Saturday, September 29, 2012

Greece: Class warfare, banksters and money laundering

Instead of an analysis of what kind of "austerity measures" and for whom the troika and its vassals in the Greek government have been preparing, I'll just show you a table of taxes before and after the the new tax system, that is part of the latest austerity package, is implemented, by income category. This is income tax only, it does not include social security taxes... The really fun part is at the bottom of the table [from Capital.gr, I took the liberty of translating the labels]

A fair tax system
This comes on top of a new tax system for freelancers / professionals, which imposes a flat tax (somewhere at the 25-35% range as government sources are leaking) from the first Euro earned, on all such non-wage earners, on top of a 500 Euro per annum fee. Now it is true that a mass of tax-evaders are such "free professionals" as they are called here (doctors, lawyers, engineers, but also designers, translators etc), included though in this category are precarious and part-time workers, young people with under minimum wage employment, second jobs etc.The number of the underpaid young, and not only, professionals that are in this category is perhaps over 250.000. So these people will be asked to be some obscene amount of their income in taxes (include another 500 - 5000 Euro on social security tax, depending on seniority - again not depending income) and ~300.000 professionals have zero or negative income this year after taxes. On the other hand if you are making over 100k per year, you have just moved the part over 100k, from a 45%, and everything between 60k and 100k from a 40% income bracket to the 25-35% rate.  Bizarrely this is sold as "taxing the tax-evading professionals", because the government has stopped even trying to make some sort of mathematical sense and hopes that soundbites substitute for arithmetic for enough people....

A cash injection for corruption

This new series of destructive measures estimated to be upwards of 14 billion Euros (that's like 7% of GDP and rising) would be enough to kill the economy if it weren't dead already. That this is demanded by the troika despite the fact that unemployment is climbing toward 30%, about a million and a half Greeks are living in households with no income at all, and that, if things go as planned, by the end of next year we will be well beyond a Great Depression scale slump, at a projected GDP decline of 30% over 5 years, does not seem to bother anyone that "matters". The new coalition government, elected on a platform of renegotiating the terms of the memorandum or at least lightening up the burden of austerity, is sending its electoral program to the dust-bin, proceeding with measures such as a reduction of farmers' pensions (from 330 Euros to 300 euros per month). Greek society is near unanimous in condemning this policy as unfair , but Samaras is adamant that he will honor none of his pre-election pledges and has been running around Europe playing the role of the good and obedient vassal.

What's at stake is the loan installment of 40 billion euros that will be used among other things to recapitalize already bankrupt and bailed-out private banks. This recapitalization was supposed to have occurred in the first half of 2012, following the successful completion of the PSI deal, yet the troika has unilaterally and against all signed agreements, held the loan back... Preparations are being made: the publicly owned banks, although arguably in better shape than the private ones, were exempt from the PSI recapitalization deal, (as were the pension funds with truly murderous consequences) are being given to bankrupt private banks, surviving only due to loans shouldered by the Greek taxpayer. ATE, owner of mortgages of half the farming land in the country was given away to Piraeus bank recently, but only the healthy parts: the bad parts will still be shouldered by the taxpayers. Piraeus bank incidentally, apart from being the recipient of successive bailout funds, was involved in a scandal recently, something exceptional as news, only because banks are almost fully protected from media scrutiny in Greece... Since the Greek banking system is the at the heart of clientilism and cronyism and since there are media magnates and other oligarchs in dire need of a liquidity transfusion, the whole corrupt banker - oligarch - political complex, is in urgent need of this loan. Public contractors and state suppliers will acquire liquidity, political parties in the verge of bankruptcy (ND and PASOK, especially PASOK) might avoid it, and the cientilist system can be set in motion again, albeit at a much lower rate of return for the troikan parties' bought voters.

10 billion euros laundered

Meanwhile, one of the few remaining relatively independent, if right-leaning newspapers in Greece published an amazing story, that if confirmed might offer a view of the scale of plunder that the country has been subjected to by the elites. Real News published last Sunday details of an investigation on money laundering involving over 10 billion Euros, the current Speaker of parliament, Vangelis Meimarakis, and at least two more conservative former ministers:

...Meimarakis is one of more than 30 politicians and public figures who have come under the microscope following a probe by the Financial Crimes Squad (SDOE) into corruption in public life.
Prosecutor Popi Papandreou, who has taken over the probe from SDOE, is expected to focus on claims against Meimarakis, former Transport Minister Michalis Liapis and former Public Order Minister Giorgos Voulgarakis.
All three were implicated in a multi-billion-euro money-laundering network in a Real News report last Sunday. Before summoning the three politicians, Papandreou is expected to call two contractors -- Iosif Livanos and Giorgos Zografakis -- who allegedly accused the three ex-ministers of involvement in money laundering with rival contractor Yiannis Carouzos.
This investigation was under wraps and going nowhere for at least a year and a half. The Speaker of the House maintains his innocence and has definitely lost his cool, although this sort of macho - hoodlum behavior is par for the course in today's New Democracy...

This is BTW why the Greek elites and their media are in complete terror that a party like SYRIZA, with no ties to this pyramid of corruption, might eventually win an election. In point of fact SYRIZA's immediate economic program is not much to the left of Paul Krugman. What is destabilizing however is the threat of local elites losing control of the web of graft that they cling on to since their grandfathers emerged after the war, as nazi-friendly black-marketeers who bought a suit and became businessmen. That EU elites chose to support the parties that nurtured this system, is probably telling as to where their interests lie...


Postscript: Athens. Social Meltdown

Finally, this is a very good brief recap of Greece's turmoil and destruction these past two years, from the ground:

Athens: Social Meltdown from Ross Domoney on Vimeo.

Cross-posted at Eurotrib

Monday, September 10, 2012

Comical Welt: All's well in the austerity front. No, really!


This has to be read to be believed "Die Welt: Happy Days Ahead? Euro Zone Austerity Measures Starting To Work" [Original in German]:

If the numbers are right, the European crisis countries are apparently healing faster than the markets have realized -- or want to realize.

An astonishingly positive total picture emerges from the various statistics. The economies of the euro zone's periphery nations are more competitive than they were just a few months ago; their industries are selling more abroad, and trade deficits are narrowing.

"Blood, sweat and tears -- everything people in these economies have been through is paying off," says Bert Colijn, a jobs market expert with Conference Board, a private economic research institute." The competitivity of the crisis countries is improving, and these first signs of improvement are encouraging. The periphery countries are moving in the right direction."

What is this right direction that brings PIIGS singing out in joy at the good effects of austerity? Well people there are working for pennies now! And doesn't that make everybody happy?

One particularly salutary development is cheaper labor costs. In Ireland, Spain and even Greece, unit labor costs have fallen significantly over the past few years. Conference Board economist Colijn and his colleague Bart van Ark researched that development, and report that of all the euro zone countries, the one that has increased its competitivity most is Ireland. Unit labor costs in Irish industry have fallen by 41.5 percent since 2008, which means that labor costs in Ireland are lower than they are in Poland and other middle and eastern European countries.

So we're there? Ordoliberal austerity's Land of Canaan has been reached? Herbert Hoover has been vindicated? Well not quite yet... it remains for the Archons of Investment to take heed of the redemption of the sinners, and in, a not quite adequately determined time-frame, we will have some sort of Growth and Jobs:

It will take time before lower unit labor costs produce full effects, but already they have made goods from those countries cheaper. In the long run, it will make them more interesting to investors.

At the moment, however, uncertainty about the future of the monetary union is keeping companies from investing. Only when they start investing again can the results of lowered costs bear its real fruit in creating growth and jobs.

Yes. At last! We're talking low paying jobs of course. And no welfare state - goes without saying. Possibly a large spike at infant mortality. And those pensions? Well the good thing about a reduced life expectancy is that fewer will feel their absence...

But let's try to confirm the "competitivity" improvement under austerity for most of the PIIGS countries from 2008 to 2012. We'll be using The Global Competitiveness Report, a composite index that has more to do with an investor's take on how they would like a country to be, rather than anything else. As investor sentiment seems to be the driving argument in the quoted article it seems useful to check the related rankings... So:

  • In the Global Competitiveness Index rankings for 2007-2008, Portugal was ranked 43d, yet this year it is ranked 49th...

  • Ireland was ranked 22d in 2007-2008, and 27th this year (despite or probably because of the >40% drop in unit labor values there I wonder?)

  • Italy was the only one of the PIIGS countries to improve from 49th (2007) to 42d, possibly because it was the country least inflicted with austerity of the five

  • Greece has dived from 67th place to 96th, as its economy was destroyed by unprecedented turbo austerity

  • Spain dropped from 29th to 36th.

Is that an improvement or what?

The whole propagandistic tenor of the piece (fox news on weed) is breathtaking since it is running counter to pretty much every published assessment of the situation. For example Bloomberg recently wrote about Spain that:

"We fear that things are likely to get worse before they get better," said Martin van Vliet, an economist at ING Bank in Amsterdam, who expects Spain will seek additional financial aid as early as next month. "With much more fiscal austerity in the pipeline and unemployment at astronomic highs, the risks are clearly tilted toward a more protracted recession."

Separate data today from the ECB showed that private-sector deposits at Spanish banks fell by a record in July, dropping 74.2 billion euros ($93 billion), or 4.7 percent, to 1.51 trillion euros. That's the biggest decline since at least 1997, when the ECB's data series started.

As Migeru pointed out in an f/b conversation, this is running counter to Die Welt's other coverage ("Spain on the brink of bankruptcy" on Sept 7, just five days after the posted article).

Could it be some sort of sarcasm that is being missed in translation? Is it part of a propaganda effort to create a more positive atmosphere toward the south in German public opinion? What? I don't know but is sure reads funny in a dark and obscene way... Cross-posted in the European Tribune

Friday, June 15, 2012

Merkel and Schauble: The thin line between economic policy and crimes against humanity

I have really huge sympathy for the man on the street in Greece. But I cannot spare him
Wolfgang Schaeuble


From the Digital Journal article linked to above:

Speaking to the German press Merkel said "the austerity imposed on Athens..." is "necessary to set an example to the entire eurozone.... The question of whether Greece carries out its programme is not just a question of whether the programme succeeds or not, but rather of whether obligations will be observed in Europe in future."
The sentiment was reiterated by Schäuble. The Telegraph reported he said although he has sympathy for the people of Greece that does not mean they don't have to put up with austerity. He said "Things are rarely fair in a crisis ... the little man suffers and the rich feather their own nests. I have really huge sympathy for the man on the street in Greece. But I cannot spare him. It is not easy to cut the minimum wage in Greece, when you think of the many people who own a yacht... If the country wants to become competitive again, it has to sink.”
So this is not by accident, nor is this. It's all premeditated.
As far as I can see this can be easily filed under "inhumane acts... intentionally causing great suffering, or serious injury to body or to mental or physical health", as policy... This is no Europe worth participating in, it is the mad austerians' penal colony... 
So on Sunday it's SYRIZA or barbarism. I would stand on a bread-line and walk 10 miles to work every day if it means telling these vile, cynical bastards and the local plutocracy that they are working with to fuck off and die.

Tuesday, June 5, 2012

Levy your myths on Greece



“Greece must be clear that it agreed to this rehabilitation program, there is no alternative, if it wants to remain a member of the Euro-zone,” - ECB executive board member Jörg Asmussen
Rehabilitation implies a return to health, or to normalcy, of course, and two years after the therapy started, the patient is sicker than ever, undeveloping and suffering societal collapse.

That these fiscal doctors are quacks therefore is indisputable. That they have no ability to learn from their mistakes or, perhaps, that indeed this political butchery is not incidental but purposeful, is evidenced by their persistence on the social and economic disaster being visited by the Frankfurt (or is it Brussels?) Consensus (worthy heir to the devastating Washington Consensus) not only on Greece but on country after peripheral country in the EU, a policy cancer that is metastasizing to the EU core - again, perhaps as intended...

I'm leaving aside the horrifying casualness with which all sorts of European officials consider or even advocate the removal of a member country from the euro. This is simply indefensible, and even "respectable" authorities call it for what it is: propaganda meant to influence the Greek electorate, terrorize them into passivity and acceptance of their fate avoiding the feared radicals... These are the sort of statements that have immediate market consequences and this is something that is possibly even illegal but certainly breathtakingly irresponsible, especially since a Greek Euro-exit has the potential to become a cataclysmic world-event.

Let's focus instead on the dominant distorted narrative about Greece and the way it is influencing not just consumers of propaganda, but even the people setting the agenda. How indeed policy makers and mainstream analysts have internalized as objective facts, all sorts of flawed arguments about the Greek crisis. This is not a fluke, it is a practice: cherry-picking or even inventing facts (as we have seen many times in the case of the EU crisis), setting up policies with no evidentiary base and with a historical record of failure, married with the sort of de-politicization of economy that is a hallmark of neoliberalism, an apolitical economy in which systemic analysis is eschewed in favor of conceptually flawed yet elegant models, and  whose accompanying rhetoric are moralistic bromides. And of course ignoring the complete failure of all "official" economic predictions. Until recently I believed that the dominant misrepresentations about Greece from the EU were no more than cunning and amoral political posturing. More and more I am coming to the conclusion lately that this complete lack of understanding of the Greek economy, what went wrong and who is to blame for its implosion, is not a bug but a feature of the austerian world view, a prerequisite for viewing the imposed policies not only as desirable but as inevitable. There truly Is No Alternative, if you filter your inputs appropriately...

Dr. Jörg Asmussen: Clueless in Frankfurt

Take Jörg Asmussen, an ECB Executive Board member now, and until recently "State Secretary at the German Federal Ministry of Finance, responsible for the Directorates Fiscal Policy and Macroeconomic Affairs, Financial Market Policy and European Policy". Surely a man who is intimate with basic facts about the Greek economy, right? Well... not exactly.

In an interview last September in Vanity Fair, Asmussen states the following after reading an IMF report on Greece (emphasis mine):
“They have not sufficiently implemented the measures they have promised to implement,” he says simply. “And they have a massive problem still with revenue collection. Not with the tax law itself. It’s the collection which needs to be overhauled.”
Greeks are still refusing to pay their taxes, in other words. But it is only one of many Greek sins. “They are also having a problem with the structural reform. Their labor market is changing—but not as fast as it needs to,” he continues. “Due to the developments in the last 10 years, a similar job in Germany pays 55,000 euros. In Greece it is 70,000.” To get around pay restraints in the calendar year the Greek government simply paid employees a 13th and even 14th monthly salary—months that didn’t exist. “There needs to be a change of the relationship between people and the government,” he continues. “It is not a task that can be done in three months. You need time.”
 Asmussen thus makes two assertions that supposedly support what he has to say: One: that a job in Germany pays less than a similar job in Greece, and that the "13th and 14th" salary is a scheme that the Greek government invented in order to pay employees more. The first assertion is mindbogglingly wrong and the second assertion is not even wrong. As this is illustrative of the the extent of the empirical void upon which the austerity prescriptions are built let's see some data:

Average gross earnings in Greece are a fraction of earnings in Germany, there were very few people, if any, in Greece that made more on any given job than their German counterparts. It is not clear if Mr Asmussen is talking about private sector jobs (which talk about "labor markets" in Greece indicates) or public sector jobs (which would be consistent with government paying salaries as stated in the next sentence). Yet in neither case is it true that Greek jobs were better paid (not even in purchasing power, as Athens is more expensive than all major German cities). Greek median salaries in fact were consistently either the lowest in the EU15 or second lowest (after Portugal), and that applied especially to low and mid-range jobs (see here - warning Google translation!). The large gap between salaries for jobs at the top and average salaries was mentioned in a Greek Unions' report for 2007:
In Greece the mean wage is approximately €1,250. In other words, 50% of paid employees receive gross monthly pay of less than €1,250. Average gross monthly pay stands at €1,668, much higher than the mean wage, since 15% of paid employees have extremely high wages, which raise the average, creating false impressions regarding the great majority of paid employees. The threshold below which workers are designated as low-paid is 2/3 of the mean wage, i.e. around €830 a month. Based on this figure, 22% of workers in Greece are low-paid. The purchasing power of the mean gross wage in Greece in 2007 was 83% of the average in the EU15. Only in Portugal was the purchasing power of wages lower (61%).
Since then, salaries and wages have been declining rapidly: by more than a quarter in 2011 according to the OECD, and heading towards a further 25% reduction in 2012.
If one was to examine compensation in public sector jobs, teachers were indicative: both entry and end-career gross salaries for teachers in Greece were around~60% of those in Germany. 

Recently some Greek teachers had to actually *pay* in order to keep their jobs, while the decline is significant and net salaries start at about 600 Euros per month, not reaching much beyond 1400 euros... Thus the average Greek teacher now makes a third to a quarter of what a German teacher makes, in a country that is more expensive than Germany...

Asmussen's second point is even more breathtakingly uninformed however: the so-called "13th and 14th" salaries are in fact: a. given in both the private and the public sector, b. not bonuses but a way to distribute annual salaries (which is what counts - duh!) in a way convenient for most Greeks and c. in place practically immediately after WWII, legally generalized in 1981 but based on a practice dating back to... 1822 [Google translation]. 
This is common knowledge in Greece, but apparently a man who gets to decide on the survival of the Greek economy and issues warnings and threats, while chiding the locals for imagined shortcomings, does not need to actually have any idea about the economy he is helping destroy...
Finally one cannot help but note that the troika under ECB supervision and the German government's acquiescence has cut down in numbers of, and reduced salaries in, exactly the government mechanism that is supposed to collect taxes. Unsurprisingly this has not made the tax collection mechanism more efficient or less corrupt...

So let us recap: important German Finance Secretary in charge of European policy gives interview in which he shows clear signs of getting his data about Greece from Bild and similar paragons of journalistic integrity. This would not have been the first time a German public official adopts anti-southern populism as a guiding light for policy recommendations, but since this was an interview in a US magazine, in a clearly relaxed conversation one is lead to believe that Mr. Asmussen's misrepresentations about the Greek economy were not a guise, or a political stratagem but a real gaping hole in his understanding of the situation...

So could be worse for Greece than a clueless German Central Banker? A clueless IMF director perhaps...

Lagarde: Most children in Greece are not starving to death, Greeks will have to try harder - till they do

Mme Lagarde, IMF director was quoted in an interview a few days ago in the Guardian talking about many things - Greece and the crisis among them. She seems to have a problem with social categories and logical consistency though, and I'll quote here the whole relevant passage:
So when she studies the Greek balance sheet and demands measures she knows may mean women won't have access to a midwife when they give birth, and patients won't get life-saving drugs, and the elderly will die alone for lack of care – does she block all of that out and just look at the sums?
"No, I think more of the little kids from a school in a little village in Niger who get teaching two hours a day, sharing one chair for three of them, and who are very keen to get an education. I have them in my mind all the time. Because I think they need even more help than the people in Athens." She breaks off for a pointedly meaningful pause, before leaning forward.
"Do you know what? As far as Athens is concerned, I also think about all those people who are trying to escape tax all the time. All these people in Greece who are trying to escape tax."
Even more than she thinks about all those now struggling to survive without jobs or public services? "I think of them equally. And I think they should also help themselves collectively." How? "By all paying their tax. Yeah."
It sounds as if she's essentially saying to the Greeks and others in Europe, you've had a nice time and now it's payback time.
"That's right." She nods calmly. "Yeah."
And what about their children, who can't conceivably be held responsible? "Well, hey, parents are responsible, right? So parents have to pay their tax."
Most of what I wanted to say about this interview, and more, has been said by Alex Andreou in the New Statesman, in an excellent piece where he debunks this nonsense, starting with the implausibility of an IMF head giving two damns about children in Niger, which the Fund has a history of helping to starve  in a country devastated more by its policies than draught.
I would simply like to highlight the following from Andreou's article:
Faced with the question of women without access to a midwife when they give birth, patients dying without access to drugs, the elderly dying alone for lack of care and children starving, Lagarde’s response is simply to say that it is very easy for them to help themselves. How? "By all paying their tax. Yeah."
That’s right. Because, plainly, it is the same mothers without access to midwives, the elderly without care, the sick who cannot afford the newly introduced €5 hospital admission fee, the children without food, who have hoards of taxable income and are busily trying to send it to banks in Switzerland, while starving. Greece as one homogenous, tax-dodging mass responsible for its own downfall.
Yet this is the quality of the arguments presented here: Lagarde starts from the correct premise that there is significant tax-evasion in Greece and then distributes blame to all Greeks despite knowing (?) full well that it is the richest members of society that have been tax-dodging and evading, while the tax burden on the average working Greek has sky-rocketed. Salaried employees and pensioners i.e. the large majority of Greek taxpayers cannot evade taxes since income tax (along with huge social security taxes) is deducted directly from their pay-checks. That the bulk of tax evasion occurs in the highest income brackets is known, as is the fact that Greek ship-owners are totally tax-exempt (including income of their employees in their offices in Greece), in one of the most tax-friendly regimes for shipping in the World contributing almost zero to state revenues despite contributing near 10% of GDP. Yet these people, along with the bulk of the Greek rich, the real and only winners of the supposed Greek "boom" in the decade before the crash of 2009, are never really targeted by anyone - much less the troika. But Lagarde would naturally feel sympathy for her peers in tax-exemption and income level as she pays no taxes at all on her close to half a million dollar annual salary in the IMF...
Lagarde's comments about the parents of hungry Greek children being guilty of not paying taxes also fail simple logic: obviously all such parents do not have to pay income tax, since they are demonstrably under the 5000 Euro/year tax floor which the IMF is working hard to remove, having as a maxim that the only kind of taxes it likes are those on the poor and the middle class. They do however pay VAT which has increased to 23% in general, and 6,5% for basic necessities. The really big tax-evaders most definitely do not have starving children... instead they have property in London, and bank accounts in Switzerland and Germany.
But let's focus on taxes and see some of "tax - reform" proposals the troika is trying to impose - probably successfully if pro-austerity parties win in the coming elections. [My comments in italics next to the proposed measures]:
The basis for the envisioned changes in the new taxation system will reportedly be the IMF and European Commission’s proposals - included in their recently released reports... Among others, these should include:
i) elimination of several tax exemptions (related to e.g. medical visits and hospital fees) and of special privileged status for certain taxpayer categories; [privileged = sick people]
ii) abolition of the VAT discount on islands and an end to reduced income tax rates for those who live in islands with fewer than 3,100 inhabitants; [privileged = people who leave in remote areas and need incentives for remaining there and aid to counter the costs of isolation]
...
iv) reduction in income tax brackets from 8 currently to 5, including a reduction in the upper tax rate for personal incomes to 40% from 45% currently. A reduction to the tax-free threshold of €5,000 per year to €3,000 or its complete elimination may also come under consideration; [That means "lower taxes for the rich, higher taxes for the poor, much higher taxes for the poorest]
vi) adoption of a uniform tax for all business and legal entities at 20% initially, with a option to reduce it further (to as low as 15%) once domestic economic conditions stabilize; [Thus mega-corporations and small shops in the same tax bracket. Again less taxes for the rich, more taxes on the poor]
Plus the property taxes imposed are set up in such a way that the home-owner is taxed at the same rate as the bank which owns 100.000 buildings and houses around Greece... The property taxes prescribed by the IMF for home-owners and small scale owners are confiscatory in their extent under the economic conditions prevailing in Greece right now.

So much for everybody paying their fair share, eh? Somehow the monstrous regressivity of the troika's tax proposals is seldom mentioned in much of the international discussion about Greece.

International Press: A vibrant mythology

The stereotypes and misinformation about Greece being pushed by MS media around the world are legend. The mention of Greece's "bloated public sector" is part of the standard clichés about the Greek crisis, seen i.e. in this article in the New York Times from this past autumn:
Some experts believe that Greece could reap significant savings by reducing its bureaucracy, which employs one out of five workers in the country and by some estimates could be trimmed by as much as a third without materially affecting services. But though salaries have been cut, the government has yet to lay off anyone.
Although I've been through this issue on this blog many times let me point out the mistakes in this single paragraph:
Although Greece could indeed reap significant savings by reducing its bureaucracy, this bureaucracy is not
a fifth of the workforce, as this blog has tirelessly pointed out since the start of this crisis. The total number of public sector employees (and that includes Greece's really bloated military, police, doctors, teachers, etc) is under 15% already and heading South fast. Here are the official, updated numbers on Greek public sector, (total workforce = approximately 5 million) and here are the real facts about public sector employment. The bureaucracy is a much, much smaller subset. However even if it was true that one could trim down this, small, bureaucracy by a third without materially affecting services, this would be a process that would necessarily extend over the space of 5-10 years, and would require a surgeon's scalpel. Instead what the IMF is insisting upon is indiscriminate firings in all sorts of public services that have nothing to do with bureaucracy in as little time as possible and through a process that utilizes an axe. As a result, public services have deteriorated to the point of total collapse, creating functional problems where there weren't any before and undermining public health, education, tax collection, infrastructure etc. The government was loathe to lay people off (it reduced the numbers though, only a bit more gradually than the IMF would like) because already at that time unemployment was pushing towards 20%, a milestone already passed now, and they were scared of the social consequences...
And this was in the NYT, not some yahoo red-state rag, failing to even google what they're writing about.

Or take this recent report from Reuters ("Greeks embrace some new myths about life with the euro") where real attitudes in Greece are misrepresented and contrasted to a supposed determination on behalf of the Eurozone to "kick Greece" out. It is implied that Greeks are delusional because they want both an end to austerity (which has failed in every goal it set and has driven Greece to a depression greater than the US depression of the 1930s) and to remain in the Eurozone. The authors seem to think that this is impossible and it may yet be, but there is no evidence presented for this. Nowhere is it even hinted that the whole austerity policy was a failure, or that the measures being demanded of Greece in return for the bailout lead Greece to the Third World (not to mention out of the eurozone) and are causing already a humanitarian crisis in the country. But see how the issue is framed:

Solemn warnings from abroad that Athens cannot stay in the Euro while rejecting the terms attached to the billions offered to pull Greece out of its financial hole are widely disbelieved in a land that considers itself the envy of foreigners.
Note that these billions are "offered to pull Greece out of its financial hole" according to the article despite the rather evident fact that these billions have actually dragged Greece deeper into a financial hole, caused a societal disaster and have sabotaged the economy to an extent that will require a decade of rapid recovery to mend. The Greeks have this funny notion that failed programs should be stopped not because this is rational, but because they generally entertain quaint notions such as that their country "is the envy of foreigners" (one would be hard pressed to find a single person nowadays in Greece that would support such an assertion).
In what many foreign partners see as the great Greek paradox, opinion polls show over 75 percent of Greeks want to stay in the euro, but two thirds oppose an international bailout, a lifeline which came with harsh salary, pension and job cuts.
Frankfurt and Brussels say it is impossible for Greece to have one without the other: no bailout means no euro and a return to the drachma - "drachmageddon", as some Greeks call it.
It isn't much of a paradox however when one realizes that there is no official way of Greece leaving the Eurozone, unless it unilaterally withdraws from the EU, and why would it choose to do that? The paradox is resoled however in opinion polls that ask whether Greeks would prefer to live with the Euro under the terms of the current austerity plan or leave: 47,8% of respondents say that they would then prefer to leave while 41,7% would choose to remain in the Eurozone even under the current plan of permanent austerity according to a recent MRB poll, while the percentage of those that set a limit to the amount of punishment they would accept to stay in the eurozone was 54% (vs 34% and 7% who wanted an immediate return to the drachma) in another poll by Pulse. This is an inconvenient fact that escapes mention in stories from Greece because it reverses the threat: most Greeks are ready to dump the Euro (if they are forced to, because very few wish to leave the EU) in order to avoid austerity - and how ready is everyone else to cope with that?
The other thing often missed when Greece is discussed in the MSM is that the vast majority of funds for the bailout never went to fill the Greek state's coffers, in fact Greece serves as a mechanism for European taxpayer money to end up back at the ECB. Indeed the whole of the bailout has had the effect of giving time to the ECB to transfer debts of private and public banks to its own back, that is again, on the backs of European taxpayers. This too is a nuance often missed by media commentators...

Many parties show no sign of heeding warnings to make clear to a public confused about what is at stake that elections next month are effectively a referendum - euro or drachma.
Again this is stated as fact. Despite the tiny detail that no one is advocating leaving the Euro. And many parties of course do not accept this (false, as they see it) dilemma which the article states as a given. It is not impossible for Greece to be pushed out of the Eurozone. However one could claim that should Greece follow the route of compliance it is much more likely that it will find itself in no time with no euro and even more disastrous conditions, as the eurostorm is breaking all over the continent and predictions about the future of the euro are quite precarious at this point, quite independently from what Greece does.

The narrative sustained by mainstream media, eurocrats and elites around the world, but especially Europe, of a "lazy" and profligate country that "boomed" with "foreign money" and now is getting its just deserts, is false. As is the meme being spread that the IMF/ECB/EU Commission program has anything to do with "getting Greece's fiscal house in order" and helping Greece out of the slump. Actually the troika program is the prime factor behind the collapse of the Greek economy, a collapse almost unique in scale during peacetime. In terms of its stated goals and socioeconomic collateral damage it is an abject failure. The dismantling of the meager welfare state that Greece had to begin with, as well as the demolition of the impotent and poorly implemented pre-crisis labor laws in favor of a framework that converges toward that of a third world dictatorship, coupled with a salary and wage cut, a high inflation rate, >20% unemployment and a mad tax-spree against working people, pensioners and small businesses, is a political project run by dangerous neoliberal ideologues, not an answer to Greece's real deep economic malaise.

The narrative is the message

All these misrepresentations, the silences, the omissions, the outright lies, the misinformation, the urban legends and the often naked condescension, form an integral part of the narrative of Greece, a narrative that is used to legitimize the policies being pursued by the core EU governments to the electorates there, not only by stereotyping but by indirectly implying that solidarity is pointless, and that they mustn't demand too much of the state and their superiors, or else the fate of the profligate Greeks will befall them.
By narrative here I imply a rhetorical tool meant to frame the issues in Greece in such a way as to exclude certain kinds of questions and objections and invite only particular others. Though it is true that in one sense every depiction of events, especially of a procession of events, is a narrative of one form or another,what we have here is a narrative that does not even try to include the relevant facts, but rather to make them opaque, to misrepresent and deny coherently, and by plan. This is a weaponized narrative, in a permanent communication war taking place where societal consensus is forged.
However the thing is that these sort of devices work better if you believe their content. As "the plan" here emerges through the alignment of elite interests, and the reflexes of the already indoctrinated who are in place at critical positions in the political-financial-industrial-media complex that supports and defines the global elites, what you get is Asmussens and Lagardes, and everything from Bild all the way to the WSJ and the NYT: people that at the same time realize the political expediency and the real economic stakes, yet seem to honestly entertain and believe the dumb BS they are peddling to the population at large, both at home and in the target country: Greece and the PIIGS in general...

Myths prop-up corruption

It is in Greece where the project of the dismantling of the European welfare state, a desire acknowledged by Mario Draghi himself openly, is being tested, after two years of daily struggles the unfolding disaster is leading to an unprecedented electoral result .
Up to a month ago the plan was moving along, supported by massive police violence whenever protesters were on the verge of dominating the streets. These protests however, as they were increasing in anger, determination and ferocity created a crisis of legitimacy, that not even the Greek oligarchs' corrupt media system could impede. In fact the media system's delegitimization was a key factor that allowed the electoral earthquake that followed. Elections were then announced with the widespread conviction that the two-party system propping the bailout and the subjugation to the IMF / ECB dictates, would be wounded yet would have managed to form some sort of legitimate government capable of moving ahead with even more anti-social cuts and productive sabotage...

But things were explosibe and SYRIZA, a small party of the radical left emerged as the main beneficiary, electorally speaking, on May 6th, and is poised to win, perhaps even win big, on the repeat elections of June 17. This is met by a chorus of local and european dismay, trying to push the the idea of Greek elections being a referendum for or against the Euro, despite the fact that SYRIZA has been insisting forever that it wants to Greece to remain in the euro, and is arguably the only pro-european party in Greece, if by Europe one means social-europe, the Europe of redistribution and democracy. In fact SYRIZA is fighting a battle that concerns everyone who doesn't want a "Europe with Asian values" as Slavoj Zizek recently pointed out or that sees austerity as the death knell of the Euro and a ticket for re-inventing the 1930s, as Yanis Varoufakis warns...

So the same forces that imposed on Greece a historically failed policy - as part of a political plan, or through sheer dogmatism, it doesn't matter - are now encouraging Greeks to vote for the same two parties that have been historically at the root cause of the Greek economy's many ills. Clientilism and corruption, oligarchs and tax-evasion, public coffers at the service of the bureaucracy/ ship-owner / public procurer / media complex, the underdevelopment of the Greek welfare state, are all the work of the two parties, ND and PASOK that the EU bureaucrats and assorted European elites are basing their hopes on. SYRIZA on the other hand has no clientilist roots, was the only major party opposed to the Athens' Olympics and the Pactolus of funds (total cost is still unknown but estimates reach 30 billion euros) that were diverted there. SYRIZA was the only parliamentary party to note that the funding growth through borrowing, 2,5 euros of debt for every euro of growth as they noted at the middle of the "boom", is a Ponzi scheme, not an economic policy, and that not reducing public debt at a time of growth is suicidal.
But the powers that be are creating a new myth, the myth of the dangerous radicals that are going to wreck Europe, and they are actively supporting the mishmash of carrierists, neoliberals and enablers of corruption that are the two parties - not to mention the scary drift to the far-right of ND that now includes a large part of the extreme-right LAOS, with fascist roots and an anti-immigrant rhetoric that would embarrass Marine Le Pen. The eurocrats and the mouthpieces of global elites are mythologizing the political landscape of Greece and they are still insisting that the disastrous measures that SYRIZA refuses to implement are the only alternative. The process by which Greece and its "radical" choice (and to be frank, SYRIZA's prescription for dealing with the crisis is a bit to the right of Paul Krugman) is to be made the scapegoat for the collapse of the euro project in the new series of myths in the post-euro landscape, is now underway...
The reasons are obvious: they fear a left wing contagion in their own countries they fear an end of the era of rule of the 1%, by the 1%, and for the 1%...

 A dilemma will emerge in the coming period regardless of what happens in Greece: the dilemma of whether Europe will drift towards a post-democratic dystopia, or whether social Europe persists and emerges stronger from this chaos. The battle that SYRIZA is facing, unprepared and nervous as it may be, is the first in a political war that can engulf the continent. "They have decided without us, we will go on without them" as SYRIZA's slogan declared. Let's go on without them, then, on a European scale...

[Crossposted at the European Tribune]


1

Friday, May 11, 2012

SYRIZA leader's second letter to Barroso et al.

 Background 1, 2, 3 (see discussions also)
 

Letter of the president of the Parliamentary Team of SYRIZA – EKM to EU Commission President Jose Barroso, the President of the European Council H. Van Rompuy, and the President of the European Parliament Μartin Sultz; attn the President of the ECB Mario Draghi and Eurogroup President Jean Claude Juncker


Athens Thursday May 10, 2012

Dear Mr. President

I am sending you this letter after returning the exploratory mandate with which the President of the Hellenic Republic entrusted me, so that I could determine the possibility of the creation of a government that would enjoy the parliament’s confidence, according to our Constitution. This letter is a continuation of the previous one I had sent you on February 21.

The vote of the the Greek people on Sunday May 6th, delegitimizes politically the Memorandum of Understanding / Memorandum of Economic and Financial Policy which was signed by the previous government under Mr. Papademos and the leaders of the two parties which had guaranteed the parliamentary majority of that government. Both these parties recorded a loss if about 3,5 million votes, receiving a combined 33,5% of total votes.

We would ask you to note that, before this, the Memorandum of Understanding / MEFP had been already delegitimized as regards to its economic efficiency.

But it isn’t just that the MoU/MEFP failed in achieving its own stated goals. It is also that it has failed to confront the structural imbalances of the Greek economy. SYRIZA has been pointing out all these past years the endogenous weaknesses of the economy. All governments, in close collaboration with the EU, ignored our proposals for concrete reforms.

Please note also, that because of the policies of the MoU/MEFP, Greece is the only European country ever in peacetime to be suffering in 2012, its fifth consecutive year of deep recession. Furthermore, the bond exchange program (PSI) has failed to secure in a reliable way the long-term viability of the public debt, which is increasing as a percentage of Greek GDP. Austerity cannot in any way be a therapy during a recession. The immediate, socially just, reversal of the declining trend of our economy is therefore imperative.

We must urgently secure economic and social stability in our country. For this reason, we have a duty to undertake every possible political initiative in order to reverse austerity and recession. Because, beyond the lack of democratic legitimization, a continued implementation of the program of internal devaluation leads the economy towards a catastrophe, without producing the prerequisites for recovery. Internal devaluation tends to lead to a humanitarian crisis.

We therefore have a duty to re-examine the whole framework of existing strategy, given that it not only threatens social cohesion and stability in Greece, but also is a source of instability for the EU itself and for the Eurozone.

The common future of European peoples is under the threat of these disastrous choices. It is our deep conviction that the problem of this crisis is European and that therefore it is at a European level that a solution must be found…



Respectfully

Alexis Tsipras

President of the SYRIZA Parliamentary Group

Vice-chairman of the Party of the European Left

Saturday, March 17, 2012

The anality of evil

Dark lords of the IMF over Dublin, one of their other lairs

EU Commission President Barroso said: 
"Greece's future passes through restoring both financial stability and growth potential. The support provided by the Commission's Task Force is a key instrument to support growth and jobs in Greece. The solidarity shown by many Member States, the Commission, and other international institutions is a very encouraging signal for this country. Let's build a future for Greece together".
The Daily Mail responded:
Is Greece becoming a third world country? HIV, Malaria and TB rates soar as health services are slashed by savage cuts:
Prostitution and heroin addiction on rise as hospital budgets cut by 40%. Malaria levels reaching near endemic levels in some areas. 'The entire health system is deteriorating'

The Guardian chimed in:
Greece is on the breadline: newborn testing is under threat... a health worker warns that children will die from disorders that are easily detected and treated
"Whatever are you talking about, these sub-humans deserve more austerity" responded the Commission and the Greek government eagerly assented:

...in preparation for the new cuts the government was reviewing public spending programmes, focusing on savings in social transfers, defense and the restructuring of central and local administration.
There would be job cuts in the public sector according to a redundancy and recruitment rule of 1 entry for 5 exits. Athens is to further cut pharmaceutical spending and operational spending of hospitals as well as welfare cash benefits.
“The continuation of the very comprehensive international financial assistance can only be expected if policy implementation improves,” the Commission report said...
"Defending the equitable state, the welfare state, is the top priority, a sine qua non condition for our survival as a civilized people" countered Nikos Xydakis.

"The European social model has already gone" said Mario Draghi dismissively."Yes" agreed the local bankers happily, busy chewing the pound of flesh they stole from the hospitals and the schools.

"While our policies may be unpopular, profligate states are finally starting to reform" added Angela, the demented ordoliberal, pointing at the breadlines and the homeless in Greece with some satisfaction... We have these sort of people here at home too, we do keep them to their station...
Cross posted at the European Tribune

Wednesday, February 22, 2012

A warning to austerian eurocrats

SYRIZA, the Greek Coalition of the Radical Left, has notified through an open letter signed by its president Alexis Tsipras and addressed to heads of Eurogroup member-states, the head of the European Commission Jose Barroso, the President of the European Council Herman Van Rompuy, and Martin Schulz head of the European Parliament, that it does not consider the signature of the politically illegitimate government of Greece binding for future Greek governments. Although SYRIZA is at 10-12% at the polls currently, there is a dynamic testified not only internally but by a recent character-assassination piece in Bild and a less rabid but if anything more vitriolic and selective in its narrative piece in Der Spiegel. SYRIZA is now the first Greek party to publicly commit itself to repudiating the terms of the latest loan agreement, as stated in the letter, translated below. Should SYRIZA continue rising in the polls expect the regime to postpone elections:
Hon. Sirs / Mms
I am sending this letter to alert you to a matter of democratic order of urgent importance for Greece. This has to do with the commitments undertaken over the past two days by the Papademos government, headed by Mr. Loukas Papademos. Allow me to remind you that this is an unelected government, which does not enjoy popular support and has consistently and consciously acted against the will of the people of Greece. This government does not have the democratic legitimacy to bind this country and its people for the coming years, the coming generations. This legitimization deficit is in conflict with the rich democratic tradition of your own country. If this continues therefore, it will become a bad precedent for Greece and Europe as a whole, which above all, have a common inheritance of political and democratic traditions, which must be respected. However great the seriousness of the current circumstances might be - over which there is room for a divergence of opinion - they should not in any way cancel democracy.
The lack of democratic legitimacy of the Papademos government arises from the following facts:
  1. The two political parties, which support the government and participate in it do not have a popular mandate to bind Greece to treaties and agreements of this nature. Their representatives were elected in the last national elections on October 2009, based on political programmes at complete odds with the policies that were followed by the previous Papandreou government as well as those being negotiated today with the EU, the troika and the IIF, by the current government. The two parties which constitute the current government have a recorded history of plundering public resources and are responsible for the current economic situation
  2. The people of Greece have been systematically misinformed and deceived about the intensity and the duration of the austerity measures, ever since their first implementation in 2010. Consequently they have withdrawn their confidence in the Greek political establishment. Furthermore, the widely admitted - inside our country and abroad - obvious failure of these measures to successfully face the fiscal problems they were supposed to solve these past two years and the five-year period of  continuously deepening recession, has further legitimated the demand for a change in policy, so as to restore a socially just growth and therefore the prospect of a fiscal rationalization.
  3. More specifically: the unelected Papademos government provides but a minimum of information, sometimes even deceitful, regarding the agreements it is secretly negotiating. It has not initiated nor has it allowed to initiate any public, informational discussion about the extremely serious long term commitments that follow. Greek Democracy has thus been deprived of the constitutionally protected right of a detailed evaluation of the consequences of the signed agreement. The so-called "second rescue" was voted through an emergency ultra fast-track procedure, in the time-frame of one parliamentary session on a Sunday. The main object of this session was the demand by the government of a carte-blanche authorization on almost blank documents, which are supposed to bind the country for years to come
  4. To the degree that there has been no information on these agreements, their content seems to be such as to commit the Greek people for generations to come. For such commitments any government should at least demand a clear and renewed mandate.
  5. To the degree that there has been no information on the government's movements, the will of the Greek people as expressed in a multitude and a variety of ways, is almost unanimous in opposition to them. Specifically, during the last two years the people of Greece, throughout the country are expressing their opposition to government policies through, among other means, repeated general strikes and demonstrations, occupations, letter writing, electronic messages and other forms of personal communication with members of Parliament. The Greek government, not only chose to ignore the voice of its people, but tried indeed to stifle it, at times even violently, so as to continue in a antidemocratic way, the policies that have been proven disastrous for the Greek economy and society.
For all of the above reasons, I  am notifying you that the Greek people, as soon as they restore their right to democratically express their will and regain control of their democratic institutions, will in all likelihood reserve recognition or compliance with these agreements that the current government is planning to assent to. Specifically the Greek people will not accept any loss of sovereignty, foreign involvement in internal matters of Greece or large-scale sale of public companies, land and other assets that the current government is preparing to accept...

Alexis Tsipras
President of the SYRIZA parliamentary team

Monday, February 20, 2012

Declaration for the Defense of Society and Democracy


I reproduce here the text of the Declaration for the Defense of Society and Democracy, organized by a group of progressive Greek intellectuals as an instrument to raise awareness about the predicament Greece is in, but also the dangers that this implies for Europe as a whole... In order to sign this document send an e-mail with your name and organization (optional) to koindim@gmail.com (signatories thus far)

The following declaration (original here) is the product of an initiative undertaken by a group of citizens from different backgrounds who have agreed on the necessity of sounding a coherent and massive critical voice inside Greece as well as internationally. We have agreed that an intervention is necessary, which will forcefully highlight to Greek and European public opinion three major issues, in a conjuncture when the dominant dilemma "austerity or bankruptcy" has given it's place to the absolutely negative sum of "both austerity and bankruptcy":
1. The collapse of the social welfare state and the intensification of social inequalities
2. The subversion of democratic institutions and civil rights
3. The dissolution of the European vision and the decay of European unity
This initiative does not aim to produce yet another petition and a collection of signatories, despite its having originated on that basis. It aims to produce wider concurrences and spread the message everywhere that the "Greek problem" is simply a warning about the danger that fundamental European social and political values are in. Therefore it concerns us all.
It is our goal that everyone who signs this petition involve themselves, if they so wish, into social action, in a potential collaboration with organizations and collective entities who know firsthand, better than all of us, what is really happening in Greece today, and who are interested in working for a social and democratic Europe. In this crisis no one is alone. The answer to exclusion is participation. The answer to defeatism and pessimism is action...


Greek society is suffering both from the crisis and the responses to it, which have reached a dead-end. Major social and political institutions that were created with enormous struggles and sacrifices in post-War Greece – social security, the public health care system, public education, public transport, the natural and urban environment, the right to live a safe existence, and various elemental goods and services that underwrite the very existence of an already curtailed and devalued Greek state – are all being utterly dismantled so that Greek society is now dying of asphyxiation.

These dead-end responses rest on the blackmailing dilemma: austerity or bankruptcy? Yet, this is hardly a dilemma – it is rather a negative aggregate: both austerity and bankruptcy. The tri-monthly threat to expel Greece from the Eurozone constitutes an ethical alienation and an economic catastrophe, precisely because it strengthens the profound recession, turning the whole of Europe into an agent of uncertainty, financial instability, and proliferation of the crisis. It is Europe itself that is producing the conditions that make it impossible for Greece to fulfill its debt obligations.

It is becoming clearer every day that the specific political response to the crisis, which culminated in the parliamentary approval of the Second Memorandum, is not a viable process of overcoming the crisis or alleviating the long term pathologies of the Greek political and economic system, but a catastrophic process that deepens already existing terms of social injustice. The crisis is not experienced by those who exploited the state and public interest for decades, but by the most vulnerable social constituencies. We are confronted with an unprecedented initiative of an upwards redistribution of wealth and power that subverts the European social model by exacerbating the most extreme economic and social inequities, while simultaneously empowering the return of nationalism and the intensification of racism and xenophobia.

The falsified use of the notion of “reform” is indicative of the incapacity to overcome the crisis. Even those who did hope that the crisis would signal the opportunity to clean up or radically renovate existing institutions understand now that such imposed “reforms” destroy what is left of the social fabric. The dominant discourse regarding Greece, both within the country and abroad, is moralistic, guilt-ridden, and punitive. Every sort of disagreement or critique is dismissed as “populism”, “unionism”, or “anti-Europeanism”. After witnessing the stigmatization of the democratizing process following the fall of the Junta in 1974, we now witness the legitimation of the Far Right, which has been invited to participate in the current government. At the same time, we are bombarded with the demand that government be left in the hands of “Sages”, to coalitions of “technocrats” who will “save” the country. These are powerful autocratic and anti-democratic tendencies that employ an extreme populist rhetoric, to exploit the understandable sentiment of people’s fear-ridden disgust with the now rapidly collapsing old political order. We reject this old order as well, but without, however, subscribing to the shallow “ethnically proud” discourse that uncritically opposes the debt agreements without considering or proposing an alternative plan that can be realistically implemented.

Both Greece and Europe are sinking into a co-dependent crisis that demonstrates, not only the institutional weaknesses of the EU but the unacceptable crisis management by conservative national leaderships with neoliberal statutes and projections. No matter how difficult it seems, we owe it to ourselves to work together for a democratic European society that will continue to project its historical and political values, and provide new content to globalization. In any case, no solution can ever be reached at a national level; it must come to terms with the broader circumstances that affect the entire continent and even beyond. Today, Greeks are being humiliated, tomorrow other peoples, in a process of spreading suspicion and hatred among all. We are facing a catastrophic moment in European history. In this respect, solidarity with the Greek people underlines a major political wager for all of progressive Europe.

Against an uncritical class-based discourse, we owe it to ourselves to respond with critical thought drawn from the daily experience of citizens’ needs, especially those who are targeted unjustly by the crisis. We, the undersigned, are declaring our commitment to engage in the formation of a powerful front for the defense of society and democracy. We are forming a broad coalition that will bring together people from a multitude of political domains with the objective to restore the real meaning of words against an abusive language of self-interest, to help produce more creative modes of communication among social spaces and citizens with different affiliations, who share the elemental values of justice, solidarity, and democracy, in other words, the constitutive identities of citizens in a free-thinking and democratic polity.

Rejecting the logic of the “one-way street”, the ahistorical stereotypes that vilify Greek society thus shredding our collective dignity, we take up the task of elucidating, the real consequences of this crisis, both within Greece and abroad. The Greek crisis is part of a broader crisis that is changing the foundations of our current historical times. In this transitional period it becomes essential to understand that the very meaning of society, and certainly the meaning of democracy and of citizenry, are under threat of being dismantled and must be defended at all cost.

e-mail to koindim@gmail.com

Thursday, February 16, 2012

Debts, promises and coups

Schäuble tyrannus

Master and servant
“In Greece the realisation that something has to change, and dramatically, still has to take place among many,” said Schäuble yesterday.
This gem of wisdom, comes from someone who supposedly is in charge of the Greek experiment, the chief of the German economy. I'm not sure how he forms an opinion on what is occurring in Greece, the effects his austerity programmes have on society and the population as a whole, nor do I understand what sort of people advise him on the mindset of the Greek population as a whole. But this didactic tone, coming from someone who obviously, from the effects of the policy he supervises, has not the faintest clue of either the society, or the economy he is helping to demolish and on which he is imposing a developing humanitarian disaster, is colonial in its contempt for the natives.

The Irish Times article linked to in the quotation above, describes Schäuble as one of the negotiators of Germany’s unification treaty, a process which he apparently considers a success and a model for Greece. I leave aside the astonishing idea that the Greek economy is anything like the East German economy was and how terrifying it is that the man running Greece, for all practical purposes, considers it to be a similar project in any meaningful way. I have no first-hand opinion on the matter of course, but it does strike me as odd that the net result is a region which seems to overwhelmingly prefer life under one of the most repressive, intrusive and harsh dictatorships in the Eastern Block, to what Schäuble achieved. So that is what the man calls success: creating mass yearning for dictatorship. I have no doubt that the corrupt and inefficient Third Greek Democracy, ending now, will be remembered with similar nostalgia should current plans persist.

The German leaders' uninformed, yet unabashed shows of contempt, bordering on the racist against Greece and the southerners are, most likely, political theater aimed to please the unthinking Bild readership,vile in its arrogance, but with a broader political aim of enforcing austerity and destroying social Europe as we know it well beyond the Greek borders. Yet one wonders: can they be as cynical as all that? Might the need to make a moralizing argument make them blind and selective as to the sort of "news" and ideas they have about what is happening in the south? I'm not sure... Could it be that it's not just that this is a policy aimed primarily at consolidating the Bild readership, but also a policy informed by Bild?

Meaningless promises burn meaningfully

I have chronicled as best as I could the trials and tribulations of Greek society and its economy, both at Histologion and the European Tribune over the past two disastrous years, and noted the disconnect of the persons in charge of "fixing" the Greek economy with its reality. This whole disaster is turning into a disgusting farce, a farce with real human casualties, but a farce nonetheless. "Greece" is being blamed for failing to meet the programme goals and "lying" to the EU officials. The programme itself cannot be at fault (although it is failing everywhere) so it must be it's lax implementation. This is something that apparently is sold as a fact to northern Europeans, along with the idea that this new package is mainly about "reform" and not about abolishing collective bargaining in Greece, forcefully decreasing private sector salaries to well under official poverty levels and reducing labor law to Burmese levels of worker protection - along with the fire sale of important infrastructure such as the Athens and Thessaloniki water companies and valuable assets such as the state lottery and football pools.

The list of "complaints" about Greece's "broken promises" is impressively ridiculous:
Taxes go uncollected, deficit targets are routinely missed, job cuts from the state payroll are postponed, privatisations have barely begun and pharmacies still shut in the middle of the day. Nearly two years into Greece's bailout, so many promises have been broken that international lenders have largely lost faith in the country's will to reform itself and are torn between imposing stricter outside control and cutting Athens loose.
Let's see how valid the complaints mentioned are:
  • Taxes go uncollected:  This is a ridiculous statement. Taxes - flat taxes, and consumption taxes almost all of them- weighed heavily on the poorer and middle class segments of society, have been vastly increased at a time of total economic implosion. You can't collect taxes now, because the capacity of citizens and most businesses is either diminished or non-existent. As household incomes have fallen by ~50% over the past few months, paying last year's taxes for most households becomes an unbearable weight, and for most small businesses an impossibility. The new tax on property including residences, which was supposed to be paid through the electricity bill (or have your electricity cut-off, I kid you not) - has been met with widespread resentment and refusal of payment from an apparently huge percentage of the population, most of which cannot afford to pay the tax, either because they don't have the money (six out of ten households can't afford to even pay the utility bills, much less the extra tax ), or they're not sure that they won't need the money for pressing and basic needs in a climate of total work insecurity, or because they refuse to be blackmailed by an extortionist state. As even the Telegraph rightly notes:
    Greece’s tax revenue from VAT collapsed by 18.7pc in January from a year earlier.
    Nobody can seriously blame tax evasion for this. It has happened because 60,000 small firms and family businesses have gone bankrupt since the summer.
    The VAT rate for food and drink rose from 13pc to 23pc in September to comply with EU-IMF Troika demands. The revenue effect has been overwhelmed by the contraction of the economy.
    Overall tax receipts fell 7pc year-on-year.
    This is a damning indictment of the EU-imposed strategy. Greece is chasing its tail. The budget deficit is stuck near 8pc to 9pc of GDP because the economic base is shrinking so fast.
  •  Deficit targets are routinely missed: They are. Of course. The targets are unrealistic to begin with, they are imposed based on political aims and not on some plan for the Greek economy, and then the austerity prescribed causes a much greater slump than originally calculated, which makes meeting the deficit target impossible without further cuts, which then cause a deeper recession which cause even greater divergences from the set goal, and so on in an infinite vicious circle... This forecasting error is not limited to Greece alone, but rather a feature of all IMF analyses, which are tools of political coercion and not objective technocratic estimates:
    The fact is that the optimistic 2012 forecasts presented in September 2011 whenever realistic. It was quite clear that the fiscal austerity being imposed upon the Eurozone was always going to result in sharp contractions in real growth.
    The IMF has a history of providing overly optimistic growth forecasts at a time when it is bullying national governments to impose fiscal austerity. The opposite is also the case, their growth estimates that typically conservative when governments are introducing fiscal stimulus packages
    Thus deficit targets are routinely missed, because they are set up that way, in an imploding economy that has lost 15% of GDP in 18 months...
  • Job cuts form the state payroll are postponed: This is hogwash. There is a constitutional ban on firing public sector workers so this can't be done legally as easily as the troika pretends it can. A loophole has been invented in that they can be fired if the position they occupy is canceled. Since 2009, the number of public employees has declined from ~700 thousand to ~500.000. Is this bloated? Well no not even in 2008 it wasn't, according to the OECD:
    Greece has one of the lowest rates of public employment among OECD countries, with general government employing just 7.9% of the total labour force in 2008. This is a slight increase from 2000, when the rate was 6.8%.
    The situation remains significantly unchanged as far as the irrelevance of the size of the public sector employment in Greece to its problems is concerned, even if one adds the broader public sector - quasi-privatized, most of it - which is immediately affected by the troika decisions even though it has no immediate budgetary impact. Now this already low number is to be reduced a further 25%, with promises of firing an extra 150 thousand public employees by 2015. This has literally dissolved the public sector, increased corruption, demotivated the public sector workers and has caused all sort of problems, not least of which is the harm inflicted on the health system, corrupt and inefficient to begin with, which now produces higher mortality rates and superbugs.
  •  privatisations have barely begun: This is true. The reason is that interest in privatized enterprises is close to zero, and the goals set were way too ambitious and unrealistic even last year... Now that the Greek economy has tanked they bring diminishing returns. This is aside of any discussion of the social and long-term economic sense and effects of selling-off things such as the water companies. Demanding immediate privatizations now is a demand for allowing the plunder of public resources. That the privatisation plans were not realistic, was noted very early on by many commentators...
  • pharmacies still shut in the middle of the day: This doesn't merit a response. The reason Greece is in an unprecedented depression is certainly not the traditional arrangements on the work schedule of pharmacies. If they mean the liberalization of professions, it is now in effect in Greece in such a drastic and idiotic way in most cases, that it has destroyed the livelyhoods of thousands of people while creating practically no jobs for anybody else.
This is the sort of propaganda that promotes that idea that the reason for this whole Greek disaster, is not the actual policies imposed by the troika, which came to Greece with general blueprints and no idea about the reality of Greece's economy, vindicating Joseph Stiglitz's views on the IMF missions to various part of the world - but now with a local, ECB flavor of ineptitude:

When the IMF decides to assist a country, it dispatches a "mission" of economists. These economists frequently lack extensive experience in the country; they are more likely to have firsthand knowledge of its five-star hotels than of the villages that dot its countryside. They work hard, poring over numbers deep into the night. But their task is impossible. In a period of days or, at most, weeks, they are charged with developing a coherent program sensitive to the needs of the country. Needless to say, a little number-crunching rarely provides adequate insights into the development strategy for an entire nation. Even worse, the number-crunching isn't always that good. The mathematical models the IMF uses are frequently flawed or out-of-date. Critics accuse the institution of taking a cookie-cutter approach to economics, and they're right. Country teams have been known to compose draft reports before visiting. I heard stories of one unfortunate incident when team members copied large parts of the text for one country's report and transferred them wholesale to another. They might have gotten away with it, except the "search and replace" function on the word processor didn't work properly, leaving the original country's name in a few places. Oops.
There is no doubt, in short, that the Greek government, a most obedient group of creditors' overseers, lacks credibility. First and foremost it lacks credibility among its population. All polls show, and Sunday's demos proved, that this is a government that has lost all real political legitimacy, and the two parties that support it are in free fall. But the reason it lacks this legitimacy, the reason that they are ineffective tools for the implementation of the IMF/ECB programme is exactly because they are trying to implement a political project of mass pauperization and destruction of the minimal social state that existed in Greece before the arrival of the troika. This is not only an unjust and violent plan, but also a plan fraught with contradictions, misdiagnoses, and ideological fixations that apart from destructive also make it unworkable. It is, I admit, a display of evil political genius, that this impossibility is used to reinforce its brutality, at least as far as the other suckers in this mass bank bailout that is sold under the guise of Greece's bankruptcy, are concerned, namely the taxpayers of the loaning countries. Money given to "Greece" in fact will end up a. feeding Greek banks, already bailed out lavishly on taxpayer money, though their ownership structure will be preserved, with sums that are two orders of magnitude larger than their current market evaluation b. To the PSI participants c. To pay of already existing debt. There is no d. It bodes ill for the future of Greece that the memorandum (which parliament approved in a few hours, in a draft version that had blanks on actual sums of money involved, to be filled after its approval!) is a straight jacket that in practice commandeers the Greek economy for the benefit of bankers and other creditors, to the detriment of its population. That is why the Greek government lacks credibility even to lenders: a democratically  illegitimate government facing elections soon, is not credible because it is not stable. Which brings us to recent developments


An EU coup?

The severity of the measures and the blatant breach of any sort of national sovereignty by the new loan deal, coupled with the growing strength of the actual left in Greece, has created a climate of insecurity for the powers that be in the EU - powers, I should add that are already seen as enemies by much of the Greek population. Thus the German Finance Minister and the EPP axis of austerity around him are apparently considering an ultimatum, or is it blackmail? call it what you will:
There were signs a group of triple A-rated governments, including Germany, Finland and the Netherlands, were hardening their stance towards Athens. During a conference call among eurozone finance minsters, the three countries suggested they may want additional letters from other smaller Greek parties and openly discussed the possibility of postponing Greek elections.
Ahead of the call, Wolfgang Schäuble, the German finance minister, said in a radio interview Greece might delay its polls and install a technocratic government that does not include politicians like Mr Venizelos and Mr Samaras, similar to the model currently in place in Italy.
So elections should be put off, according to the debtors wishes, despite the fact that Samaras has guaranteed elections will be held in April and that it is blatantly obvious that the current government is totally at odds with the popular sentiment, as is the parliament. This is not a democratic union anymore. This is a tyranny where political leaders are extorted into signing letters of submission and adherence to a dead-end policy, that has failed in multiple parts of the world. This is the neoliberal cancellation of democracy, the emergence of the European Central Bank as an instrument of transformation of the European Project to some sort of market-driven dystopia. This is not tolerable, and it's not just about Greece anymore.

It seems that the Greek debacle, the realisation of the extent to which European elites are ready to use the debt crisis as an instrument for the neoliberal transformation of the EU has stirred popular forces around the world. From England, to France, to Spain, , Belgium, Italy, even as far away as San Francisco, a lot of people realize that the fight in Greece is more than about fiscal rectitude and balancing budgets, it is the first in a series of battles that will decide the way the debt crises will unfold in Europe and beyond, whether the EU will become another labor wasteland and whether Social Europe as we have known it will continue to exist and develop.

That is the battle we're fighting here, not just for our own skins, although we're trying to avert a descent to a humanitarian disaster, but also the first battle in a world-wide social war over the debt, over who controls the economy and whom it should benefit...
[A briefer and more focused version of this story can be found at the European Tribune]