Here be dragons: Lies, horror populi and subversion amidst hope and chaos

Takis Michas' article in the WSJ, written a month ago, about Greece and what he describes as its Descent into Anarchy (full article reproduced here) is a stunning piece of disinformation on the situation in Greece, an outlandish view of the disaster unfolding in the country, tainted by class prejudices and ideolepsy. It is so utterly unrooted in reality, that, were it published in Greece anonymously, it would be unclear whether this was perhaps a parody. This is the pinnacle of a genre of alarmist anti-left writings that seem to pop-up regularly in the local MSM to lecture the restless natives on the vileness of resistance to Authority and its true Prophet, the IMF, and blame the Left as sole instigator of all sorts of violence: A"violence" however, which on closer inspection mostly consists of jeering a corrupt politician or two, staging a protest against the pauperization of this or that social group, peaceful civil disobedience and strikes. In a zoology of militantly conformist, fear-mongering tall tales on display in the government-friendly media (and that's 90% of all MSM media), Michas piece is Godzilla. That's why it was perhaps too tall for the Greek press and required a global newspaper to print it.

The WSJ readership of course, needs this potent injection of fear-mongering anyway, as the plebes in the US are rapidly becoming unruly themselves, faced with shouldering the costs of the banker bailout and this cautionary tale form the exotic Near East, complete with leftist dragons, is perfectly timed for domestic use.

As I said, if this was published in a Greek newspaper, in Greek, it would offer a hilarious peek at the paranoia that the crisis has bread among the country's upper classes, and would not merit a response significantly different from "you should go out more often". Since it is published in English, in a paper as broadly read among ruling elites as the WSJ, and might skew the perception of what is actually happening in Greece, it requires debunking, especially as I have seen the article being referred to on the www as some sort of authoritative picture of Greek "anarchy", since its publication. In the process it will provide an opportunity to relate the true story of the budding, if still incoherent, mass resistance to the ECB/IMF fiscal stormtroopers and their caretaker government in this peripheral ECB province I'm writing from, but also the truly darker side of collapsing neighbourhoods, mindless violence and general despair that is emerging from the deep cracks that the prolonged ECB/IMF induced depression has carved on the already decrepit social body. This panoramic view of civil discontent and societal unrest that answering Michas' article must include, and the true dangers lurking as the crisis deepens will be the major theme of this post, along with a discussion of things that have happened after the publication of this article: it has been a month thick with events.

Austerity? What austerity?

Michas begins by lamenting the demise of "the rule of law" in Greece and chiding the government for its inability to "to maintain order and implement its own legislation". While the debt crisis is briefly mentioned, Michas avoids pointing to a rather crucial piece of background info: the developments he "describes" (and misrepresents) are happening as Greece is plunged into the deepest recession in living memory, as unemployment is skyrocketing along with part-time and uninsured jobs, as even nominal wages are collapsing, as a quarter of small businesses have either gone bankrupt or are preparing to do so, as indirect taxes soar and inflation persists. But all this does not impress Michas: 

"Many argue that Greece’s disintegration is the unavoidable consequence of the government’s attempt to enforce economic austerity. This seems doubtful".

Now why it seems doubtful to Takis Michas, he won't say. It certainly doesn't seem doubtful to the vast majority of people in the country, as the percentage of Greeks expecting social conflict in the next few months as a result of government policies reached 84% three months ago [poll links in Greek, I'm afraid], while when asked to describe their feelings towards these policies in another poll, 35,5% mentioned "anger", 33% "disappointment", and 21% "fear". Pollsters warn that the Greek political system has "passed the point of no return", and is facing a drastic overhaul...

I don't think there is a country in the world were the population can (or should) be expected to passively accept its own impoverishment and the annihilation of lives and prospects. Society is still paralyzed from the Shock Therapy the German Bankers and their local overseers have imposed and are still, to an extent, under the spell of the neoliberal mantra: There Is No Alternative. There are movements however on the ground, local and nation-wide that resist this destruction, stemming both from a sense of injustice and a practical inability to pay for much more than basic necessities. These movements are widely accepted and approved of by the Greek population. However, for Michas to admit to large scale societal desperation, rage and depression would be to accept that there are valid reasons for this anger. But that would by ideologically problematic for a large part of the neoliberal right that he represents and, anyway, it would stand in the way of red-baiting which is the object of this article. Thus Michas proceeds to a string of accusations against the left that are blatantly outrageous and viciously false. They are the kind of accusations an authoritarian government levels against dissident groups. It is highly unlikely that Michas is so secluded and deluded that he doesn't know this already, so this is IMHO inexcusable disinformation.

All protest is lawlessness?

SYRIZA members harass pro-market politician

Michas starts his description of the Evil Greek Left with an impressive piece of disinformation:

The country is at the mercy of militant activists, who are mostly inspired by various factions of Greece’s hard left. The heaviest hitters are Greece’s Communist Party and the anarcho-Stalinist Coalition of the Radical Left, which is comprised of the Ecosocialists of Greece, the “Roza” Radical Left Group and the Internationalist Workers’ Left, to name a few. Their followers, with total impunity, have taken to harassing citizens and destroying public property, even taking over whole villages.

First if all let's start with this fact: The "militant activists" of these parties are responsible for zero (0) acts of real physical violence against anyone. They have "harassed" no citizens that I'm aware of, unless "harass citizens" means "demonstrate against politicians" perhaps, they have not destroyed public property as far as I'm aware of, and they have certainly not taken over any villages, at least since the Greek Civil War in the 1940s.

Beware of Stalinists bearing flags

The Communist Party is an ossified relic of a sovietophilic old-school stalinist party, whose intransigence and militancy in workers' movements as well as its historic role in the Greek resistance have guaranteed it a permanent place in parliament - and which is growing stronger by the day as the protest party par excellence. Its actions include the usual old-school labor actions, i.e. ship-workers and sailors blocking ports. The party has no loose canons and has a horror of things getting out of control. No police officers worry about attending a KKE demonstration. Ever.

Rabid SYRIZA Members armed with deadly pickets

The description of the Coalition of the Radical Left (SY.RIZ.A in Greek) again is, well, somewhat idiosyncratic. It is indeed a coalition, a block of left and green parties from left social-democracy to post-maoist groups. The three parties Michas chooses to enumerate are however not quite representative of the alliance. It is like saying that "the Italian peninsula is comprised among others of the Vatican and San Marino". The missing elephant, the core political and parliamentary entity around which the alliance was built, is the Coalition of the Left and Ecology (even the similar name sort of gives the deal away) a member of the Party of the European Left (along with Die Linke, Bloco, Sinn Fein, PCF etc.). Interestingly, despite Michas' claims regarding their dastardly final objectives, this party participated in two Greek governments in the late 80s early 90s (along with the Communists - with the Conservatives first and then in a emergency government): there were no gulags built. Kim Il Sung does not seem to feature among the guiding lights of either party... About "Anarchostalinism" I can only say that it is a term that has no proper place outside satire, so I'll leave it at that.

Those evil commies then, have activists who apparently "direct physical attacks primarily at politicians and journalists who support open societies and market economies". Now, the three "attacks" Michas mentions have indeed happened (as have many more like them); in fact politicians and establishment figures are currently feeling rather unsafe walking around in public without heavy escort. But that isn't because they are "for open societies and market economies" but rather because they are part of a corrupt and/or incompetent political two-party system that has thrown Greece into an unsustainable debt maelstorm, through cronyism, clientilism and theft. This opinion about the two governing parties is shared by a vast majority of the population - 93% of Greeks feel that corrupt politicians should go to jail. According to last year's Transparency International survey, Greeks were the people who ranked their political parties with the highest marks for corruption in the world. A recent poll shows that 40% of the population are for (and 56% against) violent heckling of governing politicians. As the Greek economy collapses even the "official" narrative for the crisis makes people who are facing destitution rather angry.

Even so, the conservative politician mentioned was most certainly not attacked by organized leftist activists (of any kind). Kostis Hatzidakis, MP and former transport minister, not involved in any personal scandals, was attacked by a couple of elderly men during a huge union demonstration, one carrying an umbrella which he used against the former minister, as other protesters from the crowd protected the MP.

Hadzidakis attacked

No one credible has, to my knowledge, seriously suggested that the attackers were members of any party. Their photos and the relevant video has travelled around the Greek web and the media many times. Were the perpetrators members of any left party, the MS media, quick to indulge in all sort of wild accusations against those "irresponsible leftists" would no-doubt have unearthed it.  They haven't.

Keratea burning

The same is true for both other cases (and there are many more instances of public, intense disapproval, voiced all over Greece and abroad wherever government members appear in public, on a daily basis by now, most of which have nothing to do with physical violence). In one case Michas mentions, we know for a fact that the person that threw yogurt (yogurt! how deadly can you get?) against the Vice-Premier was a voter of the far-right LAOS party, (and we know this because he gave an interview in a Greek newspaper). He was acting as a citizen of Keratea, a town whose inhabitants have immersed themselves in an insurgency against the creation of a landfill next to their homes. The town was a rather conservative - if anything - electoral municipality. This is the only instance of anything that might be legitimately called an insurrection in Greece, and it is very local in its scope. Theodoros Pangalos, the Vice Premier, elected from that particular electoral periphery, had spoken against the locals and for Law and Order, as is par for the course. Again, since local politicians of all colours and stripes have expressed their sympathies with the locals, and the whole town was behind the demonstrations, the claim that the locals were "supported by anarchist 'freedom fighters'” is ridiculous - not to mention in contradiction with the claim that the village was taken over by leftist activists. Keratea is a case study in state intimidation since from day one the government chose to use sticks - not carrots: the police have shown incredible ferocity against the inhabitants of Keratea, including Gaza-style home invasions and violence against the elderly, on orders to support tooth and claw a project that the citizens of Keratea insist is a contract awarded to politically connected construction companies. This is not the first time in Greece or in Europe, where locals have found being forced to live next to a toxic landfill violently unpalatable. Only previously, no one would have thought it necessary to invoke a conspiracy of anarchostalinists to explain it away. As for Pangalos, who has distinguished himself in heaping scorn against Greek citizens, a recent poll has shown that a full 79% of those questioned agreed with the deprecation and the jeers directed against him. By the way: it seems that these protests might yet have borne fruit... with all that this fact might have to teach us.

Raw terror at the toll booths

Similarly, the "Won't pay" movement, far from being some sort of bloodthirsty extremist group (in fact they are completely non-violent) is a citizens' initiative, mostly, but not solely, from areas where the government has set up toll booths that force the inhabitants of towns to pay in order to be able to leave their towns. At the same time, the toll fee prices had been hiked originally, exactly as general nominal income is steeply declining and inflation is charging on at 4-5%. Frequent commuters find it too much of a drain for their precarious finances to pay extra for driving to and from work, on incomplete roads constructed by the "national" contractors whose contracts are generally believed to be the product of their owners' political "entanglement". The Left certainly supported these movements but hardly initiated them. The movements had managed to win a promise of across the board reduction on toll fees (which it seems now the government has no intention of carrying out). They have also opened up with their actions, both on the road and in the courts, a new area of public inquiry, regarding the enormous costs that Greek roads seem to have incurred, as part of the corrupt relationships between some construction companies' owners and government cadres from both ruling parties...And it's far more than the voters of the Left who are furious with the toll prices: 66% of the public consider that the Minister of Infrastructure is a tool for the contractors. 52% suppport the "Won't pay" activists (vs 33% against). These people are not ideologues of any sort of "hard left" Michas is terrified of. They are people at the edge of bankruptcy and disaster. Even the regional chambers of commerce for Pieria and Thessaloniki are participating actively in these protests. So much for wild-eyed radicals...A similar story pertains to the metro/bus ticket boycott: fares went up by 40% this January, meeting a determined resistance from many commuters who have refused to pay these price hikes. In both cases the government legislated draconian measures to break these movements, and it is rumored that the toll companies are paying police officers and police departments to be present at the toll stations and force payment on anyone who denies payment, while they have tried to scare ticket dodgers with heavy penalties and fines - and even jail for a 1,4 Euro ticket!


Then there is the Marfin Bank incident last May, where, in one of the largest union rallies ever in Athens, a group of hooded "anarchists" threw molotov cocktails inside a bank, a mind-bogglingly criminal act that resulted in the death of three bank employees, who were trapped inside. This was a depraved act, no doubt about it, but the fire-bombers, who were possibly not aware of the fact that there were people inside the shuttered bank, were a small group (3-4 people strong) acting around the main demo, with no connection to Michas' "hard left" at all. Michas' claim, that activists of the main parliamentary leftist parties go after "people who refuse to participate in strikes and demonstrations" stating that: "In May 2010 three employees of the private bank Marfin suffocated to death when a hard-left mob fire-bombed their offices during a riot" is slanderous and dishonest.  

The ghost of Greek liberals past

This tale of nefarious leftists firebombing villages and occupying banks or whatever, is of course par for the course for the socialist government and its supporters in the media as well as the ultra-right wing LAOS party.This is not the only policy area where the "serious" parties converge: This January the government, the conservative opposition and the extreme right were trying to outdo each other in anti-immigrant, xenophobic and racist rhetoric when 300 (mainly North African) "illegal" workers went on a hunger strike to demand that they have the opportunity to employ themselves legally. Seeing this as a rare opportunity to gain popular points, the government rode the xenophobic horse almost until the end when, faced with the prospect of dozens of dead hunger strikers, as one after the other were fading in critical condition in Greek hospitals, they accepted some sort of deal - which after the hunger strike was over they made sure to reinterpret. The compliant government-dependent media moguls and their TV stations went on what can only be described as a week of inciting racist hatred: the intensity of rhetoric was at KKK levels and it was truly scary to realize that one was witnessing what amounted to a immigrant hate-fest in the most mainstream of Greek TV news shows. This was unfolding in an already ominous context of sky-rocketing unemployment and Dublin II, an EU treaty on migration which guarantees that Greece is and will remain a massive EU immigrant detention camp for the forseeable future, with a desperate, unemployed and hopeless detainee population that is now dying to get out of the country on top of dying to get in...   The Democratic Alliance, the party which Mr. Michas writes as a representative of in the WSJ article, was a very vocal part of that broad coalition of xenophobia. Note that as an independent journalist Michas showed a libertarian bend, and it is doubly astonishing to read such calls to authoritarianism by him especially...

The immigrant hunger strike was the most obvious example of the "respectable" part of the political spectrum seeming to have decided that, in the face of mass popular delegitimization of the political system, the proper response is to move ever rightwards on social issues. This is some sort of a collective "Sarkozy strategy", which ignores, among other things, how this is currently playing out in France. The marriage of neoliberal economics with extreme conservative, nationalist and xenophobic currents, seems to be a viable vehicle for preserving elite privilege. This has the effect of further strengthening an already empowered extreme right: the Nazi party (not a metaphor - the actual Nazi party) is polling at 1,5% according to a recent poll, ten times its historical size, and the original xenophobic extreme right-wingers at LAOS have also shown signs of a significant rise in the polls. Since Michas' article, the Nazis and the mainstream apologists for xenophobia who have fanned the flames of the racism that feeds them, have gone on an anti-immigrant rampage, a pogrom of real and horrific criminal violence, illustrating where the danger of blind and mindless destruction and societal dissolution come from and where criminal intent really is indiscernible from the effects of a programmatically antidemocratic platform. These events happened a month after Michas' aricle in the WSJ, and the trend was visible well before then. Strangely Michas' libertarianism was blind to this actual rather than invented rise of political violence. 

What is even more worrying is the fact that these pogroms happened under the indifferent eye of the police, and they were then only peripherally highlighted and lightly condemned by mainstream media. What is more: as the Minister of Public Protection mumbled a few words about dissolving the nuclei of neonazi sympathizers in the police force, "serious" newspapers, the conservative and far-right opposition, members of his own "socialist" party and pundits of every sort, actually protested against "starting witch hunts" in the police force and "hurting an already diminished morale". Thus it is plainly clear that the toleration of the far right is a reasoned choice for sections of the Greek elite.



This will not be the first time the Greek liberal right and center and the elites that run them, will have allied themselves with the extreme right: During the civil war in Greece the "traditional" parties allied themselves with Nazi collaborators, black-marketeers and goons, and proceeded to impose a national security state that, with varying ferocity, continued until 1974, after attempts at democratization were quashed by royalist parliamentary coups and then the brutal military junta of 1967-74. Thus it is truly ironic for Michas to dangle the spectre of an imaginary authoritarian left: in Greece it is the liberal and not too liberal center and conservative parties that have a history of violence, using the extreme right as their "muscle". The parties Michas slanders and their ideological forebears, have been fighting for more not less democracy in Greece over the last 60 years. Kim Il Sung would feel much more comfortable with the government's LAOS allies than he would with the independent (to say the least) minded members of the components of SYRIZA's coalition. much less of course an anarchist of any sort...

Societal Tensions

There are other things happening in Greek society, as well, other ways in which the current increasingly desperate situation expresses itself. Suicide rates have shot up in 2010, and continue unabated in 2011, a quarter of shops in downtown Athens are now empty, people are leaving Athens in panic to become farmers, organized crime is booming, while unemployment almost reached 16% this February, homelessness has become a visible issue, soup kitchens almost cannot serve all the needy...

This collapse has created hopelessness, anger and violence. Criminal violence, racist and nazi violence, police violence and anarchist / protest violence. The events of the past weeks I have described elsewhere, but a day after the brutal and murderous police attack against peaceful demonstrators - a practice so entrenched and widespread that it suggests a permanent strategy of intimidation in order to "discourage" participation -  a gang of anarchists attacked a central police station with molotov cocktails, running through a street market full of people. In the ensuing mess, three bystanders were burned by the fire bombs and one was until yesterday in serious condition, fighting for his life in a hospital...

So this explains somewhat the results that Public Issue, a polling company, published, of a survey that reported that:
- 62% of Greeks think that the memorandum with the troika has harmed the country and the same percentage is against it (13% it benefited the country - 15 support it),
- 16% think that there is no alternative (69% think there are alternatives).
- 77% do not trust the Prime Minister to manage the economy (22% trust him).
- 75% have a negative view of the IMF (69% last year), and 74% of DSK (49% last year).
- 69% believe that the IMF must leave Greece now (up 4% from 6 months ago).
- Only 52% have a negative view of the ECB (vs 33% positive) and 61% of Trichet. 59% have a positive view of the EU (up three points from 6 months ago).
- 53% want to bargain and default on at least a part of the public debt. 17% want to default completely and unilaterally.
- 33% think that the country needs a revolution and 56% deep changes.
- Greeks support strikes (74 - 20) and protests & marches (69 - 25) and are marginally not supportive of electoral abstention (45 - 54) and public deprecation and jeering of politicians (43 - 54)...
- 78% vs 21, believe that a social explosion is impending...
- 29% feel mainly angry, 18% dissapointed, 15% anxious, 11% shamed,  8% sadness and 13% all of the above.

Interestingly 48% believes that the stage is set for a successful far right party to emerge, versus 27% for a far left.

Thus contrary to Michas' assertions this is not about a leftist coup d' etat: The natives are restless and unhappy because of the, probably unprecedented during peacetime, drop of living standards they are suffering, with large swathes of the population being pushed to extremes of poverty that were unimaginable a few years ago, at the same time as prices rise, with incredibly high inflation due to a continuous barrage of indirect taxes and the backbone of state services and companies is being privatized in a gigantic sell out:  Schools are being shut down, hospitals are in jeopardy (while corruption in and around them is still rife), as per yesterday the electric utility, the healthiest bank in the country, the state gambling and betting monopolies (very profitable), the power company (again profitable), petroleum, water services etc - are on sale, a true sell out that will happen at fire-sale prices (the depression has driven the Athens stock market at an all time low, it will be interesting in a morbid way to see how low will the sell out prices go). The sad thing about the left in these circumstances is not that it does to much. But that it is still doing too little to stop the asset stripping and the destruction of a whole generation of Greeks. If only they were as dangerous as Michas claims!

Yet this work of political fiction Michas has concocted must serve a purpose. I fear it is one of creating alibis. "If you see us rolling out the tanks, rescinding a few articles of the constitution, or if you see demonstrators being trampled, beaten like it's Mubarak's Tahrir Square, Manama, or Baniya, Syria", signals Michas to US and global elites, "it's OK": It's only communists and "anarchostalinists" who are being punished for their love of Kim Il Sung. Everybody else just loves being reduced to poverty and insecurity.

P.S: And so it was until the #spanishrevolution. There are as we speak twenty or more facebook groups planning  #greekrevolution gatherings around the country, today 25/5/11. Let's see how succesful and how nonviolent these turn out to be. Unlike the #spanishrevolution however, everybody expects the #greekrevolution right now...

The Greek Economy on a Crucifix: IMF lies and misrepresents yet again

This much I have learned from watching the output of various IMF mouthpieces on Greece these past months: Even high level spokespersons lie, are ignorant of and misrepresent the facts, even easily available facts, ideoleptically making the case for the disaster they are imposing not on actual shortcomings or economic problems but, rather, on what the IMF would expect these measures to be in order to implement its (highly ideological and scantily backed by any sort of empirical evidence anyway) shock therapy on the country. This is a "therapy" that was imposed at the behest of the ECB and the Central Wankers in the process (and I'm not sure yet if it was a conscious decision or just massive ineptitude) of creating a Peripheral "Latin" Europe: the EU as a relatively wealthy (but more unequal) core, surrounded by pauperized banana cheap-service republics destroyed by policies that can only be described as "a Versailles treaty without the war".
The other thing that I've learned from our IMF experience, is that the docility of Greek Media Magnates / Public Contractors and their petty little shops towards our new Overlords and our post-quisling government that is assisting them in the most slavish manner, knows no bounds. Only the dissident media actually take the trouble of pointing out these sorts of inconsistencies. But this is a different issue, for a different post... Let us return to the IMF's latest communique...

I will eschew commenting on all of the BS that Thomsen spouts in his latest interview on IMF Survey magazine. I will specifically focus on one of his statements that is so obviously and transparently bogus (and repeated in every IMF communication), that in an ideal world it would automatically disqualify him and the organization he represents from managing having anything to do with the Greek economy:

IMF Survey online: Why is legislation to allow firm-level wage agreements so important? Will this lead to massive wage cuts?
Thomsen: The way the Greek labor market was operating contributed to a disproportionate increase in wages over the last decade and a loss of competitiveness. So wages need to be brought more in line with productivity. Over the medium term, wage developments in Greece will be governed by productivity improvements. A more open and dynamic labor market will offer more and better employment opportunities as the business environment improves, investment increases, and the economy expands.

False premises

The IMF, an organization that has been promoting such sociopathic policies around the world for a third of a century now at least, have indeed forced pretty much a complete dismantling of the collective bargaining system in Greece, in order to make it much more like those of the third world countries that were, until recently, their main victims. This is a deregulation so drastic that, in the real world, it is expected to diminish wages in the private sector by 20% - nominal wages that is, in a country which has been running up a 6% inflation rate this year on top of chronic high prices, and thus combines Swiss prices with Portugese (going on Bulgarian) wages. On top of this, in a previous obscenity the IMF/ECB demanded that lay-off compensation be drastically reduced. On top of all of this, Greek unemployment is at 12,4% this month – the highest in decades, but in reality what people actually call un- or under- employed are close to 20 to 25%.
Already we have seen unilateral action by employers who have no or few profitability problems, reducing their workers salaries by arbitrary amounts. And these “firm-level” wage agreements that the IMF and the WB has had two decades worth of experience imposing on Latin American countries, have been a failure everywhere, as has been this idea that labor flexibility will bring more and better employment. In 2001 the Multinational Monitor noted that:

The theory behind labor flexibility is that, if labor is treated as a commodity like any other, with companies able to hire and fire workers just as they might a piece of machinery, then markets will function efficiently. Efficient functioning markets will then facilitate economic growth.
Critics say the theory does not hold up. Former World Bank chief economist Joseph Stiglitz described the problem to Multinational Monitor: “As part of the doctrine of liberalization, the Washington Consensus said, ‘make labor markets more flexible.’ That greater flexibility was supposed to lead to lower unemployment. A side effect that people didn’t want to talk about was that it would lead to lower wages. But the lower wages would generate more investment, more demand for labor. So there would be two beneficial effects: the unemployment rate would go down and job creation would go up because wages were lower.”
“The evidence in Latin America is not supportive of those conclusions,” Stiglitz told Multinational Monitor. “Wage flexibility has not been associated with lower unemployment. Nor has there been more job creation in general.” Where “labor market flexibility was designed to move people from low productivity jobs to high productivity jobs,” according to Stiglitz, “too often it moved people from low productivity jobs to unemployment, which is even lower productivity.”

Meanwhile in 2004 Eckhard Hein & Thorsten Schulten noted in “Unemployment, wages and collective bargaining in the European Union”:

Analysing the developments in the EU during the last four decades, no strictly inverse relationship between real wage growth and unemployment can be found. On the contrary, persistently high unemployment has had strong adverse effects on nominal wage growth and on the labour income share. Weakened labour union bargaining power and changing collective bargaining strategies have contributed to this result. It is therefore concluded that the current EU economic and employment policies aiming at further wage restraint, wage differentiation and decentralisation of collective bargaining are deeply misguided and have to be replaced by an alternative wage policy in Europe as part of a growth and employment oriented coordination of macro-economic policies

I should add that Greece already had a very flexible job market: between unreported and semi-reported labor, pseudo-apprenticeships and "illegal" immigrant labor, as well as the high proportion of the self-employed in Greece, well over 80% of the workforce had no employee payroll taxes, no job security, no benefits - nothing. Greece's was probably the most flexible job market in the EU, unofficially "liberalized" up till now. And this did not have much of a beneficial effect on anything...

A disproportionate increase in wages?

The first lie is included in the first line of text: the "disproportionate increase in wages over the last decade" is patent nonsense, Greek wages were very much in line with productivity and in purchasing power terms were pretty much stagnant for most of the past decade. I have discussed this in previous posts so I'll just copy & paste here the relevant parts:

@Eurotrib:...Debunking IMF propaganda

It is far from obvious how the IMF measures competitiveness, the FAQ section is not referenced at all, and it's not clear how this quantification arises or what does it mean. Erik Jones, writing in Euro Intelligence, was already debunking part of the competitiveness mythology, as pertains to labor costs, in March:

...What matters in terms of a head-to-head competition is how Greece and Germany compare in the cost of labor per unit of output and not the real compensation of employees.  Moreover, we should look at their performance across the European marketplace as a whole.  By that measure, if we set the year 2000 equal to 100, then by 2009 Greece was at 98 while Germany was at 95.  Germany is still doing better than Greece, but only by a little and both have improved against the rest of Europe.

...Using national accounts data for relative real unit labor costs in manufacturing, Greece goes from 100 in the year 2000 to 87 in 2008.  Over the same period, Germany goes from 100 to 90.  It is hard to see how Germany comes off better in the comparison.

...Even if Greece is not suffering in terms of manufacturing, the high real incomes that Greek employers are doling out must surely be hitting the bottom line in the service sector, shouldn't they?  Again, that's hard to see in the data. Total compensation per employee was 53.8 percent in Greece and 57 per cent in Germany...

Furthermore the "since Euro adoption" part is misleading. Greek productivity was surging until 2007, after that year, influenced of course by the global crisis, and affected by real fiscal imbalances (about which more later) productivity (and competitiveness, however defined) fell faster than the Dow Jones average after a computer glitch, but that was surely not a uniquely Greek phenomenon.
In fact Greece was receiving praise by the IMF itself for its improved competitiveness, singled out as the most successful economy in Southern Europe.



Source: IMF

While in a recent post here a few days ago I mentioned:

Let's kill the meme that somehow in Greece workers were benefiting from unreasonable pay-hikes this past decade:
Here we are: real wages have been growing faster than productivity perhaps between 2007-2009 in Greece. Before they were not:

Based on real wage increases during 2007 (3.9%), pay increases in Greece were the highest of the countries of the EU15. Prior to the 2007 increase, there had been four years during which the average annual increase in Greece was around 3%. These big increases, by international standards, in the average real wage in Greece were fully offset by increases in labour productivity, leaving unit labour costs stable in real terms at 2000 levels.

In the private sector during the 2000-2007 period, there was a cumulative decrease of 1.2% in real unit labour costs. Average real wages increased more slowly than average labour productivity, which left companies with leeway to benefit from higher labour productivity. The effect of this development was that at the end of 2007 real wages in the private sector had increased by 27% over the 2000-2007 period, while productivity increased by 36.5%. Thus, there was a benefit to companies of around 7% in unit labour costs in real terms.

For the year 2007, Greece was in second to last place as regards the level of gross wages in € (net wages plus employee contributions). In Greece, average monthly earnings in 2006 amounted to €1,668 for full-time employees, compared to an average of €2,366 in the other countries of the EU15...

... Whereas monthly labour costs in Greece were 83% of the comparable mean costs in the EU15 (in purchasing power parities), labour productivity in Greece stood at 91% of the European average.

In recent years unit labour cost in Greece has become the lowest in the EU15. This development relates to the fact that in Greece labour productivity increased substantially in 1996-2004 and increased in the range of 1.7%-2.7% a year during the four years from 2005 to 2008.

To make things even clearer, here's a chart that shows the profit per employee in the EU market economy in 2005
[source EU KLEMS, shown here]:

The 2006 numbers for Greece are even higher (~44k, >51k in the banking sector) and these sorts of numbers were typical for the past decade up to the crisis.

Greek wages in the private sector were underperforming compared to profits during the same period. The loss of competitiveness has an insignificant labor cost component, a huge inflation component and a large profit component. Yet wage earners are asked to accept massive cuts de facto, and a general return to the 1950s in terms of worker rights and protections...

Over the medium term

...Over the medium term wages will not follow productivity. Or perhaps they will, if more and more young and skilled younger workers leave the country for abroad, leaving manual and semi-skilled labor to man the sweatshops of a new euromaquilladora economy that seems to be the only visible goal of this exercise in thirdworldization. Over the medium term, farmers' markets garbage heaps will be turned increasingly more into senior-citizen mosh pits, as pauperized pensioners fight over pieces of half-rotten tomatoes. Others, less spritely grampas and granmas, will be heading for their neighbourhood garbage cans - and it ain't just the elderly. One in five children under 17 were in poverty last year, there is no telling what the numbers will be this year...

Reforms

Finally, about those reforms that the IMF will be imposing and are supposed to take us out of the slump and into the promised land of growth, sometime, somehow... Where exactly have they been succesful in doing so Mr. Thomsen? What about the Greek government selling off pretty much everything under public control today - including public parks and water companies it seems? Where was that a success? And in doing what?

I wonder if there is somewhere *one* instance of an IMF bureaucrat daring to give an interview against a team of journalists / economists playing hardball and not acting as de facto cheerleaders for the neoliberal voodoo remedies they are peddling?

The Numbers Racket

Harper's Magazine, May 2008: Numbers racket | Why the economy is worse than we know:

Transparency is the hallmark of democracy, but we now find ourselves with economic statistics every bit as opaque—and as vulnerable to double- dealing—as a subprime CDO. Of the “big three” statistics, let us start with unemployment. Most of the people tired of looking for work, as mentioned above, are no longer counted in the workforce, though they do still show up in one of the auxiliary unemployment numbers. The BLS has six different regular jobless measurements—U-1, U-2, U-3 (the one routinely cited), U-4, U-5, and U-6. In January 2008, the U-4 to U-6 series produced unemployment numbers ranging from 5.2 percent to 9.0 percent, all above the “official” number. The series nearest to real-world conditions is, not surprisingly, the highest: U-6, which includes part-timers looking for full-time employment as well as other members of the “marginally attached,” a new catchall meaning those not looking for a job but who say they want one. Yet this does not even include the Americans who (as Austan Goolsbee puts it) have been “bought off the unemployment rolls” by government programs such as Social Security disability, whose recipients are classified as outside the labor force.



Second is the Gross Domestic Product, which in itself represents something of a fudge: federal economists used the Gross National Product until 1991, when rising U.S. international debt costs made the narrower GDP assessment more palatable. The GDP has been subject to many further fiddles, the most manipulatable of which are the adjustments made for the presumed starting up and ending of businesses (the “birth/death of businesses” equation) and the amounts that the Bureau of Economic Analysis “imputes” to nationwide personal income data (known as phantom income boosters, or imputations; for example, the imputed income from living in one’s own home, or the benefit one receives from a free checking account, or the value of employer-paid health- and life-insurance premiums). During 2007, believe it or not, imputed income accounted for some 15 percent of GDP. John Williams, the economic statistician, is briskly contemptuous of GDP numbers over the past quarter century. “Upward growth biases built into GDP modeling since the early 1980s have rendered this important series nearly worthless,” he wrote in 2004. “[T]he recessions of 1990/1991 and 2001 were much longer and deeper than currently reported [and] lesser downturns in 1986 and 1995 were missed completely.”



Nothing, however, can match the tortured evolution of the third key number, the somewhat misnamed Consumer Price Index. Government economists themselves admit that the revisions during the Clinton years worked to reduce the current inflation figures by more than a percentage point, but the overall distortion has been considerably more severe. Just the 1983 manipulation, which substituted “owner equivalent rent” for home-ownership costs, served to understate or reduce inflation during the recent housing boom by 3 to 4 percentage points. Moreover, since the 1990s, the CPI has been subjected to three other adjustments, all downward and all dubious: product substitution (if flank steak gets too expensive, people are assumed to shift to hamburger, but nobody is assumed to move up to filet mignon), geometric weighting (goods and services in which costs are rising most rapidly get a lower weighting for a presumed reduction in consumption), and, most bizarrely, hedonic adjustment, an unusual computation by which additional quality is attributed to a product or service.