Monday, October 7, 2013

German election post-mortem: European Love and Harmony; Exhibit I

In June I attended my children's elementary school end-of-the-year feast, a pleasant event with plays, dances and songs, along with displays of the kids' projects and art. Among the exhibitions was one of (selected?) drawings and images, from all grades. The pictures included, apart from the usual children's themes, a not-really-unexpected dose of social and political subjects: the crisis affects and often devastates all families and children are exposed to the worries and discussions of their kin. Most were implicitly political but a few were overtly so. Among them was this:

At the top the drawing reads "Greece will be saved if we could just kill Merkel". Underneath, intended as a title probably: "The Godmother". Angela Merkel's picture (from a magazine obviously) has horns and a Hitleresque mustache, and there is a speech bubble filled with Euro signs. The legend below the image reads: "Merkel revealed ("under the light") [to be] Hitler's granddaughter". It shocked no-one.

This is not something that is significantly divergent from the general zeitgeist concerning the German government in Greece: my 9 year old son informed me one day, that 'Merkel' is used as an insult in his football practice.Which sort of ties in with the fact that last April Angela Merkel's negative ratings in Greece were at 87% (vs 11% positive) up from 64% and 25% respectively, in March 2010.

A wide majority of Greeks has been disenchanted with Germany. Last year Germany's unfavorable rating in Greece was (uniquely in the EU) at 78% negative. But the disenchantment is broader: The latest poll numbers are dismal regarding what used to be a solid backing for the European project:

(blue = positive, red = negative opinion, left slide regarding the EU, right, the Euro)

The general trend has been similar:


The remembrance of past evils

The reality of being a debt colony, in which Merkel's "reforms" are a vehicle for large scale societal destruction, is not conducive to creating an atmosphere of cooperation and unity in the EU. The historical burden of a murderous Nazi occupation adds to the mix the aura of deja-vu. The misunderstanding regarding Merkel and her government being called Nazis in the popular / populist press, derives from this. In Greece the Nazis are first and foremost associated in popular memory (indeed living memory, still) not firstly with the Holocaust, but with famine: The last famine in Europe, created by the occupation, which killed perhaps 300.000 out of a total population of 7 million people. My mother in law remembers her grandmother starving to death to give her meager portions of food to her grandchildren and then being thrown into a cart (like the one pictured below) to be buried with nameless others into mass graves. (The irony of a Nazi party rising up in this context is biting...)

So when starvation rears its ugly head again, this time as well under "German orders", the fact that there is anti-German sentiment in the streets is hardly a surprise. It is indeed surprising that it has not gone overboard yet... Merkel's recent triumph is seen by many in Greece as a popular affirmation of homicidal policies. But of course this is short-sighted: In fact it is a test for the generalized dismantling of the whole European Social contract, which the Dutch King officially announced a few weeks ago...

[I wrote a first quick commentary on the Nazi murder over at the European Tribune. A more complete account is pending - which I will post here as well]

Friday, September 6, 2013

Merkel: Creating a desert and calling it 'reform'

"We base our actions on the principle of quid pro quo," said Ms. Merkel. "No cent for the Greek people as long as the Greek weren't willing to deliver and implement reforms. Otherwise it makes no sense because solidarity would come to nothing."
Ah reforms! I can assure Angela Merkel that these "reforms" she's actively seeking have been implemented for 3 and a half years now. The result?
After six consecutive years of brutal recession, with homeless and unemployment rates skyrocketing, Greek society is experiencing an "unheard-of fragmentation", made worse by fierce austerity measures, experts say...
...this economic crisis has now transformed into a social emergency, according to UN expert on debt and human rights, Cephas Lumina.During a recent visit to the country, Lumina said there had been "an estimated 25 percent increase in the country's homeless population since 2009" and the poverty rate for under-17s was close to 44 percent.
"Adjusted for inflation and using 2009 as the fixed poverty threshold, more than one out of three Greeks (38 percent) had already fallen below the poverty line in 2012," he estimated.
Drastic spending cuts imposed by the country's international creditors in exchange for multi-billion-euro bailouts has made a difficult situation even worse, many believe.
And how about the quid pro quo? Well it turns out that:
...the truth remains that German taxpayers, as well as those in Finland, the Netherlands and elsewhere, are no worse off at all, and their finance ministries have racked up savings.
"As an unintentional consequence of the crisis, Finland has benefited enormously," said Martti Salmi, the head of international and EU affairs at Finland's ministry of finance.
"We have not lost a cent so far," he told Reuters. "The same as for Germany very much holds for Finland."
In fact, German officials are well aware of their stronger financing position, the result of a more than two percentage point fall in borrowing costs, even as politicians continue to lament the risks being piled on German taxpayers.
When giving presentations in Germany, Klaus Regling, the German who heads the euro zone's permanent bailout fund, often cites two studies that show that Berlin has reaped substantial savings as an unintended consequence of the crisis...
It is even worse: we all know at this point that the whole First Memorandum with the troika had as its single goal to give time to EU (mainly) banks, exposed to Greek debt to cover their backsides and get rid of Greek government bonds. Had Greece defaulted on its debt the whole european banking system would totter at the even greater expense of the European and partucularly German taxpayer. What we had was basically a German bank bailout disguised as a Greek state bailout:
...It’s hard to quantify exactly how much Germany has benefited from its European bailout. One indicator would be the amount German banks pulled out of other euro-area countries since the crisis began. According to the BIS, they yanked $353 billion from December 2009 to the end of 2011 (the latest data available). Another would be the increase in the Bundesbank’s claims on other euro-area central banks. That amounts to 466 billion euros ($590 billion) from December 2009 through April 2012, though it would also reflect non-German depositors moving their money into German banks.
By comparison, Greece has received a total of about 340 billion euros [this was written in May 2012 and it seems too large, it was 240 billion Euros at the time] in official loans to recapitalize its banks, replace fleeing capital, restructure its debts and help its government make ends meet. Only about 15 billion euros of that has come directly from Germany. The rest is all from the ECB, the EU and the International Monetary Fund.
But even this is misleading, since "the Greek" aren't getting much of that 240 billion EUuros directly:
The Greek government needed €247 billion in the period from 2010—2012. Of that, a mere 7.7% went to finance the government’s deficit—the rest went for other purposes. Around 15.4% went to pay interest on debt—this money went to both domestic and foreign investors. Another 12.3% went to repay Greek investors who held government bonds that were expiring in that period. A full 24.3%, the largest item, went to repay foreign holders of Greek government bonds—in sum, almost €60 billion. Around 18% went to recapitalize banks, 14% went to support the PSI (such as buying back debt) and 8.6% went for other operations. 
 So: No "cents" for the Greek people. Plenty of cents for the local banksters and oligarchs who are doing quite well.


This whole absurdist narrative about unreformed Greeks is the modern German version of the foreign scapegoat diversion. I have lamented on this blog over the past few years of austerian shock and awe about the ensuing Greek drama, the societal dissolution and destruction, the creation of a country with even more feudal income divides and the annihilation of democracy. I do understand that this inane hate-mongering brings in the vote, but it is shocking that petty electoral posturing, can be so unprincipled as to perpetuate a policy that can only be described as a fiscal crime against humanity, not only in Greece but across the EU South.
Merkel and the CDU policies have created through this "reform" a country in which an increasing minority lives in squalor, where suicides have reached historical records, an already meager number of births have declined precipitously, AIDS infections have soared and infant mortality has increased - at the same time that the (far-right nutcase) Health Minister introduces mandatory HIV testing to the world's astonishment.
They have also created an economy  practically without any labor protections,where obscene levels of unemployment and employee fear and desperation, mix with the rise of temp agency workers with no rights and protections at all, uncertain pay-days and a vast number of undeclared / uninsured jobs, to create a labor market truly of the Third World. The ILO is calling on the Greek government and the troika that manages it to restore universally accepted labor rights, at the same time that child-labor is on the rise. Strikers get conscripted by the government... Privatisations are overseen by idiots, handing over profitable state companies to gangsters amid an orgy of corruption and public goods are on a fire-sale. The remaining industrial capacity in the country is being destroyed. Tax evaders are being protected by prosecuting whistleblowers,
At the same time this social massacre and redistribution is being overseen by the most right-wing- not to mention the most corrupt - government since the junta. A government that peddles to the already rampant xenophobia, sets up concentration camps for immigrants and refugees, uses police to crack down on any kind of protests and terrorize immigrants or youth on a regular basis and then awards them impunity. The governing conservative party is also in cahoots with the Nazi gangs that are now in parliament, increasing in strength. Decisions in government are being made by the PM alone, bills pass either without meaningful debate in parliament, or by decree, and private TV channels are all supporting the government and fighting the Left opposition tooth and claw in a media landscape that feels like a privatized North Korea, since all of them are owned by oligarchs with ties to the ruling parties. Meanwhile, ERT, the public broadcaster was illegally shut down to be replaced by a farcical "Public TV" that is so pro-government that it has absolutely no credibility (and viewers) and opposition parties refuse to participate in discussions it holds...

That is the "reform" Ms. Merkel is pushing for in Greece. If one thinks that this is desirable, or that somehow this has nothing to do with general plans for the post-European-Social-Contract EU, well I can add nothing more. The CDU government is tearing Europe apart, creating across the EU South and the Periphery in general such resentment for Germany and the core countries and such social disruption that it is destroying not only the lives of those swarthy southerners but the European project as a communal goal. It seems probable that the CDU-FDP coalition will prevail in this month's German elections. This will signal the end of the EU as we know it. And Ms Merkel's "solidarity" will be remembered as a bad, German joke.

Thursday, February 14, 2013

The Greek debacle 2013: Of paupers and taxes

Via the Guardian: "Athenians reach out for a bag of oranges during a free distribution of fruit and vegetables by farmers outside the Agriculture Ministry. The farmers are staging the event to protest against high production costs, including rising fuel prices"
It used to be the case that I would need some time and effort to select incidents that would be telling enough and substantially reported in the media enough to give readers a taste of the societal collapse and the democratic decay that is occurring in Greece under the yoke of the troika and its willing executioners among the political elites. These days its simple enough: just check the past few days' headlines.

Social collapse

On the societal collapse side Alex Politaki in the Guardian, states the obvious: Greece is facing a humanitarian crisis, deep and unprecedented during peacetime in the West:
"...There are three more indicators that point to a humanitarian crisis. First, the number of homeless people has risen to unprecedented levels for a European country: unofficial estimates put them at 40,000. Second, the proportion of Greek beneficiaries of NGO medical services in some urban centres was recorded at 60% of the total in 2012. This would have been unthinkable even three years ago, since such services were typically provided to immigrants, not Greeks.
Third, there has been explosive growth in soup kitchens and general food distribution. The levels are not officially recorded, but the Church of Greece distributes approximately 250,000 daily rations, while there are unknown numbers of rations distributed by municipal authorities and NGOs. By recent government order, municipal rations will be expanded further because of rising incidence of children fainting at school due to low calorie intake. There will also be light meals provided to young students..."

A recent survey by the Hellenic Confederation of Professionals, Craftsmen and Merchants [GSEVEE - Warning: Bad English], put some numbers behind this:
  • ...Half the population is in danger of finding themselves economically marginalized (fail to meet tax obligations, owe loans, and buy goods of inferior quality in order to meet their obligations). 
  • 93.1 % of the households have seen their incomes reduced several times during the crisis period.
  • 40% of the households have at least one unemployed member.
  • 72% of the households expect new income reductions during 2013
  • 40% of households delay paying debts in order to meet obligations, while 50% lacks sufficient income to meet their obligations.
  • 42.5% of households search for products and services of lower quality and look for enterprises that are willing to offer such products and services
  • The heavy tax burden on products and services combined with the shrinking and over-taxation of incomes “softens” tax morals thus threatening to reduce public revenues too.  47% of the population, and rising, condones various methods of sales tax and VAT evasion
  • Only 12.6% of households stated as main source of income their businesses. The main income contribution for households comes from pensions (42.6%)
  • 70% of households have cut back on food expenses, while 92% reduced expenses for clothing - footwear
All this is happening against a backdrop of record unemployment along with health indicator reversals previously unheard of in the western world, as after "three years of austerity cuts... life expectancy is dropping, while infant mortality has grown by 4 percent"...

Looting the Poor as Economic Strategy

The collapse of Greek society is evident to all but the elites and their government: After the finance minister Yianis Stournaras blamed the decline of heating oil consumption on citizens having bought heating oil before the new tax hikes - despite the widely documented shutting down of central heating in the majority of Athens flats and houses - and Finance Ministry general secretary Giorgos Mergos statement about 580 Euros (before taxes) being "too high" a minimum salary, one is certain that the people in charge have a rather inaccurate idea of what is happening in Greek streets and homes.

The latest outrage is that the government is threatening to confiscate property, wages and bank accounts of any person owing the tax revenue office more than 300 Euros. This, at a time when the tax burden has become so absurdly high in Greece that half the population does not believe they will be able to pay all of their tax, basic utility and loan obligations in 2013. Keep in mind that these are taxes on last year's incomes - and last year's incomes are significantly higher, 4 years now in a row, for a large majority of Greeks than this year's; new taxes have also been levied either as emergency contributions, or special levies, or on small, non-income bearing property that used to be non-taxable. Indirect taxes have soared. A significant portion of people are "tax-evading" nowadays as the GSEVEE survey shows, simply to be able to survive or because they have literally no money. There are furthermore persistent rumours and leaks from majority MPs that the troika is pressuring the Greek government to withdraw the legal protection against foreclosure of people's residences that has been mandated until the end of the year. This will mean mass evictions.

Thus the ministry of finance is planning to send warning letters to 2.5 million citizens, threatening to take away property (which BTW they can't sell to raise money anyway since the real estate market is dead as a doornail, and any sale is now taxed at a much higher "objective value" than its actual market price) or commandeer bank deposits and salaries, unless their owners come to some sort of settlement with the tax service. Now since the actual tax laws have become ever more regressive, richer folks can and will easily arrive at some such deal. Poorer people, including many pauperized, unemployed or even homeless will most likley not be able to afford any deal and this can lead them, even if they have nothing that the taxman can take, to prison! Even for owing as little as 3000 Euros according to the plan. So the ones most heavily targeted and affected will be the poorest, usually those with the least tax or fine debts and a real difficulty to pay up. The numbers however that the Greek Government is publishing show that cracking down on the least indebted will bring significantly fewer rewards than targetting the big fish: While 2.3 million tax-payers owing each under 3000 Euros have a total debt that adds up to 1.1 billion Euros, the top 6.270 debtors owe the Greek tax office over 35 billion Euros! This at the same time that the Lagarde list of Swiss bank account holders is causing serious trouble to the political and financial elites, despite it being just the tip of the iceberg of chronic millionaire tax-evasion...
To top all this off, the ministry of finance has circulated a proposal to have everyone over 18 file a tax report (including high-school and university students) even if they remain dependents. They, along with every living Greek no matter how destitute, will be taxed based on a fictitious income of 3000 Euros, which the government claims they must be making if they are surviving. This is literally a tax on breathing, and it means that kids living with their parents (and remember, that's a lot of people in Greece, youth unemployment is over 50%) will be taxed 75 Euros unless they can show expenses receipts that add up to 750 Euros for the year. This is in reality a double taxation of their parents incomes. Of course, more poignantly, this means that even the 40.000+ homeless must either show 750 Euros worth of expenses or else face paying 75 Euros in taxes. Insanity.

And guess what? After all this tax revenues are plummeting:
Despite big tax hikes as part of austerity measures demanded by international lenders, tax revenues fell precipitously in January, with the Greek Finance Ministry reporting a 16 percent decrease from a year earlier, and a loss of 775 million euros, or $1.05 billion in one month.
This is an economic policy leading to a failed state - a debt colony with pauperized natives. And Greece is just the guinea-pig for the rest of the EU South and beyond...

All this is of course not compatible with democracy: my next post will detail recent events in the slide towards undemocracy under the iron fist of a government of right-wing extremists...

[Edited and reposted at the European tribune

Monday, January 21, 2013

The Troika's Smog

Athens has been covered on and off these past couple of months by a thick smog produced by smoke from fireplaces and wood stoves. This is not strictly of course an Athenian phenomenon: all over Greece (and especially Northern Greece) towns and cities are enveloped this winter by an acrid smelling smog consisting of burning wood fumes and ashes, mingled with all sorts of toxic substances. As with most of the societal plagues brought on Greece these past few years, this too is a direct result of troikan austerity gone wild and a Greek government unable to protect its citizens.
The troika demanded and the Greek government acquiesced to, a tax increase on heating oil, the stuff that powers most central heating in Greek buildings, bringing its price at the same level as transportation gas. Already the price of a litre of gas at the pump in Greece was the highest in the EU, thanks to previous rounds of taxes on gas mandated by the troika. Gas prices went up by over 50% in Greece since 2009, mostly due to excise taxes. This, combined with a decline in real average income in the country of around 40-50%, led to a decrease in tax receipts from gas taxes of the order of 1.5 billion Euros.
Now apparently as heating oil has become a luxury that most people cannot afford (and with most of the population living in apartment buildings, if one resident in a block of flats cannot afford it, this means that the whole building does not buy heating oil and everyone is on their own to figure out a way to keep warm) consumption has reportedly dropped by as much as 80%. This means that alternatives to central heating must be found. Thus a lot of people turn to electric, grid powered heaters (your's truly included), that are now cheaper than oil and as many use fireplaces, and old wood stoves, occasionally with tragic consequences.
We are now discovering that picturesque and traditional methods of heating seen in villages don't scale. In fact I just realized how darn environmentally friendly heating oil is compared to burning things in a fireplace or a stove. And I do mean things: "People are burning furniture, plastic, construction materials and even their slippers" to heat themselves when it does get cold. This makes the toxic mix of deleterious fumes covering major cities, even more unhealthy:

"A group of scientists from seven research centres are taking smog readings in several cities through February 10th to assess the environmental impact from the increased use of fireplaces and wood-burning stoves, the Athens network SKAI TV reported.
The scientists, together with the Centre for Disease Control and Prevention, have warned that burning wood in the home releases 30 times more air pollution than using a well-maintained heating oil or gas-burning boiler.
They found that concentrations of particulates in the atmosphere from wood smoke increased 200 percent from December 2010 to the same period in 2012, stressing that the problem is especially acute at night, when demand for heating increases. The centre warned an increase in air pollution can lead to respiratory problems as well as aggravating allergies and disturb the neurological and reproductive systems.

The price of firewood has, naturally, doubled since last year, so the incentive to chop down trees in forests and parks is great. In fact both parks and national forests have suffered great losses:

As winter temperatures bite, that trend is dealing a serious blow to the environment, as hillsides are denuded of timber and smog from fires clouds the air in Athens and other cities, posing risks to public health.
The number of illegal logging cases jumped in 2012, said forestry groups, while the environment ministry has lodged more than 3,000 lawsuits and seized more than 13,000 tons of illegally cut trees.
Such woodcutting was last common in Greece during Germany's brutal occupation in the 1940s, underscoring how five years of recession and waves of austerity measures have spawned drastic measures
As one could have easily imagined in the first place, the measure flopped revenue-wise:

Oil suppliers claim of a 75-80% sales decrease for the period October-November-December 2012, when compared to the same period of 2011. Greek Fuel Suppliers Association estimates that the black hole in the state pockets are 400 million euro due to the sharp decrease in heating oil sales.
The Finance Minister, Yiannis Stournaras, an Economics Professor, Banker and former head of the Greek Industrialists' Economic Think Tank IOBE, was however adamant, having the perfect economics background to help him deny what is palpably (indeed chillingly) evident to every bloody citizen in the country: He has refused any extra aid to poor families, advising the freezing to "to be patient for another year" and wait out the cold. Really. And he also attributed the collapse of heating-oil revenues to "people having stockpiled heating oil from last year" despite the fact that it is consumption of heating oil that has declined by 80%. Obviously the economic cult he belongs to is loathe to price-in "externalities" such as health effects, fire hazards and illegal wood-cutting. The troika however seems happy with the results - and who are the victims of its policies to disagree? (although allegedly the troika demanded leveling the tax on heating and transport oil, to fight smuggling, but didn't state to what level - it was Stournaras who chose the highest of the two prices). Since people are turning to the power grid for heating BTW, a pinch of "energy liberalization" will see that this too becomes untenable, as electricity consumers will see a 9% hike on their bills (higher for smaller consumptions, smaller for larger ones!), pending a rumoured 20% increase spread over 2013. Already the Public Power Corporation is cutting off power to customers that can't pay at a rate of 30.000 connections a month! This means that ~300-500.000 households in Greece are living without electricity - literally powerless. Truly an achievement worthy of a Nobel Peace Prize...

The heating debacle is the perfect example of austerian madness as misanthrope feast. It has no point, it doesn't achieve its stated goals, and it has tremendously disastrous side-effects. It adds one more in the troika's long list of crimes against humanity in the European South and serves to demonstrate the imbecility of the current government and its experts...