Greek Austerity

Sven:

"Why would the Greek government be "forced" to balance its budget immediately?  Well, the only way Greece (or any country) can engage in deficit spending is for investors to put money into Greek bonds.  No investors are going to put any money in Greek bonds without significant austerity measures."

As Doug Saunders pointed out in the Globe, Germany was happy to sell its manufactured goods to Greece and German banks were delighted to extend the credit, but the German electorate is less than happy with the impact of greater state help to Greece because the electorate had no more ideas than the Greek populace about how it was worked out by the economic elite. Perhaps they could create some derivatives in Asset Backed Commercial olives and really flog them at the next Davos gathering?

Snert must be protected at all costs. His right to come here and argue for imperialism trumps all of our rights to have a conversation from a progressive perspective.

Ban me if you want but Snert is a right wing troll who's only reason for=being on this board is to poke at people and try to piss them off.

Fun game but not one I want to play anymore.

Greek trade union webpage with short video showing thousands and thousands of demonstrators.

Does anyone know what, very specifically, the protesters think the government should do right now?  Clearly not what they did do, but in lieu of that, what?  Default and go it alone?  Tax the billionaires?  Huge tariffs on olives and ouzo?

Great pic, Beltov.

N.Beltov wrote:

I say make the rich pay.

And tax the churches, like any other businesses.  Imagine the revenue that could be collected from those scoundrels.

Solidarity and internationalism are words understood in all languages.

Greek and Urdu? Or is that Bengali? Any babblers know?

Sorry, I couldn't hear you over the massive demonstrations and recent general strike in Athens. Gosh! It's loud.

BTW, how many thousands of demonstrators do the rich Greeks, their sell-out social democratic regime and their IMF representatives been able to muster? I can't seem to find any photographs? Perhaps they're having tea?

68 cities with demos is fairly substantial, don't you agree? Let's see how it plays out.

Sven wrote:

I've got a great investment tip for you, N. Beltov: Why don't you put your hard-earn money into Greek bonds?

Yeah. That is the spirit Sven. You are finally figuring out what solidarity means.

Obviously, the authorities were concerned enough about the demos to sponsor agents provocateurs. And it was provocateurs who burned down the bank and killed three bank workers.

The KKE wrote specifically about this issue. I will re-quote what I quoted above ...

Quote:

The burning of the bank at Stadiou Avenue, which lead to the death of three people, and of the buildings at the centre of Athens, is a crime aiming at the intimidation of the people and the slander of the struggle for the overthrow of the barbarous measures, the anti-people policy. These actions are useful for those who try to submit the people with lies and slander.

KKE denounces, to all the Greek people, that the provocative plan was activated when the demonstration of PAME reached the Parliament. A group of provocateurs tried to involve demonstrators in riots by snatching flags of PAME and using different slogans and actions. Their intention was clearly to slander KKE and PAME. The immediate intervention of the workers who guarded the demonstration disarmed the provocateurs and isolated them, while they were also condemned by the loudspeakers at the demonstration.

The existence of a plan was proved by the slander launched against KKE by the chairman of the extreme right-wing party "LAOS" just moments after, in the Parliament. He claimed that KKE called on the demonstrators to invade the Parliament and set it on fire. The same slander against KKE was also launched by TV channels and radio stations that belong to the big capital.

The Greek Communists even seem to suggest coordination by the right wing political forces and the provocateurs.

from Democracy Now ....

Quote:

COSTAS PANAYOTAKIS: Basically, you have a new government, it's imposing the austerity policies that it run against, and this is an attempt to solve the crisis on the backs of ordinary Greeks. And, as is usually the case with the International Monetary Fund, it's also an attempt to indirectly bailout the German banks, French banks, and European banks that hold most of the Greek debt. So it is a very brutal, unprecedented program. It will reduce wages, it will reduce pensions. It will make it easier to fire people. As people get fired, they will find their severance pay be reduced. Part of the package will actually be used to support banks and private businesses.

Quote:

And there is some resistance going on. This resistance has to escalate the strikes, general strike planned for tomorrow. I think there's also the possibility of social explosions like the big revolt in December 2008 that you reported on. At the time, people were saying that this was the revolt of the generation of 700 euros, which was the minimum monthly salary for many of the young workers. Well, with the new measures the generation of 700 euros is becoming the generation of 550 euros. So, basically, it's a very difficult situation, and it's an attempt to solve the crisis that has been produced by Neoliberal free-market policies by policies that have the same conservative philosophy, but are much more brutal and much more draconian than the policies that caused the crisis.

SHARIF ABDEL KOUDDOUS: The mainstream press reporting on this, I mean, The New York Times has used the word many times, ‘the profligate Greeks,' the irresponsible Greeks. Talk about that coverage and also about the response- these austerity measures you say are more brutal than the response to the crisis here in the U.S.

COSTAS PANAYOTAKIS: Yeah, first of all, there is a lot of misinformation about what is going on in Greece. The wages and the pensions in Greece are anything but generous. What you have also, it's not that ordinary Greeks are profligate; ordinary Greeks are basically struggling to survive. I mean, there is a problem with the government not being willing to tax people who are wealthy, people who own businesses, and so on and so forth. So, always, whenever there's a crisis, salaried and wage-workers are the easy mark and this is what's happening with this package. And I think there is also a problem that there is a certain parallel, I think, in the United States of people being angry at bailouts and the crisis. Instead of blaming the system and the policies that cause the crisis, they look for scapegoats, so you have the rise of a right-wing populism. This is a problem in Greece. This is a problem in Europe. Oftentimes, Greeks, the way they're portrayed is basically, Greeks are being racialized within Europe. And the same is likely to happen in Southern Europe as well. So there is a new rift that is coming up. It is feeding this kind of scapegoating that we see in the United States, if you think of the Arizona law and how supporters of the Arizona law- I saw a debate just a few days ago, the supporter of the Arizona law started by the fact that there are millions of Americans who are unemployed, and then he said there are millions of illegal immigrants are employed in the U.S. So, they capitalize on the understandable anger of ordinary people in the face of these crises.

Protests in Greece: Democracy Now

Meanwhile, back at the capitalist outhouse of Wall Street, a trader at a major dealer made a 16 billion dollar mistake. Oops.

Forbes wrote:

All day long, spreads in credit default swaps on major U.S. banks, like Goldman Sachs, grew wider on concern that a Greek default would translate into adverse consequences for financial companies. The euro plunged on the same concerns, now around 1.27 to the U.S. dollar. Gold soared $22 an ounce, settling at $1,197. There was plenty of fear in the market before noon.

God forbid financial companies suffer adverse consequences. The rich continue to speculate on the misery of others. Ain't capitalism GRAND??!

I've included below a link to a fairly recent (Dec 2009) analysis by the Greek Communists ( Eleni Mpellou, CC & Politbureau Member of KKE ) of the current economic and financial crisis as it affects Greece. I will have a read and either add a comment here or further along in the thread if I have anything to add to the link.

The international economic crisis and the position of Greece. The theses of KKE.

I fully expect to see a Greek default.  As part of that, to start, state wages get paid in New Drachmas (California scrip, anyone?).  Shortly after that, all wages get paid in New Drachmas.  New Drachmas will not be worth much relative to Euros, so exports to the Euro zone will be very profitable, and imports will be expensive.  Greek vactions will be mind boggling cheap for Germans.  Eventually this will all straighten out. 

But it all depends on New Drachmas.  No new Draxhmas, long term pain and huge internal conflict.

This advice is pretty public by now (see Paul Krugman), so I expect there is planning to do this inside Greece, if not at the EU yet.

from the article by the KKE, a few points ...

1. Already in 2008 there was a massive decline in the value of assets in the Athens Stock Exchange after the October 08 mass withdrawal of foreign investors;

2. Terms of borrowing for the Greek government dramatically worsened in mid-2008;

3. " the outbreak of crisis in the Greek economy is going to be profound. Predictions are being made that it will last for 2 years. It will sharpen the existing social contradictions through the increase of unemployment, part-time employment and the extension of flexible working relations. According to bourgeois measurements, poverty has already increased, with a particular concentration (about ¼) among children up to 15 years of age, as well as people in the 18-24 age bracket."

4. The KKE's analysis, from the previous economic crisis in 1998, referred to a crisis of over-accumulation of capital (see the work by the late Paul Sweezy et al in this regard) and their own prediction of more attacks on the wages and working conditions of ordinary people that would inevitably follow;

5. Critically, the following:

Quote:

We consider that the same tendency of deterioration that was manifested during the two previous decades will continue and sharpen, unless there is a visible ideological-political and organizational revitalization of the international communist movement, an emancipation of the trade union movement from the government and employer-led trade-unionism, its disengagement from EU mechanisms of manipulation (ex. ESC etc.), an ideological-political emancipation of wider working forces from the deceiving influence exerted by the so-called social-democracy, through old or new political formations.

The inner contradictions of capitalism and the international capitalist competition have reached a level where the working class, the salaried laborers that approach it in terms of income and living standards and the lower sectors of the middle strata can slow down the deterioration of their position only if they counterattack, if they avoid any political traps of compromise, consensus, acceptance of an allegedly necessary "class collaboration" for the confrontation of the crisis.

Freedom from "the deceiving influence of ... social democracy."  Hear, hear!

6. Despite capitalist unevenness of development, "the nation-state remains the organ that guarantees the economic dominance of monopolies and serves the concentration and centralization of capital in competition with similar processes in other member-states of the EU."

7. a very critical note: describing the period of the 1930's as an era, above all, of great "social prosperity" in the former Soviet Union without making reference to the Stalinist excesses and crimes and show trials, etc. , casts a dark cloud over this overwise interesting piece. We all know that capitalism was undergoing a profound crisis at the time but this hardly merits sweeping such crimes under the rug. Gah.

The article ends with a demonstration of the necessity of social ownership and some kind of central planning.

Doug wrote:

Individual nation-states have a hard time controlling global capital - it doesn't matter how radical you are.

..i suggest that capital is not difficult to control but that it is out of control. one only need to look at cuba, bolivia and argentina to catch a tiny glimpse of what is possible if there is the will. as well as what it takes to achieve control.

Snert wrote:

Does anyone know what, very specifically, the protesters think the government should do right now?  Clearly not what they did do, but in lieu of that, what?  Default and go it alone?  Tax the billionaires?  Huge tariffs on olives and ouzo?

Default, take over the factories, eat the rich, buy oil from the Iranians. And your solution is for Greeks to become indentured serfs in their own land. Will you have them sell their children in to white slavery? That should fetch them a few bucks, eh?

Actually, Argentina is the model.  Down to the use of a foreign currency (the dollar for Argentina, the Euro for Greece).

Argentina did default, and is now in better shape than it was.

It's not like stuff similar to this has never happened before.  We can learn from history, but first we have to remember it.

Snert wrote:

Here's a question I asked as a comment to Humberto DaSilva's vlog post about Greece:  what, really, is stopping a Socialist government from shifting the burden of this from the public and the public sector to the rich and the private sector by way of an increase in corporate taxes, capital gains taxes, and so on?

Corporations have to have profit before they can be taxed - a fair number of Greek comparies will be in trouble now - and there is no capital gains tax revenue to be had while the price of assets is dropping. It'll help later on, perhaps, but not right now. Also, it is fairly easy for corporations to move profitable activities elsewhere in the EU physically, or even easier through accounting measures. So there's a cost that offsets the gain of doing this.