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Greece: Why No Means Yes
Greece Rejects the Troika. Where Do We Go From Here?
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Just after 7 PM Greek time on Sunday, I was told that the “No” vote (Gk. Oxi) was winning approximately 60/40. The “opinion polls” showing a dead heat evidently were wrong. Bookies across Europe are reported to be losing their shirts for betting that the financial right wing could fool most Greeks into voting against their self-interest. The margin of victory shows that Greek voters were immune to media misrepresentation during the week-long run-up as to whether to accept the troika’s demand for austerity to be conducted on anti-labor lines.

It should not have been so great a surprise. Voting age for the referendum was lowered to 18 years, and included army members. Faced with an unemployment rate of over 50 percent, Greek youth understandably wanted no more euro-austerity.

The Troika’s demand was for austerity to be deepened solely by taxing labor and reducing pensions. Its policy makers had vetoed Syriza’s proposed taxes on the wealthy and steps to stop their tax avoidance. The IMF for its part vetoed cutbacks in Greek military spending (far above the 2% of GDP demanded by NATO), despite even the European Central Bank (ECB) and German Chancellor Merkel agreeing to this.

European Commission President Jean-Claude Juncker threatened to expel Greece from Europe, despite no law permitting this to occur. Let us see now whether he still tries to carry out his bluff, which has been echoed by right-wing leaders throughout Europe.

His retaliatory actions from an ostensibly non-political, non-elected office are not alone. The eurozone class war in support of finance against labor and industry is now open and in earnest. Instead of doing what a central bank is supposed to do – provide liquidity (and paper currency) to banks, ECB head Mario “Whatever it takes” Draghi forced them to shut down even their ATM machines for lack of cash. Evidently this was intended to frighten Greek voters to think that this would be their country’s future if they voted No.

It is an old strategy. Andrew Jackson expressed his vindictiveness toward the Second Bank of the United States by shutting it down. When it refused to appoint his corrupt political cronies, he deposited the U.S. Treasury’s money in his “pet banks.” The drain of money plunged the economy into depression. The Southern slave states welcomed deflation, because they sought low prices for their cotton exports, and also opposed northern industry with its protectionist policies and anti-slave politics.

What Greece needs is a domestic central bank – or failing that, a national Treasury – empowered to create the money to monetize government spending on economic recovery. Mr. Draghi has shown the ECB not to be “technocratic,” but a cabal of right-wing operatives working to bring down the Syriza government, in a way quite willing to empower the far-right Golden Dawn party in its stead. In light of his refusal to carry out the duties of a central bank and act as lender of last resort when Greek banks run out of cash, Mr. Varoufakis has said that: “If necessary, we will issue parallel liquidity and California-style IOU’s, in an electronic form. We should have done it a week ago.”

U.S. popular media echoed the European right by trying to frighten Greeks and their sympathizers into believing that the vote is whether or not to remain part of Europe – as if Britain does not have its own currency while remaining part of the European Union. However, the vote does throw into question just what it means to be what pro-austerity advocates call “committed to the European project.” Eurozone officials are unanimous that it means a commitment to financial war against labor – to austerity and yet further economic shrinkage; to faster privatization selloffs (but not to Russians if they offer higher prices, as Gazprom did) and hence higher prices for hitherto public utilities; to no rejection of past insider privatization deals to higher value-added taxes on consumers; and to lower pensions for labor.

This prospect was at the center of a meeting at the European Parliament in Brussels on July 2 – Peripheral debts: Causes, consequences and solutions, sponsored by the European United Left/Nordic Green Left, GUE/NGL. (My speech begins at about 27 minutes.)

There was of course unanimous support for a “No” vote to the anti-labor, pro-creditor demands by the IMF, European Central Bank and European Council. But there also was concern that the Syriza leaders did not begin immediately upon their January election victory to educate voters on what actually is at issue: why remaining subject to the junk-economics dictates by the IMF and ECB will make the economy subject to chronic debt deflation. Instead of spending the past six months educating the public over what is at issue with the Troika, Syriza focused on playing political rope-a-dope to demonstrate how firmly the ECB and EC were committed to austerity.

The left-wing Syriza members with whom I met during the last two weeks in Athens, Delphi and Brussels felt that more should have been done to educate the Greek public as to how impossible it is for Greece to pay the debts with which the Troika had loaded it down, with abject surrender by its pro-bank Pasok/New Democracy coalition that had ruled Greece for a generation. (New Democracy leader Samaras resigned after the vote was in last night.)

One factor that may have incensed Greeks to vote “No” was the revelation that an internal IMF Debt Sustainability Analysis – which Lagarde had sought to suppress – had endorsed what Syriza’s leader Alexis Tsipras has been saying all along: Greece needs a debt writedown. Its official debt is unpayable, and never should have been forced upon it in the first place – under conditions where the Troika removed the elected prime minister from office to put in their own technocrat (Lucas Papademos, who had worked with Goldman Sachs to falsify the government’s 2001 balance sheet to enable it to meet the eurozone’s entry conditions).

ORDER IT NOW

It was revealed last week that IMF head Christine Lagarde has overruled her staff and board to defend specifically French interests. As in 2010-11 under Dominique Strauss-Kahn, French banks are major holders of Greek bonds (including via their ownership of Greek banks). Strauss-Kahn notoriously overrode his staff when they urged the IMF not to capitulate to ECB demands to pay French, German and other private bondholders with Troika bailout loans for which they made Greek taxpayers liable.

Two weeks ago the Greek Parliament released a report by its Debt Truth Commission explaining why Greece’s debt to the IMF, ECB and European Council was legally “odious.” It was imposed on Greece by Ms. Merkel and other pro-bank leaders that Greece not hold the referendum that Pasok Prime Minister Papandreou had proposed on the bailout of French and German banks at Greek expense.

That was the root of today’s problems. It also was the occasion on which European finance and democracy become antithetical, prompting the late Frankfurt Allgemeine Zeitung editor Frank Schirrmacher to write his famous editorial, “Democracy is Junk.”

The Troika have refused to write down a single euro of unpayably high debt. They pretended that debt relief is an issue for later. That is what enabled Tsipras to depict his nation as being victimized by the eurozone’s vicious class war. The Syriza position has been “We’d like to pay. But there simply is no money – as the IMF’s own calculations have clearly and explicitly shown.”

Last Tuesday, Tsipras explained to Greek voters that the Troika had put nothing in writing about debt writedowns. This pierced the haze of media-induced panic. His seeming willingness to surrender simply dared the Troika to back up their promises in writing. He certainly was not going to make the tragic mistake that Russian leader Gorbachev made when he believed the verbal NATO promises that it would not move into the post-Soviet countries of Central Europe and the Baltics.

The Troika’s position was and is: “Impose austerity now. We’ll talk about debt writedowns later. But first, you must sell off what remains of your public domain. You must lower wages by another 20%, and force another 20% of your population to emigrate. Only then, when we’re sure that we can’t get another euro out of you anyway, then we may be willing to talk about writing down some of your debt. But not until we have stripped you of anything left to pay in any case!”

Tsipras and finance minister Varoufakis have been widely criticized in the U.S. media for seeming to capitulate to Troika demand. The reality is that they have been civil and polite, even taking a conciliatory stance if only to show how totalitarian and unyielding the Troika has been.

That contrast between reason and totalitarian “free market” austerity is what convinced the Greeks to vote No.

(Republished from Michael-Hudson.com by permission of author or representative)
 
• Category: Economics, Foreign Policy • Tags: Eurozone, Greece, Syriza 
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  1. Wally [AKA "BobbyBeGood"] says: • Website

    The unproductive Marxist Greeks are about to receive what they so dearly deserve.

    The end of living off other peoples’ money. The end of blaming others.

    It is the Greeks who gamed the “troika”, not the other way around. OK, fine then

    Syriza, let’s see what you got.

    Let the drachma printing presses begin.

  2. Tom_R says:

    THE GREEKS INVENTED DEMOCRACY; TODAY THEY REINVENTED IT.

    I am so glad that the Greeks (who invented democracy) refused to be brainwashed by the left-wing media and voted No in their referendums.

    Getting out of the Euro and the EU are the best things any nation can do. The other big problem with the EU is that it is inciting the 3rd world alien invasion and forcing European nations to accept these African invaders. That is an even bigger reason to get out of the criminal enterprise called the EU.

    Whites must have more children, as they do not have enough young children to run their restaurants, stores, companies, nursing homes, hospitals, etc. and be the taxpayer base necessary to support the older generation in the welfare state.

    The Greeks have national referenda at the national level. This vote shows that national referenda work. It enabled them to save their country and shake off this odious debt. We need them too, here.

    See National Citizens Initiative For Democracy

    Ncid.us

    Please go this website and start the process of American National Referenda.

  3. peterike says:

    Step 1. Kick out the immigrant parasites.
    Step 2. Kick out the EU.
    Step 3. Kick out the globalist bankster criminals.
    Step 4. Get your nation back.

    Greece for the Greeks.

    • Replies: @pyrrhus
  4. EdwardM says:

    This is really not complicated. What the author decries as “austerity” is better characterized as “forcing to survive without other people’s money.” The article also refers comically to “the debts with which the Troika had loaded it down.” So they forced Greece to live above its means, avoid any steps to make its economy productive and competitive, and run a corrupt crony state?

    Sure the creditors should suffer for their poor judgment but that doesn’t make the Greeks innocent. In all of this, have Tsipras or that clown finance minister (or even any of the “man on the street” takes all over CNN) ever admitted the country’s own fault at all? I haven’t heard it.

    • Replies: @Flower
  5. I like Hudson, he’s nothing if not persistent. I guess he’ll stop writing when Greece exits the Eurozone and starts printing drachmas (or Tsiprodollars)…

    Only problem is that the Greek people are overwhelmingly in favor of the Euro. The SYRIZA party was able to convince voters that a NO to the referendum was not meant to take the country to the drachma but simply allow the government to negotiate better terms with the EU bureaucrats. The old parties rightly pointed out that a NO most likely means exit from the Eurozone. The Greek people voted NO thinking that somehow economic reality will bend to their will…
    This was undeniably a huge victory for SYRIZA.

    Right now the banks are closed, people can withdraw 60 euros and if there is no emergency solution there will be a haircut of depositors (according to people who work in the bank sector at least 30% for deposits of over 8.000 euros).

    Go Greece!

  6. Svigor says:

    Bookies across Europe are reported to be losing their shirts for betting that the financial right wing could fool most Greeks into voting against their self-interest.

    I’d be interested in learning how anti-nationalist policies are “right-wing.”

    The margin of victory shows that Greek voters were immune to media misrepresentation during the week-long run-up as to whether to accept the troika’s demand for austerity to be conducted on anti-labor lines.

    I’d also be interested in seeing evidence that the Greek corporate media are “right-wing.”

    Step 1. Kick out the immigrant parasites.
    Step 2. Kick out the EU.
    Step 3. Kick out the globalist bankster criminals.
    Step 4. Get your nation back.

    Greece for the Greeks.

    Or evidence of how Pete’s steps 1-4 would be “left-wing.”

    • Replies: @Flower
  7. Flower says:
    @Svigor

    Steps 2 and 3 are a redundancy of step 1.

    Of the last “bail-out”, that is apparently the focus of this latest charade, how much of that money actually went to Greece, and how much went to paying off the previous “loans”? I have heard that , as much as 90% went to paying previous “loans”. In the USSA, this is commonly known as “loan sharking”, and we Americans have practiced this on ourselves to the point where we are unsurpassed in predatory economics.

  8. Flower says:
    @EdwardM

    And where do you get off deciding how I’m supposed to live? How much of the last “loan” actually made it to the Greek people, and how much went into the pockets of the banksters and their buddies? I have seen figures as high as 90% of the last loan went to “pay off” previous loans, with 10% actually getting to Greece and the Greek people. If the “Troika” thinks that the Greeks are “doing it wrong”, then why loan the money? They loaned the money because they knew it wouldn’t do anything but increase the Greek debt. They didn’t are about the money, because the “money” was nothing but numbers in some banksters’ computer. But now, the EU and the “troika” now believe they “own” Greece and can dictate what the Greeks can and can’t do within their own country. And coming from an American, any words or advice about loans and loan repayments is the height of Hypocrisy.

    Eddie, imagine it this way: all those entities out their, like China, decide one day that they aren’t going to buy any more Treasury Bonds (i.e. loan the USSA money) unless we get rid of that pimple in the WH and replace him with George Takei, y’know, because he is an Asian homo. (How popular would THAT be!?) How would you feel about that, China dictating how you are to act within your country? Admittedly, there is a slight difference with this analogy, in that Greece was sold a bill of goods (got huckstered, Bamboozled, tricked), while our Congress (and thus us?) has driven us into debt. Unlike Greece, however, we have a really big military – and if it wasn’t for that military, your dollar would be worth a FRACTION of a penny.

    You are right on one thing, Eddie, we all need to learn to live within our means. Good luck with that.

  9. I agree that this *.wing nonsense is just signaling to readers predisposed to an obsolete dialectic. The only actual “right-wing” party, GD (also expressly socialist, national version) was systematically and violently suppressed and it’s leadership jailed; so much for democracy. Most of the fiat cash went directly from bank to bank, the populace got next to nothing, and a huge percentage of that went for military spending, mostly from Germany, to defend Greece from what or whom exactly; Golden Dawn, most likely. No, it’s socialist turtles all the way down, everyone trying to live at everyone else’s expense.

    If Russia and China want to help, for whatever reason, they need to keep these natural-born chiselers on a short and tight string.

    I greatly appreciate Mr. Unz featuring these leftish writers, because reading them with an eye towards their internal contradictions is a wonderful way to obviate the confirmation bias we on the “right” are prone to.

  10. Priss Factor [AKA "The Priss Factory"] says:

    How did Greeks invent logic and innovate lots of math stuff?

    They seem illogical and have no sense of numbers.

    • Replies: @Hail
  11. LOL, even supposing that the Greeks did indeed “live beyond their means,” whatever that means, we still have the following issues:

    – Exponential growth eventually renders loans impossible to pay, and results in the borrower’s paying many times the principal should the borrower try to fight the inevitable for too long. There are practical as well as theological reasons for the ancient proscription of usury.

    – Europe and the Eurozone are basically captive markets for German exports, forced to use a currency controlled (or at least dominated) by Germany. A wag would say that Merkel has more than Hitler and Bismarck ever dreamed of. This glorious development, however, puts certain weaker players – like Greece and Portugal (among others) – in an untenable position. To wit – while economic growth is NOT a zero-sum game, exports&imports ARE a zero-sum game. For Germany to export more than it imports, some nation has to import more than it exports. Greeces have to exist for a Germany to exist.

    – Other considerations aside, Greece has to grow economically in order to be able to pay. Austerity demonstrably destroys the Greek economy, making it impossible for Greece to ever pay its (likely odious) debts. Therefore, on purely pragmatic and utilitarian grounds, austerity is bad.

    – The bulk of these imbecile economists, toy politicians and various other scumbags inveighing against Greece failed to predict, and even caused, the 2008 financial crisis. Their policies have not produced a serious recovery yet. They are discredited, their policies are bunk, and they deserve neither respect nor obedience.

    – Greece can not legally continue to practice austerity and pursue the Sisyphean task of trying to pay off its usurious debts. That is because Greece is party to various human rights agreements, and is already in the throes of a humanitarian crisis due to having followed austerity.

    To sum up:
    – The intellectual and moral authority of the debt enforcers is highly dubious.
    – Anyway, it is physically, mathematically, and legally impossible for Greece to either continue to pay the current loans, or to pursue more austerity. You can’t suck more blood than there is in a body.

    • Replies: @Epaminondas
  12. Hail says: • Website
    @Priss Factor

    That was a long time ago.

    Too many slaves and others assimilated; the Ottoman legacy. Being frank about it and risking offending some, Greece today is only partly-European. They have more in common with the Middle East than they do with Northwest Europe.

    An ancient Greek from the golden age, if transported to the present, would find himself much more at home north of the Alps.

    • Replies: @Davidski
  13. War for Blair Mountain [AKA "Great Battle for Blair Mountain"] says:

    As the scale of the torturing of the Native Greek People increases…so doese the probability of Golden Dawn Comming to Power. If this happens, Nato…led by the German Military..will invade Greece to take out a Golden Dawn Goverment.

    I have violent hatred of Germany. Russia will annihilate Germany for a second time. The Greek people are being exterminated by a fat farting Kraut Bulldyke. This IS WAR!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    • Replies: @Epaminondas
    , @Anonymous
  14. War for Blair Mountain [AKA "Great Battle for Blair Mountain"] says:
    @Wally

    More sewage from another subhuman scum anarcho-capitalist…..

  15. War for Blair Mountain [AKA "Great Battle for Blair Mountain"] says:

    The only viable option for The Historic Native Born White American Working Class and Europeans in general is:HIGHLY RACIALIZED XENOPHOBIA+RACIAL NATIONALISM+RACIAL COMMUNITY+ANARCHO SYNDICALSIM…This is the lesson of the Greek Crisis.

    Europeans should and must have the same Racial National Origins type Immigration Policy as the Israeli Jews…..

    Either we stick together as a RACIAL COMMUNITY…or we die……intolerance is a virtue!!!!!

  16. Davidski says: • Website
    @Hail

    We don’t have any genomes from Ancient Greece yet, but based on the ancient DNA that we do have (including some Iron Age samples from Bulgaria), it’s highly unlikely that they’ll cluster with Northwest Europeans or north of the Alps.

    You don’t seem to know much about this topic.

  17. Wow. This article is wrong on so many fronts, it would be hard to know where to start criticizing it. But I will say that the author’s wrong headedness is refreshingly stubborn. He doesn’t just start with one foolish statement and expand on that. Oh, no. The falsehoods and misrepresentations tumble out one after another in a cascade of Alice in Liberal Wonderland fashion. It’s as though he consulted the World Leftist Encyclopedia whenever he needed inspiration. And this is an absolutely inspired piece of lefty click bait. Trotsky would have been proud!

  18. @jimbojones

    Balderdash. The Greeks were so desperate to join the EU, they cooked the books to make it look like they were eligible for membership. They weren’t. And now they want the charade to go on.

  19. “unless we get rid of that pimple in the WH and replace him with George Takei, y’know, because he is an Asian homo. (How popular would THAT be!?)”

    Buddy, more than you know.

  20. pyrrhus says:
    @peterike

    Except for Step 2, that would be an excellent formula for the USA! But we will have to suffer for decades before a majority realizes the situation….

  21. For reasons given in Comments on Israel Shamir’s article I think this author is much closer to understanding the situation and its past and future. Grexit, supported by the EU with the UK in the lead would end up best for all but France and Germany and maybe one or two smaller countries, at least if it led to the end of the misbegotten Euro.

    Aren’t the main motivations that matter quite simple?
    1. Merkel has the political motive of appeasing German voters who would resent coddling the profligate Greeks (or other PIIGS).
    2. Those who have been real winners from the Euro, principally Germany, want to make life unpleasant enough for the Greeks to deter others from leaving the EZ.
    3. France is the big creditor so wants Greece to be able to stay in the EZ and not devalue French assets as would occur on Grexit and de facto default.

    Nothing sinister: just pretty ordinary self interest at work.

  22. Anonymous • Disclaimer says:
    @War for Blair Mountain

    Yes, Putin will surely understand that it is necessary to kick loose another world war so that you can have your psychotic fantasies fulfilled.

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