Greece says όχι

6 Jul

My elation may be short lived and is in any case tempered by the sacrifice of Yanous Varoufakis, whose intelligence and dignity put our politicians to shame. But again Greece has shown courage in the face of crude threat and moral bankruptcy from a neoliberal elite fronted by Christine Lagarde, Wolfgang Schauble and a pack of Greece’s very own and very discredited former leaders lining up to issue scare tactics reminiscent of those deployed on the eve of the Scottish referendum.

(I blame economic ignorance for the fact such people get away with passing off truly vulgar economics as common sense. Thatcher did it. The Troika are still at it: likening macroeconomics to household budgeting as they wage class war in the name of austerity.)

Here’s Varoufakis explaining in a seven minute byte from a press conference nine days ago – just two after the ECB’s final offering – why Greece went to the polls at such short notice. You have seven minutes, right? No? Well here’s the executive summary:

  1. The offering was itself recessionary and – in a metonym for our age – shifted the burden from those who “could and should” to those who “neither could or should” bear it.
  2. Technically, the details of the five month extension were inadequate. “The sums don’t add up”.
  3. The offering gave “no space for hope”; nothing to instill confidence that at the end of the five months, Greece would be in any better position. (Which, come to think of it, is also a pretty good metonym for our age: in this case the folly of likening household austerity, when funds are low, to national austerity forced on nations who must trade with one another.)

In sum, he says, the Syriza government had no mandate to accept such a deal. The Greek people would have to be asked. And now they’ve answered.

Germany’s Bundesbank said in January last year that states about to go bankrupt should draw on the private wealth of their citizens before asking other states for help. Which just goes to show how divided the Troika can be. The IMF, closer to Wall Street than to Brussels or Berlin, is less keen on taxing wealth. Only last month the immaculately attired, coiffeured and tanned Christine Lagarde was telling French fashion mag, Challenges, that any Syriza package ‘overly’ reliant on taxing wealth would be unacceptable. The IMF, it is well known, prefers to impose regressive taxation and austerity. For their part Merkel and Schauble don’t mind one bit if Athens puts the squeeze on its rich as one way of servicing the debt.

Nothing new there I guess. Creditor views of default crises tend to vary with degree and nature of exposure. Nor is there anything new in money trumping ideology when push comes to shove. But let’s turn to another Syriza option; one where Berlin and the IMF do sing from the same hymn sheet.

Greece has long exceeded Washington’s desired two percent of GDP defence expenditure by NATO member states, yet three days ago Huffington Post reported that this didn’t stop the IMF vetoing a Syriza proposal to cut back its arms-spend. Since IMF and NATO have a co-relationship akin to that of Sinn Fein and the Provisional IRA, there’s no surprise here. But why might Berlin object to Greek armed forces taking a haircut? Here’s why. After the USA, Germany is Greece’s biggest arms supplier.

* * *

Follow up July 7 – remember JK Galbraith? He linked the original demand-side economists, led by Keynes, to today’s torch bearers: Krugman, Stiglitz and … JK Galbraith Junior. I’m grateful to Sam for pointing me to Galbraith Jnr’s cogent three minute read, penned just days before the referendum: 9 myths about the Greek Crisis

And let’s not overlook  Yannis Varoufakis – ousted for being too knowledgeable for the likes of  Lagarde and Schauble – writing today in the Guardian.

Finally, here’s my own 1500 worder on the Greek Crisis.


Follow up July 10 – predictably, the Troika wins. That doesn’t make it right; doesn’t alter the fact millions will suffer through “reforms” – how that word has been stood on its head! – inflicted as the price ordinary Greeks must pay for the venality of their “own” elite as well as that of those financiers sans frontiers insulated as ever from the consequences of their reckless greed.

Greece’s misery is a more vicious echo of how, through the likes of Osborne’s budget last week and Labour’s efforts to become electable by backing ‘austerity’, ordinary Brits must pay for the venality both of our own elite and those financiers sans frontiers insulated as ever from the consequences of their reckless greed.

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