Galbraith on Greece

[astonas]

Re: This is a Mistery?

There is a strong belief in the European ideal, yes. But there is more.

Recall all the articles I have been posting in various threads detailing corruption and incompetence? Greeks are not stupid, unhinged occasionally, but not stupid. They know the system is rotten. They know that their current political system is an abysmal failure. They know better than all the well educated analysts and Nobel prize winning economists out there what life would be like in Greece should Greece go drachma.

I can't tell you how many Greeks from many political persuasions breathed a sigh of relief today, despite the damage to national pride.

Greece's tremendous contribution to history makes it abundantly clear that Greeks are not stupid; and desperation is certainly a very powerful motivator. It might even wind up being worth the great cost to respond based on it.

But have those people breathing sighs of relief actually escaped what they fear?

Isn't it more accurate to say that they postponed something -- at great additional cost -- without changing the likelihood of it happening at all? In truth, isn't the probability even greater now, since this bailout would add more debt to the pile?

In other words, is that sense of relief based on an accurate assessment of long-term odds, or is it more that the inevitable will still come, but just not today. The mind gives vastly more weight to the imminent, and relief can be based on a perceived escape, as much as a real one.

Don't get me wrong, I can understand being relieved by postponing horror. Hope springs eternal, and without it, one is defeated from the start. But it doesn't mean one has actually eliminated the horror.

Can a path be forged to do that?

I am judging by the news coverage, of course. If you are right, and there is a large silent majority desperate for change, and willing to support painful reforms -- even at their own personal expense -- at the polls, that might indeed change circumstances. But look at the referendum. 61% No. Did all of those voters imagine that they were simply giving their government ammunition for negotiating, and now that the negotiation is over, happily accept that they have the best deal they could get? "Oh well, we gave it a try?"

Possible, I suppose. We'll see how the next weeks play out. But I remain concerned.

Or perhaps it might take a Greek leader of tremendous courage and charisma to turn around the sentiment of the streets, and bring those relieved people, who might well be a silent majority, to the fore of the political stage. Where is he?

You see that I am still left confused. If what you describe is really a significant political force, why is it that this wasn't made manifest at the polls already? As you rightly point out, the corruption has gone on for decades. There was no shortage of elections that might have revealed a leader willing to support such a platform. But even when a leader does emerge with plans for reform, they wind up unsuccessful anyway. In spite of a mandate, the reform is blocked.

To be in favor of "reform" in the abstract, but also unwilling to give up something on an individual level for it without a fight, is to be against reform. It might well be that in a given society, complaining about corruption demonstrates moral standing (so you get a lot of complaining) but that it is also considered moral to defend your own interests by extralegal means, when necessary (so nothing can change). The two aren't mutually exclusive. Are you certain this isn't the sort of "support" you are seeing everywhere you go? All the words you can hear, but never any action?

The election threshold for a party in Greece is just 3%. If a sincere reformist opinion truly were truly a central political force for even a small group, wouldn't it already be well-represented? Or is the implication more that this sentiment was only really brought to the surface now, by the threat of Grexit?

If the latter, another problem arises. It would make this moment a one-time chance to reform. Grexit can't credibly be threatened over every little reform. And even if it could be made credible, the continuous harping on it would obliterate the idea that the Union could ever become something more lasting. In other words, it would be just as bad for the EMU as an actual Grexit would.

And I suspect it would be as bad for Greece, as well. The external pressure might get the reforms instituted, to some degree, but there would be tremendous internal pressure built up as a result. As soon as the forcing function leaves, wouldn't that internal resentment simply cause the reforms to be thrown out again, as a relic of the evil oppressors?

Perhaps the Buddha was right. Maybe change does have to come from within.

[gnk]

Re: This is a Mistery?

You misunderstood me, or you're reading too much into it. I said nothing about reforms. Most Greeks are relieved just to still be in the Euro. They know there is stability in that currency because that currency can't be affected by their incompetent, corrupt political class.

[astonas]

Re: This is a Mistery?

You misunderstood me, or you're reading too much into it. I said nothing about reforms. Most Greeks are relieved just to still be in the Euro. They know there is stability in that currency because that currency can't be affected by their incompetent, corrupt political class.

Fair enough. But whatever instability they think they've avoided, they've in actuality only delayed. The debt pile grows with each "bailout" round.

[gnk]

Re: This is a Mistery?

Economically speaking, it's a brutal agreement. But, I think Germany has had enough and made sure that this agreement has teeth, especially concerning reforms. We'll see. Tsipras is already facing a lot of pushback in his party. The extremists want nothing to do with it. No forced resignations among cabinet ministers yet. He should be able to get it passed with the help of the opposition. But, at what cost to Tsipras? Will we have an election again in September/October?

Tsipras' one advantage is that although just like his (establishment) predecessors he was forced into a Memorandum, he was not in power during the "wild west" days of pre crisis corruption. For many Greeks, it's easier to stomach a memorandum coming from a government that was not involved in the massive corruption that took place pre crisis. (Not that many Greeks themselves weren't a part of that corrupt era.)

[Thailandnotes]

Re: This is a Mistery?

I don't regularly watch Democracynow.org, but when stories like Greece come along, it's a given they will tell you stuff you don't know about the situation. This is Friday's show. I think Mark Weisbrot hits the nail on the head. I always enjoy listening to him speak.

http://www.democracynow.org/2015/7/1...eece_yields_to


and maybe more than you want to know or listen to...


http://therealnews.com/t2/index.php?...&jumival=14241

[don]

Re: This is a Mistery?

and maybe more than you want to know or listen to...

http://therealnews.com/t2/index.php?...&jumival=14241

Thanks for the link, Thai. Implementation could push up opposition or end in capitulation. She makes an interesting point.

[don]

Pilger on Greece

JULY 13, 2015
The Problem of Greece is Not Only a Tragedy: It is a Lie

by JOHN PILGER

An historic betrayal has consumed Greece. Having set aside the mandate of the Greek electorate, the Syriza government has willfully ignored last week’s landslide “No” vote and secretly agreed a raft of repressive, impoverishing measures in return for a “bailout” that means sinister foreign control and a warning to the world.

Prime Minister Alexis Tsipras has pushed through parliament a proposal to cut at least 13 billion euros from the public purse – 4 billion euros more than the “austerity” figure rejected overwhelmingly by the majority of the Greek population in a referendum on 5 July.

These reportedly include a 50 per cent increase in the cost of healthcare for pensioners, almost 40 per cent of whom live in poverty; deep cuts in public sector wages; the complete privatization of public facilities such as airports and ports; a rise in value added tax to 23 per cent, now applied to the Greek islands where people struggle to eke out a living. There is more to come.

“Anti-austerity party sweeps to stunning victory”, declared a Guardian headline on January 25. “Radical leftists” the paper called Tsipras and his impressively-educated comrades. They wore open neck shirts, and the finance minister rode a motorbike and was described as a “rock star of economics”. It was a façade. They were not radical in any sense of that cliched label, neither were they “anti austerity”.

For six months Tsipras and the recently discarded finance minister, Yanis Varoufakis, shuttled between Athens and Brussels, Berlin and the other centres of European money power. Instead of social justice for Greece, they achieved a new indebtedness, a deeper impoverishment that would merely replace a systemic rottenness based on the theft of tax revenue by the Greek super-wealthy – in accordance with European “neo-liberal” values — and cheap, highly profitable loans from those now seeking Greece’s scalp.

Greece’s debt, reports an audit by the Greek parliament, “is illegal, illegitimate and odious”. Proportionally, it is less than 30 per cent that of the debit of Germany, its major creditor. It is less than the debt of European banks whose “bailout” in 2007-8 was barely controversial and unpunished.

For a small country such as Greece, the euro is a colonial currency: a tether to a capitalist ideology so extreme that even the Pope pronounces it “intolerable” and “the dung of the devil”. The euro is to Greece what the US dollar is to remote territories in the Pacific, whose poverty and servility is guaranteed by their dependency.

In their travels to the court of the mighty in Brussels and Berlin, Tsipras and Varoufakis presented themselves neither as radicals nor “leftists” nor even honest social democrats, but as two slightly upstart supplicants in their pleas and demands. Without underestimating the hostility they faced, it is fair to say they displayed no political courage. More than once, the Greek people found out about their “secret austerity plans” in leaks to the media: such as a 30 June letter published in the Financial Times, in which Tsipras promised the heads of the EU, the European Central Bank and the IMF to accept their basic, most vicious demands – which he has now accepted.


When the Greek electorate voted “no” on 5 July to this very kind of rotten deal, Tsipras said, “Come Monday and the Greek government will be at the negotiating table after the referendum with better terms for the Greek people”. Greeks had not voted for “better terms”. They had voted for justice and for sovereignty, as they had done on January 25.

The day after the January election a truly democratic and, yes, radical government would have stopped every euro leaving the country, repudiated the “illegal and odious” debt – as Argentina did successfully — and expedited a plan to leave the crippling Eurozone. But there was no plan. There was only a willingness to be “at the table” seeking “better terms”.

The true nature of Syriza has been seldom examined and explained. To the foreign media it is no more than “leftist” or “far left” or “hardline” – the usual misleading spray. Some of Syriza’s international supporters have reached, at times, levels of cheer leading reminiscent of the rise of Barack Obama. Few have asked: Who are these “radicals”? What do they believe in?

The leaders of Syriza are revolutionaries of a kind – but their revolution is the perverse, familiar appropriation of social democratic and parliamentary movements by liberals groomed to comply with neo-liberal drivel and a social engineering whose authentic face is that of Wolfgang Schauble, Germany’s finance minister, an imperial thug. Like the Labour Party in Britain and its equivalents among former social democratic parties such as the Labor Party in Australia, still describing themselves as “liberal” or even “left”, Syriza is the product of an affluent, highly privileged, educated middle class, “schooled in postmodernism”, as Alex Lantier wrote.

For them, class is the unmentionable, let alone an enduring struggle, regardless of the reality of the lives of most human beings. Syriza’s luminaries are well-groomed; they lead not the resistance that ordinary people crave, as the Greek electorate has so bravely demonstrated, but “better terms” of a venal status quo that corrals and punishes the poor. When merged with “identity politics” and its insidious distractions, the consequence is not resistance, but subservience. “Mainstream” political life in Britain exemplifies this.

This is not inevitable, a done deal, if we wake up from the long, postmodern coma and reject the myths and deceptions of those who claim to represent us, and fight.

[don]

Re: Pilger on Greece

What makes it different in this case of Greece is that it is being done, not to a Third World country, but to a long established Western nation and a member of the European community. If there is any good to come out of this, at least the neo-liberal financial class has been revealed for who and what they truly are. And so we can no longer claim any illusions, no plausible excuse in our believing them once again.

'In the [1967] coup d’état the choice of weapon used in order to bring down democracy then was the tanks. Well, this time it was the banks. The banks were used by foreign powers to take over the government. The difference is that this time they’re taking over all public property.’

Yanis Varoufakis

And so we see Hillary the populist railing about wages and Wall Street today, while riding on a tidal wave of big money, insider dealings, and soft payoffs from the moneyed interests. But it is all in the patter, the words, the quality of the performance, the identity politics, don't ya know. This is a spectacle, a play on the national stage, and an act of political fiction. And so facts don't matter, just the entertainment factor. How else could one account for at least half of the Republican candidates?

We are seeing the same thing being done on a much more local scale in the UK and the US surely, with certain locales being turned into virtual protectorates after being caught up in a web of corruption, financial fraud, and unpayable debts by officially sanctioned Banks.


Consider this not an anomaly, but an experiment in progress, with more to follow.

Jesse's Cafe Americain

[gnk]

Re: Pilger on Greece

Very immature one sided analysis in my opinion.

It's called a Union for a reason, because it is made up of members, and even though some may be more influential than others, all have a vote. All votes count. There is no 100% sovereignty in a monetary union. To discuss sovereignty in a monetary union is deceptive in my opinion. And a monetary union has rules for both members and the central bank. Is one nation's economy more important than another's?

Any deal for Greece involves the agreement of all members. Is Greece's democracy more important than Malta's, Slovenia's, Findland's, etc? Does anyone here know those nations' views?

I have followed the negotiations since February. The Greek team wasted at least the first three months. Tsipras lost credibility on many levels with most members of the Eurogroup. There was absolutely no reason for the negotiations to have gone past the IMF June 30 deadline.

At the end of the day, those members have to go back to their own respective parliaments and pass an agreement for Greece. Because, yes, they have democracies as well, which means their Finance Ministers and Prime Ministers will be held accountable by their electorates. Tsipras' and Varoufakis' amateur antics changed German (and others) public opinion. By early June, most Germans wanted Greece out of the Euro - a complete reversal from January. To me, that's an utter failure in diplomacy.

So, do we not respect the rules of a monetary union? Do we not respect the democracies of Finland, Malta, Latvia, etc?

Who wants to tell a poorer member of the EU that it should subsidize Greece's pension system which includes up to 40,000 unwed daughters of civil servants that have gotten up to 550 million euros a year?

Is that what these analysts want? Sacrifice the democracies of the many for one special case?

To me, that would be a coup.

Greece, and every other member of the EU has a choice. Stay in, or get out. But if you want to get out, you better get your shit together and be a viable modern day nation that can handle a currency transition.

Is Greece such a nation?

[astonas]

Re: Pilger on Greece

Greece, and every other member of the EU has a choice. Stay in, or get out. But if you want to get out, you better get your shit together and be a viable modern day nation that can handle a currency transition.

Is Greece such a nation?

It's the right question. To me it is summarized by two statistics: 80% of Greeks want to stay in the EMU. And ~61% reject the deals that make that possible.

So far, the political leaders have basically gotten by, by pretending that these numbers aren't in conflict. That saying "no" didn't mean Grexit.

Tsipras, precisely because his popularity has swelled through his showy, if quixotic, charge against the creditors, now has the opportunity to explain to the country that a choice between these values must be made.

Which will win? Which will the >41% of Greeks who hold conflicting opinions choose, now that the chips are down? The IMF seems to be timing the leaks of their reports to inflame resistance, rather than help discussions. I'd guess they're trying to get Greek people to say "no" to the deal.

It should be pointed out that were Greece to exit, the IMF would probably replace the Troika as the sole negotiator sitting across the table from Greece, in subsequent bailouts. It is a role the institution is far more comfortable with than its current role as a "junior" advisor the the bailout process. The IMF would then have free reign to conduct its normally aggressive Anglo-Saxon policies, without interference of ordoliberal concerns about the utility of reforms.

If Greece does choose Grexit, it will be trusting that the IMF has learned its lesson, and re-instituted the "no Argentina's rule" internally. The wording of the leaks imply this is true. The timing of them, however, causes one to question that conclusion.

A key motivating element for the public break between the IMF and ordoliberals might be the negotiated agreement's clause that places 50 billion Euros of Greek public assets in a trust, where they could be sold later if needed, but not now, at fire-sale prices. The Anglo-Saxon banks, however, might prefer those to be sold now, when Greece is at its most desperate moment.

The last paragraph is pure speculation, of course, and should be treated as such. But the IMF does have a track record that is consistent with it, that the "No Argentina's Rule" was supposed to reverse.


Is the rule back?


A lot depends on the answer.

[gnk]

Re: Pilger on Greece

Of course, those statistics are not a Greek phenomenon. They are no different than what is represented by the common voter found just about everywhere that wants fewer/lower taxes and more government services. Pretty much the same thing in my view.

Furthermore, I believe and maybe naively, that within ten years EU integration will have moved along such that the current Greek debt will not be the same - somehow it will not be the burden it is today. And that could happen in a variety of ways as the EU becomes federalized in the future.

Another interpretation of the IMF's current behavior is that it wants out. It neither wants to handle Greece 100%, nor be a junior partner.

[astonas]

Re: Pilger on Greece

Of course, those statistics are not a Greek phenomenon. They are no different than what is represented by the common voter found just about everywhere that wants fewer/lower taxes and more government services. Pretty much the same thing in my view.

You're absolutely right, and I am sorry if I implied otherwise. Voters, always and everywhere, are be perfectly happy to hold discordant ideas, and even values. But when an undeniable conflict shows up, the wavefunction must collapse. One will have to be chosen.

Furthermore, I believe and maybe naively, that within ten years EU integration will have moved along such that the current Greek debt will not be the same - somehow it will not be the burden it is today. And that could happen in a variety of ways as the EU becomes federalized in the future.

That was certainly the original justification for accepting the unusual configuration in 2010, and it didn't seem crazy then. But with the Euro now proving to be a dividing, rather than unifying force since that moment, I would say that federalism's progress has been set back, rather than advanced, in the intervening time period. Until Greece's situation is resolved, federalism will continue to drift further away on the timeline.

That also means that federalism cannot be the cure for Greece. Instead, a solution is Greece is a prerequisite for federalism.

Another interpretation of the IMF's current behavior is that it wants out. It neither wants to handle Greece 100%, nor be a junior partner.

I'd find find that highly unlikely. The IMF is precisely created to be the lender of last resort to the world's most desperate countries. It is the IMF's current role in Europe that is bizarre, and unjustified by its founding documents.

The IMF took a lot of heat in South America, of example, for intervening far earlier and on better terms in Greece than it did in non-european countries. There was even a possibility that the IMF would have to lose the much-cherished tradition of having a European as its head, as a consequence. "Pro-European bias" was the phrase that was constantly used, in describing the IMF.

For it to say "no" to a lone Greece doesn't make much sense to me. It would be the first time in the whole crisis it was being asked to do its actual job.

[gnk]

Re: Pilger on Greece

If Greece were on its own, that is, it fell out of the EU, then yes, the IMF has no choice but to (warily) get involved.

I'm saying the IMF no longer wants to have a junior role (what you rightly call bizarre), which it feels is not its modus operandi. Rather, the IMF would prefer to step away and allow the EU to resolve it. To wash its hands of the matter, so to speak.

[astonas]

Re: Pilger on Greece

If Greece were on its own, that is, it fell out of the EU, then yes, the IMF has no choice but to (warily) get involved.

I'm saying the IMF no longer wants to have a junior role (what you rightly call bizarre), which it feels is not its modus operandi. Rather, the IMF would prefer to step away and allow the EU to resolve it. To wash its hands of the matter, so to speak.

Sorry for misunderstanding. Yes, that is a possibility.

I wouldn't rate it as a high probability, since the EU's lack of willingness to resolve it internally would be precisely the reason for a Grexit in the first place. But a lot can happen in politics, and there is a chance that each faction would be eager enough to avoid the blame that they provide all the help that's needed.

My real thought process though, is centered on the IMF's history, which I read as tending toward intervention, rather than away from it. I see the pro-European bias that is alleged as being pretty real. Wanting out doesn't seem to fit that.

[astonas]

Re: Pilger on Greece

It's the right question. To me it is summarized by two statistics: 80% of Greeks want to stay in the EMU. And ~61% reject the deals that make that possible.

So far, the political leaders have basically gotten by, by pretending that these numbers aren't in conflict. That saying "no" didn't mean Grexit.

Tsipras, precisely because his popularity has swelled through his showy, if quixotic, charge against the creditors, now has the opportunity to explain to the country that a choice between these values must be made.

Which will win? Which will the >41% of Greeks who hold conflicting opinions choose, now that the chips are down? The IMF seems to be timing the leaks of their reports to inflame resistance, rather than help discussions. I'd guess they're trying to get Greek people to say "no" to the deal.

It should be pointed out that were Greece to exit, the IMF would probably replace the Troika as the sole negotiator sitting across the table from Greece, in subsequent bailouts. It is a role the institution is far more comfortable with than its current role as a "junior" advisor the the bailout process. The IMF would then have free reign to conduct its normally aggressive Anglo-Saxon policies, without interference of ordoliberal concerns about the utility of reforms.

If Greece does choose Grexit, it will be trusting that the IMF has learned its lesson, and re-instituted the "no Argentina's rule" internally. The wording of the leaks imply this is true. The timing of them, however, causes one to question that conclusion.

A key motivating element for the public break between the IMF and ordoliberals might be the negotiated agreement's clause that places 50 billion Euros of Greek public assets in a trust, where they could be sold later if needed, but not now, at fire-sale prices. The Anglo-Saxon banks, however, might prefer those to be sold now, when Greece is at its most desperate moment.

The last paragraph is pure speculation, of course, and should be treated as such. But the IMF does have a track record that is consistent with it, that the "No Argentina's Rule" was supposed to reverse.


Is the rule back?


A lot depends on the answer.

Seems that initial polls say most Greeks (~70%) are supporting the deal. Here's a link that includes the results in German (scroll to 10:25 announcement), and this link is in Greek.

It looks you called the sentiment on the ground perfectly, gnk.

In Germany, there is also support, of a kind:

A poll has shown that more than half of Germans [55%] agree with Chancellor Angela Merkel's position on bailout negotiations with Greece. Almost all [81%] said they doubted whether Greece would apply the reforms.

Both Tsipras and Merkel's popularity rose domestically from the process. So the Theatrics worked for both sides.

I suppose that's what it was about, really. If a real disagreement was present in the Eurogroup meeting, a non-unanimous vote would have resulted instead.