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:

[via]

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'

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.

Deform


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...

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]


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