Jul 182017
 

By Michael Nevradakis, 99GetSmart

Originally published at MintPressNews

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

michael-120x120ABOUT THE AUTHOR
Michael Nevradakis

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

Jun 272017
 

By Michael Nevradakis, 99GetSmart

Originally published at MintPressNews:

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

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

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

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

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

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

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

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

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

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

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

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

Pensions, salaries see cuts as austerity steamrolls ahead

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

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

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

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

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

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

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

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

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

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

Move toward cashlessness benefiting “too big to fail” institutions

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

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

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

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

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

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

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

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

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

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

Civil unrest on the rise amid economic uncertainty

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

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

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

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

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

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

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

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

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

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

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

No end in sight for bleak austerity

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

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

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

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

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

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

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

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

May 302014
 

By James Petras, 99GetSmart

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Introduction

The European parliamentary elections witnessed a major breakthrough for the right-wing parties throughout the region.  The rise of the Right runs from the Nordic countries, the United Kingdom, the Baltic and Low countries, France, Central and Eastern Europe to the Mediterranean.

Most, if not all, of these emerging right-wing parties mark a sharp break with the ruling neo-liberal, Christian and Social Democratic parties who have presided over a decade of crisis.

The ‘new Right’ cannot be understood simply by attaching negative labels (‘fascist’, ‘racist’ and ‘anti-Semitic’).  The rise of the Right has to be placed in the context of the decay of political, social and economic institutions, the general and persistent decline of living standards and the disintegration of community bonds and class solidarity. The entire existing political edifice constructed by the neo-liberal parties bears deep responsibility for the systemic crisis and decay of everyday life.  Moreover, this is how it is understood by a growing mass of working people who vote for the Right.

The so-called ‘radical Left’, usually defined as the political parties to the left of the governing Social Democratic parties, with the exception of SYRIZA in Greece, have failed to capitalize on the decline of the neo-liberal parties.  There are several reasons that account for the lack of a right-left polarization.  Most of the ‘radical Left’, in the final account, gave ‘critical support’ to one or another of the Labor or Social Democratic parties and reduced their ‘distance’ from the political-economic disasters that have followed.  Secondly, the ‘radical Left’s’ positions on some issues were irrelevant or offensive to many workers: namely, gay marriage and identity politics.  Thirdly, the radical Left recruited prominent personalities from the discredited Labor and Social Democratic parties and thus raised suspicion that they are a ‘new version’ of past deceptions. Fourthly, the radical Left is strong on public demonstrations demanding ‘structural changes’ but lacks the ‘grass roots’ clientelistic organizations of the Right, which provide ‘services’, such as soup kitchens and clinics dealing with day-to-day problems.

While the Right pretends to be ‘outside’ the neo-liberal establishment challenging the assumption of broad powers by the Brussels elite, the Left is ambiguous: Its support for a ‘social Europe’ implies a commitment to reform a discredited and moribund structure.  The Right proposes ‘national capitalism’ outside of Brussels; the Left proposes ‘socialism within the European Union’.  The Left parties, the older Communist parties and more recent groupings, like Syriza in Greece, have had mixed results.  The former have generally stagnated or lost support despite the systemic crisis.  The latter, like Syriza, have made impressive gains but failed to break the 30% barrier.  Both lack electoral allies.  As a result, the immediate challenge to the neo-liberal status quo comes from the electoral new Right parties and on the left from the extra-parliamentary social movements and trade unions.  In the immediate period, the crisis of the European Union is being played out between the neo-liberal establishment and the ‘new Right’.

The Nature of the New Right

The ‘new Right’ has gained support largely because it has denounced the four pillars of the neo-liberal establishment:  globalization, foreign financial control, executive rule by fiat (the Brussels troika) and the unregulated influx of cheap immigrant labor.

Nationalism, as embraced by the new Right, is tied to national capitalism:  Local producers, retailers and farmers are counterpoised to free traders, mergers and acquisitions by international bankers and the giant multinationals. The ‘new Right’ has its audience among the provincial and small town business elite as well as workers devastated by plant closures and relocations.

The ‘new Right’s’ nationalism is ‘protectionist’ – seeking tariff barriers and state regulations to protect industries and workers from ‘unfair’ competition from overseas conglomerates and low-wage immigrant labor.

The problem is that protectionism limits the imports of cheap consumer goods sold in many small retail shops and affordable to workers and the lower middle class.  The Right ‘dreams’ of a corporatist model where national workers and industries bond to oppose liberal competitive capitalism and class struggle trade unions.  As the class struggle declines, the ‘tri partite’ politics of the neo-liberal right is reconfigured by the New Right to include ‘national’ capital and a ‘paternalistic state’.

In sum, the nationalism of the Right evokes a mythical past of harmony where national capital and labor unite under a common communal identity to confront big foreign capital and cheap immigrant labor.

Political Strategy: Electoral and Extra-Parliamentary Politics

Currently, the new Right is primarily oriented to electoral politics, especially as it gains mass support.  They have increased their share of the electorate by combining mass mobilization and community organizing with electoral politics, especially in depressed areas. They have attracted middle class voters from the neo-liberal right and working class voters from the old Left.  While some sectors of the Right, like the Golden Dawn in Greece, openly flaunt fascist symbols – flags and uniforms – as well as provoking street brawls, others pressure the governing neo-liberal right to adopt some of their demands especially regarding immigration and the ‘deportation of illegals’.  For the present, most of the new Right’s focus is on advancing its agenda and gaining supporters through aggressive appeals within the constitutional order and by keeping the more violent sectors under control.  Moreover, the current political climate is not conducive to open extra-parliamentary ‘street fighting’ where the new Right would be easily crushed.  Most right-wing strategists believe the current context is conducive to the accumulation of forces via peaceful methods.

Conditions Facilitating the Growth of the Right

There are several structural factors contributing to the growth of the new Right in Europe:

First and foremost, there is a clear decline of democratic power and institutions resulting from the centralization of executive – legislative power in the hands of a self-appointed elite in Brussels.  The new Right argues effectively that the European Union has become a profoundly authoritarian political institution disenfranchising voters and imposing harsh austerity programs without a popular mandate.

Secondly, national interests have been subordinated to benefit the financial elite identified as responsible for the harsh policies that have undermined living standards and devastated local industries.  The new Right counterpoises ‘the nation’ to the Brussels ‘Troika’ – the International Monetary Fund, the European Central Bank and the European Commission.

Thirdly, ‘liberalization’ has eroded local industries and undermined communities and protective labor legislation.  The Right denounces liberal immigration policies, which permit the large-scale inflow of cheap workers at a time of depression level unemployment.  The crisis of capitalism combined with the large force of cheap immigrant labor forms the material basis for right-wing appeals to workers, especially those in precarious jobs or unemployed.

Right:  Contradictions and the Double Discourse

The Right, while criticizing the neo-liberal state for unemployment, focuses mainly on the immigrants competing with nationals in the labor market rather than on the capitalists whose investment decisions determine levels of employment and unemployment.

The Right attacks the authoritarian nature of the European Union, but its own structures, ideology and history pre-figure a repressive state.

The Right rightly proposes to end foreign elite control of the economy, but its own vision of a ‘national state’, especially one linked to NATO, multi-national corporations and imperial wars, will provide no basis for ‘rebuilding the national economy’.

The Right speaks to the needs of the dispossessed and the need to ‘end austerity’ but it eschews the only effective mechanism for countering inequalities – class organization and class struggle.  Its vision of the ‘collaboration between productive capital and labor’ is contradicted by the aggressive capitalist offensive to cut wages, social services, pensions and working conditions.  The new Right targets immigrants as the cause of unemployment while obscuring the role of the capitalists who hire and fire, invest abroad, relocate firms and introduce technology to replace labor.

They focus the workers’ anger ‘downward’ against immigrants, instead of ‘upward’ toward the owners of the means of production, finance and distribution who ultimately manipulate the labor market.

In the meantime the radical Left’s mindless defense of unlimited immigration in the name of an abstract notion of ‘international workers solidarity’ exposes their arrogant liberal bias, as though they had never consulted real workers who have to compete with immigrants for scarce jobs under increasingly unfavorable conditions.

The radical Left, under the banner of ‘international solidarity’, has ignored the historical fact that ‘internationalism’ must be built on the strong national foundation of organized, employed workers.

The Left has allowed the new Right to exploit and manipulate powerful righteous nationalist causes.  The radical Left has counterpoised ‘nationalism’ to socialism, rather than seeing them as intertwined, especially in the present context of an imperialist-dominated European Union.

The fight for national independence, the break-up of the European Union, is essential to the struggle for democracy and the deepening of the class struggle for jobs and social welfare. The class struggle is more powerful and effective on the familiar national terrain – rather than confronting distant overseers in Brussels.

The notion among many radical Left leaders to ‘remake’ the EU into a ‘Social Europe’, the idea that the EU could be converted into a ‘European Union of Socialist States’ simply prolongs the suffering of the workers and the subordination of nations to the non-elected bankers who run the EU.  No one seriously believes that buying stocks in Deutsch Bank and joining its annual stockholders meetings would allow workers to ‘transform’ it into a ‘People’s Bank’.  Yet the ‘Bank of the Banks’, the ‘Troika’, made up of the European Commission, the European Central Bank and the IMF, set all major policies for each member state of the European Union. Un-rectified and remaining captive of the ‘Euro-metaphysic’, the Left has abdicated its role in advancing the class struggle through the rebirth of the national struggle against the EU oligarchs.

Results and Perspectives

The Right is advancing rapidly, even if unevenly across Europe. Its support is not ephemeral but stable and cumulative at least in the medium run.  The causes are ‘structural’ and result from the new Right’s ability to exploit the socio-economic crisis of the neo-liberal right governments and to denounce authoritarian and anti-national policies of the unelected EU oligarchy.

The new Right’s strength is in ‘opposition’.  Their protests resonate while they are distant from the command centers of the capitalist economy and state.

Are they capable of moving from protest to power?  Shared power with the neo-liberals will obviously dilute and disaggregate their current social base.

The contradictions will deepen as the new Right moves from positions of ‘opposition’ to sharing power with the neo-liberal Right.  The massive roundups and deportation of immigrant workers is not going to change capitalist employment policies or restore social services or improve living standards.  Promoting ‘national’ capital over foreign through some corporatist union of capital and labor will not reduce class conflict.  It is totally unrealistic to imagine ‘national’ capital rejecting its foreign partners in the interest of labor.

The divisions within the ‘nationalist Right’, between the overtly fascist and electoral corporatist sectors, will intensify.  The accommodation with ‘national’ capital, democratic procedures and social inequalities will likely open the door to a new wave of class conflict which will expose the sham radicalism of the ‘nationalist’ right.  A committed Left, embedded in the national terrain, proud of its national and class traditions, and capable of unifying workers across ethnic and religious ‘identities’ can regain supporters and re-emerge as the real alternative to the two faces of the Right – the neo-liberal and the ‘nationalist’ new Right.  The prolonged economic crisis, declining living standards, unemployment and personal insecurity propelling rise of the nationalist Right can also lead to the emergence of a Left deeply linked to national, class and community realities.  The neo-liberals have no solutions to offer for the disasters and problems of their own making; the nationalists of the new Right have the wrong -reactionary – answer.  Does the Left have the solution?  Only by overthrowing the despotic imperial rule of Brussels can they begin to address the national-class issues.

Post-script and final observations:

In the absence of a Left alternative, the working class voters have opted for two alternatives: Massive voter abstention and strikes.  In the recent EU election, 60% of the French electorate abstained, with abstention approaching 80% in working class neighborhoods.  This pattern was repeated or even exceeded throughout the EU – hardly a mandate for the EU or for the ‘new Right’.  In the weeks and days before the vote, workers took to the streets.  There were massive strikes of civil servants and shipyard workers, as well as workers from other sectors and mass demonstrations by the unemployed and popular classes opposing EU-imposed ‘austerity’ cuts in social services, health, education, pensions, factory closures and mass lay-offs.  Widespread voter abstention and street demonstrations point to a huge proportion of the population rejecting both the neo-Liberal Right of the ‘Troika’ as well as the ‘new Right’.

May 222014
 

Posted by greydogg, 99GetSmart

Written by Afrodity Giannakis, Thessaloniki

Protest against Sunday trading

Links International Journal of Socialist Renewal — “I wish I could leave Greece. I can’t go on living here. I work very long hours and live more frugally than ever, but I still can’t pay the bills, the income tax or the other taxes like the property poll tax. My tax debt keeps building up. I’ll end up losing my home. They are stealing our homes and they are not communists. And people are getting sadder and madder every day. I can’t go on like this.”

This was the response I got when I greeted a stall holder at an open-air market in my area. Due to my own extremely difficult working and commuting conditions, I hadn’t seen him in months. His anger and despair were much stronger than before, as is the case with most ordinary people in Greece.

My friend’s allusion to the communists concerns a decades-long anti-communist argument used by the power elites. The argument went that if the communists came to power, they would confiscate people’s homes. It was recently used by far-right health minister Adonis Georgiadis.

In fact, small real-estate property is being confiscated under capitalism. People are losing their homes to the banks for failing to meet mortgage payments, or to the taxation department for accumulated tax debts.

Home confiscations have been facilitated by a recent law enabling seizure of salaries, pensions, bank savings and property for even small debts to the state. There are specified debt amounts that incur property seizure or jailing. They vary according to the recipient (whether the money is owed to the taxation department, a public insurance fund etc.). The different amounts are often changed by the government. The latest ministerial circular (issued on April 15, 2014) concerning tax debts sets the line at 1500 euros.

The number of confiscated homes has risen in recent years. A big wave of new house seizures is expected soon. The finance ministry has made an agreement with the “troika” (the European Union, European Central Bank and the International Monetary Fund) to set the opening bid at auctions at 30% of the houses’ real values.

Financial hardship, combined with recent law changes, has led to a dramatic rise in debt-related jailings. People are kept in barbaric and unconstitutional prison conditions.

The ‘aid’ trap

The vast majority of people are bound to have difficulty paying their mortgages or to run up a tax debt sooner or later. This is due to the extreme austerity measures imposed on Greece at the behest of the “troika” in agreement with Greek governments.

People in Greece are suffering high unemployment (officially well over 27%, the highest in Europe), huge income cuts, rising prices of basic goods, unfair and unpayable taxes and the sky-rocketting fees imposed on many middle-class professionals.

Since the first “memorandum” agreement signed with the troika in May 2010, real-estate taxes have risen by 684%. Overall taxation has risen by up to 900% since 2010.

In addition to many other irrational measures, people are now asked to pay tax on “implied income”. In practice, this means that even if you have no income, chances are you’ll have to pay a considerable amount of tax. “Implied income” is based on the assumption that if you can afford to maintain a home or a car, you have a source of income. This has especially serious implications for most unemployed people, as about only one-tenth of the officially unemployed are currently receiving the unemployment benefit.

What’s more, the income tax for 2014 is set to rise due to the abolition of most tax exemptions and deductions. Individual taxpayers are expected to pay taxes of 800-1000 euros more than for 2013, while the clear minimum wage has dropped below 480 euros per month.

The situation was already pretty bad before the first memorandum. It has been getting much worse since the so-called “aid” from the troika and the required “structural adjustment” reforms it comes with.

Despite their stated aim, the loans given to Greece were intended to destroy rather than help the country’s economy. In May 2010, Greek public debt was 120% of GDP. Today, after four years of savage measures, it is 175% and growing.

Most of the bailout money is used to pay off previous loans and excessive loan interest. It is also handed to parasitic banks and insurance companies. On top of that, the people of Greece have paid 100 billion euros more than the loan given to their government.

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In a cynical statement in January, Greece’s Prime Minister Antonis Samaras confirmed that the people of Greece have suffered a drop in living standards greater than any other people has since the end of World War II.

Even though the people and the economy are all but crushed, the government is triumphant about a supposed current or ever-imminent economic recovery.

But, despite the government’s show of optimism, the disastrous policies it follows are not conducive to development. The “structural adjustment” memorandum-dictated measures are leading to total pauperisation and helplessness, the complete destruction of the country’s economy, the theft of all its public and private property, and the abolition of hard-won social and workers’ rights.

As in most parts of the world, capitalism is again openly showing its hideous face, even in Europe, which has been touted as the stronghold of democracy and welfare.

The deliberate economic and social destruction by big capital in many countries is clearly expounded by Naomi Klein in The Shock Doctrine. Also, the documentaries Debtocracy (2011) and Catastroika (2012) (with special reference to Greece) are enlightening about the ways global capitalism works to subjugate whole countries and their peoples.

Greece is the first eurozone country to be subjected to this fate, being often referred to as a “test case”. The implication is that the same savage policies are to be applied to other peoples if the experiment turns out to be successful. The measures taken in Greece are spreading to other countries too, especially in southern Europe.

The violent destruction of Greece’s economic order was effected through the memorandum agreements. However, it had started decades before, especially after the country joined the European Community (the previous form of the European Union) in 1981. In 1976, industrial production was about 34% of GDP. In 2000 it dropped to almost 21% and in 2008 it reached 19%. The agricultural economy was clearly restricted by European Common Agricultural Policy agreements. Agricultural production was 14% in 1976, 7% in 2000 and dropped to 3% in 2008.Between 2010 and 2013 GDP was further reduced by 40 billion euros.

All-encompassing barbarism

Since the first memorandum, the country’s decline has been much more rapid.

The powers-that-be are blatantly violating common sense, the law and the constitution in total disregard for human, working and political rights. The situation is so mind-boggling, with the attacks so relentless and all-encompassing they cannot be easily described. All areas of life are affected, from financial affairs to cultural, relationships and psychological issues. A bitter memorandum-time joke aptly describes the people’s state of mind: “Anyone who lives in Greece and is not depressed must see a doctor.”

Greek governments have been continuously changing the legislation to enforce more and more anti-people measures. To achieve their ends, they use any means, including breaking their own laws. Ministers or even the prime minister can be appointed at will, as has been the case with ex-prime minister Lucas Papademos and current finance minister Yiannis Stournaras. Important decisions are made by presidential decree and bills are rushed through parliament rapidly and quietly. There is serious criticism by experts that the imposition of the memorandum was unconstitutional. The assertion is based on the grounds that the constitution-specified parliamentary majority of three-fifths of the number of MPs was not adhered to when Greece was put under troika supervision.

Moreover, the governing parties, New Democracy and the Panhellenic Socialist Movement (PASOK), gave themselves a bonus of 50 extra seats (out of a total of 300 parliamentary seats) through a law expressly introduced before the last election, in anticipation of the election result. In this way, they ensured a parliamentary majority, which at first was made much more comfortable with the participation of the Democratic Left (DIMAR). DIMAR, a nominally left-wing party, has consistently supported memorandum policies. (Seehttp://www.redpepper.org.uk/greek-election-analysis/.)

Like legislation, the judicial system favours the dominant class against ordinary people, who more often than not cannot get justice when they are wronged. The major drawbacks are the expenses involved, long waiting periods and unfair verdicts.

Inequality and injustice are extreme on all levels. The memorandum offensive is all-sweeping. Hospitals and other services are closing down. Thousands of schools have closed and class sizes in the remaining schools have increased. Many job positions are lost and people are left without essential services like education, medical care and medication.

Salaries and pensions have been cut by about 40%. Reduced incomes are compounded by rising prices and unreasonable taxation measures, high unemployment, widespread underemployment and sackings in the private and public sectors. It is the first time since 1911 that public servants have been dismissed.

In both the public and private sectors, working conditions have deteriorated immensely, which is facilitated by newly introduced legislation. Also, many employers get away with further violations of workers’ rights. About 50% of workers have not been paid for up to 18 months.

Unpaid overtime, intensification of work, illegally low wages, extra duties and extra working time are now rampant, especially in the private sector. Working conditions of public employees have also worsened. For instance, in the teaching profession, there has been an increase in face-to-face teaching hours and student numbers per class have increased. These changes have raised stress levels and have affected the quality of teaching and learning. They have meant the closure of thousands of schools with the accompanying loss of thousands of teaching positions, especially since 2011. In recent years, teachers are also forced to do administrative work traditionally done by clerical staff or sub-principals.

People are robbed of their free time when they are forced to do work previously performed by specialised employees. That was the case with recent public servant censuses, which involved the employees’ filling out complicated forms and submitting them online in their own time. In the same spirit, taxpayers now have to download tax documents and file their tax returns electronically, irrespective of their PC and Internet skills or access.

Self-employed professionals are now required to do intricate time-consuming bookkeeping work constantly and submit records to the taxation department monthly. Failure to meet the deadline incurs a fine of 250 or 500 euros. The fines were originally 1000 and 2500 euros respectively, but were subsequently reduced. All tax penalties in the revised tax code are absurd and exorbitant.

Besides eating into people’s free time, these unprecedented measures cause a lot of stress. Some of them directly lead to the downsizing of public services by making job positions redundant. As a consequence, the remaining employees work more hours and more intensively for less money.

And the chain-reaction effect does not stop there. Reduced consumer spending ability is the main cause of the closure of small and medium-scale businesses. State-imposed excessive financial burdens on consumers and shop owners also play a large part in the closures.Thousands of shops fold up every month.

Against this background, social problems such as homelessness, crime and prostitution are on the rise. The same goes for psychological and health problems.

Another big social issue is the electricity cut-offs to hundreds of thousands of households for unpaid bills. This, together with the high cost of other conventional heating methods, has resulted in fatal accidents caused by makeshift heaters.

In keeping with its anti-social policies, the establishment follows blaming-the-victim tactics. In this spirit, it opts for punishment over social and preventive measures.

As a result, prisons have filled well beyond capacity. The conditions are inhumane, as are the conditions in migrant concentration camps. Health care in prisons and migrant detention centres is almost non-existent, so prisoners are left untreated and they often contract diseases. Physical abuse of inmates is another common occurrence.

It is the first time in the country’s history that there are concentration camps for migrants. Thousands of people are detained there in appalling conditions.

Currently, a new prison is being constructed in an ex-military camp in the city of Korinthos by George Bobolas. He is a super-rich industrialist, media magnate, real-estate owner and national roads contractor. He has huge interests both in Greece and overseas. Among these interests are the mine in Skouries, the road tolls on badly constructed national roads and the well-known Keratea dump business, whose construction has been frozen due to the magnificent struggle of the town’s residents.

The prison under construction is reported by certain sources to be the first specialised prison for financial “criminals”, that is, for people unable to pay off even small tax debts,. At the moment, the premises serve as a concentration camp where 1200 “illegal” migrants are confined in harsh and barbaric conditions.

There is a very fine line between living free and being in prison for many people in Greece these days. About 2,500,000 people have outstanding debts to the state at this time, which makes them potential prisoners and highly vulnerable in many ways. Once people lose their freedom, many possibilities are opened.

Not surprisingly, my stall-holder friend who wants to leave Greece is in good company. Hundreds of thousands have emigrated in recent years and about 400,000 are considering it. The emigration rate is rising by almost 40% a year. Emigration has played a big part in Greece’s population decrease. It is the first time in modern Greece that a population decrease has been recorded. The drop in the birthrate, combined with a higher death rate, is another factor.

The rising death rate is due to greater illness levels, compounded by the shocking state of the national health-care system and high medication prices.

Growing numbers of suicides add to the death figures. Greece is leading the world in its rising rate of suicides. Memorandum-related suicides are estimated to be up to 6000. Due to the secrecy around the issue, the exact number is not clear.

Worse in store

As the vast majority of the people suffer, Greek and foreign big capital are making huge profits. Government officials, like Georgiadis, state publicly that suffering is a fact of life. Such statements are intended to make people resigned to the current situation and prepare them for more of the same. And there is worse in store.

Troika officials keep saying the country is not ready for profitable investment yet. At the same time, they are pressing for further salary cuts. The objective is the maximum plunder of Greece’s natural wealth and exploitation of the people.

On May 6, Greek vice-president Evangelos Venizelos made a telling statement during a TV interview. He said that in Moldavia, which he claimed “is practically next to Greece”, there are wages of 70 euros per month. He concluded that Greece is a country with a really high standard of living.

Official papers and statements reveal plans to cut the minimum monthly wage to 200 euros and further increase “flexibility” in working conditions. Other plans include more tax increases and pension cuts, instituting labour hire, pillaging the country’s forests, closing public services and transferring them to private concerns, sacking tens of thousands of public servants in the next few months, creating a permanent public service mechanism for sackings and introducing individual pay for public servants based on performance assessment.

Currently, the government is trying to enforce an evaluation plan that is a pretext for more closures and sackings. The relevant law sets quotas for the classification of public servants in every single workplace into outstanding (25%), competent (60%) and inadequate (at least 15%). Those judged to be inadequate will be sacked.

The law is harsh and unreasonable, something not uncommon in the current political “paranoia”. The presumption that at least 15% of employees in each workplace are incompetent does not stand to reason. What’s more, according to the relevant government circular, failure of the assessor to conform with the quotas specified would constitute a disciplinary offence. The “inadequate” employees will be marked from 1 to 6.9. An illogical stipulation states that only those with marks 1-6 will have a right of appeal, while the ones getting 6.1-6.9 will not. The reaction to the planned assessment has been quite strong, forcing the government to tactical maneuvers.

If the government is not stopped, the consequences will be tremendous. Tens of thousands (the plan is for 150,000 sackings by the end of 2015) will lose their jobs. This will adversely affect the economy, add to the existing social misery, and deprive the people of even more badly-needed services.

Privatisation

As the people of Greece are robbed of their basic rights, public goods and services are being privatised. Electricity, water, ports, beaches, the national broadcasting service, national health care and education are only a few examples.

Greek banks, after robbing taxpayers of tens of billions of bailout money, are now sold out at bargain prices to Greek and foreign capitalists.

In August last year, about 50 public vocational education specialist courses were abolished. About 2500 teachers lost their jobs and about 20,000 students were thrown out of highly popular courses (e.g. nursing, plumbing, hairdressing and physiotherapy). Within days, the same specialist courses appeared in private teaching centres.

Opening up professional fields is another way of transferring material and human resources to big corporations. Deregulation has been viciously pursued by the government in businesses such as pharmacies, taxis and trucks, and more recently in open-air “people’s” markets.

Similar moves include facilitating milk imports at the expense of local producers and the enforcement of extended opening hours, especially introducing Sunday trading, which will wipe out small shops.

While shops have already been closing by the thousands, there is an exception. Pawnbrokers’ shops have mushroomed, being one more way of stealing people’s wealth.

There is a lot of resistance to these policies. However, it hardly has any results, as workers from different professional categories are largely isolated in their struggles. Major reasons for this are the dominant divide-and-rule propaganda, which is promoted by the media, as well as divisive and ineffectual tactics of sell-out trade-union leaderships.

The whole country is up for grabs by privateers. Whole areas are sold out for exploitation, such as the mines in Skouries, Thrace and Kilkis. The struggle against this plunder is dynamic and ongoing, most characteristically in Skouries.

In such places, as well as in ports, Special Economic Zones and Free Zones have started to materialise. Their purpose is to ensure high corporate profits of “investors” through slavery-type conditions for workers and overall unaccountability.

Authoritarianism, violence, fascism

These measures are accompanied by heightened authoritarianism. The erosion of democratic rights and police repression are reminiscent of totalitarian regimes. Police brutality is mainly aimed at those resisting the government’s policies.

Unlawful arrests, detention and prosecution practices have been extreme. Many people are persecuted for their political views and legitimate action. Strikes and political rallies are banned to an extent not seen since the end of the military junta in 1974.

The police have been given excessive powers, including the power to arrest impoverished people for tax debts. Among those arrested, there have been many feeble elderly people.

Also, there have been many reported cases of torture of activists and migrants, for example, in police custody or in detention concentration camps. The case of Ilia Kareli, a prisoner of Albanian origin who was tortured to death by correctional officers last March, is indicative of such practices. Racist attitudes that go unchecked pose a great risk for migrants.

In April last year, about 200 migrants were chased and shot by their employer’s foremen and at least 28 were transferred to hospital. They were working in strawberry fields in the area of Manolada of Ilia. Just before the event, they had met with the foremen and demanded overdue wages of six months.

These kinds of practices are akin to Neo-Nazi Golden Dawn’s actions, whose members, usually in gangs, have been attacking and killing innocent migrants on the basis of their appearance and social standing. Leftist individuals, groups and offices have also been targets. Last September, Golden Dawn thugs murdered a non-migrant, anti-fascist rapper Pavlos Fyssas.

Golden Dawn paved the way for an exacerbation of the government’s racist rhetoric and measures. Like extreme-right Popular Orthodox Alert (LAOS) before it, the neo-Nazi gang has been given disproportionate media exposure to suit the needs of the establishment. Even though Golden Dawn pretends to be on the side of ordinary people, it has strong connections with big private interests and works for them against union struggles. The criminal gang’s MPs also vote in favour of big interests in parliament and they even support the country’s sell-out, exposing the falseness of its pro-people and patriotic façade.

LAOS, a “softer”-profile fascist organisation, was a precursor of Golden Dawn. It gave ideological support to the government and participated in the undemocratically formed provisional government in November 2011. In a similar way, Golden Dawn’s racist ideas and criminal action suit the government, as they push forward the government’s political agenda. For this reason, the neo-Nazis are allowed to run wild, committing political and common law crimes, often with police cover. This started many years before the memorandum and has been going on under successive governments of the two ruling parties.

Last year, the government realised it had lost control of the situation and was losing voters to Golden Dawn. So, it decided to take action against the gang, on the grounds of its criminal activity. The government made a big fuss about being anti-fascist, while it implemented racist measures like anti-migrant police pogroms and migrant concentration camps,

At the same time, like its predecessors, the current government enforces inhumane border controls. Such policies have caused a great deal of pain. Many people have died while trying to enter Greece in order to escape terrible conditions in their countries. Two recent examples are the people who drowned off the islands of Farmakonisi and Samos. The great majority of refugees use Greece as a transit point to other European countries.

As the government puts on an anti-fascist act, it violently represses left-wing, anti-fascist actions. Furthermore, Venizelos recognised the far-right government of Ukraine, thus legitimising the neo-Nazi atrocities there and the planned destruction of the country.

Also, there are members of the Greek government who are openly fascist. Two of its ministers, Makis Voridis and Adonis Georgiadis, have a well-known history of far-right activity.

Another far-right government official, Panagiotis Baltakos, who was general secretary of the Greek government and Samaras’ right-hand man, was forced to resign in April. The reason was a big scandal concerning a videotaped private talk between him and Golden Dawn top member, Ilias Kasidiaris. On the tape, Baltakos appeared to be on very good terms with Golden Dawn. The mood and the content of the conversation were quite compromising for himself and the government.

Both the government and the neo-Nazis serve the interests of big business. Fascism is called to the system’s rescue when bourgeois democracy has reached its limits and can no longer serve corporate objectives. The connection between big capital and fascism is clearly shown in the recent documentary of the makers of Debtocracy and CatastroikaFascism Inc.

Backed by big business interests, Golden Dawn has been lying in wait, making methodical moves for many years. The neo-Nazis have infiltrated the police force and the army in large numbers. About 50% of police voted for Golden Dawn in the last elections. (This video deals with Golden Dawn’s infiltration of the state: http://www.youtube.com/watch?v=UiEHGMwud0c.)

On the bright side, an ongoing strong anti-fascist movement from the whole of the left has helped raise consciousness and contain neo-Nazi activity.

Some gains

The anti-fascist movement has had some apparent success. Other successes of the people’s fightback include a judicial win by sacked school guards and the government’s withdrawal of a planned 25-euro hospital admission fee.

Although such victories can boost people’s confidence and increase awareness, the tangible gains do not last long, with the government always finding ways to realise its plans.

A sign of increased political consciousness is the shift to the left of the balance of forces in some trade unions. Furthermore, the left is making conscious efforts to set up new union groups and counter sell-out top-tier leaderships.

With the coming combined Greek local and European Parliament election on May 18 and 25, a lot of hope is invested in an electoral victory of the Coalition of the Radical Left (SYRIZA). SYRIZA representatives express a belief that it will win the highest vote of any Greek political force in these polls, which will instigate national general elections.

But the system has so many means of manipulating voting choices that a SYRIZA win is not certain. For one thing, new capitalist parties have formed and some are promoted by the media to diffuse the vote. Forty-three political parties are going to take part in the coming elections.

As part of the effort to fool the electorate, the Greek government has tried to keep secret its new agreement with the troika, which has been revealed.

At the same time, the government is handing out a one-off 500-euro benefit to the most disadvantaged. Ostensibly, the intention is to share around a supposed budget surplus. The government and the mainstream media have been making a big deal of this surplus, which they attribute to economic development. In reality, the extra money comes from the merciless robbery of ordinary people. Besides, due to strict eligibility criteria, the benefit is given to very few.

The ruling parties are running an election campaign on accusations against SYRIZA, fear-mongering, lies and deceit. In the 2012 general national elections, they maximised their vote through false promises and scare tactics. They are employing similar methods this time and they may also have last-minute tricks up their sleeves.

There is a strong likelihood of early national elections. But even if SYRIZA wins government in the next national elections, it would need the support of a strong popular movement. Therefore, SYRIZA should step up its efforts to stand by the grassroots movement, increasing political consciousness and rallying support.

The powers-that-be are well aware of the implications of this radicalism. So they have been trying hard to tame SYRIZA and cut it off from the people’s struggle.

Although SYRIZA keeps promising it will annul all memorandum-related laws, some left-wing forces are questioning it. They accuse SYRIZA of being an establishment party and deliberately misleading the people. These practices do not help promote the badly needed unity of the left, which SYRIZA is trying to encourage.

It is imperative that left forces stick together against vested interests. They must not compromise, but find effective ways to organise and earn the people’s trust, so they can work with the people to reverse the catastrophe. If this can trigger a similar change in other countries, there might be some hope for a better future. Coordination of the struggle across Europe and other neighbouring countries could prove essential in the current circumstances.

Afrodity Giannakis is part of the Left Platform in SYRIZA, which is currently more than one-third of the party’s forces.

Nov 142013
 

By J. Iddhis Bing, 99GetSmart

Greeks protest austerity cuts in Syntagma Square, Athens. Photography by Elias Theodoropoulos

Greeks protest austerity cuts in Syntagma Square, Athens. Photography by Elias Theodoropoulos

It’s hard work getting the news from the news these days, especially if you want to know about a country like Greece. Far-away birthplace of democracy, a bit exotic, Mediterranean lifestyle, Zorba, rumored to be different. What does any of that mean? Strange things are happening there but what is going on precisely? The Greeks ran up quite a tab at the bar, or so the financial dailies tell us on a regular basis.

Almost everything we read is filtered through the point of view of the Troika – the IMF, the European Central Bank and the European Commission – or the Greek government. We know that representatives of the Troika – established during the first stage of Greece’s “rescue” in May 2010 – have been in Greece since Tuesday of last week, meeting with the Greek government about the latest round of potential bailouts for that country. Beyond the leaks from either side, the rest, for us at any rate, is guesswork.

As of Tuesday evening, November 12, no decision had been announced. The Troika is typically very business-like with its clients, out with the whip, sign here, see you later – and then the next round of what the press like to call “belt-tightening” begins. The coalition government survived a no-confidence vote on Monday the 11th but that hardly quelled the sense that they are a very fragile edifice indeed. The people are out in the streets on a constant basis. They’re an after-thought, at least as far as the world’s media is concerned.

We do know a few things: that the Troika is a quasi-legal junta, created during the first stage of Greece’s trauma. The IMF was invited to the party at the insistence of Angela Merkel. Readers with long memories may remember that Dominique Strauss-Kahn was on his way to meet Merkel to present his plan to “save Greece,” when he was abruptly detained in New York.

The Troika’s mission is to enforce an austerity program that includes the selling-off of government assets and the decimation of public services, and that even within the IMF, there is dissension over the absurd goal of turning Greece into a productive satellite of Germany. We also know or suspect that any “bailout” of Greece will only impoverish the country yet further. That’s the public record regarding employment, savings, pensions, access to housing and food. You can read it here on Ground Report and find it many other places as well.

Language, meanwhile, gets so knocked around by the pros it throws its hands up in despair. Defeat comes at the price of rational thought: being rescued by the Troika means becoming a pauper in your own country, means your pension has vanished, you are a month or so away from losing the roof over your head and your hand is in the garbage looking for food.

None of the rescues perpetrated by the Troika have successfully rescued their target countries but instead have pitched them ever further into chaos. Bailouts are not a transfusion of money but a way of channeling money from one country (Germany, in this case) to another country (Greece) where the money is then re-routed to banks in, among other places, Germany and France in the form of debt payments.

The conservative government of Prime Minister Antonis Samaras, along with his coalition partner, Socialist Evangelos Venizelos, is said to be desperate not to tamper with what they consider Greece’s “success story,” one which includes massive unemployment and at least 20 percent of the population dependent on soup kitchens for the next meal. His figure is 700 million Euros to meet the debt payment schedule. The Troika is said to be looking for 2.9 billion Euros in savings from the current budget.

That explains the lack of an agreement since last Tuesday at least in part. The Troika is being held hostage. Round One to Greece.

Spectacularly, no one in the government mentions the list of 2,062 Greeks who are holding at least $1.95 billion in secret Swiss bank accounts. A list the government has had in its possession for at least three years without a single prosecution. (Interested readers can learn more here.) Articles in the local press do muse a bit about “tax collection” being a bit in arrears but without much enthusiasm.

Rumblings, such as they are, continue to be at such a low volume they can be hard to hear. Internal documents leaked from the IMF last week reveal that as early as May 2010, more than 40 IMF member states, all outside Europe, were opposed to the aid plan drawn up for Athens. (This in a report from last week’s Wall Street Journal.) The Troika itself is said to be headed for divorce. “The ECB must refrain from intervening in highly political decisions with its advice on taxes or cuts in spending. And yet that is just what it has been doing inside the troika. It must get out of it as soon as possible,” says Paul De Grauwe, a professor at the London School of Economics. In June of this year, a high official at the IMF publicly disagreed with the Troika’s agenda in Greece.

Even the pro-government publication Ekathimerini paints a decidedly gloomy picture: “Unfortunately, what this means in practical terms is that the current political system is not in a position to lead the country any further in terms of reforms. It doesn’t truly believe in these reforms and it does not have the stamina to clash with its traditional clientele,” writes Alexis Papachelas on November 10. Not exactly a ringing endorsement from a pro-government journo.

In other words: it isn’t working, it isn’t working at all, and yet our bedazzled technocrats continue to insist that it does, even if they don’t particularly believe it either. It’s the way the world does its “business.” Consider this: the Financial Times reported last weekend that Stephen King, chief economist at HSBC, “discovered” that nearly all of his bank’s country forecasts stated that the country-in-question planned to export its way to growth. (Ah, growth, endless growth. The Holy Grail, the never-ending rainbow at the end of the road. Line it up next to the other sacred cows, bailouts and rescues, and fire away.) Where they will all export to is the question, with every other country on earth frantically exporting its way to prosperity. Mars and Venus are at the head of the list, and why not? (William Pfaff has more on this.)

Greece lost some 35,000 jobs in October. So much for that success story. My sense is that the Troika’s technocrats simply live too high up in the stratosphere – somewhere near their very own cloud 9 – to be concerned with anything so gritty as jobs or hunger or survival. For them “the people” are an abstraction on the order of heroic rescues and bailouts.

The Washington Consensus is dead. Long Live the Consensus! The world, meanwhile, hangs by a thread. No one believes, fewer and fewer people vote and countries like Greece twist in the wind. Who reaps the advantage? The far right, the angry ones, the xenophobes who see us lined against each other in a global race to the End of the Line. One wonders exactly when Angela Merkel and that ardent enemy of finance François Hollande will get the message. (Before or after the rainbow? Place your bets here.)

The Troika, intent on getting in and out of Greece quickly with as few questions asked as possible, seem to have gotten stuck in transit. On Tuesday night, they were so afraid of angry cleaning ladies demonstrating in front of the Finance Ministry that they crawled on hands and knees out the building’s fire-escape to an underground garage en route to their own private cloud. That might not be, to employ yet another word that’s taken a few body blows, progress, but if a modern-day Aristophanes was anywhere nearby, he can make use of it.

As of Wednesday morning, November 13, no agreement between Greece and the IMF was in sight.When there is one, we’ll take a close look at it to see if there are any changes to the formula that has had such devastating consequences for Greece.

Feb 012013
 

Posted by Elena Tiniakou, 99GetSmart

The Greek Public Power Corporation is cutting the electricity supply to 30,000 homes and businesses each month due to unpaid bills.

VIDEO @ http://www.dailymotion.com/video/xx4t3d_power-cuts-a-daily-reality-in-greece_news?start=4

Apr 262012
 

 

* PEOPLE ARE FINALLY FIGURING OUT: AUSTERITY IS STUPID

By Hale Stewart, The Big Picture

From the Financial Times:

“We can only win back confidence if we bring down excessive deficits and boost competitiveness,” he said. “In a such a situation, consolidation might inspire confidence and actually help the economy to grow.”

The above statement shows why austerity is simply one of the dumbest policies on the planet.  First, The EU region was already growing at a slow rate when people started to talk about austerity.  Consider the following chart: […]

[…] Since the end of the recession, the best seasonally adjusted annual rate of growth (SAAR) is 2.4%.  But that figure is really an outlier; looking at the chart we see that the rate of growth can be broken down into two time periods.  The first — the five quarters coming out of the recession — growth was actually OK; it averaged 1.78% while the median number was 2%.  But since then — when the continent decided to implement austerity — the growth rate slowed.  Either way, growth was not strong enough for the economy to achieve “escape velocity” — a rate of growth that creates a self-sustaining, private sector led growth rate over 2.5%.  As a result, unemployment hasn’t dropped, but instead has risen: […]

[…] Coming out of the recession, we see increased unemployment — which is to be expected, as unemployment is a lagging indicator.  However, since then unemployment hasn’t dropped, indicating that the economy hasn’t hit that critical growth level where employment picks up.  In fact, we see unemployment increase overall,  

INDICATING THAT AUSTERITY IS FAILING. […]

READ and CHARTS @ http://www.ritholtz.com/blog/2012/04/people-are-finally-figuring-out-austerity-is-stupid/

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* THE ECB IS ON MARS

By Delusional Economics, Naked Capitalism

Overnight the president of the European Central Bankmag-glass_10x10.gif, Mario Draghi, gave a speech to the Hearing at the Committee on Economic and Monetary Affairs of the European Parliament. The speech was not particularly out of line with what Mr Draghi usually says, such as:

Available indicators for the first quarter of 2012 broadly confirm a stabilisation in economic activity at a low level. Latest developments in survey data are mixed, highlighting prevailing uncertainty. Looking ahead, growth should be supported by foreign demand, the very low short-term interest rates as well as our non-standard measures. At the same time, downside risks relate in particular to a renewed intensification of tensions in euro area sovereign debt markets and their potential spillover to the real economy. Further increases in commodity prices may also hamper economic activity.

This is the same speech lead-in we have been hearing since Mario Draghi took over the helm of the ECB from Jean-Claude Trichet. Given recent PMI data much of this statements appears to be completely disconnected from the reality of what is happening in Europe, but this isn’t the first time I have noted Mr Draghi’s apparent delusion. […]

READ @ http://www.nakedcapitalism.com/2012/04/the-ecb-is-on-mars.html

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* THE YOUNG AND THE JOBLESS – HALF OF BACHELOR’S DEGREE-HOLDERS UNDER TEH AGE OF 25 ARE UNEMPLOYED OR UNDEREMPLOYED, IN THE U.S. SOCIAL SECURITY SHORT FALL HIGHLIGHTS DEEPER REALITY OF ECONOMY

Source: My Budget 360

The news for young Americans doesn’t seem to be getting any better.  Earlier this week it was announced that Social Security will be running out of funds by 2033, three years earlier than expected.  What this means if nothing is changed is that future retirees will receive only 75 percent of expected payouts.  Not a good item of news considering inflation in daily goods is high thanks to the bailout policies and quantitative digital printing taken on by the Federal Reserve.  The full retirement age of Social Security for those impacted will be 66 or 67 by 2033 for everyone born after 1954 or 1960 and 21 years from now will come up a lot quicker than most realize.  Yet many recent graduates, those under 25 with a bachelor’s degree are either unemployed or severely underemployed.  What is worse, the young generation is shouldering most of the massive debt in the student loan market.  Older generations are being impacted since many are moving back home or are requiring resources merely to stay afloat.  Hard to imagine a future generation with lower financial living standards but this is simply the continuing trend of breaking apart the middle class. […]

READ and CHARTS @ http://www.mybudget360.com/young-jobless-half-of-bachelors-degree-holders-under-the-age-of-25-unemployed-underemployed-social-security-system-financial-trend-for-future/

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* FOR TWO ECONOMISTS, THE BUFFETT RULE IS JUST A START

By Annie Lowrey, NYTimes

[…] Emmanuel Saez and Thomas Piketty have spent the last decade tracking the incomes of the poor, the middle class and the rich in countries across the world. More than anything else, their work shows that the top earners in the United States have taken a bigger and bigger share of overall income over the last three decades, with inequality nearly as acute as it was before the Great Depression.

Known in Washington and the economics profession by the of-course-you-know shorthand “Piketty-Saez,” the two have been denounced on the editorial page of The Wall Street Journal and won mention in White House budget documents.

Mr. Saez, a professor at the University of California, Berkeley, has won the John Bates Clark Medal, an economic laurel considered second only to the Nobel, as well as a MacArthur Fellowship grant. Mr. Piketty, 40, of the Paris School of Economics, has won Le Monde’s prize for best young economist, among other awards.

Both admire, even adore, the United States, they say, for its entrepreneurial drive, innovative spirit and, not least, its academic excellence: the two met while re-searchers in Cambridge, Mass. But both also express bewilderment over the current conversation about whether the wealthy, who have taken most of America’s income gains over the last 30 years, should be paying higher taxes.

“The United States is getting accustomed to a completely crazy level of inequality,” Mr. Piketty said, with a degree of wonder. “People say that reducing inequality is radical. I think that tolerating the level of inequality the United States tolerates is radical.” […]

READ @ http://www.nytimes.com/2012/04/17/business/for-economists-saez-and-piketty-the-buffett-rule-is-just-a-start.html?_r=1&pagewanted=all

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* SUBCOMMITTEE CHAIRMAN MEEHAN QUESTIONS WITNESSES AT HEARING ON DHS SOCIAL MEDIA MONITORING

Source: youtube 

Rep. Patrick Meehan (R-PA), Chairman of the Subcommittee on Counterterrorism and Intelligence questions witnesses at a hearing entitled: “DHS Monitoring of Social Networking and Media: Enhancing Intelligence Gathering and Ensuring Privacy.”

VIDEO @ http://www.youtube.com/watch?feature=player_embedded&v=7fcj2znlbnU

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* ACLU: NATO SUMMIT SECURITY PLAN REVEALED BY SECRET SERVICE

Source: ABC News

[…] “I would say to you, let’s relax, let the professionals do what they do best and let’s have a good time during this 24, 48 hours,” said Terry Hillard, Hillard Heintze Security.

Officials say with anywhere from 100 to 140 motorcades going between McCormick Place and hotels where dignitaries are staying, any major disruptions during the summit will more than likely come from traffic congestion, not protesters.

Permits have been granted for six protest events. Still, officials are prepared to crack down on unruly demonstrators.

“We embrace and we will welcome First Amendment activity,” said Deb Kirby, Chicago Police Department. “But criminal conduct will be addressed. And we will address it appropriately, and surgically in terms of making sure that we are able to stop criminal conduct while at the same time supporting first amendment conduct.”

The NATO summit will take place May 20-21 in Chicago.[…]

READ @ http://abclocal.go.com/wls/story?section=news%2Flocal&id=8634508

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* BRADLEY MANNING: A TOTALITARIAN SHOW TRIAL OF STATE SECRECY

The US government’s suppression of all accountability and transparency in prosecuting the WikiLeaks suspect is totalitarian.

By Michael Ratner, AlterNet

[…] As an attorney with the Center for Constitutional Rights (CCR) and a legal adviser to WikiLeaks and Julian Assange, I continue to attend Manning’s hearings and can only describe them as a theater of the absurd: the trial involves numerous and lengthy off-the-record conferences, out of sight and hearing of the press and public, after which the judge provides an in-court summary that hardly satisfies standards of “open and public”. Perhaps more remarkable is the refusal even to provide the defense with a pre-trial publicity order signed by the judge – an order that details what lawyers can and cannot reveal about the case. Yes, even the degree to which proceedings should be kept in secret is a secret, leaving the public and media chained in a Plato’s Cave, able only to glimpse the shadows of reality.

The press and advocacy groups, however, have not been quiet about the trampling of their rights. The Reporters Committee for Freedom of the Press, on behalf of 46 news organizations, urged the Department of Defense to take measures that would allow the news media to view documents prior to court arguments. The committee pointed out that the trial for the “alleged leak of the largest amount of classified information in US history” is of “intense public interest, particularly where, as here, that person’s liberty is at stake”. The Center for Constitutional Rights, too, has requested access in the interest of an “open and public” trial, but neither appeal has been answered.

This is a clear violation of the law, but it will likely take burdensome litigation to rectify this lack of transparency. The US supreme court has insisted that criminal trials must be public, and the fourth circuit, where this court martial is occurring, has ruled that the first amendment right of access to criminal trials includes the right to the documents in such trials.

The greater issue at hand is why this process should be necessary at all. As circuit judge Damon Keith famously wrote in Detroit Free Press v Ashcroft, “Democracies die behind closed doors.” Yet it is evident from the many layers of secrecy around Manning’s arrest, imprisonment and prosecution that the government shows no sign of relinquishing its claimed powers to obscure rightfully transparent judicial proceedings. The doors appear to be tightly shut.

Unless we challenge the growing culture of secrecy within our government, and counter the ever-increasing, reflexive claims of “national security” by claiming our own constitutional rights, we risk finding those doors shut indefinitely.

READ @ http://www.alternet.org/story/155136/bradley_manning%3A_a_totalitarian_show_trial_of_state_secrecy?page=entire

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* SHIT THE FBI SAYS

Source: youtube

KNOW YOUR RIGHTS! ACTIVISM IS NOT TERRORISM!

Every activist should know shit the FBI says. Learn more about how the FBI is targeting political activism as “terrorism” at GreenIsTheNewRed.com.

VIDEO @ http://www.youtube.com/watch?feature=player_embedded&v=rI8INgw0xq0#!

RELATED POST: 

This video features Chicago Lawyer, Jerry Boyle, from the NLG, giving a workshop to Occupy Chicago. KNOW YOUR RIGHTS TRAINING: http://99getsmart.com/?p=146

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* CGT STATEMENT ON THE ARREST OF BARCELONA ORGANIZATION SECRETARY, LAURA GOMEZ

Source: anarkismo.com

The repression continues after the general strike. This morning, while she was on her way to work, the Mossos d’Esquadra [Catalonian police] arrested the Organization Secretary of the CGT-Barcelona, Laura Gómez and took her to the police station in Les Corts. The charge by the police is arson and fire damage to the Barcelona Stock Exchange. This and other charges against her have no foundation and are an attempt to create an image of a violent person. Laura does not have a criminal record, and all that the police can cite are peaceful actions during the struggle for labour rights in Barcelona.

The truth – without exaggerating – is that already after the general strike we said, literally, “it is true that members of the CGT burned a couple of papers in a box in front of the Barcelona Stock Exchange, and threw a few eggs, actions that were fully symbolic and carried out openly. That is what the plainclothes police in our modst must have thought too, given that they did not bother to identify anyone. It is by no means true that it was the first fire, in Mercabarna, in the Zona Franca, etc. there were several fires throughout the night, most of which were started by other unions’ pickets”. […]

READ @ http://www.anarkismo.net/article/22628

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* PRISON FOR THE SECRETARY OF ORGANIZATION OF CGT-BARCELONA

Source: Local Federation Unions

Today, Judge of the Court of Instruction No. 23, Barcelona has decreed prison without bail to the Organizing Secretary of the CGT-Barcelona with alternative charges of fire damage, coercion, crime and public disorder offenses against fundamental rights.

The CGT believes that they are paying off political pressure, both the court and the prosecution, as a person with no criminal record, established fixed, steady job, a daughter who lives with her, is said by the prosecution that is at risk leakage and relapse before even being tried and convicted. These scales do not apply to the bankers, or politicians investigated for anti-corruption prosecutors who were released. We really question the “judicial independence” from the rest of power in a so-called “rule of law.”

Since the CGT believe that there is no reason to justify his detention, much less to his imprisonment, which is a clear abuse of power and violation of the right not to be deprived of liberty. […]

READ @ http://tinyurl.com/6mktlpb