The resignation of the Greek Finance Minister is the clearest possible indication that my last posting was correct and that Greece is ready to climb down in negotiations, in exchange for any sliver of a fig-leaf. The “Troika” is very keen that there will be another bail-out because of course the money goes to the bankers to whom the political elite are beholden. It is increasingly plain that Tsipras does not have the balls for debt repudiation. Yesterday’s choice was meaningless; debt repudiation is the only real alternative.
No bail-out will make any difference, we will be enmired in the same issues again every six months, but with less drama. The Euro will survive because it is the resilient currency of the World’s largest economy. Merkel will continue to manage it cleverly – she has just demonstrated that Germany can determine who is Greece’s finance minister. Greeks will suffer through more austerity, comforted by yesterday’s meaningless shout of defiance, and large corporations and banks will get their hands on Greece’s remaining state assets.
I think the lesson from this is that the 21st Century corporate and banking state is beyond amelioration. Any change needs to be a fundamental challenge to the system. It will seem strange to future generations that a system developed whereby middlemen who facilitated real economic transactions by handling currency, came to dominate the world by creating a mathematical nexus of currency that bore no meaningful relationship to real movements of commodities.
All true Craig but what’s your solution? I mean, how would you reorganise the international banking/finance system? Things have to get much worse before they can get better, in my opinion, and the boomer generation in the richer countries has to die off before any real progress can be made. But once some sort of 1989 situation happens all over an impoverished, ground-down Europe, and maybe in a Hispanic-majority (by then) America, how ought the “finance industry” to be organised?
Personally I would favour a ban on any form of financial activity over and above taking care of peoples’ savings, lending to socially-useful businesses, and managing the exchange of currencies, and severe restrictions even on these latter activities, which should be devolved to the most local level possible and managed by communities rather than profit-making private businesses.
However due to living in Nimby-land, I am realistically pessimistic as to what “managed by communities” might actually involve.
Can crypto-currencies like Bitcoin be borrowed and lent?
Meaningless in European institutional terms, no doubt, as the EU cannot protect its periphery from a humanitarian crisis. All the real conflict will be ideological:
on the one hand, a flashback to the red scare,
http://www.blacklistednews.com/Nuland%E2%80%99s_Nemesis%3A_Will_Greece_Be_Destroyed_to_Save_Her_From_Russia%2C_Like_Ukraine%3F/44923/0/38/38/Y/M.html
on the other hand, a renewed international effort to assert the primacy of peace and development over central planning by banks
http://www.ohchr.org/EN/Issues/Development/IEDebt/Pages/IEDebtIndex.aspx
http://www.ohchr.org/EN/Issues/Development/IEDebt/Pages/GuidingPrinciples.aspx
Viewed as Germany v. Greece, it’s dispiriting; but it’s more than that. It’s Bretton Woods v. Dumbarton Oaks – bank rule v. development through human rights
I suppose Bitcoin can be lent once, against something like an IOU, but I’ve a suspicion that the same lump of a single crypto-currency can’t be lent out multiple times, as is the case with fractional reserve banking.
The ex-finance minister has done exactly what he set out to do.
Now he retires, having got as much as his bravado could get, and leaves the place to a seemingly less reactionary person.
His staying on would have been negative from this point onwards and so he takes the positive step and resigns.
A quite brilliant man who has played his cards very well.
The other european ministers will be happy to see him go.
‘He is a man who walks like he talks, and that talk is open. This is so unlike the secretive deals usually made in airless rooms in Brussels. Here is a politician acting on his beliefs. He will be remembered not for his style, but for his substance. He faced down the automatons by insisting the Greek people should no longer be punished. And his people were with him. He refused the Eurocrats’ parameters and secrecy. He spoke with decency, and not in code. He is not afraid of the word “collective”. Nor is Syriza. Tsipras has said “negotiation does not belong to one person, it never did”. It is possible that Varoufakis was pushed rather than jumped, to smooth a deal, but whatever the case, he will not disappear, even as he revs off into the sunset. He knows, above all, that real style is substance. He saved his best look for last when he said, “I shall wear the creditors’ loathing with pride”.’
A decent human.
As Yanis Varoufakis revs off into the sunset, it’s his substance I’ll remember
Suzanne Moore
July 6th 2015
The media was mesmerised by his motorbike, but Greece’s former finance minister inspired ordinary people by the way he faced down Europe
Former Greek finance minister Yanis Varoufakis refuses to comment on his resignation as he leaves his home in Athens on Monday.
http://www.theguardian.com/commentisfree/2015/jul/06/yanis-varoufakis-motorbike-greece-finance-minister
Craig’s description seems very apt:
Every country I hear of is in “debt”, which doesn’t seem to make sense. I’m guessing that money is now entirely cyclic, self-referential, with no grounding outside itself, no basis in physical reality; a self-supporting fiction, essentially a mass-delusion.
No Craig, you are wrong-in a very liberal way.
Three quick points ( I have an urgent appointment)
1/ Varoufakis is resigning his post, not ending his career. His political stock within Greece and beyond is now at its highest. I expect him to travel across Europe preaching the need to resist austerity and democratise the EU.
2/ The Greek people have spoken unequivocally: the Opposition is weaker than it has been since 1944, Greece is committed to an alternative path. There is no chance that Syriza will be able to make a compromise which does not involve a substantial debt write down. It may try, but it will not succeed.
3/ The cat is now out of the bag. The crisis is no longer confined to the Greek forum- the issue and the possibility of resisting the bankers’ bluffs is now alive in Ireland, Spain and elsewhere. It will colour the EU debate in Britain. It will be central as the French people fight to defend their pensions and the Germans their living standards.
Last week a “sell out” was in the cards, not now.
A United Nations Debt & Austerity expert wishes to get involved, according to Euractiv.eu
He’s wittering on about Human Rights & International Law, but doesn’t he realise these are banksters!
I don’t agree with you re. Tsipras. The change in Finance Minister is a perfectly useful gesture, that Syriza is serious about negotiating with the troika, but I don’t see how Tsipras will be anything but emboldened by a decisive referendum win.
Further, the IMF’s own analysis, released Friday, that Greece needs meaningful debt relief (minimum 50bn), has also shifted the debate. Tsipras still has little leverage, much of what comes next is outside of his control, but I think he deserves the benefit of the doubt that he is not a stooge of the European elite and the rentier class. If he hadn’t become a Davos lefty to this point, I don’t think he ever he ever will.
In the immediacy, we need to watch the ECB, to see if it will provide liquidity to Greek banks. If they pull that facility, Greece at this point may as well leave the Euro. Then debt relief/default becomes inevitable. If anything, this morning, that is an outcome the European centre is now more concerned about avoiding.
“There is no chance that Syriza will be able to make a compromise which does not involve a substantial debt write down.”
____________________
A debt write-down is polite language for not paying back some of what you owe. Good luck to the Greek govt when it next attempts to borrow on the capital markets to finance govt overspending 🙂
Craig,
The options are:-
1. Utilising the ‘political capital’ of the no vote to re-negotiate terms with the IMF. This at best would be a kicking of the can down the road, but as Greece moves forward, the debt can is later still before it. This would be a measure to give the Greek people a little more breathing room for now.
2. Write off a portion of the debt and re-structure is such a way that payments and a viable socio-political environment can co-exist.
3. Significantly cut military/defence spending which is proportionately much higher than in the other EU countries; or
4. There is repudiation by Greece of the debt;or
5. There is some sort of combination of the options.
Now, if option 4 is taken, then the questions become:-
i) What value will the Greek currency have after debt repudiation?
ii) If there is endless printing of currency to address cash flow needs of the Greek people, then a currency with no gold reserve backing or productivity to hold its value will simply lead to another Zimbabwe hyperinflation situation – won’t it?
iii) If the Russians and/or Chinese are in a position of sufficient financial strength then a deal could be worked out – but this would also imply Greece leaving the EU and making a new global alliance for economic survival.
Whatever plays out – it won’t be easy for the Greek people.
If those who hold all the money do not release it so that people can work and prosper, then eventually the people will revolt all over the world.
What will they do then? Hide behind bales of money?
“Insiders say Greek finance minister Yanis Varoufakis still holds a lot of sway in negotiations, despite Alexis Tsipras appointing a new coordinator.”
“one well-placed Athens official insisted that Varoufakis’s role had been upgraded “in many ways”. The official added: “To make him resign would be to retreat and the government would never do that.””
http://www.theguardian.com/world/2015/apr/27/greece-reshuffles-negotiating-team-creditors-yanis-varoufakis
““We are only more radical in the sense that we have been influenced by the anti-globalisation movement and believe in concepts of participatory democracy,” he told the Guardian. “The angst Syriza has caused is down to us challenging a system that can’t actually represent the interests of ordinary people.””
Euclid Tsakalotos.
http://www.theguardian.com/business/2015/apr/28/euclid-tsakalotos-greece-debt-bailout-varoufakis
Brilliant and concise analysis of the current mess. The physicists stopped working for the USUK governments making nukes to destroy the world and instead are deployed by the banksters to reinvent finance! This move somehow brings physics into disrepute as a science, given the totally arbitrary and nonsensical basis of the monetary systems. The fact remains the banksters have only promoted money and its accumulation without ever explaining the fundamentals concerning the said money ever getting explored, ie what is money, how it comes about, and why should it be so expensive to borrow and so cheap to save?.
The market regulation includes debtors walking away from the debt and the creditors and their money these produce on demand from thin air getting a dose of their own medicine; the debt disappearing back to whence the money came from, ie thin air.
“The Troika’s demand was for austerity to be deepened solely by taxing labor and reducing pensions. Its policy makers had vetoed Syriza’s proposed taxes on the wealthy and steps to stop their tax avoidance.”
Tells you all you need to know about the bona fides of the banking filth.
We want our money, but only from the poorest.
And gives the lie to all the shit media have been spouting about the matter.
http://www.counterpunch.org/2015/07/06/greece-rejects-the-troika/
“The IMF for its part vetoed cutbacks in Greek military spending (currently far above the 2% of GDP demanded by NATO), despite even the European Central Bank (ECB) and German Chancellor Merkel agreeing to this.”
The bastards demanded that the poorest be hit first.
” Merkel will continue to manage it cleverly – she has just demonstrated that Germany can determine who is Greece’s finance minister. ”
You don’t see anything at all sinister in that? Nothing clever about a big rich country bullying a small poor one.
As happened in Ireland, emigration of young professionals from Greece will increase.
Imagine a country losing all of its college grads
Thousands of young, college-educated professionals are going abroad as the unemployment rate for their group soars over 50 percent.
http://www.cnbc.com/id/102450911
There is already a community of 300,000 Greek people in Melbourne, welcomed by Abbott presumably.
‘Australian Communities: Greek Australians
The Greek community in Australia is estimated at 600,000-700,000 (including the second and third generations). 47 per cent of the Greek Australian community lives in Melbourne and 29 per cent in Sydney. Melbourne, Sister City to Thessaloniki in northern Greece, is the third largest “Greek city” in the world and an important overseas centre of Hellenism/’
http://www.racismnoway.com.au/teaching-resources/factsheets/56.html
and
http://dfat.gov.au/geo/greece/pages/greece-country-brief.aspx
Greece has already cut back military spending from 2.7% GDP in 2010 to 2.2% in 2014. Hardly “far above” NATO requirements (UK defence spending is 2.1% GDP.
Mr Murray,
As historian you surely know that countries have always been ruled by elites and bankers have always been either part or closely associated with elites. Even the most powerful kings got in trouble when run out of money.
Nowadays with all this supposedly democracy and all that it is even either for bankers to rule nations and as the world today is more or less global place, the world. All they need to do is to ensure that majority of plebs have jobs that keep them paying for mortgages and spending money (in shops, hotels, online) thus creating even more wealth for the bankers. Middle men became truly the front man when comes to the real power but also hidden behind so called elected establishment when comes to responsibilities. The system is perfect for them.
But plebs benefited too. What are the alternatives? Peoples republic? We have known few in the past, turned out to be bloody experiment costing millions of lives. The main reason was economic mismanagement made even worse by so called charismatic leaders who care less for peoples’ well being than for ideas.
What we (plebs) can do is elect government which will mediate better between us and them (bankers). However; this has largely failed so far in UK (you can argue that Scotland did differently but until Scotland is part of UK, SNP does not really matter) when pro bankers have come back with even larger majority.
How did France and Germany wriggle out of their war sovereign debt? Austerity? Nope.
I’m thinking of this guy who made the mistake of Nationalizing the oil industry.
http://www.mohammadmossadegh.com/biography/
It is an old strategy. Andrew Jackson expressed his vindictiveness toward the Second Bank of the United States by shutting it down. When it refused to appoint his corrupt political cronies, he deposited the U.S. Treasury’s money in his “pet banks.” The drain of money plunged the economy into depression. The Southern slave states welcomed deflation, because they sought low prices for their cotton exports, and also opposed northern industry with its protectionist policies and anti-slave politics.
What Greece needs is a domestic central bank – or failing that, a national Treasury – empowered to create the money to monetize government spending on economic recovery. Mr. Draghi has shown the ECB not to be “technocratic,” but a cabal of right-wing operatives working to bring down the Syriza government, in a way quite willing to empower the far-right Golden Dawn party in its stead. In light of his refusal to carry out the duties of a central bank and act as lender of last resort when Greek banks run out of cash, Mr. Varoufakis has said that: “If necessary, we will issue parallel liquidity and California-style IOU’s, in an electronic form. We should have done it a week ago.”**
http://www.counterpunch.org/2015/07/06/greece-rejects-the-troika/
Mary,
You are surely hugely exaggerating. Even in Uzbekistan when employment prospects were/are much worse then in Greece today (or have even been) there are young people with higher educational degrees in employment. There are many more reasons for people not to emigrate than just difficult employment opportunities. Greeks (just like Uzbeks and unlike Brits) are closely linked to their parents and relatives and will try harder (than lets say Brits) to stay at home town. Only when there is no job at all that they can find, only then they will be forced to emigrate.
I do not argue that employment opportunities in Greece are much poorer than in other more developed EU economies, but one of the things I was claiming here is that Greek economy was overinflated by cheap European money. It is no wonder that all these artificially funded jobs have now evaporated when cheap money was cut down.
Something similar happened in USSR when jobs have been created to keep people employed as unemployment was an offence. This was called nomenglatura and evaporated as soon as USSR hit its economic downturn.
I don’t know her current status but Heather D Gibson was described as ‘Heather Gibson, Director-Adviser, Bank of Greece’ on the bank’s website in 2013.
She is married to Euclid TSackthelotofthem, the new Finance Minister when she presented this paper.
“Structural Reform, Productivity and Growth: the case of Greece”
~~
Do the banksters/gangsters-in-charge care one jot for the people? No.
EU questions legality of referendum as Euclid Tsakalotos replaces Yanis Varoufakis after resignation
Well it has already started. The vote did not pan out as the expectations, then best have another vote, and keep on voting until the correct vote is cast! Please more austerity and even less for services, and think of the poor banksters, what about those poor banksters!!!
Then it will be all legal!!!
Kempe at 3:38 cites NATO satellite UK as an example of European defense expenditures. That distorts the purely political ‘requirements.’ Nothing in the NATO Charter requires particular levels of military mobilization, and the continent ignores US importuning. Look past the UK, the Western Bloc’s DDR, and you see Greece spends twice what comparable countries do as a percent of GDP. Disarmament would not solve all Greece’s problems but it is necessary for renewed development.
They care, Mary. It’s just that they have different values for people. They see us as units; part of a herd. Two ways to make money; people at work….money at work. They need us, just like we need dinner.
Dishonesty in portraying political appointees losing their jobs/status as the “evaporated jobs”. Further, twenty five percent unemployment is an exaggeration apparently, added to which evidently British are less likely to value their families than Greeks and Uzbek too (hint of racism?) whom will migrate from their town and cities as oppose to hanging around the place and suffering hunger, and destitution!
There is delusional and then there is down right dishonest to stay on the right side of the right people!