Its my Friday lay day blog and I have been working on various things today. But for this little blog I am still trying to work out an impression of what is going on in Greece and the Brussels. There is little uncertainty on the Troika side although the various elements of that position are still nuanced. The sheer antagonism of the Baltic States towards Greece is a newly revealed element which is interesting. If their logic prevails then it really is a race to the bottom unless the nation is Germany. Representing the desired benchmark by massive mediocrity if not near disaster (as in Latvia, Lithuania etc) seems to be the new normal in EU debates. Spare the thought. The Baltics should be joining Greece in a solidarity pact to oppose austerity and seek fundamental changes to the EU Treaties instead of siding with the Troika’s death wish for Greece. But there is quite a bit of uncertainty in trying to guage the Greek position. One is led to the most obvious, simple and consistent interpretations of that position – that Syriza is a fractured coalition and those currently in positions of authority (Prime Minister etc) are surrender monkeys who have miscalculated dramatically. But that would tell us that they are so acting with such venality towards their people as to be almost an unbelievable narrative. Looking deeper into the plot doesn’t provide anything consistent, just dead ends and speculation. We are close to finding out though.
The simple story went like this. Syriza was elected in January against the odds on the groundswell of deep resentment in Greece for the austerity program and the humiliating treatment of the nation by the Troika – it was becoming a newly-created German colony.
All the early rhetoric about outstanding Second World War damages etc was indicative of the new sense of national sentiment about its place in Europe and the sense of anger at being targetted for punishing austerity – to wipe out the prosperity the nation had built over several decades.
Syriza was an aspirational force and spoke strongly about its mission which in no uncertain terms was anti-austerity.
At the time, I pointed out that it was a seemingly inconsistent position it was proposing – to oppose austerity yet stay within the Eurozone, which apparently the majority of Greeks prefer.
Please read my blog – The incommensurate aims of the Greek people – for more discussion on this point.
It was pointed out to me by those in the know that the plan was consistent because they were calling for massive investment injections from the – European Investment Bank.
Some notable “in the know” Post Keynesians asserted I was totally wrong in my assessment that agreeing to run a primary fiscal surplus was going to continue the austerity because the EIB would come to the party with the funds to offset the fiscal drag coming from Greece’s own fiscal stance.
I was told that “they were on the ground and knew what was happening” and that I should be “more supportive of the Syriza efforts”.
Apparently, they had had a dream one night that Juncker’s measly €315bn investment plan would somehow be increased several fold and most of it would flow down to poor beleaguered Greece and things would be fine.
Well despite the ‘plan’ being way under the funds needed to restore some sense of growth to the Eurozone and help the many nations in desperate need of a spending boost, not much of it has flowed anywhere.
Certainly, the Greek economy has not enjoyed a major external spending boost.
Yes, once again, the so-called ‘progressives’ who think it is fine for Greece to remain in the Eurozone, fundamentally misread the Groupthink that binds the Troika together as a ‘Recession Cult’.
When the Greek government got a modest concession renaming the Troika – the “institutions” – apparently that was a success. It is a Recession Cult and should be thought of as such.
Anyway the big external spending boost is not about to happen – and really, it never was.
The Troika’s position has really only hardened from ridiculous to something beyond believable – if you sit outside the neo-liberal Groupthink that they are trapped within.
This is a world of mob rule where basic realities are ignored, things most people think are important that bind societies together like jobs and incomes are disregarded as being unimportant, and plain facts are denied or reinterpreted to become inanities.
It is virtually impossible having a conversation with the Recession Cult. Normal logic, rules of evidence, common sense, appeals to humanity – all fail.
That is the way the internal disciplining structures that perpetuate the Groupthink work. It builds an impenetrable barrier to reality and only recognises and acts according to its own ridiculous, self-serving logic.
Then we had months of bickering, increasingly vituperative sniping between the nations, old wounds opened to bleed, and increasingly revisionist narratives about why Greece is in the trouble it is – all pointing to the nation’s apparent ‘bloated’ public sector, wasteful and extravagant spending and being petals to precious to appreciate how well off they are compared to the Baltics, who had taken their medicine and moved on … that sort of stuff.
The reaction of the Baltics has been interesting. These are nations which have governments that have devastated their prosperity, forced a significant percentage of their skilled and younger workers out to seek livelihoods in other lands, are beset with old national versus Russian rivals and ethnic divisions, who somehow want to suggest that what they have been through should represent the template for all nations – advanced or otherwise.
When a simple spending boost would resolve most of the problems everywhere these idiot Finance Ministers and other officials, who have not been personally scarred at all by the vicious austerity they have imposed on their people, have the audacity to demand that Greeks should drink the Kool-Aid and impoverish themselves like the Baltic common folk have been impoverished. You couldn’t write about it.
Slovakia – poor country it is, has a government who wants to make it poorer just because the top officials can wine and dine in Brussels with the ‘best of them’. Their moral outrage about Greece has been a sight to behold (and read about).
And then we have Finland, not a Baltic but an austerity maven nonetheless. This is a country that is losing its technological edge because of failed corporate visions and government austerity and is not content with that – it wants to join the race to the bottom of its neighbours – who can hit rock bottom the first.
But it is more than that – it is also a contest as to who can create the lowest trough to hit! Idiocy when simple spending stimulus is all that is needed to get things rolling again.
And meanwhile Germany is acting with contempt for all its neighbours. It helped create this mess and yet it thinks it is justified in wallowing in its socio-pathological ‘inflation angst’, as if that was based in reality anyway.
So when Syriza said it was going to oppose austerity – the simple story is that it was going to pursue that option.
Over the months since January, the slippage has been monumental. As late as last week, the Greek Prime Minister wrote to Brussels saying he would accept their dirty, blackmailing deal.
Then we get to the referendum. The former Finance Minister called it a “majestic, big YES to a democratic, rational Europe!” and that the victory of the NO vote meant that “dignity was restored to the people of Greece”.
Syriza Member of Parliament Costas Lapavitsas wrote earlier this week (July 7, 2015) in the article – Syriza’s Next Steps – that:
The Greek people’s rejection of austerity in Sunday’s referendum was an enormous victory.
Be reminded that the NO vote was a “rejection of austerity” and if that was translated into positive policy action then one might conclude that the “dignity was restored to the people of Greece”.
No dignity is restored by the act of ticking a box with OXI next to it and cheering in a city square, if the government of your nation then heads to Brussels and agrees to austerity measures that are worse than the ones it rejected no less than 14 odd days before.
That would amount to a capitulation or surrender to the Recession Cult. That would amount to jettisoning the peoples’ interests.
EU finance ministers, presidents etc came out on script and said if they vote NO then it was equivalent to voting to leave the Eurozone (it should have been) and the “bridges were being burned”. The last comment came from the German SDP leader. His abandonment of any notion of social democracy is a disgrace.
But come Sunday night in Europe, the threats of exit were gone and Brussels was assembling the bullies to resume business as usual.
Those pitiful Greeks had had their day in the sun, god bless them. They played ‘Democracy’, that curious game that really ends up meaning nothing, for a day and now the Eurogroup had to get back down to work. It was a Monday after all and the markets were getting busy to shuffle some more wealth and so the little Greek game had to stop.
It seems that it did.
The ECB started the Troika noose tightening by changing collateral rules relating to the on-going ELA, which is keeping the commercial banks in Greece on a drip-feed while the Government is brought to heel. In threatening to bankrupt the Greece financial system, the ECB is acting wildly outside its charter as a central bank who carries a (legistlated) responsibility to maintain financial stability.
The ECB is a political machine in the Eurozone now and that tells us, if nothing else is taken into account, that the monetary system has failed – categorically and irretrievably under the current institutional structure and leadership.
Then there was a disturbing article in the British Telegraph this week (July 7, 2015) – Europe is blowing itself apart over Greece – and nobody seems able to stop it – which was apparently the result of briefing by the outgoing Finance Minister of Greece.
The article relates that:
Greek premier Alexis Tsipras never expected to win Sunday’s referendum on EMU bail-out terms, let alone to preside over a blazing national revolt against foreign control.
He called the snap vote with the expectation – and intention – of losing it. The plan was to put up a good fight, accept honourable defeat, and hand over the keys of the Maximos Mansion, leaving it to others to implement the June 25 “ultimatum” and suffer the opprobrium.
Which if true, is a shocking reality.
That “majestic, big YES to a democratic, rational Europe” was just a great con job all the time to save a few political skins and fuck the people. The little game of play ‘Democracy’ for a day.
The article claims that the Greek leader, before calling the referendum, “had already made the decision to acquiesce to austerity demands, recognizing that Syriza had failed to bring about a debtors’ cartel of southern EMU states and had seriously misjudged the mood across the eurozone”.
But when the bullies went in for some more punches (higher VAT increases, larger cuts to pensions and other income support measures for the poor, and deeper fiscal cuts) without any debt relief, it was clear according to the outgoing Finance Minister that “They just didn’t want us to sign. They had already decided to push us out”.
That motivated the referendum which to “their consternation, they won”.
The options were clear:
- maintain the dignity of the Greek people, respect the democratic sentiment (not only in the referendum but also in the January national election outcome, and reject austerity and tell the Eurogroup to jump.
Next day, exit and restore growth; OR
- Surrender like surrender monkeys, scrap the finance minister who the spivs from the north hated, and sell the Greek people down the drain.
Apparently, there had been planning whereby the Bank of Greece would issue vouchers (in euros) to keep the system afloat while the Greeks defaulted on their debts to the ECB (next tranche to be due) and fought it out with the Eurogroup.
That option was rejected as being “too dangerous”.
So now we know what has transpired. The simple and easily interpreted story is contained in the documents that the Greek government has now submitted for approval.
You can read them – HERE.
They read like some twisted Baltic-state dreamworld. Vicious, penal, capricious austerity and privatisation as far as the eyes can read.
Dirty, neo-liberal austerity that will attack the most disadvantaged and drive the nation back into a deep recession.
Filthy austerity that is the exact opposite to what the Syriza politicians said to the Greek people they would do when they went for their ‘job interviews’. They are now all earning their salaries on the basis of a treacherous deception. They should resign.
Syriza will say that as of today it looks like Germany is backing down on debt relief. But debt relief is somewhat of a side issue. The damage is not being done by the outstanding debt but the spending flows that should be occuring that are not as a result of the austerity.
The latest Eurostat figures released this week (July 7, 2015) – Government expenditure accounted for 48.1% of GDP in the EU in 2014 – show that of all the European nations, the cuts in Greek public spending have been the largest between 2013 and 2014.
They have cut their general government spending by 10.7 per cent. Only Slovenia is close at 9.9 per cent cuts and it is a basket case to as a result.
Greece’s public spending is at 49.3 per cent of GDP whereas the Euro area average is 49.0 per cent.
Yet the Recession Cult wants more.
It all looks like surrender to me. There is some consistency in this interpretation. They are so scared of leaving the Euro that anything is acceptable – irrespective of what the people of Greece have on two occasions rejected.
But then that might be too simple.
I continue to study the tea leaves to see if I can find any other less obvious interpretations of what has been going on.
Speech in European Parliament
I consider the British political party UKIP to be racist and xenophobic and, in general, a pretty unsavoury lot.
But like all populist parties that work on igniting the emotions of those who are experiencing disadvantage and dislocation, some of what the leaders say resonates.
This week (July 7, 2015), with the Greek Prime Minister visiting the European Parliament, and the so-called Socialist President of the Parliament Martin Schultz presiding, having just recently threatened the Greek people with power cuts and a break down of the public transport system if they voted OXI in last week’s referendum, the UKIP leader Nigel Farage delivered one of those resonating speeches.
If you haven’t seen it, I include it below.
I note a lot of news reports are now starting to talk about EU Groupthink, which I am happy about given that is what my current book – Eurozone Dystopia: Groupthink and Denial on a Grand Scale – is about.
Some of what the UKIP leader said in his parliamentary attack on the Eurozone and austerity is plain wrong in terms of the economics – but most of what he said is correct and the Greek Prime Minister squirmed in his chair one imagines as the speech was directed at him, given he is proposing to accept even worse austerity than the Troika came up with a few weeks ago.
I loved his description of Kohl and Mitterand and Delors.
And you UKIP supporters, please no comments about whether it is racist or not – that was not the point of the post.
King Tubby Meets The Rockers – yeh, get down!
Here is what I was listening to this morning. It is from the Jamaican jazz reggae guitar player – Ernest Ranglin – who I have featured before. He is one of my favourites.
He is joined here with Ira Coleman (Bass), Idris Muhammad (Drums), Monty Alexander (Piano and Melodica), and Gary Mayone (Keyboards, Percoussion).
The album is – Below the Baseline – published in 1996 and it is full of gems like this. It is 55 minutes of joy.
The song is a dedication to the great – Osbourne Ruddock aka King Tubby – who was one of the top dub sound engineers in Jamaica during the early development phases 1960s and 1970s.
He worked with all the great reggae dub players (Augustus Pablo, Aggrovators, Prince Jammy, Scientist, Bunny Lee and others). King Tubby meets the Rockers Uptown – is one of the best albums ever produced (in my biased opinion).
Here is Ernest Ranglin making “some noise … hopefully, some joyful noise” in Amsterdam in 2011.
If you are in Melbourne this weekend, my band Pressure Drop is playing at Kindred Studios, Whitehall Street, Yarraville on Sunday afternoon.
The first band Blak Roots starts off around 15:00 and we will be on stage from around 17:00 to 19:00.
A big afternoon of roots, reggae, jazz, rocksteady and dub.
The Saturday Quiz will be back again tomorrow. It will be of an appropriate order of difficulty (-:
Advertising: Special Discount available for my book to my blog readers
My new book – Eurozone Dystopia – Groupthink and Denial on a Grand Scale – is now published by Edward Elgar UK and available for sale.
I am able to offer a Special 35 per cent discount to readers to reduce the price of the Hard Back version of the book.
Please go to the – Elgar on-line shop and use the Discount Code VIP35.
Some relevant links to further information and availability:
2. You can read – Chapter 1 – for free.
3. You can purchase the book in – Hard Back format – at Edward Elgar’s On-line Shop.
4. You can buy the book in – eBook format – at Google’s Store.
It is a long book (501 pages) and the full price for the hard-back edition is not cheap. The eBook version is very affordable.
That is enough for today!
(c) Copyright 2015 William Mitchell. All Rights Reserved.