Α)Οι OccupyWallStreet : «Η Ελλάς χρειάζεται κοινωνικό μετασχηματισμό, ΟΧΙ παράδοση» #ThisIsACoup
https://twitter.com/OccupyWallStNYC/status/620661279036960768
Needed in Greece: Social Transformation, Not Surrender
Imagine you’re a Greek worker. Maybe you voted among the 36% that
voted for the «Radical Left» Coalition, and maybe you weren’t. Maybe you
were among the 61.3% who voted OXI on the 5 July referendum on the
European Union’s harsh austerity-laden third memorandum.
And to show for it? You’re being told to accept lower wages, a lower
pension, higher taxes, higher utility bills, other higher bills, fewer
services, the possibility of a lay-off, and even if you keep your job,
the prospect of losing your collective bargaining agreement. This
agreement, for which the spoiled brats who rule the EU whined about
spending a few all-nighters, will crush you from all sides.
Via Europeans Against the Political System
This in a Greece whose unemployment is increasing as is its suicide
rates. The pragmatism of officials and policy wonks is never a
pragmatism for the poor and the workers. It is as impoverished a
political philosophy as the people it allows sink to the bottom of
bourgeoissociety. It is near impossible to think of capitulation to
German Finance Minister Wolfgang Schauble (the dominant voice in the
European Central Bank, and whose office was, appropriately, built by
Hitler for Goring’s Air Ministry), who has desired banishing Greece from
the Eurozone according to Timothy Geithner and others, as pragmatic,
even from the standpoint of governance.
A report came out last week about the somehow less harsh EU austerity bailout on Portugal, one of the Eurocrisis «successes,» that suggests the Portuguese had had their standard of living set back 25 years, and that they now have the highest rate of emigration to other EU states. Marxists outside and left-wing inside the Greek government are not alone in suggesting that this pressure is a failed strategy. Shrinking the Greek economy has failed so far, and non-Marxist economists like Thomas Piketty, Paul Krugman and Joseph Stiglitz all came out against the previous memorandum, saying they would have voted OXI (No) on 5 July. Syriza Finance Minister Yanis Varoufakis was fired immediately afterwards, and it became apparent his sacking was the result of his opposition to Prime Minister Alexis Tsipras’ impending acquiescence to the European Union’s June demands. People thought Varoufakis left government over his lack of tact at negotiations, until they saw Tsipras’ proposals.
Just days after receiving an anti-austerity mandate from every single region of the country,Tsipras turned around and brought a document to the Hellenic Parliament that was nearly verbatim the demands that the voters had rejected. He had promised he would quit government before he would administer the demands under a yes vote. With a no vote, he chose to stay in government and push them anyway. What they were to vote on was Tsipras and his new Finance Minister Euclid Tsakalotos (an even softer Marxist than Varoufakis) taking his capitulatory proposal back to the EU and the IMF for negotiations that weekend. Some Syriza Ministers of Parliament cried, at least fifteen signed a letter saying they would vote yes under duress but no when some of the reforms actually came back to parliament. They would vote in favor of Tsipras continuing negotiations, but they would not bring themselves to vote in favor of the elements of the exact package their people had voted against: pension reforms, a higher age of retirement, public wage cuts, widespread privatizations, tax reforms, cutbacks in collective bargaining rights, rollback of gains made earlier this year, refinancing banks, and on and on and on. The head of Syriza’s Left Platform (Syriza being a multi-tendency party) Production and Energy Minister Panagiotis Lafazanis, head of parliament Zoi Konstantopoulou, and six others abstained. Six missed the vote. Only MPs Ionna Gaitani (DEA) and Eleni Psarrea voted no among Syriza MPs, joining the 15 KKE MPs and the 17 Golden Dawn neo-nazi MPs. Before the vote, the neoliberal parties of old, PASOK and New Democracy congratulated Tsipras on coming to his senses while rubbing his face in the dirt for taking so long. There was parallel talk that some communists in the Syriza might leave, or that others that didn’t vote with Tsipras would be purged, much like the Brazilian Workers Party did of its far left early in its first administration.
Tsipras and Tsakalotos left to Brussels on virtually no sleep, as if to answer the question how can they sleep at night when capitulating so much. They faced a European Commission and European Central Bank dominated by Germany, whose money keeps it afloat, and a series of German lackeys, including the Dutch, Austrians and Finns. They faced the neoliberal socialists of countries like Italy and France, who have a view of a gentler neoliberalism that was politically quashed by Germany by the end of the weekend. They faced a number of countries who, like them, have debt that amounts to over 100% of their GDP, including Italy, Portugal, Belgium, and Cyprus. And they faced a Germany hellbent on demanding structural power be taken away from the sovereign state of Greece and delivered to finance capital. People in Greece created a #TsiprasLeaveEUsummit but he preferred capitulation.
Surrender to a man who wants you to die.
With added duress, the European Central Bank shut off the valve of
currency to Greece, and Greeks had been living for a week with closed
banks and ATM limits. Under such blackmail, as the Syriza government
called it, they voted No. And while a majority of Greeks in polls
suggest they’ve always liked to stay in the Eurozone, many on the left
questioned why Tsipras hadn’t spent the first half of the year at least
creating forums for a national conversation about an exit – at least as a
bargaining chip, at most as preparation.A report came out last week about the somehow less harsh EU austerity bailout on Portugal, one of the Eurocrisis «successes,» that suggests the Portuguese had had their standard of living set back 25 years, and that they now have the highest rate of emigration to other EU states. Marxists outside and left-wing inside the Greek government are not alone in suggesting that this pressure is a failed strategy. Shrinking the Greek economy has failed so far, and non-Marxist economists like Thomas Piketty, Paul Krugman and Joseph Stiglitz all came out against the previous memorandum, saying they would have voted OXI (No) on 5 July. Syriza Finance Minister Yanis Varoufakis was fired immediately afterwards, and it became apparent his sacking was the result of his opposition to Prime Minister Alexis Tsipras’ impending acquiescence to the European Union’s June demands. People thought Varoufakis left government over his lack of tact at negotiations, until they saw Tsipras’ proposals.
Just days after receiving an anti-austerity mandate from every single region of the country,Tsipras turned around and brought a document to the Hellenic Parliament that was nearly verbatim the demands that the voters had rejected. He had promised he would quit government before he would administer the demands under a yes vote. With a no vote, he chose to stay in government and push them anyway. What they were to vote on was Tsipras and his new Finance Minister Euclid Tsakalotos (an even softer Marxist than Varoufakis) taking his capitulatory proposal back to the EU and the IMF for negotiations that weekend. Some Syriza Ministers of Parliament cried, at least fifteen signed a letter saying they would vote yes under duress but no when some of the reforms actually came back to parliament. They would vote in favor of Tsipras continuing negotiations, but they would not bring themselves to vote in favor of the elements of the exact package their people had voted against: pension reforms, a higher age of retirement, public wage cuts, widespread privatizations, tax reforms, cutbacks in collective bargaining rights, rollback of gains made earlier this year, refinancing banks, and on and on and on. The head of Syriza’s Left Platform (Syriza being a multi-tendency party) Production and Energy Minister Panagiotis Lafazanis, head of parliament Zoi Konstantopoulou, and six others abstained. Six missed the vote. Only MPs Ionna Gaitani (DEA) and Eleni Psarrea voted no among Syriza MPs, joining the 15 KKE MPs and the 17 Golden Dawn neo-nazi MPs. Before the vote, the neoliberal parties of old, PASOK and New Democracy congratulated Tsipras on coming to his senses while rubbing his face in the dirt for taking so long. There was parallel talk that some communists in the Syriza might leave, or that others that didn’t vote with Tsipras would be purged, much like the Brazilian Workers Party did of its far left early in its first administration.
Tsipras and Tsakalotos left to Brussels on virtually no sleep, as if to answer the question how can they sleep at night when capitulating so much. They faced a European Commission and European Central Bank dominated by Germany, whose money keeps it afloat, and a series of German lackeys, including the Dutch, Austrians and Finns. They faced the neoliberal socialists of countries like Italy and France, who have a view of a gentler neoliberalism that was politically quashed by Germany by the end of the weekend. They faced a number of countries who, like them, have debt that amounts to over 100% of their GDP, including Italy, Portugal, Belgium, and Cyprus. And they faced a Germany hellbent on demanding structural power be taken away from the sovereign state of Greece and delivered to finance capital. People in Greece created a #TsiprasLeaveEUsummit but he preferred capitulation.
Via Jo Di Graphics
Plain and simply, the people were told that their government would
proceed with defiance and dignity if given the mandate of a referendum,
and then were sold out. The Tsipras’ capitulation is to just about
everything that the people of every part of Greece resoundingly voted
down, and on top of that so much more that was added as a punishment for
a defiant play at participatory democracy. Up to 50 billion euros in
privatizations (originally to a public firm controlled by Schauble, not
that was dropped), demands on immediate «shows of good faith» to the
European oligrachs who themselves have none to give, and, to paraphrase
the euphemism for the 1960s dictatorship, offices for a new Regime of
the Bankers to come in, a return of the Troika (instead of a junta) of
the ECB, the IMF and the European Commission to preside over the state.
Via Jo Di Graphics
That is why #ThisIsACoup, and a neocolonial one at that. And this
vindictiveneocolonialism- something countries of the Global South have
been decrying since decolonization- reverberates towards the neoliberal
socialists who had an idea of a gentler EU neoliberalism, and it
reverberates to the left socialists (like Podemos in Spain) who might’ve
hoped gaining power in an EU state could change the union. Bourgeois
democracy is often prepared to be a whole lot more bourgeois, a whole
lot less democracy.
And Tsipras seems to teeter at the brink. Suggestions of a purge of at least the leftists from parliament, from Lafazanis to Konstantopolou and the sole «No» voters of Friday: Gaitani and Psarrea. Or a defection of the actual radical left. Mention is given by the old neoliberal parties of a unity government. So much is left to happen. But Tsipras’ political capital is by-and-large spent, not just with Greeks, but with hundreds of thousands of anti-austerity marchers across Europe that carried banners of solidarity with Greece. All socialist leaders of the past have come to crossroads, from Tito to Allende to PASOK to Hugo Chavez. Some chose the great risks of launching toward social transformation, and others chose irreversible path toward capitulation. Tsipras has made his choice.
But for the workers and the poor and the majority of Greek society at this point, this capitulation stands as a testament that their earlier distrust in the idea that there is dignity in bourgeois democracy, pre-Syriza election, was right. Anarchists, KKE/PAME, and Antarsya are in the streets, hopefully to be joined by an ex-Syriza left, and an «active» general strike has been called- active in barricades and marches, not in simply staying home.
As I often suggest, the far left should let the near left win elections, even work with them until they turn traitors on us and on the people. The truly radical left needs to be with the people so long as the people don’t tread down the darkest roads- for example, towards fascism. But there comes a time when the soft left does get power, and does show that it has the will to treachery when under pressure. And then, it is time for us to take up social war.
Written by José Martín who welcomes feedback on twitter @sabokitty
Η σκληρή συνθηκολόγηση που επιβλήθει στην Ελλάδα μετά από 31 ώρες από στη διπλωματική πυρά δεν προσφέρει με κανένα δυνατό τρόπο έξοδοπό διαρκή κρίση της χώρας. Οι όροι είναι πιο σκληροί από εκείνους που απορρίφθηκαν από τους Έλληνες ψηφοφόρους σε δημοψήφισμα και ως εκ τούτου δεν μπορεί να έχει τη δημοκρατική συναίνεση.
Θα πρέπει να υλοποιηθεί από ένα ελληνικό κοινοβούλιο που εξακολουθεί να κυριαρχείται από τους βουλευτές της Αριστεράς και Δεξιάς, που απεχθάνονται κάθε γραμμή της δήλωσης της συνόδου κορυφής, το περίφημο SN 4070/15, και έχουν συμφωνήσει – αν έχουν συμφωνησεί – με ένα μαχαίρι στο λαιμό τους.
Το μόνο που λείπει είναι μια μονάδα της χωροφυλακής ΟΝΕ.
Αυτοί οι όροι είναι μη εφαρμόσιμοι.
Οι πιστωτές έχουν επιδιώξει να καθηλώσει το νέο μνημόνιο με τη μεταφορά 50 δις € των ελληνικών περιουσιακών στοιχείων σε «ένα ανεξάρτητο ταμείο, που θα αποτιμηθούν σε χρήμα τα περιουσιακά στοιχεία μέσω των ιδιωτικοποιήσεων και άλλα μέσα». Θα χρησιμοποιηθεί εν μέρει για την αποπληρωμή των χρεών.
ΟΛΟΚΛΗΡΟ ΤΟ ΑΡΘΡΟ
‘Crucified’ Tsipras capitulated to draconian measures after 17 hours of late night talks
In other words, they are seizing Greece’s few remaining jewels at source. This is not really different from the International Committee for Greek Debt Management in 1898 imposed on Greece after the country went bankrupt following a disastrous Balkan war.
A six-power league of bondholders, led by British bankers, impounded customs duties in the Port of Piraeus, and seized revenues from stamp duty, tobacco, salt, kerosene, all the way down to playing cards. But at least there was no humbug about solidarity and helping Greece on that occasion.
“It is the Versailles Treaty for the present age,” said Mr Varoufakis this morning, talking to me from from his island home in Aegina.
• What’s next for Greece? Timeline of the remaining obstacles
•Greece deal explained: how it reached the final agreement
•Greece bailout: Eurozone summit was ‘centimetres from crashing’ before agreement reached
Under the new terms, Greece must tighten fiscal policy by roughly 2pc of GDP by next year, pushing the country further into a debt-deflation spiral and into the next downwards leg of its six-year depression.
This will cause the government to miss the budget targets yet again – probably by a large margin – in an exact repeat of the self-defeating policy that caused Greek debt dynamics to spin out of control in the last two Troika loan packages.
As the International Monetary Fund acknowledged in its famous mea culpa, if you misjudge the fiscal multiplier and force austerity beyond the therapeutic dose, you make matters worse. The debt to GDP ratio rises despite the cuts.
EMU leaders have an answer to this. Like Canute’s courtiers, they will simply command the waves to retreat. The text states that on top of pension cuts and tax increases there should be “quasi-automatic spending cuts in case of deviations from ambitious primary surplus targets”,.
In other words, they will be forced to implement pro-cyclical contractionary policies. The fiscal slippage that acted as a slight cushion over the last five years will be not be tolerated this time.
«This goes beyond harsh to pure vindictivenes,» says Nobel economist Paul Krugman of the EMU demands
And let us not forget that these primary surpluses never made any sense in the first place. They were not drawn up on the basis of macro-economic analysis. They were written into prior agreements because that is what would be needed – ceteris paribus – to pretend that debt is sustainable, and therefore that the IMF could sign off on the accords. What a charade.
Nobel economist Paul Krugman says the EMU demands are “madness” on every level. “What we’ve learned these past couple of weeks is that being a member of the eurozone means that the creditors can destroy your economy if you step out of line. This has no bearing at all on the underlying economics of austerity,” he said.
“This goes beyond harsh into pure vindictiveness, complete destruction of national sovereignty, and no hope of relief. It is, presumably, meant to be an offer Greece can’t accept; but even so, it’s a grotesque betrayal of everything the European project was supposed to stand for,” he said.
Yes, Syriza has blinked, though there are many chapters in this sorry saga yet to come.
The Greek banks are on the verge of collapse. There is not enough cash left to cover ATM withdrawals of €60bn each day through this week, or to cover weekly payments of €120 to pensioners and the unemployed – that is the to say, the tiny fraction of the jobless who receive anything at all.
Capital controls have led to an economic stand-still. Almost nothing is coming into the country. Firms are running down their last stocks of raw materials and vital imports. Hundreds of factories, mills, and processing plants have already cut shifts and are preparing to shut down operations as soon as this week.
Late tourist bookings have crashed by 30pc. Syriza faced a serious risk that the country would run out of imported food stocks by end of this month, with calamitous consequences at the peak of the tourist season. So yes, faced with the full horror of what is happening, they recoiled.
You don’t need to be an oracle to see that there is more trouble ahead for Greece
There is no doubt that Syriza sold the Greek people a false prospectus with its incompatible promises both to tear up the Troika Memorandum and to keep Greece in the euro. They have learned a horrible lesson.
Yet that is only half the story. We have also watched the EMU creditor powers bring a country to knees by cutting off the emergency liquidity (ELA) to the banking system.
Let there be no doubt, it was the decision by the European Central Bank to freeze ELA at €89bn two weeks ago that precipitated the final crisis and broke Syriza’s will to resist. The lines of authority on this episode are blurred. Personally, I do not blame the ECB’s Mario Draghi for this abuse of power. It was in essence a political decision by the Eurogroup.
But however you dress it up, the fact remains that the ECB is by its acts dictating a political settlement, and serving as the enforcement arm of the creditors rather than upholding EU treaty law.
It took a stand that further destabilised the financial system of an EMU member state that was already in grave trouble, and arguably did so in breach of its primary treaty duty to uphold financial stability. It is a watershed moment.
What we have all seen with great clarity is that the EMU creditor powers can subjugate an unruly state – provided it is small – by shutting down its banking system. We have seen too that a small country has no defences whatsoever. This is monetary power run amok.
To make matters worse Greek premier Alexis Tsipras cannot make a plausible case to his own people that he has secured debt relief, the one prize that could have saved him. Germany blocked even this.
It did so despite massive pressure from the Obama White House and the IMF, and even though France, Italy, and the leaders of the EU Commission and Council accept that a haircut of some sort is necessary.
The IMF says debt relief must be at least 30pc of GDP. Even this is too low. Given the damage done by six years of economic implosion, a lost decade of investment, chronic hysteresis, youth unemployment of 50pc or higher, a brain drain of the educated, and a ruined banking system, it would still be inadequate even if the entire debt was written off. That is what this EMU experiment has done to the country.
Yet all the Greeks get is vague talk of a “possible” extension of maturities, at some point in the future, once they have jumped through umpteen hoops and passed their exams. This is what they were promised in 2012. It never happened.
“If the specifics of debt relief are not written clearly into the overall package, this is not worth anything,” said Mr Varoufakis.
The summit document asserts with self-serving dishonesty that Greece’s debt has come off the rails due to the failure of Greek governments to stick to the Memorandum over the last year. Had this not occurred, the debt would still be sustainable.
This is a lie. Public debt ballooned to 180pc late last year – long before Syriza was elected – and even though the New Democracy government had complied with most Troika demands.
The truth is that Greece was already bankrupt in 2010. EMU creditors refused to allow a normal debt restructuring to take place because it would have led to instant contagion to Portugal, Spain, and Italy at a time when the eurozone had no lender-of-last resort or defences.
The crushed Syriza leader must sell a settlement that leaves Greece in a permanent debt trap
Leaked documents from the IMF leave no doubt that the rescue was intended to save the euro and European banks, not Greece. More debt was shoveled onto the Greek taxpayers in order to buy time, both in 2010 and again in 2012, storing up the crisis that Europe faces today.
In an odd way, the only European politician who was really offering Greece a way out of the impasse was Wolfgang Schauble, the German finance minister, even if his offer was made in a graceless fashion, almost in the form of diktat.
His plan for a five-year velvet withdrawal from EMU – a euphemism, since he really meant Grexit – with Paris Club debt relief, humanitarian help, and a package of growth measures, might allow Greece to regain competitiveness under the drachma in an orderly way.
Such a formula would imply intervention by the ECB to stabilise the drachma, preventing an overshoot and dangerous downward spiral. It would certainly have been better than the atrocious document that Mr Tsipras must now take back to Athens.
The crushed Syriza leader must sell a settlement that leaves Greece in a permanent debt trap, under neo-colonial control, and so economically fragile that it is almost guaranteed to crash into a fresh crisis in the next global downturn or European recession.
At that point, everybody will blame the Greeks again, unfairly, and we will go through yet another round of bitter negotiations, until something finally breaks this grim cycle of failure and recrimination.
The deal will leave Greece so economically fragile that it is almost guaranteed to crash into a fresh crisis in the next global downturn
For the eurozone this “deal” is the worst of all worlds. They have solved nothing. Germany and its allies have for the first time attempted to eject a country from the euro, and by doing so have violated the sanctity of monetary union.
Rather than go forward in times of deep crisis to fiscal and political union to hold the euro together – as the architects of EMU always anticipated – they have instead gone backwards.
They have at a single stroke converted the eurozone into a hard-peg currency bloc, a renewed Exchange Rate Mechanism that is inherently unstable, at the whim and mercy of populist politicians playing to the gallery at home. The markets are already starting to call it ERM3.
I will return to the behaviour of Germany and the diplomatic disaster that has unfolded over coming days. For now let me just quote the verdict of historian Simon Schama.
“If Tsipras was wearing the crown of King Pyrrhus this time last week, Merkel is wearing it now. Her ultimatum the beginning of the end of the EU,” he said. Exactly.
And Tsipras seems to teeter at the brink. Suggestions of a purge of at least the leftists from parliament, from Lafazanis to Konstantopolou and the sole «No» voters of Friday: Gaitani and Psarrea. Or a defection of the actual radical left. Mention is given by the old neoliberal parties of a unity government. So much is left to happen. But Tsipras’ political capital is by-and-large spent, not just with Greeks, but with hundreds of thousands of anti-austerity marchers across Europe that carried banners of solidarity with Greece. All socialist leaders of the past have come to crossroads, from Tito to Allende to PASOK to Hugo Chavez. Some chose the great risks of launching toward social transformation, and others chose irreversible path toward capitulation. Tsipras has made his choice.
But for the workers and the poor and the majority of Greek society at this point, this capitulation stands as a testament that their earlier distrust in the idea that there is dignity in bourgeois democracy, pre-Syriza election, was right. Anarchists, KKE/PAME, and Antarsya are in the streets, hopefully to be joined by an ex-Syriza left, and an «active» general strike has been called- active in barricades and marches, not in simply staying home.
As I often suggest, the far left should let the near left win elections, even work with them until they turn traitors on us and on the people. The truly radical left needs to be with the people so long as the people don’t tread down the darkest roads- for example, towards fascism. But there comes a time when the soft left does get power, and does show that it has the will to treachery when under pressure. And then, it is time for us to take up social war.
Written by José Martín who welcomes feedback on twitter @sabokitty
=====================================================
Β)Telegraph «Αντιμετώπισαν την Ελλάδα ως κατεχόμενη εχθρική Χώρα» @Telegraph #ThisIsACoup
Η σκληρή συνθηκολόγηση που επιβλήθει στην Ελλάδα μετά από 31 ώρες από στη διπλωματική πυρά δεν προσφέρει με κανένα δυνατό τρόπο έξοδοπό διαρκή κρίση της χώρας. Οι όροι είναι πιο σκληροί από εκείνους που απορρίφθηκαν από τους Έλληνες ψηφοφόρους σε δημοψήφισμα και ως εκ τούτου δεν μπορεί να έχει τη δημοκρατική συναίνεση.
Θα πρέπει να υλοποιηθεί από ένα ελληνικό κοινοβούλιο που εξακολουθεί να κυριαρχείται από τους βουλευτές της Αριστεράς και Δεξιάς, που απεχθάνονται κάθε γραμμή της δήλωσης της συνόδου κορυφής, το περίφημο SN 4070/15, και έχουν συμφωνήσει – αν έχουν συμφωνησεί – με ένα μαχαίρι στο λαιμό τους.
Το μόνο που λείπει είναι μια μονάδα της χωροφυλακής ΟΝΕ.
Αυτοί οι όροι είναι μη εφαρμόσιμοι.
Οι πιστωτές έχουν επιδιώξει να καθηλώσει το νέο μνημόνιο με τη μεταφορά 50 δις € των ελληνικών περιουσιακών στοιχείων σε «ένα ανεξάρτητο ταμείο, που θα αποτιμηθούν σε χρήμα τα περιουσιακά στοιχεία μέσω των ιδιωτικοποιήσεων και άλλα μέσα». Θα χρησιμοποιηθεί εν μέρει για την αποπληρωμή των χρεών.
ΟΛΟΚΛΗΡΟ ΤΟ ΑΡΘΡΟ
Like the Neapolitan Bourbons – benign by comparison – the leaders of the eurozone have learned nothing, and forgotten nothing.
The cruel capitulation forced upon Greece after 31 hours on the
diplomatic rack offers no conceivable way out the country’s perpetual
crisis. The terms are harsher by a full order of magnitude than those
rejected by Greek voters in a landslide referendum a week ago, and
therefore can never command democratic assent.
They must be carried through by a Greek parliament still dominated by
MPs from Left and Right who loathe every line of the summit statement,
the infamous SN 4070/15, and have only agreed – if they have agreed –
with a knife to their throats.
EMU inspectors can veto legislation. The emasculation of the Greek
parliament has been slipped into the text. All that is missing is a unit
of EMU gendarmes.
Such terms are unenforceable. The creditors have sought to nail down
the new memorandum by transferring €50bn of Greek assets to “an
independent fund that will monetise the assets through privatisations
and other means”. It will be used in part to pay off debts.
ADVERTISEMENT
This fund will be under EU «supervision». The cosmetic niceties of
sovereignty will be preserved by letting the Greek authorities manage
its day to day affairs. Nobody is fooled.‘Crucified’ Tsipras capitulated to draconian measures after 17 hours of late night talks
In other words, they are seizing Greece’s few remaining jewels at source. This is not really different from the International Committee for Greek Debt Management in 1898 imposed on Greece after the country went bankrupt following a disastrous Balkan war.
A six-power league of bondholders, led by British bankers, impounded customs duties in the Port of Piraeus, and seized revenues from stamp duty, tobacco, salt, kerosene, all the way down to playing cards. But at least there was no humbug about solidarity and helping Greece on that occasion.
“It is the Versailles Treaty for the present age,” said Mr Varoufakis this morning, talking to me from from his island home in Aegina.
• What’s next for Greece? Timeline of the remaining obstacles
•Greece deal explained: how it reached the final agreement
•Greece bailout: Eurozone summit was ‘centimetres from crashing’ before agreement reached
Under the new terms, Greece must tighten fiscal policy by roughly 2pc of GDP by next year, pushing the country further into a debt-deflation spiral and into the next downwards leg of its six-year depression.
This will cause the government to miss the budget targets yet again – probably by a large margin – in an exact repeat of the self-defeating policy that caused Greek debt dynamics to spin out of control in the last two Troika loan packages.
As the International Monetary Fund acknowledged in its famous mea culpa, if you misjudge the fiscal multiplier and force austerity beyond the therapeutic dose, you make matters worse. The debt to GDP ratio rises despite the cuts.
EMU leaders have an answer to this. Like Canute’s courtiers, they will simply command the waves to retreat. The text states that on top of pension cuts and tax increases there should be “quasi-automatic spending cuts in case of deviations from ambitious primary surplus targets”,.
In other words, they will be forced to implement pro-cyclical contractionary policies. The fiscal slippage that acted as a slight cushion over the last five years will be not be tolerated this time.
«This goes beyond harsh to pure vindictivenes,» says Nobel economist Paul Krugman of the EMU demands
And let us not forget that these primary surpluses never made any sense in the first place. They were not drawn up on the basis of macro-economic analysis. They were written into prior agreements because that is what would be needed – ceteris paribus – to pretend that debt is sustainable, and therefore that the IMF could sign off on the accords. What a charade.
Nobel economist Paul Krugman says the EMU demands are “madness” on every level. “What we’ve learned these past couple of weeks is that being a member of the eurozone means that the creditors can destroy your economy if you step out of line. This has no bearing at all on the underlying economics of austerity,” he said.
“This goes beyond harsh into pure vindictiveness, complete destruction of national sovereignty, and no hope of relief. It is, presumably, meant to be an offer Greece can’t accept; but even so, it’s a grotesque betrayal of everything the European project was supposed to stand for,” he said.
Yes, Syriza has blinked, though there are many chapters in this sorry saga yet to come.
The Greek banks are on the verge of collapse. There is not enough cash left to cover ATM withdrawals of €60bn each day through this week, or to cover weekly payments of €120 to pensioners and the unemployed – that is the to say, the tiny fraction of the jobless who receive anything at all.
Capital controls have led to an economic stand-still. Almost nothing is coming into the country. Firms are running down their last stocks of raw materials and vital imports. Hundreds of factories, mills, and processing plants have already cut shifts and are preparing to shut down operations as soon as this week.
Late tourist bookings have crashed by 30pc. Syriza faced a serious risk that the country would run out of imported food stocks by end of this month, with calamitous consequences at the peak of the tourist season. So yes, faced with the full horror of what is happening, they recoiled.
You don’t need to be an oracle to see that there is more trouble ahead for Greece
There is no doubt that Syriza sold the Greek people a false prospectus with its incompatible promises both to tear up the Troika Memorandum and to keep Greece in the euro. They have learned a horrible lesson.
Yet that is only half the story. We have also watched the EMU creditor powers bring a country to knees by cutting off the emergency liquidity (ELA) to the banking system.
Let there be no doubt, it was the decision by the European Central Bank to freeze ELA at €89bn two weeks ago that precipitated the final crisis and broke Syriza’s will to resist. The lines of authority on this episode are blurred. Personally, I do not blame the ECB’s Mario Draghi for this abuse of power. It was in essence a political decision by the Eurogroup.
But however you dress it up, the fact remains that the ECB is by its acts dictating a political settlement, and serving as the enforcement arm of the creditors rather than upholding EU treaty law.
It took a stand that further destabilised the financial system of an EMU member state that was already in grave trouble, and arguably did so in breach of its primary treaty duty to uphold financial stability. It is a watershed moment.
What we have all seen with great clarity is that the EMU creditor powers can subjugate an unruly state – provided it is small – by shutting down its banking system. We have seen too that a small country has no defences whatsoever. This is monetary power run amok.
To make matters worse Greek premier Alexis Tsipras cannot make a plausible case to his own people that he has secured debt relief, the one prize that could have saved him. Germany blocked even this.
It did so despite massive pressure from the Obama White House and the IMF, and even though France, Italy, and the leaders of the EU Commission and Council accept that a haircut of some sort is necessary.
The IMF says debt relief must be at least 30pc of GDP. Even this is too low. Given the damage done by six years of economic implosion, a lost decade of investment, chronic hysteresis, youth unemployment of 50pc or higher, a brain drain of the educated, and a ruined banking system, it would still be inadequate even if the entire debt was written off. That is what this EMU experiment has done to the country.
Yet all the Greeks get is vague talk of a “possible” extension of maturities, at some point in the future, once they have jumped through umpteen hoops and passed their exams. This is what they were promised in 2012. It never happened.
“If the specifics of debt relief are not written clearly into the overall package, this is not worth anything,” said Mr Varoufakis.
The summit document asserts with self-serving dishonesty that Greece’s debt has come off the rails due to the failure of Greek governments to stick to the Memorandum over the last year. Had this not occurred, the debt would still be sustainable.
This is a lie. Public debt ballooned to 180pc late last year – long before Syriza was elected – and even though the New Democracy government had complied with most Troika demands.
The truth is that Greece was already bankrupt in 2010. EMU creditors refused to allow a normal debt restructuring to take place because it would have led to instant contagion to Portugal, Spain, and Italy at a time when the eurozone had no lender-of-last resort or defences.
The crushed Syriza leader must sell a settlement that leaves Greece in a permanent debt trap
Leaked documents from the IMF leave no doubt that the rescue was intended to save the euro and European banks, not Greece. More debt was shoveled onto the Greek taxpayers in order to buy time, both in 2010 and again in 2012, storing up the crisis that Europe faces today.
In an odd way, the only European politician who was really offering Greece a way out of the impasse was Wolfgang Schauble, the German finance minister, even if his offer was made in a graceless fashion, almost in the form of diktat.
His plan for a five-year velvet withdrawal from EMU – a euphemism, since he really meant Grexit – with Paris Club debt relief, humanitarian help, and a package of growth measures, might allow Greece to regain competitiveness under the drachma in an orderly way.
Such a formula would imply intervention by the ECB to stabilise the drachma, preventing an overshoot and dangerous downward spiral. It would certainly have been better than the atrocious document that Mr Tsipras must now take back to Athens.
The crushed Syriza leader must sell a settlement that leaves Greece in a permanent debt trap, under neo-colonial control, and so economically fragile that it is almost guaranteed to crash into a fresh crisis in the next global downturn or European recession.
At that point, everybody will blame the Greeks again, unfairly, and we will go through yet another round of bitter negotiations, until something finally breaks this grim cycle of failure and recrimination.
The deal will leave Greece so economically fragile that it is almost guaranteed to crash into a fresh crisis in the next global downturn
For the eurozone this “deal” is the worst of all worlds. They have solved nothing. Germany and its allies have for the first time attempted to eject a country from the euro, and by doing so have violated the sanctity of monetary union.
Rather than go forward in times of deep crisis to fiscal and political union to hold the euro together – as the architects of EMU always anticipated – they have instead gone backwards.
They have at a single stroke converted the eurozone into a hard-peg currency bloc, a renewed Exchange Rate Mechanism that is inherently unstable, at the whim and mercy of populist politicians playing to the gallery at home. The markets are already starting to call it ERM3.
I will return to the behaviour of Germany and the diplomatic disaster that has unfolded over coming days. For now let me just quote the verdict of historian Simon Schama.
“If Tsipras was wearing the crown of King Pyrrhus this time last week, Merkel is wearing it now. Her ultimatum the beginning of the end of the EU,” he said. Exactly.
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