It's not Greece being bailed out - it's the banks

Outbackjack: When it comes to the prospect of a bailout, it should be remembered that it is not Greece that is being bailed out - it's the institutions that recklessly doled out the Euro loans, writes Ian Verrender.

English poet William Blake captured the imagination of generations with his revolutionary and romantic vision of the afterlife in one of his most famous works, Proverbs of Hell.

One of his more famous lines, written around 1793, goes thus: "The road of excess leads to the palace of wisdom."

It was a proverb endorsed with enthusiasm by everyone from the idle upper classes to the hippie movement. In more recent times, however, it appears to have been the credo of a legion of central bankers and financiers who have flooded the world with cheap cash and a mountain of public debt.

Outbackjack: As asset bubbles form around the globe - from the Shanghai Stock Exchange to the Nasdaq, in real estate from London to Lidcome while bond markets from New York to Tokyo shake and gyrate - this week could mark the beginning of the end of the great monetary experiment.


While it could take some time yet before we reach the palace of wisdom, the unfolding climax in Athens, Brussels and Berlin has begun to harden views on the role of debt and radically shift the conventional wisdom on finance, banking and how to manage an economy.

For months now, even our own chief central banker, Glenn Stevens, has taken to delivering warnings of the limitations of monetary policy; that cutting interest rates is not the panacea to recession that Milton Friedman and his acolytes once proclaimed.

In a world swimming in debt, and still reeling from a debt fuelled financial crisis, the idea that it all could be fixed by throwing even more debt into the mix was always a gamble that at best seemed counterintuitive.

But with the monetarists firmly in control, and the ethos that loose fiscal policy amounts to economic recklessness, it was seen as the only lever to pull.


Regardless of whether Athens and its creditors reach a compromise this week, one thing is certain. The Greek people will endure years more of hardship. But the private sector banks that lent the cash and helped hide the debt for years, will walk away unscathed.

Global banks have risen beyond the scope of national electoral oversight. They have become sacrosanct, particularly since Lehman Brothers hit the wall in 2008, turning global finance into a chaotic maelstrom that threatened the future of Western democracy.

Forty-odd years of financial deregulation and innovation have turbocharged economic growth. But it has helped create a monster.

Once was a staid occupation; the interface between those with excess cash and those who needed money to borrow, banking has come to dominate our economies.

It has become an industry that sucks our brightest and most creative minds into its vortex who, instead of engaging in productive work to benefit mankind, spend their lives shuffling paper, trading obscure instruments and devising new methods by which to enrich themselves.

In good times, our bankers proclaim the benefits of laissez-faire free market economics. But when the going gets tough, they demand taxpayer support. And they get it.

If that sounds like a radical treatise on the evils of modern capitalism, then spare a few minutes, or perhaps an hour, to pore over the latest research from that hotbed of Marxist thinking, the Organisation for Economic Co-operation and Development.

It found that our banking system is sucking the life out of our economy. Not just here, but in developed countries around the globe.

The OECD study has found that financial deregulation and expanded lending boosts economic growth - up to a point.

But when loans exceed 60 per cent of gross domestic product, they start to sap economic growth. Lifting loans from 100 to 110 per cent of GDP actually reduces economic growth by 0.25 per cent.

As Drum regular Michael Janda points out, Australia is off the chart when it comes to debt with a credit to nominal GDP rate of 140 per cent.

A large part of that debt is in ordinary Australian households. Back in 1990, household debt represented about 60 per cent of income. By 2013 - the last time the ABS measured it - household debt had soared to 180 per cent of income.

A large part of that debt is related to mortgages, which now total $1.4 trillion. Prior to deregulation in 1983, most mortgages were funded domestically from the cash banks raised as deposits.

But in the years since, the development of global capital markets and wholesale debt markets has seen our private foreign debt soaring as our banks have tapped ready cash and pushed it into mortgage loans.

In 2013/14, net private foreign debt totalled $639.26 billion, accounting for 74 per cent of all foreign debt and dwarfing the government debt that, according to Prime Minister Tony Abbott, was a "disaster".

An interesting finding in the OECD report was that the growth in banking and the financial sector fostered greater financial inequality.

Bankers, it found, earned a premium to those in other industries as the higher wages "draw the most talented workers into the financial sector where they may not contribute as much to economic growth as compared to jobs in sectors with greater potential for productive innovation".

Bankers created the global financial crisis. As Mike Smith, the soon-to-depart head of ANZ Banking Group, once candidly noted to me: "Bankers found new and interesting ways to destroy wealth."

Only one banker ever saw jail time as a result of the financial crisis. And when it comes to Greece, will anyone call Goldman Sachs to account for its role in hiding Greece's debt from the rest of the European Union and the world?

As for the now shaky prospects of a bailout by the European Commission, the European Central Bank and the International Monetary Fund, it should be remembered that it is not Greece that is being bailed out.

It is the European banks, the French and German institutions that recklessly doled out Euro loans to Greece, safe in the knowledge that any losses would be covered by Frankfurt.

As at December last year, German banks still had 10.63 billion euros outstanding, with American banks following closely and British banks in third place with 9.74 billion euros.

A bail-out, should it occur, will once again shift private debt onto the public books and hopefully deliver central bankers closer to the palace of wisdom. A default, on the other hand, may see financiers for once confront Blake's vision of hell.

ehartshorn77: You are right.

lori100: “The money power preys upon the nation in times of peace and conspires against it in times of adversity. It is more despotic than monarchy, more insolent than autocracy, and more selfish than bureaucracy.” – Abe Lincoln, 1864

ehartshorn77: Hey heck of a quote.

lori100: ty....here's another telling the truth and it cost him his life also......-----“Whoever controls the volume of money in any country is absolute master of all industry and commerce. And when you realize that the entire system is very easily controlled, one way or another by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate.” – President James Garfield, 1881. He was assassinated just weeks after making this statement.

Outbackjack: So Greece is not going to make the deadline for it's payment to the IMF their Finance minister just said..This would put it in technical default.It will be interesting to see how the Capitalists will react.Sure they might try and extend the deadline but it seems like the Greece government has just said Basta! or enough is enough.

Lets hope they hold their nerve and stare down these parasites.Greece exiting the Euro could be a good thing for them in the longer run There will be pain and the economy could crash but from the ashes a future will arise for Greece and its people.

It will be one free from the banking fascists in the European union.

ehartshorn77: hurray. The E.U is soon to be over.

Captain Canada: E.U. Not going anywhere soon sorn77
Greece was always the weakest link,just like Portugal,Spain and Italy was and still are weak but they have managed somehow to stay under the radar
With Greece gone,stock market boys will find another euro nation to give investors the jidders and sleepless nights again.
Jack your right on spot,no banker going to jail and bailouts are to bail banks not countries or its citizens.
Just look closer to home in the fiasco in the USA housing crisis
Anybody in the banking industry suffered any losses.big fat NO
Homeowners lost due to bad judgement,greed and jealousy
Joe and Jane America had a combined income of a 1000.00 monthly on the market for a house,they just don't want any house they want a house with 12 bedrooms like the one they seen on a magazine of rich and famous people.somehow some banker figures that yes they can have it for a payment of 800 month mortgage but wait they can't move in with the 2 year old cars they have,they need the big Hummer,the Mercedes,Joe needs his Harley and Jane needs her mustang,they can't afford it but they living the dream,they need a pool in the yard,just get a line is credit,and while pool being build they will go on a vacation to exotic places,no worries we can get more credit

Outbackjack: The battle for Greek votes was in full swing Thursday ahead of a crucial weekend referendum that could decide whether the country falls out of the euro. For Greeks, particularly the elderly, the daily struggle to get cash ground on in the face of massive uncertainty.

Greece's creditors have halted any negotiations on a new financial rescue program until after the popular vote on whether to accept proposed reforms in exchange for bailout loans.

Greek Prime Minister Alexis Tsipras has staunchly advocated a "no," saying it would put the country in a stronger negotiating position with creditors. But European officials and the Greek opposition have warned such an outcome could be tantamount to a decision to leave the euro.

Until then, the country remains in limbo, with banks mostly shut and strict cash withdrawal limits imposed until after the vote.

Crowds of elderly Greeks, some struggling with walking sticks or being held up by others, thronged the few banks opened to help pensioners without debit or credit cards withdraw at least some money.

The banks shut down on Monday to prevent remaining funds fleeing after Tsipras announced he was calling the referendum.

Greeks are now restricted to a daily withdrawals of 60 euros ($83 Cdn), although in practice this has become 50 euros ($70 Cdn) for many as large numbers of ATMs have run out of 20 euro notes.

Pensioners without bank cards are being allowed to withdraw a maximum 120 euros ($167 Cdn) for the week from open bank branches.

"All I know is that that we are all going crazy here," said Anisia Kaklamanou, one of those waiting to get into a bank in central Athens. "And I don't know what to do on Sunday: vote "yes", vote "no". I don't know. All I know is that I have 120 euros to get by until whenever the banks open."

The question on Sunday's ballot is whether they accept or reject a reform proposal made by creditors during negotiations last week.
No talks until after vote

But that particular proposal is no longer on the table. It was amended later in the week and has now been rendered moot by the fact that Greece's international bailout expired Tuesday. The same day, the country also became the first developed nation to miss a debt repayment to the International Monetary Fund.

The country is now seeking a different deal with its European creditors. But European officials have said they cannot negotiate with Athens until after Sunday's vote.

The head of the eurozone finance ministers' group, Jeroen Dijsselbloem, says it will be "incredibly difficult" to build a new bailout package for Greece if the country votes "no" in Sunday's referendum.

He raised questions about the new government's ability to continue talks in such a case and rejected the Greek government's argument that it might get a stronger bargaining position in case of a `no' vote.

"That suggestion is simply wrong," Dijsselbloem told lawmakers in the Netherlands.

Some European officials have said the Greek referendum amounts to a vote on whether to stay in the euro. The Greek government says that is merely an attempt to terrorize the people into voting in favor of destructive austerity policies.

Many Greeks say they will be casting their ballots to end the budget cuts and tax increases imposed in return for bailout loans from other eurozone countries and the IMF.

"We've been going through this crisis over the last five years and we had nothing to eat, our pensions and our wages have been slashed and some made a profit off us," said pensioner Koula Makri in a bank queue.

She said Tsipras took too long to shut down the banks. "I'm in total agreement with (banks) closing. The queues are nothing next to all the suicides, the soup kitchens and the homeless on the streets of Athens."
Vow to resign

Greek Finance Minister Yanis Varoufakis told Bloomberg TV he would resign in case of a "yes" vote.

French Finance Minister Michel Sapin said Europe remains committed to avoiding "catastrophe" for Greece and keeping it in the eurozone.

"The exit of Greece from the eurozone is not desirable, nor envisaged," Sapin said on France's iTele television Thursday.

If voters reject international bailout terms in Sunday's vote, then "we are entering in an unknown zone, an economic slide," Sapin warned.

Sapin had been pushing for an agreement with Greece before Sunday, but after a fruitless meeting of European finance ministers Wednesday, he conceded there was no point negotiating until after the vote.

He said he and other European finance ministers "tried until the last minute to find an accord, until the Greek prime minister said no."

European officials say Greece walked out of negotiations last week when the two sides were relatively close to a deal. Varoufakis said the main disagreement between the two sides was the notion of easing the terms on Greece's debt.

He told Bloomberg TV "I prefer to cut my arm off" than sign a rescue deal that does not include a debt relief provision.

Business associations and the country's largest labor union urged the government to cancel the referendum, while two private citizens have appealed to the Council of State, the country's highest court, to rule the vote unconstitutional.

The Council of Europe — an independent body with 47 member states that monitors elections and human rights — told The Associated Press the referendum would fall short of its internationally accepted recommendations, with the time allowed too short and the question put the people not clear.

In a sign of serious financial deterioration, Greece suffered another sovereign downgrade Wednesday night, the fourth this week. Moody's slashed the country's rating from Caa2 to Caa3, or just above default.

Captain Canada: It's talk and to place things on the proper scale of value.
I will state that what I am posting is strictly my opinion.
Mr.Sapin is so determined in reaching a deal"""I will cut my arm off"""cut your arm off to show the Greeks and the rest of Europe that you got balls brother,it's all a show.talk is cheap and worth millions in the political arena
If every single home,business beach,livestock in Greece place in the open market worth enough to pay its dept?hardly
Is gathering every woman in Greece and selling them in the sex trade around the world,enough to help pay it's debt?hardly
Selling every man into labour industry enough to pay its debt? Hardly.
Placing bankers and politicians in a jungle as prey for investors to pay a kings ransom to shoot and kill them would it be enough to pay its debt. Hardly
Why even bother
That's my opinion eh

Outbackjack: Whilst all the focus seems to be on Greece the Chinese stock market has lost nearly $4 Trillion since mid June.

Captain Canada: Yes heard That sometime back in late December from a stockman at a party that Chinese market was to make negative news by the summer,buddy also mentioned bad economic news for the USA by end of 2015,due to over priced homes off 30% a USA currency being way over inflated for a non stable economy

Outbackjack: Just like the U.S in 2008 unsecured debt is a huge problem in China and a lot of it is undeclared.

Captain Canada: Chinese brokerage firms robbed billions from investors now government punishing those firm to get money back
It's not over yet,lots of stockbrokers will be jumping off their office windows soon

Outbackjack: Greece is the latest battleground in the financial elite’s war on democracy

by George Monbiot

From laissez-faire economics in 18th-century India to neoliberalism in today’s Europe the subordination of human welfare to power is a brutal tradition

Greece may be financially bankrupt, but the troika is politically bankrupt. Those who persecute this nation wield illegitimate, undemocratic powers, powers of the kind now afflicting us all. Consider the International Monetary Fund. The distribution of power here was perfectly stitched up: IMF decisions require an 85% majority, and the US holds 17% of the votes.

The IMF is controlled by the rich, and governs the poor on their behalf. It’s now doing to Greece what it has done to one poor nation after another, from Argentina to Zambia. Its structural adjustment programmes have forced scores of elected governments to dismantle public spending, destroying health, education and all the means by which the wretched of the earth might improve their lives.
The euro will be stuck with austerity unless it learns to embrace democracy


The same programme is imposed regardless of circumstance: every country the IMF colonises must place the control of inflation ahead of other economic objectives; immediately remove barriers to trade and the flow of capital; liberalise its banking system; reduce government spending on everything bar debt repayments; and privatise assets that can be sold to foreign investors.

Using the threat of its self-fulfilling prophecy (it warns the financial markets that countries that don’t submit to its demands are doomed), it has forced governments to abandon progressive policies. Almost single-handedly, it engineered the 1997 Asian financial crisis: by forcing governments to remove capital controls, it opened currencies to attack by financial speculators. Only countries such as Malaysia and China, which refused to cave in, escaped.

Consider the European Central Bank. Like most other central banks, it enjoys “political independence”. This does not mean that it is free from politics, only that it is free from democracy. It is ruled instead by the financial sector, whose interests it is constitutionally obliged to champion through its inflation target of around 2%. Ever mindful of where power lies, it has exceeded this mandate, inflicting deflation and epic unemployment on poorer members of the eurozone.

The Maastricht treaty, establishing the European Union and the euro, was built on a lethal delusion: a belief that the ECB could provide the only common economic governance that monetary union required. It arose from an extreme version of market fundamentalism: if inflation were kept low, its authors imagined, the magic of the markets would resolve all other social and economic problems, making politics redundant. Those sober, suited, serious people, who now pronounce themselves the only adults in the room, turn out to be demented utopian fantasists, votaries of a fanatical economic cult.

Those sober, suited, serious people turn out to be demented utopian fantasists, votaries of a fanatical economic cult

All this is but a recent chapter in the long tradition of subordinating human welfare to financial power. The brutal austerity imposed on Greece is mild compared with earlier versions. Take the 19th century Irish and Indian famines, both exacerbated (in the second case caused) by the doctrine of laissez-faire, which we now know as market fundamentalism or neoliberalism.

In Ireland’s case, one eighth of the population was killed – one could almost say murdered– in the late 1840s, partly by the British refusal to distribute food, to prohibit the export of grain or provide effective poor relief. Such policies offended the holy doctrine of laissez-faire economics that nothing should stay the market’s invisible hand.
Live Greece submits new bailout request as Tsipras blasts austerity - live updates
European leaders told Greece it has five days to agree a reform plan that will allow it to stay in the euro.


When drought struck India in 1877 and 1878, the British imperial government insisted on exporting record amounts of grain, precipitating a famine that killed millions. The Anti-Charitable Contributions Act of 1877 prohibited “at the pain of imprisonment private relief donations that potentially interfered with the market fixing of grain prices”. The only relief permitted was forced work in labour camps, in which less food was provided than to the inmates of Buchenwald. Monthly mortality in these camps in 1877 was equivalent to an annual rate of 94%.

As Karl Polanyi argued in The Great Transformation, the gold standard – the self-regulating system at the heart of laissez-faire economics – prevented governments in the 19th and early 20th centuries from raising public spending or stimulating employment. It obliged them to keep the majority poor while the rich enjoyed a gilded age. Few means of containing public discontent were available, other than sucking wealth from the colonies and promoting aggressive nationalism. This was one of the factors that contributed to the first world war. The resumption of the gold standard by many nations after the war exacerbated the Great Depression, preventing central banks from increasing the money supply and funding deficits. You might have hoped that European governments would remember the results.

Today equivalents to the gold standard – inflexible commitments to austerity – abound. In December 2011 the European Council agreed a new fiscal compact, imposing on all members of the eurozone a rule that “government budgets shall be balanced or in surplus”. This rule, which had to be transcribed into national law, would “contain an automatic correction mechanism that shall be triggered in the event of deviation.” This helps to explain the seigneurial horror with which the troika’s unelected technocrats have greeted the resurgence of democracy in Greece. Hadn’t they ensured that choice was illegal? Such diktats mean the only possible democratic outcome in Europe is now the collapse of the euro: like it or not, all else is slow-burning tyranny.

It is hard for those of us on the left to admit, but Margaret Thatcher saved the UK from this despotism. European monetary union, she predicted, would ensure that the poorer countries must not be bailed out, “which would devastate their inefficient economies.”

But only, it seems, for her party to supplant it with a homegrown tyranny. George Osborne’s proposed legal commitment to a budgetary surplus exceeds that of the eurozone rule. Labour’s promised budget responsibility lock, though milder, had a similar intent. In all cases governments deny themselves the possibility of change. In other words, they pledge to thwart democracy. So it has been for the past two centuries, with the exception of the 30-year Keynesian respite.

The crushing of political choice is not a side-effect of this utopian belief system but a necessary component. Neoliberalism is inherently incompatible with democracy, as people will always rebel against the austerity and fiscal tyranny it prescribes. Something has to give, and it must be the people. This is the true road to serfdom: disinventing democracy on behalf of the elite.

Captain Canada: Jack can you please summarize all that post in your own words,it migh just be half as long
Thank you 🍻

duncan124:
Greece is not in debt. It is rubbish from Spain.

If you can't decide what is true and what is not you need to buy help.

Outbackjack: I think George Monbiots title to his piece summarises it enough.You should read it.

Capitalism V Democracy/

Outbackjack: So Greece has blinked and caved in to the European banks.Shame on the greek government I say.They were actually voted in to repeal the Euro fascist austerity but all they have shown is that they are typical piss weak social democratic pussies.

Some critics are saying the agreement reached is worse than the treaty of Versailles and we all know how that turned out:

The government in Athens and its creditors have reached a deal that will shore up Greece’s place in the eurozone after marathon overnight talks.

After 31 hours of acrimonious discussions spread over one tense weekend, a breakthrough came early on Monday morning. Donald Tusk, the head of the European Council, announced that the 19 leaders of the eurozone had unanimously reached agreement.

He said they were “all ready to go” on a new programme for Greece under the eurozone bailout fund, the European Stability Mechanism, adding that Athens had signed up to “serious reforms”.

But the hard-fought political deal is only the start of yet another round of talks to hammer out the technical details of a bailout plan that could be worth up to €86bn (£61bn) for Greece.
Live Greek crisis: Tsipras could lose majority if Syriza MPs refuse to back bailout - live
There is relief and anger in Athens after the Greek prime minister agrees to deep economic reforms, including asset sales, in an attempt to get a third bailout
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In order to get these desperately needed funds, the radical left government of Alexis Tispras had to submit to draconian economic reforms that the Greek people had rejected in a referendum barely a week before.

Greece has promised to pass laws introducing controversial economic reforms by Wednesday. These include reforming the VAT system, overhauling pensions and signing up to plans that ensure immediate spending cuts in the event of breaching creditor-mandated budget targets.

Athens has also agreed to sell off state assets worth €50bn, with the proceeds earmarked for a trust fund supervised by its creditors. Half the fund will be used to recapitalise Greek banks, while the remaining €25bn will pay down Greek debts.

Tsipras did manage to win a concession that the fund should be managed from Greece, not Luxembourg, as envisaged in a German plan, but the rules will be drawn up by Greece’s creditors – the troika that Tsipras vowed to throw off, but only succeeded in renaming as “the institutions”.

These institutions – the European commission, International Monetary Fund and European Central Bank – have also asked Athens to come up with a plan to “de-politicise” its civil service by next Monday.

In another humiliating climbdown, Athens could be forced to reverse measures it passed upon assuming power that are deemed to run counter to the bailout philosophy. Potentially, this could mean firing the government cleaners that Syriza rehired with such fanfare.

Paul Krugman, the Nobel-prize winning economist and prominent critic of austerity in Greece, said the creditors’ demands on Greece “went beyond harsh into pure vindictiveness, [leading to the] complete destruction of national sovereignty [with] no hope of relief”.

“It’s a grotesque betrayal of everything the European project was supposed to stand for,” he wrote several hours before the final deal emerged. As the talks dragged on through Monday night, #ThisIsaCoup became the top trending topic on Twitter in Greece, Germany, the UK and Ireland.

Echoing a widespread view on social media, one financial analyst claimed the deal was worse than the 1919 Treaty of Versailles that crushed Weimar Germany with debt and paved the way for the second world war.

Marc Ostwald, of ADM Investor Services, argued that the eurozone creditor countries wanted “to completely destroy Greece”.

Asked about the Versailles analogy, German Chancellor Angela Merkel said: “I never make historical comparisons.” She added that the Greek programme was “nothing special”, apart from the sums of money involved, and in line with other bailout schemes devised for Spain and Portugal.

Jean-Claude Juncker, the rejected criticism that Greece’s creditors had been too harsh. “I don’t think that the Greek people have been humiliated and I don’t think the other Europeans were losing their face. It’s a typical European arrangement.”

While recriminations continue to swirl, Greece urgently needs cash to stave off bankruptcy. Athens has to find €7bn by next Monday and a further €5bn by mid-July.

Eurozone finance ministers, who have been stuck on a loop of emergency meetings for three-and-a-half weeks, will reconvene at 15.00 in Brussels (14.00 BST) to discuss emergency bridge finance to tide over the Greek government while further talks on the €86bn bailout grind on.

Although EU leaders trumpeted the avoidance of Grexit, in the communique they made clear the deal could still unravel. “The risks of not concluding swiftly the negotiations remain fully with Greece.”

Greece’s parliament is expected to push through the controversial reform package by Wednesday, paving the way for parliaments in other eurozone members to ratify the agreement. The Bundestag and Finnish parliament are among several legislatures that must approve eurozone bailout programmes.

Finland is expected to reject any further bailout for Greece to avoid a schism that could topple its two-month-old government.

duncan124:

What the fook are you talking about OBJ??


" Tusk said the eurozone is now ready to talk about assistance from the European Stability Mechanism for Greece in return for "major reforms" and financial assistance for the country.

Thanks to Tusk's intervention a privatisation fund has been set up which will be located in Greece and managed by Greeks, and not in Luxembourg managed by Germans, as the German contingent reportedly wanted. Athens will now start selling off state assets worth EUR 50 billion, with the income to go into the fund co-supervised by its creditors.

Half of the proceeds will recapitalise Greek banks and the other half will pay down Greek debts. A transfer of state-owned companies into a fund in Luxembourg was seen to be undermining Greek sovereignty and was a main stumbling block for Athens. "

- See more at: http://www.thenews.pl/1/10/Artykul/213545,Tusk-rises-to-the-moment#sthash.TgvvMNb8.dpuf

The fiction is different where you read it.

Captain Canada: And WTF happens to does funds when not enough to shore banks and other government intuitions,in a year or so?eh?
Didn't the Greek citizens vote count on their future recently?????
I guess people's decisions mean fucking crap.

duncan124:

Sluggerotoole takes aim at the Anti-austerity protests and the Irish Greek relationship but without much real content.

http://sluggerotoole.com/2015/07/14/failure-of-anti-austerity-narrative-and-the-political-fallout-of-the-greek-diktat-in-ireland/

Outbackjack: John Pilger sums it up best.As always:

The Problem Of Greece Is Not Only A Tragedy. It Is A Lie: John Pilger -

The heart of Greece's troubles lie within the political fraud and cowardice of its leaders, writes John Pilger.

An historic betrayal has consumed Greece. Having set aside the mandate of the Greek electorate, the Syriza government has willfully ignored last week’s landslide “No” vote and secretly agreed to a raft of repressive, impoverishing measures in return for a “bailout” that means sinister foreign control and a warning to the world.

Prime Minister Alexis Tsipras has pushed through parliament a proposal to cut at least 13 billion euros from the public purse – four billion euros more than the “austerity” figure rejected overwhelmingly by the majority of the Greek population in a referendum on July 5.

These reportedly include a 50 per cent increase in the cost of healthcare for pensioners, almost 40 per cent of whom live in poverty; deep cuts in public sector wages; the complete privatization of public facilities such as airports and ports; a rise in value added tax to 23 per cent, now applied to the Greek islands where people struggle to eke out a living. There is more to come.

“Anti-austerity party sweeps to stunning victory”, declared a Guardian headline on January 25. “Radical leftists” the paper called Tsipras and his impressively-educated comrades. They wore open neck shirts, and the finance minister rode a motorbike and was described as a “rock star of economics”. It was a façade. They were not radical in any sense of that cliched label, neither were they “anti-austerity”.

For six months Tsipras and the recently discarded finance minister, Yanis Varoufakis, shuttled between Athens and Brussels, Berlin and the other centres of European money power. Instead of social justice for Greece, they achieved a new indebtedness, a deeper impoverishment that would merely replace a systemic rottenness based on the theft of tax revenue by the Greek super-wealthy – in accordance with European “neo-liberal” values - and cheap, highly profitable loans from those now seeking Greece’s scalp.

Greece’s debt, reports an audit by the Greek parliament, “is illegal, illegitimate and odious”. Proportionally, it is less than 30 per cent that of the debt of Germany, its major creditor. It is less than the debt of European banks whose “bailout” in 2007-8 was barely controversial and unpunished.


For a small country such as Greece, the euro is a colonial currency: a tether to a capitalist ideology so extreme that even the Pope pronounces it “intolerable” and “the dung of the devil”. The euro is to Greece what the US dollar is to remote territories in the Pacific, whose poverty and servility is guaranteed by their dependency.

In their travels to the court of the mighty in Brussels and Berlin, Tsipras and Varoufakis presented themselves neither as radicals nor “leftists” nor even honest social democrats, but as two slightly upstart supplicants in their pleas and demands.

Without underestimating the hostility they faced, it is fair to say they displayed no political courage. More than once, the Greek people found out about their “secret austerity plans” in leaks to the media: such as a June 30 letter published in the Financial Times, in which Tsipras promised the heads of the EU, the European Central Bank and the IMF to accept their basic, most vicious demands – which he has now accepted.

When the Greek electorate voted “no” on July 5 to this very kind of rotten deal, Tsipras said, “Come Monday and the Greek government will be at the negotiating table after the referendum with better terms for the Greek people”. Greeks had not voted for “better terms”. They had voted for justice and for sovereignty, as they had done on January 25.

The day after the January election a truly democratic and, yes, radical government would have stopped every euro leaving the country, repudiated the “illegal and odious” debt – as Argentina did successfully - and expedited a plan to leave the crippling Eurozone. But there was no plan. There was only a willingness to be “at the table” seeking “better terms”.

The true nature of Syriza has been seldom examined and explained. To the foreign media it is no more than “leftist” or “far left” or “hardline” – the usual misleading spray. Some of Syriza’s international supporters have reached, at times, levels of cheerleading reminiscent of the rise of Barack Obama. Few have asked: Who are these “radicals”? What do they believe in?

In 2013, Yanis Varoufakis wrote: “Should we welcome this crisis of European capitalism as an opportunity to replace it with a better system? Or should we be so worried about it as to embark upon a campaign for stabilising capitalism? To me, the answer is clear. Europe’s crisis is far less likely to give birth to a better alternative to capitalism….

“I bow to the criticism that I have campaigned on an agenda founded on the assumption that the left was, and remains, squarely defeated…. Yes, I would love to put forward [a] radical agenda. But, no, I am not prepared to commit the [error of the British Labour Party following Thatcher’s victory].

“What good did we achieve in Britain in the early 1980s by promoting an agenda of socialist change that British society scorned while falling headlong into Thatcher’s neoliberal trip? Precisely none. What good will it do today to call for a dismantling of the Eurozone, of the European Union itself …?”

Varoufakis omits all mention of the Social Democratic Party that split the Labour vote and led to Blairism. In suggesting people in Britain “scorned socialist change” – when they were given no real opportunity to bring about that change – he echoes Blair.

The leaders of Syriza are revolutionaries of a kind – but their revolution is the perverse, familiar appropriation of social democratic and parliamentary movements by liberals groomed to comply with neo-liberal drivel and a social engineering whose authentic face is that of Wolfgang Schauble, Germany’s finance minister, an imperial thug. Like the Labour Party in Britain and its equivalents among former social democratic parties such as the Labor Party in Australia, still describing themselves as “liberal” or even “left”, Syriza is the product of an affluent, highly privileged, educated middle class, “schooled in postmodernism”, as Alex Lantier wrote.

For them, class is the unmentionable, let alone an enduring struggle, regardless of the reality of the lives of most human beings. Syriza’s luminaries are well-groomed; they lead not the resistance that ordinary people crave, as the Greek electorate has so bravely demonstrated, but “better terms” of a venal status quo that corrals and punishes the poor. When merged with “identity politics” and its insidious distractions, the consequence is not resistance, but subservience. “Mainstream” political life in Britain exemplifies this.

This is not inevitable, a done deal, if we wake up from the long, postmodern coma and reject the myths and deceptions of those who claim to represent us, and fight.

- See more at: https://newmatilda.com/2015/07/14/problem-greece-not-only-tragedy-it-lie-john-pilger#sthash.v47RB8kL.dpuf

duncan124:

It was a referendum OBJ!

As the title suggests Pilger is a liar.

Outbackjack: What planet are you on Duncan?

The Greek government have blatantly ignored the referendum and caved into the Capitalists.