|International Monetary Fund (Photo credit: Wikipedia)|
|Board of Governors - International Monetary Fund (IMF) (Photo credit: Wikipedia)|
|IMF Headquarters, Washington, DC. (Photo credit: Wikipedia)|
|English: The European Central Bank. Notice a sculpture of the euro sign. (Photo credit: Wikipedia)|
I don’t know anything about economics --- to put it another way, I agree with the Amory Lovins perception that “economics is a brain disease” --- but I find the current crisis confronting the left-wing government of Greece endlessly fascinating, and I have been reading up on everything I can get my hands on, to try to keep on top of what is happening. However much the guardians of economic orthodoxy in the Western world chunter on about the sacred duty to repay loans, nothing can disguise the fact that what they really have in mind is to crush any credible uprising of left-wing politics within the European Economic Community, and they have no hesitation about using bully-boy methods to carry out this aim.
From my point of view, these arguments about international finance are all about funny money. It is well-known that for all the aid poured into Africa and Latin America from Western sources, still those continents repay more every year than they receive in aid, and they repay it to banks of one kind or another. In other words, the set-up is a monstrous hypocrisy. This system has been entrenched over the years by such institutions as the International Monetary Fund and the World Bank, both controlled and mostly funded by the United States (which today is the world’s leading oligarchy, whose government seems to be completely in the control of Big Money), and whose primary purpose seems to have been to ensure that capitalism governs the affairs of the whole world. In other words, they don’t lend money unless the receiving countries agree to do away with such nonsense as nationalized industries, high wages and liveable pensions. In one country after another, they have not only tied receiving countries into knots but have in the process ruined indigenous industry and agriculture and made it simple for Western companies to flood their markets with lower-priced goods. This is the basic understanding from which I approach this Greek crisis because it seems to fit the same parameters as those described.
Any whisper of opposition, as in Greece, and the country is fast brought to its knees by massive withdrawals of funds heralding the likelihood of a banking crisis from which the local government could probably never recover. The terms of the loans granted to Greece have been that they should follow a rigid programme of economic austerity, which has immeasurably worsened the condition of the Greek people, plunging them into massive unemployment and forcing what is widely described as “a humanitarian crisis.” The troika --- sixty per cent of Greece’s debt is owed to European Union governments, 10% to the International Monetary Fund (IMF) and 6% to the European Central Bank (ECB), which are collectively known as the troika --- have insisted Greece privatize everything that is publicly owned, reduce wages and pensions, and so on until the populace is literally on its knees.
“(Since the election) we’ve seen that these European institutions are not receptive to the kind of political or democratic argument, which says ‘we’re an elected government with a mandate to carry out, and you’re our central bank, and we can expect you to do your work and let us do what we were elected to do,’ ” said Stathis Kouvelakis, a member of the central committee of Syriza, who teaches political theory at King’s College, London, during a recent fascinating analysis of the whole crisis in conversation with a French philosopher Alan Badiou. The conversation is published in Jacobinmag.com, which describes itself as “a leading voice of the American left.”
He added: “All left-wing governments in the world who were determined to change things ended up faced with this kind of obstacle. At the heart of this question, is (the) decision (of Syriza’s leadership) to break with austerity within the framework of the European institutions, and, more particularly, within the terms of the eurozone. This was the basis Syriza was elected on, and this has been its line throughout the last three years in particular.
“Now we can say that we’ve seen the limits of this strategy. This is not at all what it is about. These institutions are there in order to lock in extremely harsh neoliberal policies, to lock in the troika supervision of entire countries. And that’s exactly what they’ve set out to do, forcing the Greek government into making very serious retreats …. Indeed… at this very moment the teams of troika experts are in Athens scrutinizing Greece’s accounts.”
If this is what it is about, one would have expected the European leftists to have taken to the streets. For a time the French unions obliged, with a huge march of support. But the French so-called Socialist government leader, President Hollande, launched a ferocious attack on Syriza and its pretensions. This did no more than confirm that the European leftist parties have become paper tigers, totally overcome by the neoliberalist cant coming from the big battalions.
A great deal depends on what kind of an outfit Syriza is. Until fairly recently it was a small party, and even today, its ministers mostly are drawn from intellectuals, many of them being professors who have been working away in universities in various countries until drawn back to their homeland to serve in its hour of need. In the months before the election, however, a mobilization of the population occurred that gave the party its momentum to carry it into office, and soon thereafter the Prime Minister Alexis Tsipras called for more mobilization, more street action, more study of the situation as a means of building support. The participants in this round table agreed that the party’s support within Greece today is now higher than it was before and at the time of their election. So much will depend on which strain of the party’s membership gains the upper hand. Faced with similar situations in the recent past, socialist movements within Europe have come to power talking a good game, but have collapsed at the first whiff of powder from the bosses in the citadels of economic power.
Badiou made reference to the Mitterand government as an example. When the name of Mario Draghi, now the leader of the European Central Bank was mentioned, with a hint that he might be considering himself as an internationalist in this situation, Kouvelakis responded very sharply, saying, “I would say that the European Central Bank has nothing to do with internationalism, I don’t see the slightest hint of internationalism in Mr. Draghi, and I think internationalism is on the side of those who are now opposed to (him), his politics, and everything he embodies — including him personally, physically.” He might well say so: Mr. Draghi is just another one of the army of banking operatives trained and employed by the infamous U.S. firm Goldman Sachs, who have been sent out around the world to make sure that global financial management remains in the safe hands of the bankers. The ubiquity of these Goldman Sachs guys really has to be seen to be believed --- they are everywhere, hundreds of them, making decisions for more governments than anyone would have believed possible, and when their bank and others got the world into the crisis of 2008, one of them was appointed as the U.S. government’s point man to steer the way out of the crisis while preventing the banks from paying for their mistakes and greed.
On the BBC today, the former leader of the European Central Bank, Jean-Claude Trichet, told his interviewer, Stephen Sackur, that the argument was not about repayment of loans. That was subsidiary to the Greek government agreeing to “a credible recovery programme.” He repeated this numerous times, as if no one could argue with its irrefutable logic. But Sackur, though he did try to press the man on a number of issues --- particularly on Greece’s inability to repay any sum of money, however large or small--- never asked him what was his definition of “credible.” If he had he might conceivably have gotten the answer that to be credible a recovery package would have to bow to the austerity programme insisted on by the troika, as if it were the Bible.
Syriza was a small party until a few years ago, and would never have come to power if not for the emergence of popular mobilization and social movements before the election, which Badiou described as without a doubt greater in scope than anything seen in Europe since the 1970s.
As against the dictates of this “masters of the universe” troika, Tsipras in his appeal to the Greek people following his election asked them to uphold the constitution, and invoked its final article which specifies that the constitution resides in the people and their patriotic right to rise up. When the negotiations showed the determination of the European elites to be inflexible, Tsipras gave an interview to a Greek paper, and when asked if he had an alternative, he replied: “Of course, we have an alternative plan. Greece does not do blackmail, but nor will we accept blackmail from others. The country has a lot of possible options; of course we don’t want to reach such an impasse, but . . .”
Kouvelakis added: “So that’s where we are at the moment, in sum. In my view, there’s no other way…. For Europe’s political elites, and the economic forces they represent, it’s vital not only to force Syriza into a retreat, but to humiliate it politically. Such a political humiliation would also be a shot across the bows of Podemos and all the social and political forces in Europe that challenge austerity policies: ‘See what happened to the Greeks? That’s what’s in store for you if you try and do the same.’ ”
Confirmation that the issue is politics, rather than economics, seems to come from an article in the Wall Street Journal on April 8, entitled “The case for letting Greece go.” The writer points out that the problem is not “financial contagion”, since more than 80 per cent of the country’s debt is held by governments or “official creditors” who “could absorb default-related losses.” Private Eurozone banks last September were owed just over $18 billion dollars, one-third of the level in 2012, and much of it in short-term or speculative loans, so that the total today is probably even lower. If that is so what is the problem?
The Wall Street Journal confirms the answer in straight language: “If creditors allow Athens to increase government spending while reversing labor-market liberalization and privatizations, they’ll encourage anti-reform movements elsewhere. Spain’s left-wing Podemos party has polled well since Syriza’s Greek victory in January as Spaniards consider whether it might offer an alternative to painful reforms, and the party won 15 seats in the regional parliament in Andalusia last month. Ireland’s Sinn Fein is gaining support for its anti-reform platform…A serious Greek government would offer to press ahead with privatization and deregulation in exchange for some leeway to cut tax rates along with government spending cuts. But Syriza has insisted on a return to something like the status quo ante, with higher spending, anti-growth tax policies and delays or halts in deregulation….Accommodating Syriza’s agenda now would be a severe blow to a eurozone that urgently needs faster growth….”
This is what M. Trichet meant in his BBC interview, no doubt, by “a credible recovery package”. A veritable gallery of right-wing economic mantras: Privatizations. Deregulations. Lower taxes. Government spending cuts. The very policies that landed the world economy in the mess of 2008.