Le site Bellaciao: coloré, multiple, ou le meilleur cotoie fort heureusement le pire, mélangé, bizarre, picabien et dadaîste, explorant toutes sortes de registres et de régimes rhétoriques, drole et polémiqueur, surréaliste: rencontre d'un parapluie et d'une machine à coudre sur une table de dissection, têtes de Lénine sur le clavier d'un piano Steinway ou Bosendorfer...
FR
ES
Senal en Vivo
VIDEO
RADIO
FRIENDS SITES
with Bellaciao
Bellaciao hosted by
To rebel is right, to disobey is a duty, to act is necessary !
Bellaciao  mobile version   |   Home  |   About us   |   Donation  |   Links  |   Contact  |   Search
The Greek debt crisis and the end of Social Europe

by : PhT
Tuesday June 28, 2011 - 09:36
1 comment

Following the “Greek” crisis in the news can be puzzling for the average observer, who watches befuddled as “lazy Greeks” and their “profligate welfare state”, threaten her country’s fragile economic recovery. The situation becomes even more incomprehensible as the public discourse progresses from reports on the impending doom to reports about “rioting Greeks”, who quite ungratefully seem to be rebelling against their country’s own “salvation” by another massive ECB/IMF loan to their government. All this may detract the reader from the fact that what is going on in Europe right now is a massive transfer of money from European taxpayers to European banks via the Greek state, as well as the scariest breakdown of democratic politics in a very long time. The proverbial “European democratic deficit” has come home to roost. To understand this one needs to have a little more background on the crisis.

First, the so-called “Greek crisis” is in reality a deep crisis of the European banking system. European banks were propped up after the 2008 through a huge socialization of their risk by transfer of their liabilities onto public accounts. This was not enough to save them. Their financial situation became shaky again, once it became obvious that they were holding sovereign debt that was worth much less than its nominal value. The weakest link, Greece, started having difficulties funding itself in the bond markets. The prospect of a Greek default spelled the potential downfall of the significantly weakened European banks, to which the ECB and the European Commission reacted promptly, with an approving nod from the U.S. and China.

In addition, the crisis is one of the euro itself. The European elites that designed the euro overlooked all warnings about the dangers of binding together under the same currency economies of different caliber without a unified fiscal policy and substantial transfers to make up for the trade deficits that would necessarily end up on the weakest members’ accounts. The graft and corruption of the Greek elites is part of the explanation for the fact that Greece let itself become the weakest link, but Ireland, Portugal, and Spain are inexplicable without a structural account of how the entire European periphery found itself up to the neck in debt despite fiscal austerity measures of more than a decade in some cases. This account includes at least two elements. One is the lack of any mechanism in the design of the monetary union to deal with balance of payments crises, and the other is Germany’s tendency to feed its trade surplus with its EU partners by stimulating demand via loans to the PIIGS guaranteed by their sovereign bonds. The second element is also a story of graft and corruption. But this time, it is private corruption of European companies responding to the corruption of Greek elites and hoisting the Greek people with unnecessarily high prices for lucrative state contracts.

Second, the loan that the Greek government will try to push through Parliament this week is not a bailout of Greece or the Greeks. Greece is bankrupt already, it has been since May 2010, but is not allowed to default or somehow restructure in order to protect the European banking system and the euro itself, as well as the stability of a fragile global economy interconnected by a web of debt guaranteed by more debt. According to the Greek government’s budget for 2010, Greece was to receive 53 billion euros from the ECB/IMF mechanism. In turn, it was to pay 50 billion of these to its creditors (32 for interest on the long term debt, 18 for rolling over short term debt). Thus, the Greek ‘bailout’ is siphoning money from the European taxpayers (and American via the IMF) who are funding it, back to European banks who are the holders of Greek bonds that need servicing. The latter are for the moment held unaccountable for their bad bets, even though they unrealistically equated Greek sovereign debt to the German one. They are also given the time to try and hedge against an upcoming Greek default. The ECB is another big loser in this because as the de facto lender of last resort it is holding a lot of Greek sovereign debt. That’s the European taxpayer again. Thus, the ECB wants to hear nothing about “forcing” any creditor to do anything that they have not contractually agreed upon.

Unless of course we are talking about Greek workers’ rights as creditors of the Greek state’s promises about wages and pensions. Those can apparently be unilaterally discharged without further ado. The average worker is the object of punitive measures justified on a fantastic narrative of Greek laziness supposed to satisfy the Germans who think they are transferring money directly to the pockets of the Greeks.[1] In the midst of an economic crisis the measures have sent the economy into a downward spiral. Wages and pensions have been cut by up to a quarter, thousands of small businesses have closed, and the unemployment rate among the youth has reached the dizzying rate of 40%. All of this was predictable and indeed predicted long before the Greek government, which was elected on the promise of taxing the tax-evading rich, accepted the first loan in May 2010.

Furthermore, against any measure of reality Greece is held up for the rest of the world as an example of why the “welfare state” has failed. Greece was never a welfare state. It is a corrupt, clan-cased cash machine for the insiders, with the outsiders left to fund education, health, housing, and any other services that a welfare state would support on their own. It is a low-productivity economy, based on low wages, family provisioning, and public employment as a substitute for welfare for the one quarter of the workforce who can get such jobs. Which is why the notorious “internal devaluation” plans, based on the idea that what Greece needs is to depress its inflated wages, are completely misguided, and characterized as such even by researchers of one of the biggest private banks in Greece.[2] The main loss of competitiveness since joining the euro in Greece apparently did not come from a rise in labor costs relative to our competitors in services, but rather from a rise in costs from the excessive increase in industry’s margin of profits since 2000, which led to a worsening of our trade balance.[3] Depressing wages even further is therefore like trying to put out a house fire by blowing at it. Worse, it is like throwing petrol at it, since you are helping in the collapse of aggregate demand.

Now let’s turn to the breakdown of democratic politics at the national and European level. The loan agreement presents all sorts of constitutional problems for Greece, as well as for the EU. There is a good argument that the ratification of the loan agreement was unconstitutional since it is a sui generis international treaty between Greece’s creditors and Greece and it therefore requires approval by 180 MPs, as opposed to the 153 who voted for it. It is not an act of any EU institution nor is it a regular act of the executive, in which case there would be no need for ratification by the Parliament. At the European level, the Council decisions addressed to Greece that incorporate the terms of the ECB/IMF loan agreement are also arguably in violation of the Treaty on the Functioning of the European Union, because they basically dictate in detail tax, wage, and social security policy all of which belong to the exclusive competence of Member States and therefore cannot be adopted on the basis of the Treaties as they stand.[4]

Since there were no procedures foreseen to deal with such a crisis some procedure had to be made up on the go of course. But that does not detract from the fact that we are in a situation where fundamental questions of tax, social security, and wage policy for the countries that are receiving loans from the European Financial Stability Facility (EFSF) have been de facto transferred to the European level without any proper mechanism for ensuring democratic legitimacy. Worse still, governance at the European level seems to be supremely tone deaf to the current legitimacy crisis at the national and European levels. What else can a decision by the EFSF to place Goldman Sachs as joint manager of the Portuguese bonds amount to, when GS colluded with the Greek government to hide the true degree of Greece’s public debt in order to ‘facilitate’ Greece’s entry to the euro? What else but tone deafness to legitimacy questions can it be that the most peaceful demonstrations in recent Greek memory are overwhelmingly reported on throughout Europe as “riots”, when the accompanying photos are actually depicting the June 15th police brutality against protesters exercising the constitutional right to association and speech?

A poll of the protesters last week showed that 87% of them would like Parliament to vote down Papandreou’s new government and refuse the “bailout”, while 47% in a national poll said they would prefer for the loan to be rejected, as against 34% in favor of getting the new loan along with the austerity measures. Greeks already knew very clearly that the “vote of confidence” in the Greek Parliament on June 21st was a theatrical exercise aimed outside of Greece, where nervous “markets” were watching closely in order to gauge the risk of an immediate Greek default. The vote of confidence went as expected. The Greek Prime Minister won the confidence of 153 out of the 300 MPs and then everybody had to be rushed out through the back door with heavy police protection to guard them from the people whose confidence they were supposed to have just won. Instead of trying to represent the legitimate protests on the street as the result of Greek populism and provincialism, the government could pay heed to the fact that a critical number of citizens are reaching the breaking point, and use those facts to push back instead of acting as the steward of European elite interests.

Even better, it should seek alliances with the peripheral countries that share a common interest with Greece in fixing the problems resulting from a monetary Union without common fiscal policy and a transfer union. What would a Greek government push back towards is of course the next obvious question. A Europe-led restructuring of the debt of burdened countries along with a correction of the structural problems of a monetary union without fiscal policy should be the order of the day. Greece itself needs a lot of institutional reforms, but this could take years. A fire sale of its assets and an impoverishment of its citizens for years to come is not a solution, as we already know from similar experiences in Latin America and the former Soviet Union.

But a “Europe-led restructuring” is an empty vessel and can take many different forms with radically dissimilar distributional and political consequences. One can imagine a “European led restructuring” that completely embraces the ECB/IMF’s current version of how a country should grow, namely through depressed wages, fiscal austerity and migration. In fact, this seems like the likeliest option under current political conditions. The problems of this version are poignantly illustrated in the recent NPR story detailing how the Chinese company that runs a part of the port of Piraeus is importing Chinese labor conditions to a Greek workforce terrified and without alternatives to uninsured, dangerous, and low-paying jobs.

The fact that this is what European policy amounts to today spells the end of dreams of “social Europe” as a bulwark against the social disruption inevitably created by debt ‘guaranteed’ by more debt moving freely throughout the globe. The EU’s emergency wholesale abandonment of a social vision for Europe is perhaps the most politically explosive part of the situation. The European project is losing the confidence of European electorates. Paradoxically, herein also lie the possibilities for transformation. It is possible of course that European citizens will buy the story of the lazy Greeks, take more medicine themselves and hope that the same will not happen to them because they are hard working (and European). But there is also the option that as the Greeks become more and more despondent the version of recovery currently peddled by the EU will cease to convince the average European, who might awaken to the possibility that some such similar fate awaits them down the road. The unprecedented trans-European dialogue of protesters from London, to Spain, to Greece, carries some of that promise.

I personally hope that the latter is the option that comes to pass.

[1] Greeks work harder than Germans. Check out the stats from Eurostat http://www.phantis.com/news/souther... )

[2] Dimitris Malliaropulos, How much did competitiveness of the Greek economy decline since EMU entry?, Eurobank Research 2010

[3] id.

[4] http://www.dsanet.gr/epikairothta/m...



Leave a comment
Print this article


Commentaires de l'article
 

The Greek debt crisis and the end of Social Europe
Tuesday July 5 - 01:41 - Posted by gmathol - 61c045c65dec76fb670669a632baa534...

Its not the hard working Greece, Englishmen or Frenchmen who hits the streets in protest. Often time it is the public employee, which f. e. in UK has to fear that his pension of 10.000 USD a month will be cut down to 8000 or 7000 USD a month.

That is the paradox.

German have introduced the Hartz IV laws which creates austerity measures for almost 21 million German people, who can’t find jobs or working in jobs which don’t pay enough.

Nevertheless, European countries still keep their so called defense spending, some have extra money to bomb Libya into stone age.

The movement which will be needed to bring a change, won’t form until the pain we all feel will become unbearable.

Revolution in Greece? Forget it! It seems possible that even a military dictatorship will be allowed by the EU again.







Trump uses Jews to get pedophile elected
Sunday 10 - 12:45
by Eaton
WHAT TRUMP IS DOING IN JERULSALEM AND WHY HE IS DOING IT
Wednesday 6 - 18:40
by JOHN CHUCKMAN
SUPPORT RACISM: WATCH THE NFL
Saturday 18 - 01:38
by David R. Hoffman, Legal Editor of Pravda.Ru
WHAT IS REALLY GOING ON IN SAUDI ARABIA?
Friday 10 - 15:13
by JOHN CHUCKMAN
Sorry, Ain’t got cash. God bless you, too.
Wednesday 8 - 09:22
by Bailey Anderson
REFLECTIONS ON HOW LITTLE IS REVEALED BY JUST-RELEASED JFK ASSASSINATION DOCUMEN
Monday 30 - 19:43
by JOHN CHUCKMAN
PEOPLE OF COLOR: THE NFL DOESN’T GIVE A DAMN ABOUT YOU
Tuesday 17 - 23:07
by David R. Hoffman, Legal Editor of Pravda.Report
TRUMP, JONES, THE NFL, AND THE NEW MCCARTHYISM
Tuesday 10 - 23:14
by David R. Hoffman, Legal Editor of Pravda.Report
Catalonia referendum: 90% voted for independence, say officials (video)
Monday 2 - 09:55
Catalonia referendum: ’Spanish authorities are the criminals’ (video)
Monday 2 - 09:47
If I was truly evil
Tuesday 12 - 14:22
Yves Bouvier Faces Swiss Tax Investigation
Saturday 9 - 03:27
by lishk
The Polisario front suspected of double-play around humanitarian aid hijacking
Friday 8 - 21:44
by NathanT
The Polisario front suspected of double-play around humanitarian aid hijacking
Friday 8 - 21:37
by Nathan Taylor
AMERICA’S JUDASES
Sunday 27 - 20:02
by David R. Hoffman, Legal Editor of Pravda.Report
What happend to Soraya and Hussein Khashoggi?
Friday 25 - 20:38
by Perseus
The falling Max Ehrich
Thursday 17 - 19:40
by celbbetty
DAMN THE NFL
Wednesday 16 - 01:44
by David R. Hoffman, Legal Editor of Pravda.Report
Overplaying your hand
Thursday 10 - 12:36
Gujarat Flood 2017 Devastation- Inevitable or Orchestrated in Dhanera ?
Thursday 3 - 06:19
by Dwarika Nath Rath
Multiple citizenship & Zionist subversion of America, Australia, India, Humanity
Wednesday 2 - 03:10
by Dr Gideon Polya
I’M AN IDIOT AND I VOTE
Thursday 27 - 23:23
by David R. Hoffman
The Top Ten Art Scandals That Have Rocked the World
Tuesday 18 - 15:48
by Curtis Judge
John Pilger slams Mainstream silence re Apartheid Israel crimes: Free Palestine
Thursday 13 - 02:43
by Dr Gideon Polya
RUSSIAN MAFIA – NOW IN DUBAI?
Monday 3 - 14:52
by James Dolay
THE NFL IS RACIST
Saturday 1 - 00:31
by David R. Hoffman, Legal Editor of Pravda.Report
Australian Finkel Review has dirty energy for 50 years & ignores 25 key issues
Monday 19 - 03:37
by Dr Gideon Polya
ENOUGH IS ENOUGH: JUSTICE FOR PHILANDO CASTILE
Sunday 18 - 01:03
by David R. Hoffman, Legal Editor of Pravda.Report
Find out what is true and false about climate change - Kenneth Pouchet
Friday 16 - 17:43
by Kenneth Pouchet
Freedom For Me, But Not You
Wednesday 31 - 02:17
by David R. Hoffman, Legal Editor of Pravda.Report
Post-Apartheid, non-racist, One State, democratic Palestine can happen tomorrow
Tuesday 30 - 08:21
by Dr Gideon Polya
A Review of Gilad Atzmon’s new book, “Being In Time: The Post-Political Manifes
Wednesday 17 - 21:23
by June Terpstra
Avoiding Another War in North Korea
Sunday 14 - 18:27
by William John Cox
Judah Ben Hur for President 2020
Saturday 13 - 16:15
by William Morgan
ARTICLES OF IMPEACHMENT FOR DONALD J. TRUMP
Saturday 13 - 02:33
by David R. Hoffman, Legal Editor of Pravda.Report
As War Party shadow boxes, its agenda surges unopposed
Friday 12 - 14:28
by Daniel Patrick Welch
Yves Bouvier caught in a real estate bankruptcy
Thursday 11 - 20:19
by Pierre Gove
Book: This Is How The State Fucks Your Mind
Tuesday 9 - 19:16
by OAF
ISRAEL’S 1967 ATTACK ON INTELLIGENCE SHIP U.S.S. LIBERTY - THE ONLY MYSTERY
Thursday 20 - 20:06
by JOHN CHUCKMAN
Denmark eaten down to the bone, what’s next?
Wednesday 19 - 16:22
by Henrik Petersen

home | webmaster



Follow-up of the site's activity
RSS Bellaciao En


rss FR / rss IT / rss ES



Bellaciao hosted by DRI

It is the responsibility of the intellectual to speak the truth and to expose lies. Noam Chomsky
Facebook Twitter Google+
DAZIBAO
I, European citizen, won’t let refugees be rejected in my name
Thursday 10 March
©Olivier Jobard/Myop I, European citizen, won’t let refugees be rejected in my name THE RIGHT TO ASYLUM IS A RIGHT In the phrase « right to asylum », every word matters. Under the law, every person who is persecuted because of his or her political opinions or because of his or her identity, every person that is endangered by violence, war or misery has a RIGHT to seek asylum in another country The aim of this petition is to collect (...)
read more...
Neo-Nazis and far-right protesters in Ukraine 3 live-stream
Friday 24 January
2 comments
The far-right in Ukraine are acting as the vanguard of a protest movement that is being reported as pro-democracy. The situation on the ground is not as simple as pro-EU and trade versus pro-Putin and Russian hegemony in the region. When US Senator John McCain dined with Ukraine’s opposition leaders in December, he shared a table and later a stage with the leader of the extreme far-right Svoboda party Oleh Tyahnybok. This is Oleh Tyahnybok, he has claimed a "Moscow-Jewish mafia" (...)
read more...
Hugo Chavez is dead (video live)
Wednesday 6 March
by : Collective BELLACIAO
1 comment
President Hugo Chavez companeros venezueliano died after a long battle with cancer.
read more...
International initiative to stop the war in Syria Yes to democracy, no to foreign intervention!
Thursday 13 December
Your support here: http://www.peaceinsyria.org/support.php We, the undersigned, who are part of an international civil society increasingly worried about the awful bloodshed of the Syrian people, are supporting a political initiative based on the results of a fact-finding mission which some of our colleagues undertook to Beirut and Damascus in September 2012. This initiative consists in calling for a delegation of highranking personalities and public figures to go to Syria in order to (...)
read more...
THE KU KLUX KLAN ONCE AGAIN CONTROLS INDIANA
Monday 12 November
by : David R. Hoffman, Legal Editor of Pravda.Ru
7 comments
At first glance, the results of America’s 2012 election appear to be a triumph for social, racial, and economic justice and progress in the United States: California voters passed a proposition requiring the rich to shoulder their fair share of the tax burden; Two states, Colorado and Washington, legalized the recreational use of marijuana, while Massachusetts approved the use of marijuana for medical purposes; Washington and two other states, Maine and Maryland, legalized same-sex (...)
read more...
I’VE DECIDED TO "WASTE" MY VOTE
Sunday 28 October
by : David R. Hoffman, Legal Editor of Pravda.Ru
In a 2004 episode of Comedy Central’s animated series South Park, an election was held to determine whether the new mascot for the town’s elementary school would be a “giant douche” or a “turd sandwich.” Confronted with these two equally unpalatable choices, one child, Stan Marsh, refused to vote at all, which resulted in his ostracization and subsequent banishment from the town. Although this satirical vulgarity was intended as a commentary on the two (...)
read more...
HIGHER EDUCATION IN AMERICA: DREAM OR NIGHTMARE? PART IV
Friday 28 September
by : David R. Hoffman, Legal Editor of Pravda.Ru
PART I PART II PART III If there is one major inconsistency in life, it is that young people who know little more than family, friends and school are suddenly, at the age of eighteen, supposed to decide what they want to do for the rest of their lives. Unfortunately, because of their limited life experiences, the illusions they have about certain occupations do not always comport to the realities. I discovered this the first time I went to college. About a year into my studies, I (...)
read more...
HIGHER EDUCATION IN AMERICA: DREAM OR NIGHTMARE? PART III
Friday 28 September
by : David R. Hoffman, Legal Editor of Pravda.Ru
PART I PART II PART IV Disillusioned with the machinations of so-called “traditional” colleges, I became an adjunct instructor at several “for-profit” colleges. Thanks largely to the power and pervasiveness of the Internet, “for-profit” colleges (hereinafter for-profits) have become a growing phenomenon in America. They have also been the subject of much political debate and the focus of a Frontline special entitled College Inc. Unlike traditional (...)
read more...
HIGHER EDUCATION IN AMERICA: DREAM OR NIGHTMARE? PART II
Friday 28 September
by : David R. Hoffman, Legal Editor of Pravda.Ru
PART I PART III PART IV Several years ago, a young lady came into the college where I was teaching to inquire about a full-time instructor’s position in the sociology department. She was advised that only adjunct positions were available. Her response was, “No thanks. Once an adjunct, always an adjunct.” Her words still echo in my mind. Even as colleges and universities raise their tuition costs, they are relying more and more on adjunct instructors. Adjuncts are (...)
read more...
HIGHER EDUCATION IN AMERICA: DREAM OR NIGHTMARE? PART I
Friday 28 September
by : David R. Hoffman, Legal Editor of Pravda.Ru
PART II PART III PART IV When The Bill of Rights was added to the United States Constitution over two hundred years ago, Americans were blessed with many rights considered to be “fundamental.” One conspicuously missing, however, was the right to an education. This was not surprising given the tenor of the times. America was primarily an agrarian culture, and education, especially higher education, was viewed as a privilege reserved for the children of the rich and (...)
read more...
ONE SOLITARY LIFE, PART TWO
Monday 30 July
by : David R. Hoffman, Legal Editor of Pravda.Ru
3 comments
If there is one universal question that haunts all human beings at some point in their lives, it is, “Why do we die?” Death, after all, is the great illogic. It ultimately claims all, the rich and the poor, the mighty and the small, the good and the evil. Death also has the capability to make most human pursuits—such as the quest for wealth, fame and power—vacuous and fleeting. Given this reality, I have often wondered why so many people are still willing to (...)
read more...
HOW MUCH CORRUPTION CAN DEMOCRACY ENDURE?
Thursday 28 June
by : David R. Hoffman, Legal Editor of Pravda.Ru
6 comments
How much corruption can a “democracy” endure before it ceases to be a democracy? If five venal, mendacious, duplicitous, amoral, biased and (dare I say it) satanic Supreme Court “justices”—John Roberts, Samuel Alito, Antonin Scalia, Clarence Thomas and Anthony Kennedy—have their way, America will soon find out. In several previous articles for Pravda.Ru, I have consistently warned how the Supreme Court’s 2010 Citizens United decision is one of the (...)
read more...
DEMOCRACY IN THE HANDS OF IDIOTS, PART TWO
Tuesday 12 June
by : David R. Hoffman, Legal Editor of Pravda.Ru
1 comment
Imagine, if you will, that the United States government passes a law banning advertisers from sponsoring commercials on Rush Limbaugh’s radio show or Rupert Murdoch’s Fox (Faux) “News” Network. On one hand, there would be two decided advantages to this ban: The National IQ would undoubtedly increase several percentage points, and manipulative pseudo-journalists would no longer be able to appeal to the basest instincts in human nature for ratings and profit while (...)
read more...
DEMOCRACY IN THE HANDS OF IDIOTS
Thursday 7 June
by : David R. Hoffman, Pravda.Ru Legal Editor
4 comments
LIVE, from the State that brought you Senator Joseph McCarthy, Wisconsin voters now proudly present, fresh from his recall election victory, Governor Scott Walker! At first glance, it is almost unfathomable that anyone with a modicum of intelligence would have voted to retain Scott Walker as Wisconsin’s governor. This, after all, is a man who openly declared he is trying to destroy the rights of workers through a “divide and conquer” strategy; who received 61% of the (...)
read more...
PEOPLE WITHOUT SOULS
Tuesday 13 March
by : David R. Hoffman, Legal Editor of Pravda.Ru
2 comments
A question I’ve frequently been asked since I began writing for Pravda.Ru in 2003 is, “Why did you become disillusioned with the practice of law?” This question is understandable, particularly since, in most people’s minds, being an attorney is synonymous with wealth and political power. I’ve always been reluctant to answer this question for fear it will discourage conscientious and ethical people from pursuing careers in the legal profession—a (...)
read more...