Since PM Alexis Tsipras announced a referendum about whether to accept or reject Troika’s ultimatum to Greece for further austerity measures, the corporate media have sided uncritically with the Yes party. They’ve gone so far as to claim that the Greek citizens should vote YES because such initiative was a mistake.
In the days leading the referendum, they couldn’t help but spew the customary panicking pro-EU repertoire. They showed queues of people at ATMs – though dressed in scarves and coats, despite it’s July. They stated Greece was undergoing a shortage of food, heralded that soon a 30% compulsory levy on current accounts exceeding €8,000 would be carried out. And way more drivel of this very mold.
But for 5 years they have kept silent about Greece’s spike in the suicide count, now up to 10,000 cases, about 500,000 malnourished children, and about 3 million people with no access to healthcare, leading to a rise of stillbirths and infant mortality rates, soaring levels of HIV infection among drug addicts, and the revival of malaria after 40 years since the last time – all of it, an outcome of the EU austerity politics, which included public hospital budget cuts and halved public spending on pharmaceuticals. Of course, such stuff isn’t newsworthy at all – made-up reporting is!
Greece was compelled to make swingeing cutbacks to meet the terms of the bailout packages offered by the European Commission, the European Central Bank, and the International Monetary Fund – read the Troika.
Syriza Party was elected to power on January 2015 elections with an explicit mandate to put an end to austerity, and the people’s NO at the July 5 referendum is also a rejection of Tsipras’s attempt to seal an agreement with the EU and ECB based on a further program of cuts, simply to be implemented over a slightly delayed timetable.
The Troika imposed austerity measures in 2010. Greeks’ salaries and pensions shrank dramatically hereinafter, and two-thirds of pensioners ended up living below the poverty line. Privatizations of the public asset involved everything and anything profitable: airport services, national banks, port authorities, post offices, water utilities, electricity, telecommunication, the prime publicly-owned real estate, the national lottery. All was quickly sold off to oligarchs and international corporations. Many schools and hospitals were shuttered for lack of funds. Five years later, nearly 26% of working-age adults are unemployed, as well as 50% of youth, with no prospect of a future. And the Troika wants more of that – more looting for Greece.
On July 5, the Greek people uttered aloud a clear NO to bankers, financial technocrats, EU-bureaucrats and minions to follow. More than 61% of the voters rejected the bailout plan proposed by the Troika, which envisaged new cuts in public spending and indiscriminate increases of taxes in order to get additional financial assistance to pay off… the Troika itself!
Voters dumped out the ploy. Nothing new so far. Most times, when the European citizens are called to express themselves, the schedules plotted in secret rooms by the European bureaucrats and bankers are likely to blow.
In 2005, France and the Netherlands asked the opinion of the citizens to approve the European Constitution, and the NO won. Italy ratified it only through parliament. Poland, Ireland, Denmark, Czech Republic, after the results of the French and Dutch referendum, called off theirs. The European Constitution was rejected. Thus, the technocrats concocted the Treaty of Lisbon, which was nothing else but a modification of few minor aspects to the previous text. The trick was to turn a founding act, like the draft constitution, in an emendatory treaty, as if it was a mere modification of agreements already in place.
This time, they eschewed asking for the views of citizens. Only Ireland decided to ratify the treaty by referendum, and the NO win. Eurocrats claimed it was to be redone. A year later, the YES won, and this time the referendum was fine. The same thing had happened in 2001 with the Treaty of Nice, concerning EU enlargement to the east.
Such failed experiences led to the usual rejection of European representatives towards citizens’ opinion. Namely, towards democracy itself, regarded by the financial circles as an unnecessary complication to be relegated to the past.
The representatives of the financial oligarchy were unable to conceal their resentment and hostility at the Greek referendum. Therefore, is no wonder the sort of comments preceding and following it, that the MSM have parroted daily.
European Parliament Chairman M. Schulz, who previously warned the Syriza Govt to abide by the austerity agreements concluded by the past Pasok and conservative governments, had expressed his hope in a YES victory and the following formation of a government of technocrats, in order to resume the negotiations and find a reasonable deal with the creditors – reasonable for the creditors, I guess. He added also that this would be the end of the Syriza era – obviously if YES wins, the EU would require a change of government.
On several occasions, Schulz did not hide his intolerance towards political entities not aligned with him, often calling “fascists” their representatives as well. According to him, Greeks’ choice to elect Syriza to power in January 2015 elections is unacceptable.
Martin Jaeger, the spokesman of German Finance Minister W. Schaeuble, keeps rejecting the possibility of a debt restructuring for Greece: “Europe has opted for solutions other than cutting debt to solve the problems of the Euro countries, and it has worked.”
As regards to Italy, in 2011 the solution the EU opted for was the bankers’ puppet Mario Monti, a liquidator imposed to further scuttle Italian economy. Commenting the Greek referendum, he said: “Greece is at the mercy of Russia and other powers threatening us.”
Who did he mean by us, I wonder? Italian people? I guess no. The Monti Cabinet, composed entirely of unelected technocrats, lasted just 529 days and at the end of it the country’s economy was in shambles, worse than ever.
Monti struck the basis of Italy’s welfare by making changes to Social Security system (like a raise of retirement age), and to work dynamics (less strict rules on layoffs and work contracts vexatious towards employees). These reforms aimed to reassure markets on the country’s financial resilience. Moreover, to ensure a sham stability of the public debt, he increased taxation, especially on house property – the fine European solutions!
D. Sassoli, an MP of the Democratic Party, which was the main supporter of the Monti Cabinet at the time, commenting the Greek referendum, stated: “How can you deal with a government that remits to citizens the decisions to be taken?”
Damn’ right! Why should the Greek people have a voice on their fate?
Being rooted so high a concept of “democracy” in the EU domain, there’s little doubt the referendum result will be disregarded, and the EU will keep its inflexible stance that the Greek debt issue must be resolved only on its own terms.
Now, the question is: where does this debt come from?
Greece had been running a government deficit since 1973 and very high deficits since the early 80s. Economic development was limited mainly to tourism and shipping. There was little chance of competing in industrial production against northern European nations, particularly Germany. Greek governments used the money to provide public sector jobs, generous pensions, and social benefits. By joining the Eurozone at the rate of exchange that they did, the Greek people got a lot of Euro for their converted drachma, and thus plenty of purchasing power to buy imported consumption goods from EU members at a favorable price. Interest rates were also low, but this would not go on much longer.
The excess of imports over exports made the deficit worsen. While Greek purchasing power was helping to boost the EU economy (mainly German), it was not flowing back into national economy – not flowing into domestic tax payments.
When Greece joined the Eurozone, it falsified its debt figures. In 2001, head of central bank L. Papademos worked with Goldman Sachs to make complex derivative deals which allowed to hide the true extent of the debt and ended up almost doubling its amount. In 2010, right after the Pasok Party came to power, they revealed the fact that the figures had been fudged all along, and that the debt was so large that Greece couldn’t pay.
The IMF European staff unanimously agreed the debts were fraudulent, and way beyond the ability to be paid. They had got to be written down. The board of directors agreed as well.
But Dominique Strauss-Kahn, then head of the IMF, aimed to run for France presidency. President Sarkozy warned him that French banks were the largest holders of Greek debt. If Greece didn’t pay, the French banks would go under, and German banks would follow. Then, at the 2011 G8 summit President Obama told that his major campaign contributors (primarily, Goldman Sachs) were on Wall Street, and they had made huge bets that Greece would pay. Thus, it was necessary to lend the Greek government the financial aid to pay the bondholders, so that Wall Street banks wouldn’t lose their money. Greece would be sacrificed and driven to poverty.
So, the ECB and IMF decided to ignore the stats and paid over 100 billion Euro to the bond holders. From then on, Greece, instead of owing to Wall Street private bondholders, owed to the IMF and ECB.
Now the ECB wants to get paid, but there is no money in Greece’s coffers. So, they require Greece to sell off its public asset and impose austerity. Greece will be forced to increase its unemployment rate to 80% and double the emigration, in order for the ECB to make the loans to the government that will turn right around and pay off… the ECB!
The Troika’s demand was for austerity to be deepened solely by taxing labor and reducing pensions. Its policy makers vetoed Syriza’s proposed taxes to the wealthy, vetoed steps to stop their tax avoidance, and the IMF vetoed cutbacks in Greek military spending (far above the 2% of GDP demanded by NATO). And instead of doing what a central bank is supposed to do – provide liquidity to banks – as of July 1, ECB head Mario Draghi, as part of the ploy to frighten the voters leaning the NO, denied the Greek banks the emergency liquidity to which they are entitled as members of the Eurozone – that’s the EU solidarity! Tsipras was compelled to close the banks and set up capital controls, like restrictions capping the daily amount of money people can withdraw from ATMs.
A government having the power to issue a national currency of its own could cover the deficit by printing money. Greece central bank is not run by the Greek government, but by the ECB, as it is for all the countries in the Eurozone. The Maastricht Treaty clearly states that Eurozone governments cannot be funded by money creation by their own central banks. Money creation is a prerogative of the private banks and ECB. If states get into financial difficulties, they can get loans on conditions.
These regulations are the basis of the criminal system put in place by the EU to crush the poorest countries, and the Euro itself is the deception point – no wonder in 2011, the then Greek PM G. Papandreou was hounded out of office after announcing a referendum on the Euro.
In Germany, the cost of borrowing is very low. Thus, German banks collect money from German taxpayers, then they use that money to buy Greek titles. Greece, though it’s a risky country, is charged a 15% interest rate. So, it happens that from a poor country massive resources get displaced to a rich one through the difference in interest rates. By this system, as the banks make whopping profits, the poor country starts up on impoverishment proceedings. When it is no longer able to pay its debt, EU aid arrives.
The subsequent bailout loans made available to Greece – a total of 240 billion Euro – were mainly used to pay off the interest to the French and German banks, and Greek people benefited from less than 10% of the amount.
Now the Greek banks cannot reopen without a resolution of the debt issue. ECB will provide no emergency support without a bailout in place, and Greece could be heading for default.
Greece might choose to leave the Euro and return to its own currency in order to reopen the banks. Most likely the EU would attack the new currency and drive its value in exchange markets to such a low rate that Greece could not import, and wealth held in Greek currency would be worthless abroad.
Allegedly for about one year or two, it would be really tough. Then, despite the very low GDP, Greece would become a net exporter and everything would start over (exports, employment, domestic consumption.)
Greece-EU deadlock might also create the conditions for Russia and China to finance Greece and bring it into the economic relationships established by the BRICS.
Russia has already taken steps to integrate Greece into the $100 billion New Development Bank, and since April, Tsipras has made two visits to Moscow, which have led to a lifting of import ban on some Greek products, and Russia’s stance to be ready to include Greece in the Turkish Stream pipeline project, worth 2 billion Euro ($2.2 billion). And the day after the referendum, a phone conversation took place between Putin and Tsipras in order to discuss the result and issues of further development of Russian-Greek cooperation.
Unfortunately, both of the options are far from being taken into account.
First and foremost, staying in the Eurozone was among Syriza’s slogans before the elections earlier in 2014.
Facing the creditors’ inflexibility, the government called the referendum as a ploy, hoping to use it as a mean to conclude an agreement with the EC, ECB, and IMF, whatever the result. Its ultimate objective was to get them to agree on a bailout package providing partial relief from repayments, along with a substantial debt write-down.
Once the NO victory was confirmed, Tsipras stated the mandate citizens gave him didn’t call for a break with the EU, but rather gave him greater negotiating power. In fact, he immediately made overtures to the same EU leaders who had repeatedly refused any concession to Greece over the past five months.
As further confirmation of this stance, Finance Minister Yanis Varoufakis resigned few hours after vote result surfaced. He stated he was told that some members of Eurozone considered him unwelcome at meetings of finance ministers.
New minister was appointed E. Tsakalotos, a leading member of Greece’s bailout negotiation, whose paramount objective is to restart dialog between Greece and its creditors.
The masochistic stubbornness the Syriza government shows in keeping shackled to the Euro at any cost can be understood by switching from regarding Greece as a country to regard Greece as a condition. Being Greece is simply the terminal stage on a road undertaken by each of the Eurozone member states.
The implementation of the Euro leads to end the welfare state. It’s the primary cause of the exponentially growing debt that makes the loans necessary. The loans are granted along with agreements for forced privatizations. So, the public asset is yielded up to the private sector. Prices rise, state revenues fall sheer. Cutbacks in wages and pensions follow. It’s a loop. Eventually, bankruptcy is here.
Tsipras doesn’t have the means to bring the country out of this vicious circle, neither would any other leader, no matter how high a score of votes he gets, or how loud an enthusiastic crowd shouts on Syntagma Square. Greece is only the first one to cross the finish line, others will follow.
The Greece issue was among the topics of the ridiculous G7 summit in Bavaria last June. Though it was not necessary, the meeting proved one more time the EU leaders are nothing but vassals of a master overseas, and their sole task is do their bidding. The EU could do much to help Greece, and in a short time as well. It did hardly anything, but threaten financial havoc and social collapse, because Greece’s default consequences don’t bother at all. The EU is no family of equals, whose members help one another through difficult times. Rather than use taxpayers’ money to help Greece, the EU used it to destabilize Ukraine, a non-member state. This heinous and madcap act didn’t favor anyone but NATO expansionist policies.
Therefore, Greece won’t exit from the Eurozone, let alone the EU. US hegemony is there to keep it well shackled – no free choice allowed. Washington’s interest is Greece to remain under full European control, as an essential country for strategic and geopolitical balance. Its plans don’t envisage power vacuums or not under control territories in the Mediterranean to benefit competitors – especially Russia, which would get to dock warships in Greek ports, very close to the Black Sea, Europe, and Turkey. And the Kremlin is eager to count on an EU member to exert its influence from within. Even China, currently engaged in intensive consultations to solve the crisis, repeatedly stated that the EU must safeguard its unity and Greece should stay in the Eurozone.
Those who believe the Greek referendum to set the spark for a liberalization process from the EU dictatorship, they’ll be utterly disappointed. If the Greek people rescued themselves from the clutches of the EU simply by voting, the same attempt could be made in Italy, Spain, Portugal – all of them targeted for looting. A domino effect with dramatic consequences might start.
The growth of BRICS economic cooperation might attract other EU states such as Bulgaria, Hungary, and the Balkans, breaking western unity while strengthening non-European partnership across Asia. The erosion of western economic alliance could mean the start of a process of unraveling NATO. Inevitably, this would imply war.
Thus, what will remain of the Greek NO to the Troika?
The Eurozone will keep playing hardball. Even though the IMF itself admits some debt relief is inevitable. Even though Merkel herself, in an NSA spying released by Wikileaks, admitted back in 2011 that Greece’s debt was unsustainable.
If the Troika gives in to Tsipras’s demands and renegotiates the debt implementing policies stimulating economic growth, the ruthless austerity program it carried out so far would eventually appear for what it truly is: useless, spurious, prevaricating, suicidal.
By keeping downright inflexible, the outcome would be Greece’s bankruptcy in a matter of months and the subsequent social collapse. European financial elite would present it as the inevitable outcome of Greek’s initiative and use it to deter other nations from following their example. The punchline would be no salvation outside the EU.
Instead, a game of agreements, relief and concessions back and forth, all of them foisted off on the public as significant or irrelevant as the case, will begin, and allegedly a slice of the debt will be shared among EU members somehow. Much truth will be kept silent, much sham strewn out and about. It will be a national-popular epic, filled up with heroics, endurance and glory days.
Greece people have borne the brunt of some of the most brutal austerity measures ever carried out against a European population in peacetime. Tried and humiliated, they had the guts to openly challenge the Troika, and they did it by claiming sovereignty in their own country through voting – through democracy. A thing the EU elite abhors.
That’s what will remain: a moral victory, and an example not to be followed. It takes far more to kill the monster.