough to seal their fate. They should have known how the Cold War works.

I believe Syriza is sincere, and I’m rooting for them, but they may have overestimated their own strength, while forgetting how the Mafia came to occupy its position; it didn’t derive from a lot of compromise with left-wing upstarts. Greece may have no choice, eventually, but to default on its debts and leave the Eurozone. The hunger and unemployment of the Greek people may leave them no alternative.

The Twilight Zone of the US State Department

“You are traveling through another dimension, a dimension not only of sight and sound but of mind. A journey into a wondrous land whose boundaries are that of imagination. Your next stop … the Twilight Zone.” (American Television series, 1959-1965)

State Department Daily Press Briefing, February 13, 2015. Department Spokesperson Jen Psaki, questioned by Matthew Lee of The Associated Press. 3

Lee: President Maduro [of Venezuela] last night went on the air and said that they had arrested multiple people who were allegedly behind a coup that was backed by the United States. What is your response?

Psaki: These latest accusations, like all previous such accusations, are ludicrous. As a matter of longstanding policy, the United States does not support political transitions by non-constitutional means. Political transitions must be democratic, constitutional, peaceful, and legal. We have seen many times that the Venezuelan Government tries to distract from its own actions by blaming the United States or other members of the international community for events inside Venezuela. These efforts reflect a lack of seriousness on the part of the Venezuelan Government to deal with the grave situation it faces.

Lee: Sorry. The US has – whoa, whoa, whoa – the US has a longstanding practice of not promoting – What did you say? How longstanding is that? I would – in particular in South and Latin America, that is not a longstanding practice.

Psaki: Well, my point here, Matt, without getting into history –

Lee: Not in this case.

Psaki: – is that we do not support, we have no involvement with, and these are ludicrous accusations.

Lee: In this specific case.

Psaki: Correct.

Lee: But if you go back not that long ago, during your lifetime, even – (laughter)

Psaki: The last 21 years. (Laughter.)

Lee: Well done. Touché. But I mean, does “longstanding” mean 10 years in this case? I mean, what is –

Psaki: Matt, my intention was to speak to the specific reports.

Lee: I understand, but you said it’s a longstanding US practice, and I’m not so sure – it depends on what your definition of “longstanding” is.

Psaki: We will – okay.

Lee: Recently in Kyiv, whatever we say about Ukraine, whatever, the change of government at the beginning of last year was unconstitutional, and you supported it. The constitution was –

Psaki: That is also ludicrous, I would say.

Lee: – not observed.

Psaki: That is not accurate, nor is it with the history of the facts that happened at the time.

Lee: The history of the facts. How was it constitutional?

Psaki: Well, I don’t think I need to go through the history here, but since you gave me the opportunity –- as you know, the former leader of Ukraine left of his own accord.

………………..

Leaving the Twilight Zone … The former Ukrainian leader ran for his life from those who had staged the coup, including a mob of vicious US-supported neo-Nazis.

If you know how to contact Ms. Psaki, tell her to have a look at my list of more than 50 governments the United States has attempted to overthrow since the end of the Second World War. None of the attempts were democratic, constitutional, peaceful, or legal; well, a few were non-violent. 4

The ideology of the American media is that it believes that it doesn’t have any ideology

So NBC’s evening news anchor, Brian Williams, has been caught telling untruths about various events in recent years. What could be worse for a reporter? How about not knowing what’s going on in the world? In your own country? At your own employer? As a case in point I give you Williams’ rival, Scott Pelley, evening news anchor at CBS.

In August 2002, Iraqi Deputy Prime Minister Tariq Aziz told American newscaster Dan Rather on CBS: “We do not possess any nuclear or biological or chemical weapons.” 5

In December, Aziz stated to Ted Koppel on ABC: “The fact is that we don’t have weapons of mass destruction. We don’t have chemical, biological, or nuclear weaponry.” 6

Iraqi leader Saddam Hussein himself told CBS’s Rather in February 2003: “These missiles have been destroyed. There are no missiles that are contrary to the prescription of the United Nations [as to range] in Iraq. They are no longer there.” 7

Moreover, Gen. Hussein Kamel, former head of Iraq’s secret weapons program, and a son-in-law of Saddam Hussein, told the UN in 1995 that Iraq had destroyed its banned missiles and chemical and biological weapons soon after the Persian Gulf War of 1991. 8

There are yet other examples of Iraqi officials telling the world, before the 2003 American invasion, that the WMD were non-existent.

Enter Scott Pelley. In January 2008, as a CBS reporter, Pelley interviewed FBI agent George Piro, who had interviewed Saddam Hussein before he was executed:

PELLEY: And what did he tell you about how his weapons of mass destruction had been destroyed?

PIRO: He told me that most of the WMD had been destroyed by the U.N. inspectors in the ’90s, and those that hadn’t been destroyed by the inspectors were unilaterally destroyed by Iraq.

PELLEY: He had ordered them destroyed?

PIRO: Yes.

PELLEY: So why keep the secret? Why put your nation at risk? Why put your own life at risk to maintain this charade? 9

For a journalist there might actually be something as bad as not knowing what’s going on in his area of news coverage, even on his own station. After Brian Williams’ fall from grace, his former boss at NBC, Bob Wright, defended Williams by pointing to his favorable coverage of the military, saying: “He has been the strongest supporter of the military of any of the news players. He never comes back with negative stories, he wouldn’t question if we’re spending too much.” 10

I think it’s safe to say that members of the American mainstream media are not embarrassed by such a “compliment”.

In his acceptance speech for the 2005 Nobel Prize for Literature, Harold Pinter made the following observation:

Everyone knows what happened in the Soviet Union and throughout Eastern Europe during the post-war period: the systematic brutality, the widespread atrocities, the ruthless suppression of independent thought. All this has been fully documented and verified.

But my contention here is that the US crimes in the same period have only been superficially recorded, let alone documented, let alone acknowledged, let alone recognized as crimes at all.

It never happened. Nothing ever happened. Even while it was happening it wasn’t happening. It didn’t matter. It was of no interest. The crimes of the United States have been systematic, constant, vicious, remorseless, but very few people have actually talked about them. You have to hand it to America. It has exercised a quite clinical manipulation of power worldwide while masquerading as a force for universal good. It’s a brilliant, even witty, highly successful act of hypnosis.

Cuba made simple

“The trade embargo can be fully lifted only through legislation – unless Cuba forms a democracy, in which case the president can lift it.” 11

Aha! So that’s the problem, according to a Washington Post columnist – Cuba is not a democracy! That would explain why the United States does not maintain an embargo against Saudi Arabia, Honduras, Guatemala, Egypt and other distinguished pillars of freedom. The mainstream media routinely refer to Cuba as a dictatorship. Why is it not uncommon even for people on the left to do the same? I think that many of the latter do so in the belief that to say otherwise runs the risk of not being taken seriously, largely a vestige of the Cold War when Communists all over the world were ridiculed for blindly following Moscow’s party line. But what does Cuba do or lack that makes it a dictatorship?

No “free press”? Apart from the question of how free Western media is, if that’s to be the standard, what would happen if Cuba announced that from now on anyone in the country could own any kind of media? How long would it be before CIA money – secret and unlimited CIA money financing all kinds of fronts in Cuba – would own or control almost all the media worth owning or controlling?

Is it “free elections” that Cuba lacks? They regularly have elections at municipal, regional and national levels. (They do not have direct election of the president, but neither do Germany or the United Kingdom and many other countries). Money plays virtually no role in these elections; neither does party politics, including the Communist Party, since candidates run as individuals. Again, what is the standard by which Cuban elections are to be judged? Is it that they don’t have the Koch Brothers to pour in a billion dollars? Most Americans, if they gave it any thought, might find it difficult to even imagine what a free and democratic election, without great concentrations of corporate money, would look like, or how it would operate. Would Ralph Nader finally be able to get on all 50 state ballots, take part in national television debates, and be able to match the two monopoly parties in media advertising? If that were the case, I think he’d probably win; which is why it’s not the case.

Or perhaps what Cuba lacks is our marvelous “electoral college” system, where the presidential candidate with the most votes is not necessarily the winner. If we really think this system is a good example of democracy why don’t we use it for local and state elections as well?

Is Cuba not a democracy because it arrests dissidents? Many thousands of anti-war and other protesters have been arrested in the United States in recent years, as in every period in American history. During the Occupy Movement two years ago more than 7,000 people were arrested, many beaten by police and mistreated while in custody. 12   And remember: The United States is to the Cuban government like al Qaeda is to Washington, only much more powerful and much closer; virtually without exception, Cuban dissidents have been financed by and aided in other ways by the United States.

Would Washington ignore a group of Americans receiving funds from al Qaeda and engaging in repeated meetings with known members of that organization? In recent years the United States has arrested a great many people in the US and abroad solely on the basis of alleged ties to al Qaeda, with a lot less evidence to go by than Cuba has had with its dissidents’ ties to the United States. Virtually all of Cuba’s “political prisoners” are such dissidents. While others may call Cuba’s security policies dictatorship, I call it self-defense.

The Ministry of Propaganda has a new Commissar

Last month Andrew Lack became chief executive of the Broadcasting Board of Governors, which oversees US government-supported international news media such as Voice of America, Radio Free Europe/Radio Liberty, the Middle East Broadcasting Networks and Radio Free Asia. In a New York Times interview, Mr. Lack was moved to allow the following to escape his mouth: “We are facing a number of challenges from entities like Russia Today which is out there pushing a point of view, the Islamic State in the Middle East and groups like Boko Haram.” 13

So … this former president of NBC News conflates Russia Today (RT) with the two most despicable groups of “human beings” on the planet. Do mainstream media executives sometimes wonder why so many of their audience has drifted to alternative media, like, for example, RT?

Those of you who have not yet discovered RT, I suggest you go to RT.com to see whether it’s available in your city. And there are no commercials.

It should be noted that the Times interviewer, Ron Nixon, expressed no surprise at Lack’s remark.

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Notes

  1. William Blum, Killing Hope: U.S. Military and C.I.A. Interventions Since World War II, chapters 3 and 35
  2. Greek Debt Crisis: How Goldman Sachs Helped Greece to Mask its True Debt”, Spiegel Online (Germany), February 8, 2010. Google “Goldman Sachs” Greecefor other references.
  3. U.S. Department of State Daily Press Briefing, February 13, 2015
  4. Overthrowing other people’s governments: The Master List
  5. CBS Evening News, August 20, 2002
  6. ABC Nightline, December 4, 2002
  7. “60 Minutes II”, February 26, 2003
  8. Washington Post, March 1, 2003
  9. “60 Minutes”, January 27, 2008
  10. Democracy Now!, February 12, 2015, Wright statement made February 10
  11. Al Kamen, Washington Post, February 18, 2015
  12. Huffington Post, May 3, 2012
  13. New York Times, January 21, 2015
Jan 272015
 

Posted by SnakeArbusto, 99GetSmart

The Troika imposes policies that are destroying social rights in Greece

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“An audit committee of the Greek debt could show that 80% of the debt required by the troika is illegal,” said Mr. Toussaint on an interview with Christina Vasilaki, stoKokkino`s correspondent in Brussels.

Éric Toussaint, Senior Lecturer at the University of Liège, is president of CADTM Belgium (Committee for the Abolition of Third-World Debt), and a member of the Scientific Committee of ATTAC France.

“An audit committee of the Greek debt could show that 80% of the debt required by the troika is illegal,” said Mr. Toussaint making reference to Article 7, paragraph 9 of the European Regulation on countries in program adaptation, according to which:

“A Member State subject to a macroeconomic adjustment programme shall carry out a comprehensive audit of its public finances in order, inter alia, to assess the reasons that led to the building up of excessive levels of debt as well as to track any possible irregularity”.

Radio interview transcribed by SnakeArbusto:

CV Which is the EU Regulation that Syriza’s demand for an audit of debt could be based on?

ET In May 2013 the European Parliament and the European Commission adopted a Regulation requiring all countries who sign a Memorandum of Agreement–as in the present case of Greece,  Ireland, Portugal, and Cyprus. Article 7 of this Regulation says that governments will carry out a comprehensive audit of the debt contracted by the country and to identify possible irregularities. So, Paragraph 9 of this Article of the Regulation allows a government headed by SYRIZA to create, immediately, such a commission in implementation of the Regulation.

CV What can be revealed by this audit?

ET For me it’s very clear that the debt contracted by Greece with the Troika, which represents 80% of the Greek debt now, is clearly illegitimate because the Troika has imposed policies on Greece which have destroyed part of the economy of Greece and destroyed the social rights and the economic rights of the population.

CV Do you believe that it’s necessary to write off part of the Greek debt? And what would be the result for access to the international markets in the long term?

ET As you know we have had more than 600 restructurings of debt since 1950. A lot of countries have suspended payment of the debt, and in the case of Greece, if Greece succeeds in imposing a large cancellation of its debt, which is totally possible, I think there is no real problem, after several years, (for Greece) to go back to the market if Greece needs it. But also you could imagine some alternative way of financing Greek development – fiscal reform (), reducing the taxes paid by the poor and increasing the taxes paid by the richest 1% of the population and big private enterprises could allow the government to raise sufficient money to not be obliged to go to the market and contract new debt.

CV Could the extension of the maturity of the loan and the reduction of the interest rates be an alternative solution?

ET Greece needs a real cancellation of a big part of its debt. And for the other part of the debt which will not be cancelled, abolished, a reduction of the interest rates and an extension of the maturity of payment is necessary, I suppose, too. But it’s not an alternative to the cancellation. It’s complementary to cancellation. You need both things.

Radio Interview @ http://cadtm.org/The-Troika-impose-to-Greece

Nov 012014
 

By Eric Toussaint and Tassos Tsakiroglou, CADTM

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• Manuel Valls and Matteo Renzi are asking for more time to reduce their countries’ deficits, offering in exchange reforms that would make their countries more competitive. Is this a real challenge to the European austerity consensus? Can this bring about some advantages?

I think their request will be refused. The European Commission wants to continue to apply its brutal austerity policies over the whole of the European Union, in particularly to the peripheral countries (Cyprus, Greece, Ireland, Spain, Portugal and the central and eastern European countries), but also to countries like France, Italy, Belgium, the Netherlands, Austria and Germany. If the French and Italian governments managed to persuade the European Commission to abandon austerity policies, that would be welcome, but it’s impossible. Even as they are making these requests to the European Commission, Mr. Hollande and Mr. Renzi are keeping up the pressure on the labour market, making it more precarious. In Italy, for example, Mr. Renzi is attacking the remaining social achievements that Mr. Berlusconi failed to destroy. What’s more, we know that the Valls government in France is favourably inclined towards the big corporations, banks and insurance companies.

• Alexis Tsipras has called for an international conference for the abolition of the debt of the Southern European countries that are affected by the crisis, similar to what was done for Germany in 1953, when 22 countries, including Greece, cancelled a large part of the German debt. Is this a realistic possibility today?

This is a legitimate demand. Unlike Nazi Germany, Greece has not caused any conflict on European soil. The Greek people can strongly insist that the Greek debt is illegal or illegitimate and should be cancelled, just as the German debt was in 1953. |2| However, I don’t think that SYRIZA and other European political forces can convince the European institutions to get together around a table to do the same as was done for Germany in 1953. Although this request is legitimate, and this is why I have supported the Tsipras candidature to the Presidency of the European Commission |3|, it will not be possible to bring the governments of the main European economies and the EU institutions to the table on this agenda.

The experience of the last ten years has shown that unilateral sovereign acts can get results. The creditors that reclaim the payment of an illegitimate debt and impose violent measures that attack fundamental human rights, including economic and social rights, must be refused. I think that Greece has strong arguments for forming a government that would have popular support for working in this direction. Such a popular leftist government could establish a debt audit committee that would include a large popular democratic participation. This audit committee would unilaterally suspend repayments and finally repudiate the part of the debt that it identifies as illegal and/or odious.

• In Greece, SYRIZA is topping all the polls and several of its leaders have declared that any debt negotiation will be done within the Eurozone context and will not be a unilateral decision. What do you have to say about this?

Yes, I know the official SYRIZA position. Personally, I try to show that another way is possible. It’s clear that most of the Eurozone governments and the ECB will not agree to an important reduction of Greek debt. So, in spite of SYRIZA’s willingness to negotiate, I think it will be impossible to come to terms with all. This requires a more radical approach – there is no other possibility – just as was done by Iceland after 2008, Ecuador in 2007 – 2009 and Argentina between 2001 and 2005.

Since then, those governments have made a series of mistakes and abandoned their radical positions. This why they are in great difficulty today, as is the case of Argentina, that I have recently visited. The Argentine parliament has passed a law that means Argentina must, from now on, act in a sovereign fashion in the management of its debt. It was agreed to create a Congressional Audit Committee that will sit for three months; we will see whether this does come about.

• You have said that reducing public debt is necessary, but not sufficient to bring the EU countries out of the crisis, that other strong measures will be necessary in different sectors. Can you, briefly, tell us more?

First of all, nationalize the banks – I prefer to use the term socialization. I think that the Greek banks, and the banks of other countries, should become public and be put to the service of the population, in a framework of strict regulations imposing the rules and the objectives fixed by the population. Controlling the circulation of capital is also essential, in particularly that made by the big financial institutions. I am not talking about remittances of 1,000 or 2,000 euros, but large sums, which would require authorization by controlling authorities, without which a guilty bank would be sanctioned by heavily dissuasive fines and the revocation of its banking licence. This measure must be seriously applied. It would be a protection for ordinary users who make reasonably-sized international transfers of money. Tax reform is also very important: reduce taxes paid by the majority of the population and greatly increase, on a progressive scale, those imposed on the richest households and international companies, whether national or foreign.

• And for Greece?

SYRIZA made interesting propositions during the 2012 elections. If there is a SYRIZA government the unjust laws (in particular, those that abolished collective bargaining between labour and employers) that were passed under pressure from the Troika must be repealed. Other necessary measures would include: radical tax reform favouring social justice and redistribution of the country’s wealth; the abolition of the most unfair taxes paid by the poor and increased taxation of the rich; an audit of the debt and the repudiation of the part identified as illegal and/or odious; socialization of the banks and control of the movement of capital.

• As Naomi Klein has said, “Neoliberal capitalism is fundamentally at war with life on Earth”. Recently, hundreds of thousands of people have taken to the streets in many countries to protest against climate change. What does this mean?

This very important because, worldwide, more and more people are becoming aware that we are facing global problems: global inequalities damage the climate, push people to migrate, and cause wars. International protest movements are fundamental and essential. Nevertheless, they need to be strengthened. I am impatient to see greater, and stronger, worldwide mobilisation of the peoples.

Translated from French to English by Snake Arbusto, Vickie Briault and Mike Krolikowski.

The original Greek version is available here : http://www.efsyn.gr/?p=245093
Translated by Christian Haccuria, from Greek to French.

Footnotes

|1| The original version appeared on Sunday, 20 October 2014 in the Greek centre-Left daily Εfimerida ton Syntakton (Journal of Editors): http://www.efsyn.gr/?p=245093, «Νόμιμο το αίτημα Τσίπρα για διεθνή διάσκεψη για το χρέος». The French version was reviewed by Éric Toussaint.

|2| See the article: Eric Toussaint, “The cancellation of German debt in 1953 versus the attitude to the Third World and Greece”, published 18 August 2014.

|3| In 2014, when the new President of the EU Commission was designated, the European Left parliamentary group had nominated Alexis Tsipras as a candidate against Jean-Claude Juncker (supported by the European People’s Party and the European Socialist group) and a liberal.