Originally published by ANewDomain.net:
This is not what democracy looks like.
In January, Greek voters stunned Western political analysts by electing Alexis Tsipras of the self-proclaimed socialist Syriza party as prime minister in what was, by all accounts, a cri de coeur, as close to a primal scream as one can deliver via a voting booth: Enough! Enough austerity! Enough budget cuts! Enough hopelessness!
Syriza ran on a clear platform: No more kowtowing to Germany and the European Union. No more savaging of the social safety net.
Even if that meant leaving the Eurozone and reverting to the drachma, even if that meant currency devaluation and even more misery in the short run, Greeks said, they were willing to endure those sufferings to avoid more of the same: 25 percent unemployment, the sight of graduate students and once-elegant women scavenging food from wastebins.
Just over a week ago, Tsipras asked Greeks for a “No” vote on a referendum he called: No on austerity. No to debt slavery, euro-style. No. More. They gave him that vote, decisively.
But now here we are, watching Tsipras engaged in one of the most extreme sellouts of the modern political era.
Neil Irwin of The New York Times’ The Upshot writes:
In exchange for a cash lifeline, the country has agreed to much greater concessions than those that were under discussion a few weeks ago. Among them: higher taxes, cuts to government pensions and a sell-off of $55 billion worth of state assets in order to recapitalize banks and make debt payments. That last strategy is a little like a family selling off its furniture to make its mortgage payment; you can do it, but it does not exactly amount to a long-term solution.”
Details of the new loan terms still have to be negotiated, but the basics are clear: Things will get worse for Greeks — much worse than they are now. And that’s really, really bad — comparable to the grisly state of the U.S. at the peak of the Great Depression — all as the result of Tsipras’ sellout.
Reports USA Today:
One proposal floated in Brussels would require Greece to place $56 billion of state assets in an off-shore trust for liquidation, a huge sum that equals the value of every single thing the government owns … “
“I thought it couldn’t get worse, but the last week seems like it was designed specifically to humiliate my country. We are not without blame, but it seems as if nobody wants to reach an agreement with us. They want to embarrass us and punish us. When will it end?” asked Maria Scafidi, 29, a Greek tour guide.
This is what the seeds of revolution look like.
“By Wednesday, the country must promise to broaden its tax base to increase collections and reform its pension program, including raising the retirement age,” reports The Politico.
What is the point, from the standpoint of Greek voters, of electoral democracy, if elected “representatives” are elected with clear messages, reinforced by clear mandates delivered via referenda, who then ignore those popular directives when they feel squeezed by the so-called “great powers” in distant, fancy conference rooms?
If a national desire as clear-cut as that delivered by the Greek public — No. More. Austerity! — can be shrugged off just like that, it becomes clear that there is only one route left to effect real change: violence, revolution, violent revolution (which are one and the same).
No one knows what comes next.
But I know what’s unlikely: Greeks bending over and taking it. Google the phrase “Greece revolution” and you get more dates than you know what to choose from. The German-led European push for even worse austerity, the further gutting of pensions and seizing the nation’s public assets, including its municipal parks, would push even a nation of stoner losers to riot.
This being Greece, already past the breaking point, the safe bet is that nothing is safe.
“I’m relieved that Greece remains in the eurozone, but I still find the terms of the agreement offensive and full of the arrogance the rich and successful often have towards their poorer relations,” Pierre Haski of the French website Rue89 said after the deal was announced.
This is worse than arrogance. It’s hubris.
Not for the first time, the Germans have gone too far.
Not for the first time, their victims will pay first.
5 Comments.
Germany’s loans were forgiven after WWII. They eventually turned into an economic powerhouse. Funny how people forget their own history.
Germany was saddled with debts so great they could not repay after WWI. All the gold backing their currency was taken by the Allies, and the German currency became worthless. In response, the Germans elected Adolph Schicklegrüber.
After WWII, the Allies hanged all the German leadership, and saw that, as after WWI, Germany could not repay its debts. They worried about a) West Germany deciding to leave Western Europe and going with Stalin; or b) another Adolph. So the Allies forgave the German debts (they even generously forgave Germany’s debts to Greece).
If the Greeks elected an Adolph, he couldn’t do anything because Greece does not have Germany’s resources. And Alexis is no Alexander. So no need to forgive Greek debt.
Thrasymachus had it right: the most powerful can do whatever they want and call it Right and Just and Ethical and every other virtue, and no one can disagree.
And now the US says it will employ the same financial resources that forced Syprias to capitulate, and use them against Russia. Is the US really that powerful compared with Russia? I guess we’ll find out soon. ‘So long, Mom, I’m off …’
Two things are almost certain: a revolution and a dead Tsipras. Let’s see which comes first.
I assume Mr Rall has read John Perkins, Confessions of an Economic Hit Man.
Before, developing countries in Asia, Africa, and Latin America were approached by banks offering loans in hard currency for development. Mr Perkins said his boss told him his job was just to say, ‘The ROI will be more than 20%,’ to Indonesia and the banks. He did his job. The real economist said, ‘5% max,’ and, since he did not do what the boss told him, he was fired and Perkins was promoted to Chief Economist. Indonesia could not repay the loan and had to sell state resources at foreclosure prices. Subsistence farms were converted to cash crops with all the cash going to foreign owners, so Indonesians starved. Mines got opened (with 100% foreign ownership and no regulations), they polluted the water and Indonesians could die of thirst or die from drinking the water (their choice). And Indonesia had no choice, since sovereign debt must be repaid, or the world financial system will cut the country off from essential imports (like food and fuel) until they agree to sell off all resources at foreclosure prices and let their citizens die (but at least the heads of state get some baksheesh, so they don’t suffer, and as long as the leadership doesn’t suffer, no one cares about ordinary citizens).
Before the Euro, when Greece wanted a sovereign loan, it insisted on denominating the loan in drachmas. German banks would not loan money to Greece, since they knew that they had to convert marks to drachmas and, when they got the full value of the sovereign debt back with interest in drachmas and converted back to marks, they’d get fewer marks than they’d loaned. But with Greece on the Euro, all loans were in hard currency, Greece could not repay, and the world financial system holds enough power that Greece has no choice but to let the ordinary Greeks die as most of the Greek GDP goes to service the loan, and (since that’s not enough) Greece must sell off all resources at foreclosure prices, so everyone agrees: the Parthenon will look MUCH better in Berlin.
Syriza tried bluffing for six months, ending with the referendum, but their bluff got called. The financial system now has the power to force any debtor country to do exactly as it’s told.
Of course, when the US banks make loans to African, Asian, and Latin American countries, the US uses the CIA and the US military to ensure that the banks can collect. Heads of state who do not comply die mysteriously (according to Perkins, who provided quite a lot of evidence that this is the case).
Germany seems to be able to just use the financial rules that provide unbearable pain to any country that cannot pay a sovereign debt and then refuses to do exactly as its creditors order.
So Greece has no choice but to to do as it’s told, and the bankers’ bonuses are safe.
***
It gets better. John Perkins said he and others like him convince nations to take out loans for development, promising the returns will make their country so prosperous that the loan will be very easy to repay out of the increase in GDP. Then the money goes to the bankers’ friends, the ‘development projects’ do not add anything to GDP, and the countries still have to repay the sovereign loan. Which is what they did to Greece.
But the newspapers all say that Greece has retirement at 30 with pensions that are greater than the average Eurozone income, all paid for with borrowed money, and now the Greeks don’t want to repay the money they borrowed so they could all live lives of leisure, nor do they want to end those ridiculous pensions. Not true, but if they could lie to the borrowers to get them to take out subprime loans, they can lie to the Europeans and say the Greeks want them to pay more taxes so all the Greeks can continue to live as members of Veblen’s leisure class.
And they’re very good liars.
See? The system works!