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Posts tagged ‘George Papandreou’

Did the greek government prevent a military take over???


By Laura Smith-Spark, CNN

Athens, Greece (CNN) — Greece’s cabinet voted Wednesday to
support Prime Minister George Papandreou‘s call for a referendum on the latest
bailout plan as soon as possible.

The vote was unanimous, though some of the ministers expressed criticism
prior to casting their votes, CNN affiliate Mega Channel reported.

It came hours before German Chancellor Angela Merkel, French President
Nicolas Sarkozy and senior figures from the International Monetary Fund and
European Union were to meet with Papandreou and his finance minister at an
emergency meeting in Cannes, France, ahead of the upcoming G-20 summit.

German and French markets rallied Wednesday after tumbling Tuesday on the
news of the referendum call, and London’s FTSE also closed slightly higher. The
Dow Jones Industrial Average index closed up 178 points (1.53%).

Papandreou is seeking public backing from the Greek people for last week’s
bailout deal, an accord that took months to craft.

But the move has created turmoil in domestic politics and angered his
European counterparts.

A “no” vote could force Greece to abandon the euro and send shock waves
through the global financial system

full article at source: http://edition.cnn.com/2011/11/02/world/europe/greece-debt/

Did the greek government prevent a military  take over???

Meanwhile, several senior military leaders in Greece have been replaced.

The Government Council for Foreign Affairs and Defense, which Papandreou
chairs, decided Tuesday on “sweeping changes in the armed forces’ leadership,”
the Athens News Agency reported.

The council replaced the general staff chiefs for the Greek Army, Navy and
Air Force, the news agency said.

Though the government said it was a long-planned, routine move

source http://edition.cnn.com/2011/11/02/world/europe/greece-debt/


Greece has no more money to pay its civil servants !

The fact that Merkel is now saying something about a “orderly default” one can surmised that this method will be used to eject the other Pigs.

We are heading for default and no amount of pats on the head for been the trachers pet will not get you a pass in the comming exams !

Where Greece goes we are heading there too !

The Great Global Debt Depression: It’s All Greek To Me

by Andrew Gavin Marshall

In late June of 2011, the Greek government passed another round of austerity measures,
ostensibly aimed at getting Greece “back on track” to economic progress, but in
reality, implementing a systematic program of ‘social genocide’ in the name of
servicing an endless and illegitimate debt to foreign banks. Right on cue,
protests and riots broke out in Athens against the draconian measures, and the
state moved in to do what states do best: oppress the people with riot police,
tear gas and bashing batons, leaving roughly 300 people injured.

Is Greece simply a case of a country full of lazy people who spent beyond their means and are now paying for their own decadence? Or, is there something much larger at stake
– and at play – here? Greece is, in fact, a microcosm of the global economy:
mired in excessive debt, economically ruined, increasingly politically
repressive and socially explosive. This report takes a look at the case of the
Greek debt crisis specifically, and places it within a wider global context.
The conclusion is clear: what happens in Greece will happen here.

This report examines the Greek crisis, as well as the larger global economic crisis,
including the origins of the housing bubble, the bailouts, the banks, and the
major actors and institutions which will come to dominate the stage over the
next decade in what will play out as ‘The Great Global Debt Depression.’

An Olympian Debt

With the global economic crisis rampaging throughout the world in 2008, Greece experienced major protests and riots at government reactions to the crisis. The
unpopularity of the government led to an election in which a Socialist
government came to power in October of 2009 under the premise of promising an
injection of 3 billion euros in order to revive the Greek economy.[1] When the
government came to power, they inherited a debt that was double that which the
previous government had disclosed. This prompted Greece’s entry into a major
debt crisis, as the debt was roughly 127% of Greece’s GDP in 2009, and thus,
the costs of borrowing rose exponentially. In April of 2010, Greece had to seek a bailout by the EU and the IMF in order to pay the interest on its debt. However, by taking such a bailout from the EU and IMF, Greece ultimately incurred a larger long-term debt, as the money from these institutions simply added to the overall debt, and thus, actually increased eventual interest payments on that debt. Thus, we see the true nature of debt:
a financial form of slavery. Debt is designed in such a way that, like a fly
caught in a spider’s web, the more it struggles, the more entangled it gets;
the more it struggles to break free, the more it arouses the attention of the
spider, which quickly moves in to strike its prey – paralyzed – with its venom,
so that it may wrap the fly in its silk and eat it alive. Debt is the silk, the
people are the fly, and the spider is the large financial institutions – from
the banks to the IMF. The nature of debt is that one is never meant to be able
to escape it. Hence, the “solution” for Greece’s debt problem – according to
those who decide policy – is for Greece to acquire more debt. Of course, this
new debt is used to pay the interest on the old debt (note: it is not used to
pay OFF the old debt, just the interest on it). However, the effect this has is
that it increases the over-all debt of the nation, which leads to higher
interest payments and thus a greater cost of borrowing. This, ultimately, leads
to a need to continue borrowing in order to pay off the higher interest
payments, and thus, the cycle continues. For all the “bail outs” and aims at
addressing Greece’s debt, this prescription inevitably results in greater debt
levels than those which induced the debt crisis in the first place.

So why is this
the prescription?

Not only does this prescription incur more debt to pay interest on old debt, but the process of borrowing and “consolidating” debt has devastating social and political
consequences. For example, in the case of Greece, in order to receive loans
from the IMF and EU, Greece was forced to impose “fiscal austerity measures.”
This blatantly ambiguous economic nomenclature of “fiscal austerity” is in fact
more accurately described in real human terms as “social genocide.” Why is this

FiscalAusterity’ means that the state – in this case, Greece – must engage in “fiscal
consolidation.” In economic parlance, this implies that the state must cut
spending and increase taxes in order to “service” its debt by reducing its
annual deficit. Thus, the ‘conditions’ for receiving a loan demand “fiscal
austerity” measures being implemented by the debtor nation. This is supposedly
a way for the lender to ensure that their loans are met with appropriate
measures to deal with the debt. The objective, purportedly, is to reduce
expenditure (spending) and increase revenue (income), allowing for more money
to pay off the debt. However, as with most economic concepts, the reality is
far different than the theoretical implications of “fiscal austerity.”

In fact,‘fiscal austerity’ is a state-implemented program of social destruction, or
‘social genocide’. Such austerity measures include cutting social spending,
which means no more health care, education, social services, welfare, pensions,
etc. This directly implies a massive wave of layoffs from the public sector, as
those who worked in health care, education, social services, etc., have their
jobs eliminated. This, naturally, creates a massive growth in poverty rates,
with the jobless and homeless rates climbing dramatically. Simultaneously, of
course, taxes are raised drastically, so that in a social situation in which
the middle and lower classes are increasingly impoverished, they are then
over-taxed. This creates a further drain of wealth, and consumption levels go
down, further driving production levels downward, and (local) private
businesses cannot compete with foreign multinational conglomerates, and so
businesses close and more lay-offs take place. After all, without a market for
consumption, there is no demand for production. In a country such as Greece,
where the percentage of people in the employ of the state is roughly 25%, these
measures are particularly devastating.Naturally, in such situations, the masses of people – those who are doomed to suffer most – are left greatly impoverished and the middle classes essentially vanish, and are absorbed into the lower class. As social services vanish when they are needed most, life expectancy rates decrease. With few jobs and massive
unemployment, many are left to choose between buying food or medicine, if those
are even options. Crime rates naturally increase in such situations, as
desperate conditions breed desperate actions. This creates, especially among
the educated youth who graduate into a jobless market, a ‘poverty of expectations,’
having grown up with particular expectations of what they would have in terms
of opportunities, which then vanish quite suddenly. This results in enormous
social stress, and often, social unrest: protests, riots, rebellion, and even
revolution in extreme circumstances. These are exactly the conditions that led
to the uprising in Egypt.

The reflexive action of states, therefore, is to move in to repress – most often quite
violently – protests and demonstrations. The aim here is to break the will of
the people. Thus, the more violent and brutal the repression, the more likely
it is that the people may succumb to the state and consent – even if passively
– to their social conditions. However, as the state becomes more repressive,
this often breeds a more reactive and radical resistance. When the state
oppresses 500 people one day, 5,000 may show up the next. This requires, from
the view of the state, an exponentially increased rate of oppression. The risk
in this strategy is that the state may overstep itself and the people may
become massively mobilized and intensely radicalized and overthrow – or at
least overcome – the power of the state. In such situations, the political
leadership is often either urged by a foreign power to leave (such as in the
case of Egypt’s Mubarak), or flees of their own will (such as in Argentina), in
order to prevent a true revolution from taking place. So, while the strategy
holds enormous risk, it is often employed because it also contains possible
reward: that the state may succeed in destroying the will of the people to
resist, and they may subside to the will of the state and thereby consent to
their new conditions of social genocide.

Social genocide is a slow, drawn-out and incremental process. Its effects are felt by poor
children first, as they are those who need health care and social services more
than any other, and are left hungry and unable to go to school or work. They
are the ‘forgotten’ of society, and they suffer deeply as such. The
reverberations, however, echo throughout the whole of society. The rich get
richer and the poor get poorer, while the middle class is absorbed into
poverty.The rich get richer because through economic crises, they consolidate their businesses and receive tax breaks and incentives from the state (as well as often direct
infusions of cash investments – bailouts – from the state), purportedly to
increase private capital and production. This aspect of “fiscal austerity” is
undertaken in the wider context of what is referred to as “Structural

This term refers to the loans from the World Bank and IMF that began in the late 1970s
and early 1980s in their lending to ‘Third World’ nations in the midst of the
1980s debt crisis. Referred to as “Structural Adjustment Programs,” (SAPs) any
nation wanting a loan from the World Bank or IMF needed to sign a SAP, which
set out a long list of ‘conditionalities’ for the loan. These conditions
included, principally, “fiscal austerity measures” – cutting social spending
and raising taxes – but also a variety of other measures: liberalization of
markets (eliminating any trade barriers, subsidies, tariffs, etc.), supposedly
to encourage foreign investment which it was theorized would increase revenue
to pay off the debt and revive the economy; privatization (privatizing all
state-owned industries), in order to cut state spending and encourage foreign
direct investment (FDI), which again – in theory – would create revenue and
reduce debt; currency devaluation (which would make foreign dollars buy more
for less), again, under the aegis of encouraging investment by making it
cheaper for foreign companies to buy assets within the country.However, the
effects that these ‘structural adjustment programs’ had were devastating.
Liberalizing markets would eliminate subsidies and protections which were
desperately needed in order for these ‘developing’ nations to compete with the
industrialized powers of America and Europe (who, in a twisted irony, heavily
subsidize their agriculture in order to make it cheaper to foreign markets).
For example, a small country in Africa which was dependent upon a particular
agricultural export had heavily subsidized this commodity, (which keeps the
price low and thus increases its demand as an exported commodity), then was
ordered by the IMF and World Bank to eliminate the subsidy. The effect was that
foreign agricultural imports, say from the United States or Europe, were
cheaper not only in the international market, but also in the nation’s domestic
market. Thus, grains imported from America would be cheaper than those grown in
neighbouring fields. The effect this had in an increasingly-impoverished nation
was that they would become dependent upon foreign imports for food and
agriculture (as well as other commodities), while the domestic industries would
suffer and be bought out by foreign multinational corporations, thus increasing
poverty, as many of these nations were heavily dependent upon their
agricultural sectors as they were often still largely rural societies in some
respects. This would accelerate urbanization and urban poverty, as people leave
the countryside and head to the cities looking for work, where there was none.

Please read full article here at source: http://www.globalresearch.ca/index.php?context=va&aid=25648

***Andrew Gavin Marshall is an independent researcher and writer based
in Montreal, Canada, writing on a number of social, political, economic, and
historical issues. He is co-editor of the book, “The Global Economic Crisis:
The Great Depression of the XXI Century.” His website is http://www.andrewgavinmarshall.com

Government is supposed to be for the people and not unelected moneymen that hide behind the shadows

With a heavy heart I am forced to concede that our democracy
is no more our gutless politicians who got their slimy hands on the levers of
power have turned out to be the instruments of our enemies and those who would
make slaves of our entire nation .Foisting so called austerity measures on the
people to bail out gangsters while living lavishly on the proceeds of penal taxes designed to appease their real masters hiding in the shadows. Hatching plots to steal our nations
resources while these traitors applause and wallow in their own sense of importance and arrogance.These are the kind of people Cicero warned about!

EU Threatens Greek Default If Austerity Plan Rejected

By Matthew Dalton


BRUSSELS (Dow Jones)–European Union officials Tuesday increased pressure on
the Greek parliament to approve a EUR28 billion package of spending cuts and tax
hikes, saying the country would face a default if legislators don’t approve the
austerity plan in a series of votes this week.

Greece will face a cash shortfall in the middle of July unless it receives a
EUR12 billion rescue loan payment from the euro-zone governments and the
International Monetary Fund, the fifth slice of EUR110 billion in rescue loans
agreed upon last year. Euro-zone governments and the IMF have said they won’t
approve the payment unless the Greek parliament passes the legislation, proposed
by Greek Prime Minister George Papandreou, in votes scheduled for Wednesday and

Greek labor unions Tuesday started a 48-hour strike ahead of the votes to
pressure Greek lawmakers to vote against the legislation, which would slash
social welfare spending and impose a special crisis levy on all taxpayers.

Some press reports, citing unnamed officials, have said that the EU has a
back-up plan to prevent a default if the parliament doesn’t approve the new
legislation. EU authorities in the past have pledged to prevent Greece from

But EU economics commissioner Olli Rehn denied that a back-up plan is ready
and threatened Greece with default if parliament doesn’t approve the austerity

“The only way to avoid immediate default is for parliament to endorse the
revised economic program,” Rehn said in a statement Tuesday. “To those who
speculate about other options, let me say this clearly: there is no Plan B to
avoid default.”

Joaquin Almunia, the EU’s antitrust chief and its former economics
commissioner, Tuesday warned of an “acute crisis” in the euro zone because of
Greece’s dire budget problems.

“The fiscal crisis in Greece is threatening to destabilize other euro-area
economies and even the proper functioning of the European monetary union, with
serious implications for the growth outlook in large parts of Europe and
beyond,” Almunia said in a speech in London.

Greece has billions of euros of debt maturing in the coming months: EUR4.4
billion in short-term treasury bills in July, another EUR2.48 billion in August
and a EUR5.9 billion bond repayment on August 20.

The government should be able to roll over the Treasury bills, but it must
also fund its budget deficit during that time. The deficit is expected to be
EUR17.1 billion for all of 2011, according to the government’s latest budget

Rehn in his statement also urged a reform of the Greek tax system that would
fight tax evasion, reduce rates and widen the tax base.

-By Matthew Dalton, Dow Jones Newswires; +32 (0)2 741 1487;


Looks like the boys in Brussels are getting tired of been
nice to Greece and the gloves are coming off. Threats are now emerging and the real
nasties are coming out, the same nasties by the way, our own gutless
politicians are grovelling up to on all fours !

I hope the Greeks will tell them where to go just like the
Icelanders did.

There country is been stolen right under their noses from
them and at least they are fighting back!

A cautionary tale for Ireland, Portugal, the whole of Europe

By Yanis Varoufakis

Professor of Economics

If 1929 has taught us anything, it is that a major (capital ‘c’) Crisis poses a lethal threat to (a) currency unions (e.g. the Gold Standard then, the euro today) and (b) political liberalism. The latter threat has, so far, featured only as a projection (see here for a relevant argument), rather than an observed reality. In a recent post I argued that the EU’s recent demand that Greece’s assets be privatised by a junta of foreign officials was the first step toward the dismantling of the EU’s basic democratic principles.

Today, in this post, I  warn about an even more radical threat, this time to basic liberal tenets about the rights of private citizens. My warning will take the form of a true story, to which I am an eyewitness. It should, I submit, send shivers down the spine of all European (small ‘l’) liberals. Precisely because this is a seriously worrying tale, I shall include no commentary: just a blow by blow account of facts.

My tale begins about nine weeks ago. From April 2010 till nine weeks ago, I was a regular invitee on public TV and radio (ERT, the Greek public broadcaster). Ever since my criticism of the government’s policies intensified, about a year ago, every time I went to the ERT’s TV studios technicians would approach me in disbelief that I was still being invited. I paid no attention, even though their incredulity was becoming louder and more intense. It was around March when the CEO of ERT called me to his office to announce that he wanted me not only to appear regularly on their TV current affairs programs but also to present my own program after the main news bulletin, offering a running commentary on the unfolding crisis. His kind offer made me think that the technicians’ musings were verging on the paranoid. Though accepting his offer would entail a huge workload, I promised to send him some ideas on the matter; which I promptly did.

Please read full article at source here :http://yanisvaroufakis.eu/2011/06/12/the-greek-crisis-and-the-threat-to-political-liberalism-a-cautionary-tale-for-ireland-portugal-the-whole-of-europe/

Greece Struck Down by General Strike

Hellenic Parliament

Image by borkur.net via Flickr

ATHENS—Clashes have broken out at a protest in the Greek capital over
government austerity measures as dozens of self-styled anarchist youths sparred
with police in the city’s main square just outside the country’s finance

The anarchists hurled petrol bombs, set fire to garbage bins and smashed
paving stones which they used as projectiles to attack police. They uprooted and
set fire to several umbrellas at a nearby cafe, and attacked the shop front
window of a McDonald’s restaurant on the square. Police responded with repeated
volleys of tear gas and stun grenades to disperse the anarchists. There were
reports of at least one injury.

Agence France-Presse/Getty ImagesUnionists rallied toward the Greek Parliament on Tuesday
in Athens.

The clashes come as several thousand workers, students and ordinary citizens
staged an otherwise peaceful demonstration in the center of the city that was
called to protest the government plans for a five year austerity plan the
country has promised its international creditors.

The walkout is the second general strike to hit the country this month and
has been called by Greece’s two major umbrella unions to oppose the measures,
which are seen as critical to the financial stability of Europe’s 17-member
currency bloc.

At issue is a five-year, €28 billion ($40 billion) austerity plan and related
privatization program that Greece must approve in exchange for fresh aid from
its European partners and the International Monetary Fund.

In a late night address to lawmakers Monday, embattled Socialist Prime
Minister George Papandreou appealed to the country’s European partners to give
Greece time and money to fix its public finances, as he tried to rally wavering
support among his party’s rank-and-file.

“Now is the hour of responsibility for all of us. I know that the Socialist
parliamentary group will do its duty,” Mr. Papandreou said. “We call on Europe
to do the same—to give Greece the time, but also the terms, that will enable it
to truly repay its debt without drowning.”

His remarks came at the start of a two-day debate over the government’s
austerity plan which is due to culminate in a vote midday Wednesday. The
Socialists control a majority of 155 deputies in Greece’s 300-member parliament,
but at least four Socialists lawmakers have expressed reservations about the

Across the country, public services were shut Tuesday by the strike, with
central and local government offices closed, while public hospitals were
operating on skeleton staff and postal operations were suspended.

Schools and universities were also closed as tens of thousands of teachers
and professors walked off the job. They were joined by workers at state-owned
companies—many slated for privatization—with select bank employees, journalists
and pharmacists also staging their own walkouts.

Transportation services around Greece were severely disrupted with rail and
ferry operations suspended and air traffic controllers planning a series of work
stoppages that led to the cancelation of dozens of flights. Public transport
around the capital, Athens, ground to a halt, with only the city’s subway system
continuing to operate to allow workers to join in mass rallies scheduled for
later in the day.

In a statement, public-sector umbrella union ADEDY said that the strike would
be a “catalyst” for overturning the government’s austerity plan. It would also
mark a turning point for Greece to escape “the bonds of its creditors, the loan
sharks and the government’s policies who are endeavoring to sell out the

In May last year, Greece narrowly avoided default with the help of a €110
billion bailout from its euro-zone partners and the IMF in exchange for fiscal
and economic reforms. But facing still prohibitively high borrowing costs on
international markets, Greece is now seeking about €100 billion in fresh aid to
cover its borrowing needs for the next three years.

The European Union and IMF, however, have demanded that the country pass the
austerity plan, implementing legislation and a related €50 billion privatization
program before they disburse any fresh aid to the cash-strapped country.

Greece faces a cash crunch in mid-July and is counting on euro-zone finance
ministers to release the next tranche of its existing loan before then. A
special meeting of those ministers has been called for July 3 to decide whether
to release that disbursement.

Jitters over whether Greece will pass the austerity measures have rocked
European financial markets, stoking fresh fears of contagion should parliament
fail to implement the austerity package.

On Monday, bond prices of high-debt governments such as Portugal and Ireland
fell further amid fears those countries could follow Greece into a default. Such
contagion fears are also putting pressure on Italian debt, which returned to
market focus after Moody’s ratings agency last week threatened to downgrade
Italy’s sovereign credit rating. Italy now has to pay the highest premium over
equivalent German government bonds since the launch of the euro.

—Terence Roth in London contributed to this article.



We in Ireland should watch as this is our final faith, Greece is been sold off piece by piece ,but at least the Greeks have the balls to get up and fight !

We in Ireland are  going to have to leave the euro or get booted out. The powers in Europe are ignoring us because the politicians that we have elected are nothing more than mouthpiece for them .They are bought and paid for with lucrative jobs in Europe and lottery pensions. There is no opposition here in Ireland as the unions are also part of the status quo.

The last time Jack o Connor called a demonstration he was himself booed off the stage as the demonstrators realized they were been used by the unions to enforce the coke park deal that would only save the jobs of the chosen few and keep themselves in their plush jobs with enormous salaries ,that are many times the average wage. No my friends we the ordinary people must take action ourselves and we must become vocal and present on the streets.

That’s right we must stay on the streets to keep the crooked politicians in cheque as they are already selling off our country to their buddies .will we wait until we have to pay to bring our children to the local forest, Yesterday a call went out to the local authorities to privatize local services .the health board got the same instructions. I bet that every government department got the same instructions sell off anything you can, cut services and introduce new charges .So much for no new taxes.

For god sake wake up Ireland!  

New bailout on the cards for Greece

Whoever thought that Austerity would be the common denominator
for most small countries in the Euro zone!

Greece – Salvation by Politicians( By The Daily Bell)

Thursday, June 23, 2011 – by Staff Report

 The Reboot Greece Needs … Greece’s prime minister, George A. Papandreou, comfortably survived a confidence vote on Tuesday, momentarily stabilizing his fragile Socialist government and clearing the way for a fresh infusion of financial assistance from the European Union. But the country’s economic crisis, which began at the end of 2009 when the world belatedly realized that Greece’s fiscal and trade deficits were unsustainable, is far from over; in fact it has taken a new and dangerous turn. – New York Times

Dominant Social Theme: If we could all just get along … Let the politicians lead the way.

Free-Market Analysis: Loukas Tsoukalis has written an editorial for the New York Times (excerpt above) that provides us with yet another glimpse into elite thinking when it comes to the salvation of the European Union.

It is perhaps persuasive on paper, but we would humbly submit that the laundry list Tsoukalis proposes is proof positive of the EU’s dire circumstances. None of them are practical, at least not when pursued to their logical conclusion. That they appear in the pages of the New York Times and are presented as logical outcomes is further evidence of the undoing of the euro, and perhaps the union itself.

As we mentioned, the article SOUNDS reasonable, in a kind of soft-authoritarian way. He provides us, throughout, with a fear-based dominant social theme – that disaster will occur if Greece is not properly “fixed.” He then suggests political solutions, beginning with a meeting of the minds of the leadership and a “government of national unity.”

full article at source: http://www.thedailybell.com/2528/Greece-Salvation-by-Politicians

If this is not war, what is?

By: Michael_Hudson

Soon after the Socialist Party won Greece’s national elections in autumn 2009, it became apparent that the government’s finances were in a shambles. In May 2010, French President Nicolas Sarkozy took the lead in rounding up €120bn ($180 billion) from European governments to subsidize Greece’s unprogressive tax system that had led its government into debt – which Wall Street banks had helped conceal with Enron-style accounting.

The tax system operated as a siphon collecting revenue to pay the German and French banks that were buying government bonds (at rising interest risk premiums). The bankers are now moving to make this role formal, an official condition for rolling over Greek bonds as they come due, and extend maturities on the short-term financial string that Greece is now operating under. Existing bondholders are to reap a windfall if this plan succeeds. Moody’s lowered Greece’s credit rating to junk status on June 1 (to Caa1, down from B1, which was already pretty low), estimating a 50/50 likelihood of default. The downgrade serves to tighten the screws yet further on the Greek government. Regardless of what European officials do, Moody’s noted, “The increased likelihood that Greece’s supporters (the IMF, ECB and the EU Commission, together known as the “Troika”) will, at some point in the future, require the participation of private creditors in a debt restructuring as a precondition for funding support.”1

The conditionality for the new “reformed” loan package is that Greece must initiate a class war by raising its taxes, lowering its social spending – and even private-sector pensions – and sell off public land, tourist sites, islands, ports, water and sewer facilities. This will raise the cost of living and doing business, eroding the nation’s already limited export competitiveness. The bankers sanctimoniously depict this as a “rescue” of Greek finances

What really were rescued a year ago, in May 2010, were the French banks that held €31 billion of Greek bonds, German banks with €23 billion, and other foreign investors. The problem was how to get the Greeks to go along. Newly elected Prime Minister George Papandreou’s Socialists seemed able to deliver their constituency along similar lines to what neoliberal Social Democrat and Labor parties throughout Europe had followed –privatizing basic infrastructure and pledging future revenue to pay the bankers.

The opportunity never had been better for pulling the financial string to grab property and tighten the fiscal screws. Bankers for their part were eager to make loans to finance buyouts of public gambling, telephones, ports and transport or similar monopoly opportunities. And for Greece’s own wealthier classes, the EU loan package would enable the country to remain within the Eurozone long enough to permit them to move their money out of the country before the point arrived at which Greece would be forced to replace the euro with the drachma and devalue it. Until such a switch to a sinking currency occurred, Greece was to follow Baltic and Irish policy of “internal devaluation,” that is, wage deflation and government spending cutbacks (except for payments to the financial sector) to lower employment and hence wage levels.

What actually is devalued in austerity programs or currency depreciation is the price of labor. That is the main domestic cost, inasmuch as there is a common world price for fuels and minerals, consumer goods, food and even credit. If wages cannot be reduced by “internal devaluation” (unemployment starting with the public sector, leading to falling wages), currency depreciation will do the trick in the end. This is how the Europe’s war of creditors against debtor countries turns into a class war. But to impose such neoliberal reform, foreign pressure is necessary to bypass domestic, democratically elected Parliaments. Not every country’s voters can be expected to be as passive in acting against their own interests as those of Latvia and Ireland.

Most of the Greek population recognizes just what has been happening as this scenario has unfolded over the past year. “Papandreou himself has admitted we had no say in the economic measures thrust upon us,” said Manolis Glezos on the left. “They were decided by the EU and IMF. We are now under foreign supervision and that raises questions about our economic, military and political independence.”2 On the right wing of the political spectrum, conservative leader Antonis Samaras said on May 27 as negotiations with the European troika escalated: “We don’t agree with a policy that kills the economy and destroys society. … There is only one way out for Greece, the renegotiation of the [EU/IMF] bailout deal.”3

But the EU creditors upped the ante: To refuse the deal, they threatened, would result in a withdrawal of funds causing a bank collapse and economic anarchy.

The Greeks refused to surrender quietly. Strikes spread from the public-sector unions to become a nationwide “I won’t pay” movement as Greeks refused to pay road tolls or other public access charges. Police and other collectors did not try to enforce collections. The emerging populist consensus prompted Luxembourg’s Prime Minister Jean-Claude Juncker to make a similar threat to that which Britain’s Gordon Brown had made to Iceland: If Greece would not knuckle under to European finance ministers, they would block IMF release of its scheduled June tranche of its loan package. This would block the government from paying foreign bankers and the vulture funds that have been buying up Greek debt at a deepening discount.

To many Greeks, this is a threat by finance ministers to shoot themselves in the foot. If there is no money to pay, foreign bondholders will suffer – as long as Greece puts its own economy first. But that is a big “if.” Socialist Prime Minister Papandreou emulated Iceland’s Social Democratic Sigurdardottir in urging a “consensus” to obey EU finance ministers. “Opposition parties reject his latest austerity package on the grounds that the belt-tightening agreed in return for a €110bn ($155bn) bail-out is choking the life out of the economy.” (Ibid.)

At issue is whether Greece, Ireland, Spain, Portugal and the rest of Europe will roll back democratic reform and move toward financial oligarchy. The financial objective is to bypass parliament by demanding a “consensus” to put foreign creditors first, above the economy at large. Parliaments are being asked to relinquish their policy-making power. The very definition of a “free market” has now become centralized planning – in the hands of central bankers. This is the new road to serfdom that financialized “free markets” are leading to: markets free for privatizers to charge monopoly prices for basic services “free” of price regulation and anti-trust regulation, “free” of limits on credit to protect debtors, and above all free of interference from elected parliaments. Prying natural monopolies in transportation, communications, lotteries and the land itself away from the public domain is called the alternative to serfdom, not the road to debt peonage and a financialized neofeudalism that looms as the new future reality. Such is the upside-down economic philosophy of our age.

Concentration of financial power in non-democratic hands is inherent in the way that Europe centralized planning in financial hands was achieved in the first place. The European Central Bank has no elected government behind it that can levy taxes. The EU constitution prevents the ECB from bailing out governments. Indeed, the IMF Articles of Agreement also block it from giving domestic fiscal support for budget deficits. “A member state may obtain IMF credits only on the condition that it has ‘a need to make the purchase because of its balance of payments or its reserve position or developments in its reserves.’ Greece, Ireland, and Portugal are certainly not short of foreign exchange reserves … The IMF is lending because of budgetary problems, and that is not what it is supposed to do. The Deutsche Bundesbank made this point very clear in its monthly report of March 2010: ‘Any financial contribution by the IMF to solve problems that do not imply a need for foreign currency – such as the direct financing of budget deficits – would be incompatible with its monetary mandate.’ IMF head Dominique Strauss-Kahn and chief economist Olivier Blanchard are leading the IMF into forbidden territory, and there is no court which can stop them.”4

The moral is that when it comes to bailing out bankers, rules are ignored – in order to serve the “higher justice” of saving banks and their high-finance counterparties from taking a loss. This is quite a contrast compared to IMF policy toward labor and “taxpayers.” The class war is back in business – with a vengeance, and bankers are the winners this time around.

The European Economic Community that preceded the European Union was created by a generation of leaders whose prime objective was to end the internecine warfare that tore Europe apart for a thousand years. The aim by many was to end the phenomenon of nation states themselves – on the premise that it is nations that go to war. The general expectation was that economic democracy would oppose the royalist and aristocratic mind-sets that sought glory in conquest. Domestically, economic reform was to purify European economies from the legacy of past feudal conquests of the land, of the public commons in general. The aim was to benefit the population at large. That was the reform program of classical political economy.

European integration started with trade as the path of least resistance – the Coal and Steel Community promoted by Robert Schuman in 1952, followed by the European Economic Community (EEC, the Common Market) in 1957. Customs union integration and the Common Agricultural Policy (CAP) were topped by financial integration. But without a real continental Parliament to write laws, set tax rates, protect labor’s working conditions and consumers, and control offshore banking centers, centralized planning passes by default into the hands of bankers and financial institutions. This is the effect of replacing nation states with planning by bankers. It is how democratic politics gets replaced with financial oligarchy.

Finance is a form of warfare. Like military conquest, its aim is to gain control of land, public infrastructure, and to impose tribute. This involves dictating laws to its subjects, and concentrating social as well as economic planning in centralized hands. This is what now is being done by financial means, without the cost to the aggressor of fielding an army. But the economies under attacked may be devastated as deeply by financial stringency as by military attack when it comes to demographic shrinkage, shortened life spans, emigration and capital flight.

This attack is being mounted not by nation states as such, but by a cosmopolitan financial class. Finance always has been cosmopolitan more than nationalistic – and always has sought to impose its priorities and lawmaking power over those of parliamentary democracies.

Like any monopoly or vested interest, the financial strategy seeks to block government power to regulate or tax it. From the financial vantage point, the ideal function of government is to enhance and protect finance capital and “the miracle of compound interest” that keeps fortunes multiplying exponentially, faster than the economy can grow, until they eat into the economic substance and do to the economy what predatory creditors and rentiers did to the Roman Empire.

This financial dynamic is what threatens to break up Europe today. But the financial class has gained sufficient power to turn the ideological tables and insist that what threatens European unity is national populations acting to resist the cosmopolitan claims of finance capital to impose austerity on labor. Debts that already have become unpayable are to be taken onto the public balance sheet – without a military struggle, needless to say. At least such bloodshed is now in the past. From the vantage point of the Irish and Greek populations (perhaps soon to be joined by those of Portugal and Spain), national parliamentary governments are to be mobilized to impose the terms of national surrender to financial planners. One almost can say that the ideal is to reduce parliaments to local puppet regimes serving the cosmopolitan financial class by using debt leverage to carve up what is left of the public domain that used to be called “the commons.” As such, we now are entering a post-medieval world of enclosures – an Enclosure Movement driven by financial law that overrides public and common law, against the common good.

Within Europe, financial power is concentrated in Germany, France and the Netherlands. It is their banks that held most of the bonds of the Greek government now being called on to impose austerity, and of the Irish banks that already have been bailed out by Irish taxpayers.

On Thursday, June 2, 2011, ECB President Jean-Claude Trichet spelled out the blueprint for how to establish financial oligarchy over all Europe. Appropriately, he announced his plan upon receiving the Charlemagne prize at Aachen, Germany – symbolically expressing how Europe was to be unified not on the grounds of economic peace as dreamed of by the architects of the Common Market in the 1950s, but on diametrically opposite oligarchic grounds.

At the outset of his speech on “Building Europe, building institutions,” Mr. Trichet appropriately credited the European Council led by Mr. Van Rompuy for giving direction and momentum from the highest level, and the Eurogroup of finance ministers led by Mr. Juncker. Together, they formed what the popular press calls Europe’s creditor “troika.” Mr. Trichet’s speech refers to “the ‘trialogue’ between the Parliament, the Commission and the Council.”5

Europe’s task, he explained, was to follow Erasmus in bringing Europe beyond its traditional “strict concept of nationhood.” The debt problem called for new “monetary policy measures – we call them ‘non standard’ decisions, strictly separated from the ‘standard’ decisions, and aimed at restoring a better transmission of our monetary policy in these abnormal market conditions.” The problem at hand is to make these conditions a new normalcy – that of paying debts, and re-defining solvency to reflect a nation’s ability to pay by selling off its public domain.

“Countries that have not lived up to the letter or the spirit of the rules have experienced difficulties,” Mr. Trichet noted. “Via contagion, these difficulties have affected other countries in EMU. Strengthening the rules to prevent unsound policies is therefore an urgent priority.” His use of the term “contagion” depicted democratic government and protection of debtors as a disease. Reminiscent of the Greek colonels’ speech that opened the famous 1969 film “Z”: to combat leftism as if it were an agricultural pest to be exterminated by proper ideological pesticide. Mr. Trichet adopted the colonels’ rhetoric. The task of the Greek Socialists evidently is to do what the colonels and their conservative successors could not do: deliver labor to irreversible economic reforms.

Arrangements are currently in place, involving financial assistance under strict conditions, fully in line with the IMF policy. I am aware that some observers have concerns about where this leads. The line between regional solidarity and individual responsibility could become blurred if the conditionality is not rigorously complied with.

In my view, it could be appropriate to foresee for the medium term two stages for countries in difficulty. This would naturally demand a change of the Treaty.

As a first stage, it is justified to provide financial assistance in the context of a strong adjustment programme. It is appropriate to give countries an opportunity to put the situation right themselves and to restore stability.

At the same time, such assistance is in the interests of the euro area as a whole, as it prevents crises spreading in a way that could cause harm to other countries.

It is of paramount importance that adjustment occurs; that countries – governments and opposition – unite behind the effort; and that contributing countries survey with great care the implementation of the programme.

But if a country is still not delivering, I think all would agree that the second stage has to be different. Would it go too far if we envisaged, at this second stage, giving euro area authorities a much deeper and authoritative say in the formation of the country’s economic policies if these go harmfully astray? A direct influence, well over and above the reinforced surveillance that is presently envisaged? … (my emphasis)

The ECB President then gave the key political premise of his reform program (if it is not a travesty to use the term “reform” for today’s counter-Enlightenment):

We can see before our eyes that membership of the EU, and even more so of EMU, introduces a new understanding in the way sovereignty is exerted. Interdependence means that countries de facto do not have complete internal authority. They can experience crises caused entirely by the unsound economic policies of others.

With a new concept of a second stage, we would change drastically the present governance based upon the dialectics of surveillance, recommendations and sanctions. In the present concept, all the decisions remain in the hands of the country concerned, even if the recommendations are not applied, and even if this attitude triggers major difficulties for other member countries. In the new concept, it would be not only possible, but in some cases compulsory, in a second stage for the European authorities – namely the Council on the basis of a proposal by the Commission, in liaison with the ECB – to take themselves decisions applicable in the economy concerned.

One way this could be imagined is for European authorities to have the right to veto some national economic policy decisions. The remit could include in particular major fiscal spending items and elements essential for the country’s competitiveness. …

By “unsound economic policies,” Mr. Trichet means not paying debts – by writing them down to the ability to pay without forfeiting land and monopolies in the public domain, and refusing to replace political and economic democracy with control by bankers. Twisting the knife into the long history of European idealism, he deceptively depicted his proposed financial coup d’état as if it were in the spirit of Jean Monnet, Robert Schuman and other liberals who promoted European integration in hope of creating a more peaceful world – one that would be more prosperous and productive, not one based on financial asset stripping.

Jean Monnet in his memoirs 35 years ago wrote: “Nobody can say today what will be the institutional framework of Europe tomorrow because the future changes, which will be fostered by today’s changes, are unpredictable.”

In this Union of tomorrow, or of the day after tomorrow, would it be too bold, in the economic field, with a single market, a single currency and a single central bank, to envisage a ministry of finance of the Union? Not necessarily a ministry of finance that administers a large federal budget. But a ministry of finance that would exert direct responsibilities in at least three domains: first, the surveillance of both fiscal policies and competitiveness policies, as well as the direct responsibilities mentioned earlier as regards countries in a “second stage” inside the euro area; second, all the typical responsibilities of the executive branches as regards the union’s integrated financial sector, so as to accompany the full integration of financial services; and third, the representation of the union confederation in international financial institutions.

Husserl concluded his lecture in a visionary way: “Europe’s existential crisis can end in only one of two ways: in its demise (…) lapsing into a hatred of the spirit and into barbarism ; or in its rebirth from the spirit of philosophy, through a heroism of reason (…)”.

As my friend Marshall Auerback quipped in response to this speech, its message is familiar enough as a description of what is happening in the United States: “This is the Republican answer in Michigan. Take over the cities in crisis run by disfavored minorities, remove their democratically elected governments from power, and use extraordinary powers to mandate austerity.” In other words, no room for any agency like that advocated by Elizabeth Warren is to exist in the EU. That is not the kind of idealistic integration toward which Mr. Trichet and the ECB aim. He is leading toward what the closing credits of the film “Z” put on the screen: The things banned by the junta include: “peace movements, strikes, labor unions, long hair on men, The Beatles, other modern and popular music (‘la musique populaire’), Sophocles, Leo Tolstoy, Aeschylus, writing that Socrates was homosexual, Eugène Ionesco, Jean-Paul Sartre, Anton Chekhov, Harold Pinter, Edward Albee, Mark Twain, Samuel Beckett, the bar association, sociology, international encyclopedias, free press, and new math. Also banned is the letter Z, which was used as a symbolic reminder that Grigoris Lambrakis and by extension the spirit of resistance lives (zi = ‘he (Lambrakis) lives’).”6

As the Wall Street Journal accurately summarized the political thrust of Mr. Trichet’s speech, “if a bailed-out country isn’t delivering on its fiscal-adjustment program, then a ‘second stage’ could be required, which could possibly involve ‘giving euro-area authorities a much deeper and authoritative say in the formation of the county’s economic policies …’”7 Eurozone authorities – specifically, their financial institutions, not democratic institutions aimed at protecting labor and consumers, raising living standards and so forth – “could have ‘the right to veto some national economic-policy decisions’ under such a regime. In particular, a veto could apply for ‘major fiscal spending items and elements essential for the country’s competitiveness.’
Paraphrasing Mr. Trichet’s lugubrious query, “In this union of tomorrow … would it be too bold in the economic field … to envisage a ministry of finance for the union?” the article noted that “Such a ministry wouldn’t necessarily have a large federal budget but would be involved in surveillance and issuing vetoes, and would represent the currency bloc at international financial institutions.”

My own memory is that socialist idealism after World War II was world-weary in seeing nation states as the instruments for military warfare. This pacifist ideology came to overshadow the original socialist ideology of the late 19th century, which sought to reform governments to take law-making power, taxing power and property itself out of the hands of the classes who had possessed it ever since the Viking invasions of Europe had established feudal privilege, absentee landownership and financial control of trading monopolies and, increasingly, the banking privilege of money creation.
But somehow, as my UMKC colleague, Prof. Bill Black commented recently in the UMKC economics blog: “One of the great paradoxes is that the periphery’s generally left-wing governments adopted so enthusiastically the ECB’s ultra-right wing economic nostrums – austerity is an appropriate response to a great recession. … Why left-wing parties embrace the advice of the ultra-right wing economists whose anti-regulatory dogmas helped cause the crisis is one of the great mysteries of life. Their policies are self-destructive to the economy and suicidal politically.”8

Greece and Ireland have become the litmus test for whether economies will be sacrificed in attempts to pay debts that cannot be paid. An interregnum is threatened during which the road to default and permanent austerity will carve out more and more land and public enterprises from the public domain, divert more and more consumer income to pay debt service and taxes for governments to pay bondholders, and more business income to pay the bankers.

If this is not war, what is?



Last week Mr. Mr Bruton declared his intention to introduce legislation to overhaul the system for the payment of more than 200,000 workers, which could result in them losing Sunday working premiums.

Fine Gael Dublin South TD Olivia Mitchell welcomed the proposals, saying the wage agreements were damaging to the economy and it was almost impossible to get a meal outside cities on a Sunday because of wage rates. People were being paid €20 an hour, more than double the minimum wage to wash dishes on Sundays, she said..

see article here http://www.irishtimes.com/newspaper/ireland/2011/0527/1224297853397.html

Now I would just like to remind myself exactly what payment are these two public servants getting. I bet it is way more than minimum wage .Yes my friends we have these cheerleaders

That are no more that leaches sucking the country dry ready to pounce on the lowest paid workers in the country. Yes the attack on wages in Ireland is in full swing and the new government are busy trying to impress their real masters in Europe    

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