June 30, 2015–Rallies are taking place in Greece and internationally to say ‘No’ (Oxi) to the extortionist, austerity demands of the European governments and financial institutions against the Greek people and government. Tens of thousands rallied on the evening of June 29 in Athens. The Guardian reports, “Rallying in front of the Greek Parliament on Monday night, supporters of the Syriza-led government of Prime Minister Alexis Tsipras demanded an end to the ‘economic asphyxia’ and ‘social catastrophe’ of austerity – and the return of dignity.” The newspaper reports that 17,000 people rallied in Thessaloniki, the second largest city in the country, the same day.
Today is a crucial day as the Greek government is supposed to make a loan payment of 1.6 billion euros (US$1.8 billion) to the International Monetary Fund but does not have the means to do so. Next up is a 3.5 billion euros payment on July 20. These are loans which past, right-wing governments in Greece took on with the gleeful cooperation of the banksters of Europe.
Stock markets around the world dropped by an average of two percent yesterday.
Enclosed are articles and reports on the political situation in Greece and the growing international movement of solidarity with the Greek people.
News and political analysis:
* The Guardian, live from Greece
The Guardian newspaper in the UK is providing a live news feed from Athens on its website.
* Kevin Ovenden,UK writer, reporting from Athens on his Facebook page.
* A new mode of warfare: The Greek debt crisis and crashing markets, by Michael Hudson, Counterpunch, June 29, 2015 (full text is further below)
* Greece, the euro and gunboat diplomacy, by Karl Whelan, June 20, 2015
“The original decision to provide a bailout is the source of the current crisis. It’s time for Europe to share the blame and financial consequences.” (Karl Whelan is Professor of Economics at University College Dublin)
* Report of the Truth Commission of the Greek Public Debt
The Commission’s report was issued on June 17, 2015. Read the executive summary of the Commission report and access the full report at the weblink.
(And from the Globe and Mail, June 30, 2015: Five charts that explain Greece’s predicament)
* Greece imposes capital controls as Troika escalates blackmail, by Jorge Martin, published on In Defense of Marxism, June 29, 2015
* First step for Greece to end austerity: slash its monstrous military spending, Finnian Cunnigham, Sputnik News, June 29, 2015
* Greek debt crisis could shape the future of the euro as a currency, Bloomberg News, June 28, 2015
Much attention on the Greek government financial crisis is focused on the consequences for Greece and its people. But what about the consequences for the European Union and its capitalist currency? An article by Bloomberg describes the degree to which Europe’s capitalist leaders are bluffing the Greek people in pressing for harsher austerity measures:
“German Finance Minister Wolfgang Schaeuble warned on June 26 of the harm an ineffective resolution to the crisis may do to the euro. There’s the risk of losing “confidence in markets, in the euro, the monetary union”, he said at an event in Frankfurt. “This can be dramatic. We destroy the monetary union.”
* Greece: Drop the debt, break the chains
International campaign of the Jubilee Debt Network. Full text of Jubilee’s appeal and its petition is further below.
* Call of trade union leaders and Labour Party MPs in Britain for debt cancellation for Greece
Full text is further below.
* ‘Can’t Pay Won’t Pay’ anti-austerity coalition in Britain
The ‘Can’t Pay Won’t Pay’ anti-austerity coalition in Britain is organizing rallies and other events in solidarity with the Greek people through its Facebook page, with 57,000 ‘likes’. 57,000 likes.
* Petition by ‘Just Foreign Policy’ in the U.S.
Petition demanding that members of U.S. Congress speak out against the brinkmanship of the International Monetary Fund.
The following two interviews were broadcast on CBC Radio One:
* June 29, 2015, on the current affairs program ‘The Current’, with:
Yannis Zabetakis, professor of food chemistry at the University of Athens
Eric Reguly, European Bureau Chief for the Globe and Mail, in Athens. Reguly says that imposing further austerity measures on Greece is tantamount to a Ponzi scheme.
* June 16, 2015, on the current affairs program ‘As It Happens’
James Galbraith, economist at the University of Greece and an advisor to the finance minister of Greece. The interview begins at the seven minute mark of third half hour of the program.
Three texts enclosed:
1. Greece: Drop the debt, break the chains
International campaign of the Jubilee Debt Network
Visit the campaign website. There, you can sign the Europe-wide petition demanding cancellation of the odious debt imposed on the Greek people by the wealthy class of that country in league with European and international banksters. So far, more than 19,000 people have signed.
We, the citizens of countries across Europe, call for:
A European conference to agree debt cancellation for Greece and other countries that need it, informed by debt audits and funded by recovering money from the banks and financial speculators who were the real beneficiaries of bailouts.
An end to the enforcing of austerity policies that are causing injustice and poverty in Europe and across the world.
The creation of UN rules to deal with government debt crises promptly, fairly and with respect for human rights, and to signal to the banks and financiers that we won’t keep bailing them out for reckless lending.
People across Europe are being crushed by austerity, a failed policy and false solution to the problem of accumulating public debts, much of which were caused by the bailing out of the banks. They join millions of people in developing countries who continue to be profoundly affected by repeat debt crises and decades of punishing austerity.
Greece is the frontline on Europe’s debt crisis. The Greek people are burdened by an enormous and unpayable debt caused by the lending of irresponsible European banks, the borrowing of the corrupt Greek elite, and a global network of tax havens allowing money to flow out of the country. The Greek Truth Commission is starting to expose the deep injustice of these debts.
Greece’s crisis and those before it are symptoms of a global financial system that puts the interests of banks and financial elites above the needs of ordinary people and our rights to secure homes, decent work, and access to essential public services like water, healthcare, education.
We urgently need to cancel unjust debts, end forced austerity, and create new rules to tackle debt crises fairly and promptly when they occur.
We call on David Cameron to support the organisation of a European conference to agree debt cancellation for Greece and other countries that need it, informed by debt audits and funded by recovering money from the banks and financial speculators who were the real beneficiaries of bailouts (Greek leader calls last ditch referendum on bailout, 27 June). We believe there must be an end to the enforcing of austerity policies that are causing injustice and poverty in Europe and across the world. We urge the creation of UN rules to deal with government debt crises promptly, fairly and with respect for human rights, and to signal to the banks and financiers that we won’t keep bailing them out for reckless lending.
Frances O’Grady General secretary, TUC
Len McCluskey General secretary, Unite the Union
Paul Kenny General secretary, GMB
Manuel Cortes General secretary, TSSA
Sarah-Jayne Clifton Director, Jubilee Debt Campaign
Paul Mackney Chair, Greece Solidarity Campaign
Nick Dearden Global Justice Now
Owen Epsley War on Want
James Meadway New Economics Foundation
Ann Pettifor Prime Economics
Diane Abbott MP
Dave Anderson MP
Richard Burgon MP
Jeremy Corbyn MP
Jonathan Edwards MP
Roger Godsiff MP
Harry Harpham MP
Carolyn Harris MP
George Kerevan MP
Ian Lavery MP
Clive Lewis MP
Rebecca Long-Bailey MP
Caroline Lucas MP
John McDonnell MP
Liz Mcinnes MP
Rachael Maskell MP
Michael Meacher MP
Grahame Morris MP
Kate Osamor MP
Liz Saville-Roberts MP
Cat Smith MP
Chris Stephens MP
Jo Stevens MP
Catherine West MP
Hywel Williams MP
3. A new mode of warfare: The Greek debt crisis and crashing markets
By Michael Hudson, Counterpunch, June 29, 2015
Back in January upon coming into office, Syriza probably could not have won a referendum on whether to pay or not to pay. It didn’t have a full parliamentary majority, and had to rely on a nationalist party for Tsipras to become prime minister. (That party balked at cutting back Greek military spending, which was 3% of GDP, and which the troika had helpfully urged to be cut back in order to balance the government’s budget.)
Seeing how unyielding the opposition was, Syriza’s stance was: “We would like to pay. But there’s no money.”
This kept throwing the ball back into the troika’s court. The Institutions were so unyielding that Syriza’s approval rating in the polls rose by 13% by June. Greek voters became increasingly incensed at the Troika’s demand for further pension cuts and privatizations.
Tsipras and Varoufakis were willing to pay the IMF with the IMF’s own funds, in what V. called “extend and pretend.” But their only interest in keeping current on debt was to obtain additional funding that could be used to pay domestic pensions and other basic government budgetary expenditures.
The basic tactic in such tensions between creditors and debtors is clear: once debt repayments exceed new loans, stop paying.
So when The Institutions made it clear that no more credit would be forthcoming without Syriza adopting the old Pasok/New Democracy capitulation to Troika demands, Tsipras and Varoufakis decided it was time to call a referendum eight days hence, on Sunday, July 5.
Late Friday night and into the early Saturday morning hours, Greeks ran to the ATM machines to convert their checking and savings deposits into euro notes, expecting that the end game would involve a likely 30% depreciation of the drachma – and that indeed, the ECB would stop lending to support Greek banks (the only role the ECB wanted to play).
Syriza had no love for the banks. They were the vehicles through which the oligarchs controlled the Greek economy, after all. For a month, they had been discussing how to separate the banks into “good bank” and “bad bank,” either nationalizing them (wiping out stockholders) or creating a Public Option alternative.
Most important, once out of the eurozone, Greece could create its own Treasury to monetize its spending. The Institutions called this “scrip,” but the Greeks could establish it as their national currency. They would escape from euro-austerity – except, of course, to the extent that the ECB waged economic war on Greece by imposing its own capital controls.
By going through the sham negotiations with The Institutions, Syriza gave Greeks enough time to protect what savings and cash they had – by converting these bank deposits into euro notes, automobiles and “hard assets” (even boats).
Businesses borrowed from local banks where they could, and moved their money into eurozone banks or even better, into dollar and sterling assets. Their intention is to pay back the banks in depreciated drachma, pocketing a 30% capital gain.
What commentators miss is that Syriza (at least its left) wants to be transformative. It wants to free Greece from the post-military oligarchy that evades taxes and monopolizes the economy. And it wants to transform Europe, away from ECB austerity to create a real central bank. In the process, it demands a clean slate of past bad debts. It wants to reject the IMF’s austerity philosophy and refusal to take responsibility for its bad 2010-12 bailout.
This larger, transformative picture is at the center of Syriza-left plans.
I’m in Germany now (on my way to Brussels), and have heard from Germans that the Greeks are lazy and don’t pay taxes. There is little recognition that what they call “the Greeks” are really the oligarchs. They have gained control of the old coalition Pasok/New Democracy parties, avoided paying taxes, avoided being prosecuted (New Democracy refused to act on the “Lagarde List” of tax evaders with nearly 50 billion euros in Swiss bank accounts), orchestrated insider dealings to privatize infrastructure at corrupt prices, and used their banks as vehicles for capital flight and insider lending.
This has turned the banks into vehicles for the oligarchy. They are not public institutions serving the economy, but have starved Greek business for credit.
So one casualty apart from the credibility of the eurozone, the ECB and the IMF will be these banks. Syriza is positioning itself to provide a public option – public banks that will promote the economy, and a national Treasury that will spend government money INTO the economy, not drain it to pay the Troika for having bailed out French and other banks back in 2010-11.
The European popular press is as bad as the U.S. press in describing matters. It warns of “hyperinflation” if a central bank monetizes as much as one euro of government spending in the way that the U.S. Fed does, or the bank of England or any other real central bank. The reality is that nearly all hyperinflations stem from a collapse of foreign exchange as a result of having to pay debt service. That was what caused Germany’s hyperinflation in the 1920s, not domestic German spending. It is what caused the Argentinean and other Latin American hyperinflations in the 1980s, and Chile’s hyperinflation earlier.
But once Greece frees itself from the odious debts forced upon it at financial gunpoint in 2010-12, its balance of payments will be roughly in balance (subject to some depreciation of the drachma; 30% is a number I heard bandied about in Athens last week).
To mimic Margaret Thatcher, “There is No Alternative” to withdrawing from the eurozone. The terms dictated for remaining in it was to sell off all of what remained in Greece’s public sector to European and U.S. buyers, at insider prices – but not to Russian buyers, even for the gas pipeline that was to have been sold.
Evidently, the eurozone financial strategists thought that Tsipras and Varoufakis would simply surrender and be promptly voted out of power, thereby crushing their socialist policy agenda. They miscalculated – and are now hoping to create as much anarchy as possible to punish the Greek people. The punishment is for not continuing to support their client oligarchy, which has moved most of its assets out of reach of the government.
But instead of Syriza losing credibility, it is the ECB – which refuses to create money to finance economic recovery, but only to pay the oligarchs’ banks so that they can continue to control the government. This control is now being weakened precisely because their banks are being weakened.
Greece’s Parliament last week released its Debt Truth Commission report explaining why Greece’s debts to the IMF and ECB are odious, and were taken on without a popular referendum approving these loans. Indeed, Mrs. Merkel and Mr. Sarkozy obeyed Mr. Obama and Geithner when the latter insisted at a G8 meeting that the ECB ignore the IMF economists’ analysis that Greece could not pay its debts, and bail out the banks. Geithner and Obama explained that U.S. banks had placed big financial bets that Greece would pay its private bondholders, so the ECB and IMF had to lend the government the funds to pay – but had to overthrow the country’s Prime Minister Papandreou who had urged a referendum on whether Greek people really wanted to commit economic and political suicide.
Financial technocrats were put in place to serve the domestic oligarchy and foreign bondholders. Greece was under financial attack just as deadly as a military attack. Finance is war. That is this week’s lesson.
And for the first time, debtor countries are realizing that they are in a state of war. This is why markets are crashing on Monday, June 29.
* * *
Eurozone financial strategists made it clear that they wanted to make an example of Syriza as a warning to Spain’s Podemos party and anti-euro parties in Italy and France. The message was supposed to have been, “Avoid our austerity and we will cause chaos. Look at Greece.”
But the rest of Europe is interpreting the message in just the opposite way: “Remain in the eurozone and we will only create money to strengthen the financial oligarchy, the one per cent. We will insist on budget surpluses (or at least, no deficits) so as to starve the economy of money and credit, forcing it to rely on commercial banks at interest.”
Greece has indeed become an example. But it is an example of the horror that the eurozone’s monetarists seek to impose on one economy after another, using debt as a lever to force privatization selloffs at distress prices.
In short, finance has shown itself to be the new mode of warfare. Resisting debt leverage and financial conquest is as legal as is resisting military invasion.