Europe's emergency aid to Greece, A dual disappointment

Just to reinforce some of the points made in that excellent post

www.zerohedge.com/news/where-does-greek-bailout-money-go

http://ekathimerini.com/4dcgi/_w_articles_.../02/2012_426623




Yet the ECB is still not facing reality. It is reported they have finally accepted they are not likely to make a profit on the greek bonds they have been buying. Yet acccording to the BBC the current proposals require


I am not seeing anything to suggest that default is not Greece's best option. This is beyond stupid

Slightly off topic but Finland was mentioned:

http://www.google.com/hostednews/ap/articl...1bb7176a8aaa059

Nokia moving all manufacturing to Asia

Somewhat confusing reports about the agreement which may have been reached with Greek politicians: but it is reported by Reuters that the minimum wage is to be cut by 20% and 15000 public sector workers are to be sacked. Pension cuts are not agreed, according to the report

Meantime the people have called a 48 hour general strike due to start tomorrow, I believe. More details will come out over the next day or so. Prospects for the greek people are not good

The greek politicians are to debate the austerity measures demanded by the EU etc today. They are likely to pass.

In light of the public reaction, including the opposition of the police noted in the previous post, it occurs to me to wonder what the point of this is. The politicians do not appear to have any popular support for these measures, nor any mandate to pass them. In fact in Greece they have no mandate at all to the extent that the "technocrats" are in power.

I realise that neither the EU nor the politicians care much for democracy. They appear to believe that so long as all parties agree the people can do nothing about it and so can be safely ignored. For the most part that calculation is correct: Usually when there is no democracy real opposition leads to blood in the streets and it is mostly the people's blood. There is enormous reluctance to push things in that direction, and the politicians know that. In a functioning democracy it does not come to that: because there is an effective opposition offering genuine alternatives. That is no longer true.

When I was a student I remember being disturbed when one of the tutors stated that it is the job of opposition to oppose. At the time this seemed very cynical to me and I had some starry eyed notion that they should support what they could agree with and oppose on the basis of genuine difference: his proposition seemed cynical to me. I understand it now and I think he was right.

It remains to be seen whether the people of Greece (and other places) will accept these measures. It does not seem likely. There is no current political means of rejecting it, and the alternative is outright revolution, or so I fear. In the arab world such action spreads and there is much scope for that in europe: because if Greece defaults it is likely that Portugal and Spain, at least, will be faced with the next attack and the same choice.

It seems obvious to me that there is a total disconnect between agreement and the prospects for implementation. If the calculation is that this can be imposed no matter what the people think then that is what will happen. But I do not think that is at all obvious and so I wonder why this is happening at all. And I think it is at least possible that all of this is just a stalling measure to allow rich people to get their money out of the country and plutocrats to adjust their arrangements. Once that is done Greece will be forced out the EU and, whatever happens thereafter, the rich will be fine.

We have seen that money is flowing out of the country. In the current situation I would have been looking to a government to pass controls to prevent that: but no such measures have been taken. Yet they might just have persuaded the people that their interests were at least defended by their government. Without wishing to sound overly cynical I think that is at least some reason to believe that there is no genuine attempt to solve this problem: there is only a strategy to protect the very wealthy.

To me the Greek people should default: yesterday

Slightly relevant to the conversation. Do you think the Euro will collapse eventually. I don't see it being able to stay afloat with the mederterain countries as they are economically speaking.

http://www.inclusivedemocracy.org/fotopoul...uct_irae_92.htm

On that point, this is a rather interesting (not to say prescient) paper from 1992 on the Greek economic problem. What is interesting is the pattern of the economic structure and the reasons for it. Read in conjunction with Ha Joon Chang's later book "The Bad Samaritans" it can be clearly seen how damaging the neoliberal analysis is. Those countries, past and present, which have done well have adopted opposite policies to those imposed/recommended by the neoliberals. They have done so through strong state involvement in the economy and strong regulation of the private sector. I am not aware of any state which has done well any other way, though there may be some examples

Tonight it is being reported that the dutch and belgian finance ministers wish to annexe Greece: I can make no other sense of this statement

http://blogs.channel4.com/faisal-islam-on-...ve-bubble/16292

I read an extremely interesting article today. I have no idea if it is accurate but for what it is worth this is what it says

First, the "agreement" reached about the Greek bail out provides that the Greek people and its government will be totally infantilised. A "permanent" presence of "Troika" officials will be placed in Athens to "monitor" and oversee implementation of the programme. There is no pretence of "advice". According to the statement issued the agreement envisages that the Greek constitution will be changed "as soon as possible" to priortise the payment of debt over all other considerations. Meantime the law will be changed to make the same provision, presumably

Second, the article gives some information about the Greek constitution. Article1 of the constitution says that all powers derive from the people and exist for the people and the nation: they shall be exercised as provided in the constitution. It is difficult to see how the current agreement can be said to meet this, since there is no indication that the people have approved this. It may be argued that they have because this has been agreed by the parliament: but since the current body is led by unelected technocrats that seems rather thing to me.

Third, Article 120 makes it hard to change the Greek constitution. Most countries have similar provisions, as you might expect. In this case it is very strong, presumably because of the history of military rule in the recent past. The report says that "Usurpation, in any way whatsoever, of popular sovereignty ...shall be prosecuted upon restoration of the lawful authority": which would seem to put the Troika in the frame if they try this: and being "permanent"ly in Athens would seem to render them open to arrest and prosecution, since they will be in Greek jurisidiction. Article 120 also says "Observance of the constitution is entrusted to the patriotism of Greeks who shall have the right and the duty to resist by all possible means against anyone who attempts the violent abolition of the Constitution". The Troika do not meet the conditions of violent abolition, I don't think: but defence of national sovereignty is clearly envisaged to rest with the people where it comes under threat of a lesser sort, I would suggest.

Since the plan is not going to work, by the admission of an internal memo which has been leaked, as well as being obvious to anyone who opens their eyes, the Greek people are being asked to accept austerity for an avowed 8 years: but are in fact expected to suffer it for far longer; if it ever stops. They might decide that 8 hard years is bearable, and that is presumably why that is the picture painted. It is a lie. And this plan is not for the greek people: it is for the bankers and financiers and their puppets in governments across Europe.

I am genuinely shocked that this has been allowed to pass. All pretence of democracy is gone. All notion that governments rule on behalf of all the people has vanished. Plutocracy stands naked and unashamed.

If we do not refuse this for Greece it will not stop there. We may seek to protect ourselves by throwing Greece to the wolves: but there is not much advantage in being eaten last, in the scheme of things: for we will not reach safety before the dawn even if we lighten the sledge in this way

http://www.aljazeera.com/programmes/counti...tm_medium=tweet

An Al Jazeera report on the situation in Greece: it includes an interview with an Investment Manager. Interesting for the sheer heartlessness and for the fact that they have already made money and expect to make more. While I accept that it is his job to make money there is a point beyond which that is not "hard headed" it is sociopathic.

http://www.huffingtonpost.com/ann-pettifor...s_b_881188.html

This is an open letter to the people of Greece from Anne Pettifor: an economist I quite like so far. She advocates that Greece leave the euro: now. I personally think it will be much harder than it would have been 2 years ago because of the capital flight which has made the position of the Greeks much worse than it was. But still it seems a better alternative then continuing with this failed policy. I was particularly struck with the parallel drawn with abandonment of the gold standard in the 1930's: seems reasonably apt, to me.