On the radio this morning there was an interview with two Greek politicians (though the spokeswoman for Pasok denied that is what she is: she says she is independent).
As is usual this was an unsatisfactory interview: far too short and with little in the way of hard information. But it is was worth while to this extent: the media this morning are talking about the refusal of Syriza to enter coalition
The spokesman for that party told us that the fundamental split is between those who wish to endorse the agreement on austerity and those who do not. He made the very reasonable point that this is not something which can generate a compromise: the positions are diametrically opposed. It follows that there cannot be a coalition if it depends on such a compromise: so there is nothing to be gained by talking about it.
He said that ND + Pasok + the Democratic Left have 168 seats between them: they can therefore command a majority in parliament if they reach agreement. Thus it is not the decision of Syriza which will lead to fresh elections if that is what happens: though they will doubtless get the blame, if blame there be. Syriza takes the view that they are happy to be in opposition if that is the outcome, and they will continue to oppose austerity in parliament. This seems a democratic stance and I see nothing extreme about it. All the talk which seeks to equate Syriza with Golden Dawn is really propaganda, so far as I can tell: aimed at continuing the characterisation of politics as being on a single spectrum from left to right. As I have said before that conventional characterisation is no longer helpful if you wish to understand the political landscape, because it excludes the major political force of our time: plutocracy. In this connection it should be noted that the "third force" is already known. Tony Blair talked about the "third way": ordinary people talk about the irrelevance of all the political groupings on offe:r and that is an inchoate way of saying the same thing, I think. But where it goes wrong is in not identifying the plutocrats as a political movement simply because they do not stand for election. Elections are a means of determining who gets the power to affect our lives on the basis of what those who stand say they will do, and why. But the fact that one does not stand for election does not mean one is not political:it means one is not democratic and that is not the same thing.
The plutocratic party is international and global, so it is hard to hold it to any kind of account even if one recognises its nature. What this means is that the national elections in Greece did hinge on the chasm of austerity/no austerity: but the two sides now attempting to form a government are in a no-win situation. The pro austerity parties appear to be very different: Pasok is presented as Centre Left and ND as Centre Right. On some issues that is no doubt true: but they are not different in terms of what they believe Greece should do about the austerity. Yet all substantive differences between them are irrelvant in face of that similarity. Whether you are leftist (with a programme of increased equality and social welfare and control of banks and businesses) or rightist (with a programme of free market "reform" and individual liberty and reduced role for government etc) matters not one whit. If you cede control of the economy to unelected plutocrats you can't do anything you promise. This is the reason a lot of people are now rejecting politics per se: but the analysis is wrong: they have just failed to notice that the broken promises are a consequence of the fact that the power does not lie where they think it lies: with those they elected.
The "person who does not speak for Pasok" was pathetic on this showing. What she appeared to be saying was that the Greek people are "confused" because the politicians have not explained things to them properly.She said they have not distinguished between necessary structural reform and austerity: and appeared to think that once the people grasp that they will return to sanity. She founded strongly on the fact that the greek people wish to stay in the euro, and that they have to grasp that is impossible if they do not stick with the programme.
Well I don't think the Greek people are confused at all. I think they understand this very well and I think they also understand that that false dichotomy is wholly the product of the plutocrats and their democratically elected figleafs: it is a political decision in its entirety. Syriza rightly draws attention to the fact that default does not
necessarily imply exit from the euro: Greece has already defaulted and it is still in the euro. As I noted elsewhere, the write down was just enough to make sure the Greek people continued to slide into poverty: and that this is not how one would deal with debt if one seriously wanted to solve the problem. One can only conclude that solving the ostensible problem is not the aim.
One of the things I have learned in the last few days is that the Maastricht Treaty does not provide any mechanism for expelling a state from the eurozone: in short the other states cannot actually throw Greece out. So I wondered what the implications of that are. Should there be fresh elections: and should Syriza win, as is possible according to the polls; their avowed policy is rejection of the austerity agreement but continued use of the euro as their currency. It now appears that they can do that if they wish. It is really hard to understand what would happen and I am not seeing it discussed anywhere I am looking. It is just assumed that rejection of austerity means exit: but I don't actually see how
Obviously the european states and the IMF etc have decided that if Greece rejects the austerity they will not give her any more money. And we are told that this will mean that the state will not be able to pay for anything within 6 weeks. So no pay for civil servants nor benefits for anyone etc etc. I don't understand that really: there is currency circulating in Greece right now. Not so much as before, because a lot has left the country through expatriation by the rich, and through debt repayments to the banks and the ECB etc. But obviously there is enough to pay for whatever they are paying for now, inadequate as that is.
So let us say the Greeks reject the austerity: and freeze capital flight (which they should have done long ago but which is prevented by european rules): and nationalise their banks. What we are told is that the deficit will mean the government will run out of money because it gets less in than it pays out. How does that work? Serious question: I just don't understand. It seems to suggest that the money is fixed: and if you are part of the euro that seems to be true: but where the money is is not fixed: it circulates. So long as it is not leaving the country and you are not burning it it seems to me you can decide who has it: and that includes government.
I see that they will not be able to buy imports: and that is very important because, as I understand it, Greece is not self sufficient in food or energy. But Greece would still have the euro, and it also has reserves of foreign currency and gold. I have found it difficult to discover how much they have in that form: and it is certainly less than it used to be. But the figure for 2009 is reported as $5,546,000,000. That includes special drawing rights from the IMF and other things like that: which would presumably be withdrawn. But it is not chicken feed. Imports have already fallen a lot because of the poverty: cutting defence spending and other non-essentials of that sort would cause very little pain in Greece for a great deal of benefit.
There is a lot of information about the level of debt: what I cannot find is how much servicing that debt actually costs in terms of money out. One report says that the Greek government had to pay 14 billion euros in March 2012: but how often they have to pay that sort of sum and how typical that payment is I cannot say. Not paying it would surely offset some of the loss if the europeans decided to impose total trade sanctions on the country, I think
Exports accounted for 21.5% of GDP in 2010. That is a problem normally, because prosperity is often said to depend on exports (compare germany, where exports account for more than a third of GDP): but if we are contemplating a trade embargo even the loss of all of that revenue does not look disastrous to me, when one considers that GDP fell 7% in one year to January 2012. And it fell a lot the year before and the year before that.
www.tradingeconomics.com/greece/gdp-growth-annualThere is no reason to suppose that exports will cease unless that is a malicious decision of the europeans backed by actual trade embargo, in any case. Much of it is tourism and shipping: those are decisions for private individuals. Tourism, at least, would probably benefit from more stability: and since the greek people are rioting because of austerity it should benefit from rejection of that programme, presumably
I mentioned before that we are told this is not a viable option and that greeks will suffer more if they reject the programme than if they don't. It is perfectly possible that the justification for that assertion is right and that the information is available and I am just not finding it. But the fact remains that I am not finding it. And I am looking. So if any of you know how this is supposed to work do post: I really want to know the answers.
Specific questions include:
1. How does the "money out" of greek government break down ?
2. If the money in circulation is disappearing, where does it go ?
3. If it is correct that the bail out money goes to banks and not to greek people what is the benefit to them of accepting the bail out money on austerity terms (to me it looks like the greek people borrow from Peter to pay Paul and nothing substantive changes for the better)
Edited by FionaK - 14/5/2012, 10:49
