Alexis Tsipras: ‘We are the great hope for change’

December 27, 2012 by



Greece’s young leftist firebrand held the future of his country in his hands for a few days in June. He may do again in 2013

“He came from Greece‘s political wilderness – yet for a few days in June Alexis Tsipras held the future of the euro in his hands. Six months on, the fast-talking firebrand who took the world by storm in the runup to the Greek elections may no longer be in the spotlight, but he has not faded into history. “We may have narrowly lost the battle,” Tsipras says of the failure of his radical left Syriza party to clinch power. “But we have not lost the war.”"


See on www.guardian.co.uk


Filed Under: Economic Crisis, Economy, Elections, Europe, Headlines, Politics, Unrest Tagged With: , , ,

Crisis in the Eurozone: Costas Lapavitsas: 9781844679690: Amazon.com: Books

December 26, 2012 by



Crisis in the Eurozone [Costas Lapavitsas] on Amazon.com. *FREE* super saver shipping on qualifying offers. A controversial call to break up the Eurozone and stop the debt crisis.


See on www.amazon.com


Filed Under: Economic Crisis, Economic Policy, Economy, Europe, Headlines Tagged With: , , ,

Irregular Migrants Face the Boot in Greece

August 29, 2012 by

Global Geopolitics & Political Economy / IPS

Apostolis Fotiadis

ATHENS, Aug 29 (IPS) – A crackdown on irregular migration has entered its fourth week in Greece. The government is shutting the Greek-Turkish northeastern border across river Evros, and removing massive numbers of undocumented migrants from big urban centres into makeshift detention camps.On Aug. 2 police deployed 1,881 new police officers along the river Evros in an attempt to seal the border. Greek Police spokesman Christos Manouras told IPS that the deployment “has effectively stopped new arrivals…When we become aware through our infrared cameras or our patrols that someone attempts a crossing, police officers form a human shield against them and prevent them from entering.”

Meanwhile in Athens alone the police have apprehended 12,900 migrants and arrested 2,100 who resided in the country illegally. About 400 are kept in a new detention camp in Amugdaleza on the outskirts of Athens. The rest have been sent to two police academies turned into makeshift camps in Xanthi (500) and Komotini (800) in northern Greece.

Doctors Without Borders (MSF) members visited both these camps last week and described conditions as substandard. “Our team registered serious deficits regarding the infrastructure and conditions of detention, despite the obvious efforts of authorities to improve the situation,” director general of MSF Reveka Papadopoulou told IPS.

“We will monitor the situation further but we will not get involved in a way that will prevent the government from dealing with responsibilities that occur from a political choice of implementing a policy of large-scale detentions.”

Authorities do not allow journalists to visit detention camps, and access to the border is limited in coordination with the Greek Border Guard.

The European Commission has not ruled out financing for such measures. The Commission “organises regularly technical missions on the ground to discuss with the Greek authorities eligibility of actions under the EU co-financed programmes,” the Commission told IPS by email, referring to a Commission mission to the border.

Last week authorities opened a makeshift camp at the site of old military barracks in Korinthos, 75 km south of Athens, that can host another 2,000 detainees. Currently 400 people are detained there.

“Detentions will last for up to one year” as authorities try to send people back to their countries of origin, Manouras said. “Many of them could opt to return through the programme we implement together with the International Organisation for Migration (IOM).”

Co-financed by Greece and the European Union Returns Fund, the programme has already sent 5,000 people back. At the end of July IOM and Greece signed a 10 million euro 12-month agreement that will offer assisted voluntary return to countries of origin for some 7,000 irregular migrants.

Since 2005 Greece has become the main influx point for undocumented migrants, with more than 80 percent entering Europe coming from Turkey through the Aegean Sea or the Northeast mainland boundary of the river Evros.

The vast majority of these migrants hope to move towards Northern Europe. However, the distance to other European countries as well as clauses in the Dublin II regulation that dictates the return of asylum seekers to the European country they first entered, have effectively condemned scores of immigrants to remain stuck in limbo in Greece.

This has transformed the country, and Athens in particular, into a depot of hundreds of thousands of irregular immigrants and asylum seekers, who survive on below-subsistence incomes in a vast black market.

The new migration policy of the coalition government of the right-wing New Democracy, the technocrat PASOK and moderate leftist DEMAR is being implemented at a time when many international organisations are expressing concern about the failure of authorities to protect the human rights of migrants and asylum seekers, and to offer them protection from a rising tide of racist attacks.

The policy is being implemented in the midst of an economic crisis. Since 2009 debt insolvency has translated into a full-blown economic crisis for Greece, and driven the country into borrowing heavily in order to avoid disorderly default. The country is undergoing a fourth consecutive year of recession, with unemployment climbing to 29 percent.

In the economic collapse, xenophobic sentiment has swept through society. Racist attacks have increased on the streets of Athens and are spreading fast throughout the country.

On Jul. 23 the rape and attempted murder of a 15-year-old girl on the island Paros by an irregular Pakistani worker outraged the public. In a wave of attacks against foreigners that followed the event, an Iraqi migrant was beaten and stabbed to death by five hooded youngsters Aug. 12.

“You know this might happen to you every time you go out of the house,” asylum seeker Ramadan Sah who fled the Taliban in Afghanistan tells IPS in fluent Greek. “One might stop you and ask you where are you from. And then many more appear and attack you. It is really dangerous out there.”

Sah has been stuck in the asylum system for more than a decade. A couple of months ago the appeals committee reviewed his application. He is about to finish a degree in political science, but he faces renewed fears.

“It’s like when we hid in houses to escape the Taliban. Then they called us leftist, now we are the foreigners.”

All rights reserved, IPS – Inter Press Service, 2012.

This article may not be republished, broadcast, framed, or redistributed without the written permission of IPS – Inter Press Service. Republication of this material without permission from IPS, the copyright holder, constitutes a violation of United States and international copyright laws and may result in legal action.


Filed Under: Economic Crisis, Europe, Featured, Human Rights Tagged With: , ,

Austerity, the Euro Crisis and the US

May 12, 2012 by

Published on May 8, 2012 by

Dean Baker: Austerity policy hitting a dead end, threat to US is a sovereign default leading to financial crisis.


More at The Real News


Filed Under: Elections, Europe, Unrest, Video Tagged With: , , ,

Round One to Radical Left, Round Two to Europe?

May 12, 2012 by

Global Geopolitics & Political Economy / IPS

Analysis by Apostolis Fotiadis

ATHENS, May 12, 2012 (IPS) – Kosmas Bitros (29) didn’t "believe in politics and in elections as a way of changing society". Still, he showed up at the ballot boxes for the first time last Sunday to cast a vote against austerity in the Greek national elections.

Though he did not identify with one particular party, Bitros believed it was a matter of great urgency to bring down the two-party regime, comprised of PASOK and the New Democracy (ND) party, which has dominated Greek politics for the last 30 years.

He cast his vote for the Coalition of the Radical Left, or Syriza and went out with friends. At night they gathered together to watch the results and for the first time ever Bitros witnessed what he had believed was impossible: Syriza was coming second with 16.7 percent of the vote, just behind the right wing ND, with 18.8 percent.

"The (old regime) was corrupted, they have destroyed the country and they didn’t want to give up power," Bitros told IPS.

"When the (economic) crisis came, I realised how defenseless we are, how they are playing with our lives without care."

Although he was hesitant to vote, believing his actions to be of little consequence, he finally understood that politicians "cannot destroy democracy completely. You have to use even the most marginal chance you have to push things where you want to see them, not let go," Bitros added.

The outcome of the election proved that scores of other Greeks felt exactly the same way.

The size of the ‘protest vote’ in Greece was directly proportional to the level of frustration among ordinary people in the country whose lives have been turned upside down by sweeping cuts in public spending mandated by the so-called austerity programme that has gripped the country since May 2010.

Guided and coerced by the Troika – the European Commission, the International Monetary Fund and the European Central Bank – Greek politicians slashed pensions, government salaries and public services in an effort to close the country’s massive deficit and receive billions of dollars in bailout loans from the international community.

Rather than pull the country out of recession, the austerity era ushered in an unemployment rate of 22 percent, as well as a new class of poor, disenfranchised and desperate Greeks, who turned out in droves over the weekend to demolish the two traditional political forces in the country.

The former socialist-turned-neoliberal PASOK party went from 43.9 percent of support in 2009 to just 13.5 in this election; while the ND, notorious for being the party that governed the country from 2004 to 2009, also experienced a huge drop in popularity.

"The protest vote was an anti-bailout vote," economist Leonidas Vatikiotis told IPS. "The election produced a fragmented political environment that gave rise to political forces of the left and the right, and brought into the parliament the neo-Nazi Golden Dawn," a party that has risen from a marginal fascist group to a parliamentary party with seven percent support.

"You look at the picture after elections and understand that people do not trust austerity as a solution. Three years of austerity have pushed the country’s debt from 125 billion to 165 billion. Public finance consolidation has not happened despite the remarkable sacrifices people have put up with. In the end, we do not believe in austerity and Europe needs to get that message," Vatikiotis stressed.

News of François Hollande’s victory in France fueled optimism in Greece that an alternative coalition could renegotiate the terms on which Greece settles its debt with the outside world, particularly with the international financial institutions (IFIs).

Europe on edge

European officials are extremely alarmed by the prospect of an anti-bailout front being formed in Greece, and of a European swing against austerity following elections in Greece and France.

On Tuesday German officials responded by issuing several warning statements in the international press. Chancellor Angela Merkel personally excluded the possibility of renegotiating the European public finance agreement put in place at the end of last year, which imposes very strict rules on how member states run their public finances, as well as severe penalties for those who fail to comply with the so-called regulations.

The country is expected to face enormous pressure at the beginning of next week when the Council of the European Ministers of Finance (ECOFIN) convenes in Brussels.

European Commissioner Jose Manuel Barosso, European Council President Herman Van Rompuy and Vice- President of the Commission, Olli Rehn, rushed to warn the country that if Greece failed to observe commitments made in the bailout agreement, its status in the eurozone would be at stake.

German finance minister Wolfgang Schauble was more succinct, saying the country could not "have the euro without the austerity agreement. If it seriously observes its commitments then we will observe ours as well. But if Greece decides not to stay in the eurozone, we are not able to coerce it."

Europe bureau chief for the U.S.-based McClatchy news service, Roy Gutman, has described the German official’s words as "a direct intervention into another country’s politics. The German finance minister goes beyond commenting on political developments in Greece to telling the people there what he wants them to do," he said to IPS.

Meanwhile, inside the country, leaders of the pro-austerity coalition have warned that the anti-bailout rhetoric and promises made by Syriza’s leader, Aleksis Tsipras, are jeopardising progress in the country, for which millions of Greeks have made huge sacrifices in recent years.

For now it seems that no amount of scare tactics and criticism can turn the tide of support away from Syriza. The latest poll leaked to the press two days ago shows the party’s popularity increasing by the day.

Perhaps the only thing that could reverse the momentum would be the formation of a national salvation government, which PASOK leader Evangelos Venizelos has invited all parliamentary parties to do. He is also pushing ahead with efforts to prevent a head-on collision with Brussels and Berlin; but time is running out.

According to the constitution, if talks convened by Greek President Karolos Papoulias fail to produce a coalition government by the beginning of next week, the country will be forced back to the polls in a month’s time. So far, neither side has budged.

"European officials and Greek politicians should think seriously about the fact that the Greek political stalemate might lead us into a head-on confrontation between anti and pro-austerity forces," said Vatikiotis.

"The fear of punishment has coerced Greeks into accepting austerity but after Sunday’s elections this bond has been broken. More coercion of this kind now might produce unpredictable results."

If it comes down to it, he said, people will realise that the choice before them in a second election will not be between parties that are for or against austerity but between a sovereign, democratic country or a future in the eurozone.

All rights reserved, IPS – Inter Press Service, 2012.

This article may not be republished, broadcast, framed, or redistributed without the written permission of IPS – Inter Press Service. Republication of this material without permission from IPS, the copyright holder, constitutes a violation of United States and international copyright laws and may result in legal action.


Filed Under: Analysis, Economic Crisis, Elections, Europe, Unrest Tagged With: , , ,

Greeks Gear Up to Cast ‘Protest Votes’ Against Austerity

May 3, 2012 by

Global Geopolitics & Political Economy / IPS

Analysis by Apostolis Fotiadis

ATHENS, May 3, 2012 (IPS) – Aggeliki Anagnostopoulou (30) sits in a corner of the huge room that volunteers from the new party, Independent Greeks, are using as a headquarters for their pre-election campaign in the lead up to polling day on May 6.

A New Democracy (ND) voter until the last election in 2009, she recently joined the Independent Greeks, led by former ND minister Panos Kammenos who broke away from his old party when it entered a pro-bailout coalition government at the end of last year.

"Greek voters are disappointed with the two big parties. They are trying to find a new perspective. I (used) to vote for Panos Kammenos in New Democracy but I was disenchanted with the party so I followed him to this new beginning," said Anagnostopoulou, who used to work as an external auditor for a United States-based multinational but was made redundant in 2011.

At the two-month-old, improvised party headquarters, modern techniques like the use of social media are being fused with the traditional practice of citizens registering with the party, in the hope of attracting new supporters while keeping the old voter base happy.

With elections just around the corner, the Independent Greeks’ headquarters has become increasingly populated.

Former supporters of ND and PASOK, the two parties that dominated Greek politics from the beginning of the 1980s up until the last election in 2009, have thrown their lot in with Kammenos in what appears to be the biggest protest vote the country has experienced in the last 30 years.

Kammenos, known for his explosive speeches in parliament, has capitalised heavily on anti-bailout rhetoric with nationalist undertones, in a campaign that blames PASOK and New Democracy politicians for betraying the country and conspiring against the nation.

Recent polls show him climbing up to 10 percent support in the national election this Sunday.

Creditors hold the reigns

Greece all but handed over its public finances to its creditors – led by the Troika, an administrative structure consisting of the European Commission, the European Central Bank and the International Monetary Fund – when it became all too clear in May 2010 that the country was unable to repay its huge public debt.

Since then it has implement a severe austerity programme of raising taxes and cutting pensions and state salaries across the board, deregulating the labour market and pushing ahead with pro-market reforms in exchange for billions of ‘bailout euros’.

The programme of slashing public spending has sunk the country into three years of recession and pushed unemployment up to 21 percent.

The austerity policy has also damaged political parties associated with its implementation and sent an enormous wave of protest votes fleeing towards leftist and right-wing parties.

Pre-election polls have highlighted the fragmentation of political forces, showing ten parties from across the political spectrum climbing above the three percent support threshold.

"It is evident now that the old political system that nurtured Greece’s public finance issues is meeting the beginning of its end," said Nick Malkoutzis, a renowned journalist and political analyst who has gained recognition covering the crisis on his popular blog ‘Inside Greece’.

Increased support for leftists or the appearance of extremist groups like the neo-Nazi Golden Dawn party are not yet proof of a change in political culture; still, "It is evident that people are looking for something different. Plenty of them think that a vote for the neo-Nazis is a way to punish traditional politicians," said Malkoutzis.

"Real change might come not in this but the next election," he told IPS.

Given that the Troika plans to return to Greece right after the elections, to determine an economic plan that will bring 11.5 billion euros into the country, "it is unlikely that the new parliament will live long," Stavros Lygeros, a senior Greek political analyst, commented a few days ago.

"It is in fact one of the major paradoxes of this election that ND and PASOK fight each other, when they have both signed (onto) the austerity programme to be implemented after elections."

He added that the mainstream political establishment is hopeful that the two parties will survive the election only to form a new coalition government that will carry on under the Troika’s command.

During the announcement of elections at the beginning of April, Troika officials publicly exerted pressure on the leaders of PASOK and ND in order to prevent them from straying too far from the rhetoric of bailout commitments.

Paul Thomsen, head of the IMF mission in Greece, has specified measures the new government will have to implement, irrelevant of which party wins the election.

"It is very negative for Europe that technocrats were able to express opinions in international media that elections should not take place in Greece, or that the country must carry out its commitments irrelevant of the outcome of this election. It is obvious that the Troika would prefer a PASOK and ND government that implements further austerity measures," says Malkoutzis.

ND and PASOK leaders have employed a pre-election rhetoric that borders on blackmail, explicitly warning the nation in their latest speeches and articles about the chaos that will surely follow if they do not survive the election.

Though "this blackmail worked for the last two years, it wont be of use for much longer," said Zeza Zikou, an economic analyst for the biggest national political newspaper, Kathimerini.

Gradually, she said, people will understand that the bailout agreements have condemned ordinary people to work forever to repay a debt that can never be settled.

All rights reserved, IPS – Inter Press Service, 2012.

This article may not be republished, broadcast, framed, or redistributed without the written permission of IPS – Inter Press Service. Republication of this material without permission from IPS, the copyright holder, constitutes a violation of United States and international copyright laws and may result in legal action.


Filed Under: Economic Crisis, Europe, Featured, Unrest Tagged With: , , ,

GREECE-CYPRUS-ISRAEL ENERGY TRIANGLE: DYNAMICS AND POTENTIALS IN THE EAST MEDITERRANEAN BASIN

April 15, 2012 by

Global Geopolitics & Political Economy

Republished with the author’s permission

Read the article in the original form on the RIEAS site.

Petros Makris-Kourkoulos

(RIEAS Research Associate and Energy Security Analyst)

In the mid-60s, John F. Kennedy stated the famous geography has made us neighbors, history has made us friends, economics has made us partners and necessity has made us allies having the flourishing US-Canadian alliance on his mind. Fifty years later, those words have a deep meaning for a newborn block in the East Mediterranean Sea. The potential “third energy corridor” is the most prominent ace up Europe’s sleeve to reshuffle and win the energy game, as for the Greece-Cyprus-Israel triangle to lead the sequence of the raising pots and eventually, to win a hard pot of poker.

On 28th and 29th of March, a significant Investment Energy Summit was held in Athens regarding prospective energy projects which can upgrade the geo-political role of the East Mediterranean Basin. The “East Mediterranean Gas Politics” is a concept which was born after the discovery of vast gas fields in the eastern side of the Mediterranean Sea. The Israeli “Tamar” and “Leviathan” gas fields as well as the “Aphrodite” offshore gas field off the southern coast of Cyprus located at country’s maritime Exclusive Economic Zone, created new attractive potentials for a third energy corridor to Europe in parallel with the existing Nordic and the upcoming Southern. Numerous officials from Greece, Israel and Cyprus, involved with the energy sector, participated at the conference making substance to a rising dynamic triangle in the chessboard of energy game while, the special envoy appointed by Hillary Clinton for Eurasian energy Mr. Richard Morningstar and industry participants from Noble Energy and Gazprom as well gave an extra significance. The creation of LNG stations in Cyprus and Israel and the creation of a pipeline connecting the fields with Greece and from there on to the EU via Italy are some of the most crucial issues were discussed. But what is the meaning and the geostrategic reality of such a conference?

The triangle’s geo-political role in South Eastern Europe

Speaking about international politics, it is quite clear to understand a necessity for a geo-political block among Greece-Cyprus-Israel which is going to play a key role in the energy transportation to Europe. Having the Russian Nord corridor which is used to monopolize the gas streaming to Europe and to exercise political pressure on ex-Soviet states, the planned rival Southern corridor is backed fully by the EU and generally by the West for energy security reasons. However, the existence of a third alternative would add more options towards this goal as it could strengthen Europe’s negotiating tools in the market. Of course, it is noteworthy to mention that this third corridor has more stable and reliable potentials on the grounds that Greece and Cyprus are direct parts of Europe, and Israel is an honest and trustworthy ally where bilateral relations have to be enhanced more by such economic and strategic agreements. Moreover, Ambassador Morningstar’s presence, as that of Noble energy as well, gave a plus prestige to the highest importance of this triangle for the US’s interest in the area. The Tamar gas field is the largest organic find ever discovered in the under-explored area of the Mediterranean Sea and Noble Energy is the basic operator with a 36% working interest on it. Additionally, Noble started drilling the offshore prospect south of Cyprus, which lies close to large discoveries off Israel, at the end of September 2011.

In one other point of view, a dynamic triangle between Greece-Cyprus-Israel could be treated as an efficient geo-political counterweight to Turkey. In a same sense, Abraham Lincoln aptly expressed his view on friendship and rivalry in politics stating that a friend is one who has the same enemies as you have; and it is quite obvious that there is a crying need for balance of power in the region. Turkey, has already disputed energy explorations in the Cypriot exclusive economic zone reacting aggressively because it considers that its regional energy primacy could be threated. Indeed, regarding energy domain, I would dare to say that Turkey is one of the fastest growing energy markets in the world having introduced the “East-West Energy corridor Concept” many years before. Its geographical proximity to energy producer (Azerbaijan-Turkmenistan-Iraq-Russia) and consumer (Europe) has highlighted its geopolitical significance as energy intermediate. Turkey has deployed outstanding oil and gas pipeline system which has its roots in the mid-70’s while now, it negotiates the significant Russian South Stream gas pipeline via Black Sea and the Western backed pipelines such as the imposing almost 4000km Nabucco with 31 bcm/a capacity, the 520km Trans Adriatic Pipeline (TAP) with 10 bcm/a and the 807km Interconnector Turkey-Greece-Italy (ITGI) with 10 bcm/a. By the end of this year, one of these pipelines will be chosen to transport gas to Europe bypassing Turkey. Therefore, Turkey will assume full authority to preside over the route enhancing its geo-political role in the Mediterranean Sea.

Suggestions for a feasible Greek strategy

Greece is given outstanding multiple chances in the middle of an economic storm. What Greece must do and what could be gained by this alliance is simple. Initially, Greece must walk the tightrope and balance between tough domestic reforms and an unstable external environment. Thus, the most important Ministries of Foreign Affairs and Energy ought to be secured. The Ministry of Energy must give an extra focus on the proved offshore natural resources underneath the Ionian Sea and Crete in order to be capable of join the triangle more active. It is inconceivable to think the reason of past years’ torpidity in the field of energy exploration and production if we think that countries like Norway cover close to 20 per cent of European gas consumption. More recently, the Cypriot celerity to exploit its energy potentials has shown how a small state can make energy jumps towards energy emancipation and exports. Additionally, the Greek benefits from a direct pipeline from Israel and Cyprus to European markets could be highly effective as intermediate while the support on the southern corridor which probably is going to be TAP is strictly necessary. TAP pipeline will eventually bypass Turkey, Greece and Albania in order to transport the Azeri gas to Europe through Italy.

Lastly, Greece must ameliorate the domestic regulatory system in order to create the breeding ground for foreign investments. Competitiveness is a key word towards this way. Unfortunately, Greece is at the bottom of the European competitiveness rankings lying in the last position (27th). Specifically, according to Formula Europa Institute analysis, Greece is among the less competitive countries in Europe in terms of political stability (25th), government effectiveness (24th), regulatory quality (26th), control of corruption (25th); these are factors that without any doubt drive back foreign capital and potential investments at flourishing sectors like energy. Last Friday, the open call for competition on the state-own oil company DEPA ended presenting a number of candidates who are ready to take on the management of the company. However, the question is how effective can be a privatization of DEPA with a possible Gazprom’s participation which obviously reveal Russian intentions in strengthening its influence over southeastern Europe.

 

Copyright: www.rieas.gr

This article should not be republished or redistributed without the permission of the original author or copyright holder.

About the Author

Petros Makris-Kourkoulos is a Research Analyst for the Formula Europa Institute based in Brussels, Belgium and a Research Associate and Energy Security Analyst for the Research Institute for European and American Studies (RIEAS) in Athens, Greece.


Filed Under: Energy, Europe, Featured, Geopolitics Tagged With:

GREECE: Public Outrage over Austerity Plan

July 1, 2011 by

Global Geopolitics & Political Economy / IPS

By Bego Astigarraga

ATHENS, Jun 30, 2011 (IPS) – The mass protests in Greece swelled by the hour as parliament voted this Thursday to implement the social and economic adjustment plan approved Wednesday, including measures for privatisation, tax hikes, spending cuts and mass lay-offs in the state sector.

The increasingly disappointed and restless crowd continued to demonstrate in the streets of Athens against the new Medium Term Fiscal Strategy 2012-2015, that will seriously affect middle- and low-income families and was approved at the insistence of the European Union and the International Monetary Fund (IMF).

A prime target of the protestors’ wrath is German Chancellor Angela Merkel. "She is to blame for handing Greece over to the speculators," said Nikiforos, one of the thousands of demonstrators gathered in front of the parliament building in Syntagma Square. "We must carry on demonstrating and organise a united social movement in Europe."

Konstantine, a physics student at the University of Athens, said: "The situation for workers is tragic, as they are on the edge of levels of genuine poverty." "University matriculation used to be free, but it now costs 800 euros (1,161 dollars). Schools are being closed, and public transport fares have risen by 40 percent," she told IPS.

For his part, Alexander, a psychologist and teacher of children with disabilities who belongs to the Front of the Anti-Capitalist Left (ANTARSYA), told IPS the government "wants to sell the country out to the IMF in order to save the bankers.

"Do they want to strangle us even more? We won’t let them," he said.

In spite of the pressure exerted by a two-day general strike, the crowds of demonstrators surrounding parliament and the clashes with police that have left dozens of people injured, parliament narrowly passed the new adjustment plan Wednesday, with 155 votes in favour, 138 against and five abstentions. Only one lawmaker of the rightwing opposition New Democracy party voted with the governing Panhellenic Socialist Movement (PASOK).

Panayotis Kurublis, the sole socialist lawmaker who voted against the austerity programme, was immediately expelled from the party, further narrowing the government’s parliamentary majority.

Kurublis and the opposition appear to agree with over 80 percent of Greeks who in various polls rejected the stringent austerity plan and said they were totally against "selling their country at the diktats" of the so-called "troika" of the EU, the European Central Bank and the IMF.

Following the approval of the plan, a condition laid down by the troika for proceeding with the second phase of a financial bailout, the government of Prime Minister George Papandreou will have to implement a vast privatisation programme this year.

"We must prevent the country’s collapse at all costs," said Papandreou ahead of the parliamentary vote. The passage of the austerity plan freed up the payment of the next tranche of 17 billion dollars out of a bailout loan totalling 157 billion dollars that was approved in May 2010 by the EU and IMF.

Experts say Greece’s debt, the highest in the EU, will grow to 166 percent of GDP by 2012.

The new austerity package – the second since March 2010 – aims to make savings of some 28.4 billion euros (over 40 billion dollars) between 2012 and 2015 from tax hikes and public spending cuts. The government’s target is to reduce the deficit to below three percent of GDP in 2015.

An estimated 45 billion euros (65.3 billion dollars) of revenue during the same period is expected from the total or partial sale of dozens of public enterprises, such as state-owned refineries, power stations, ATEbank (a largely agricultural bank), as well as management concessions for airports, highways and ports, mining rights, real estate and land.

A "solidarity tax" has been introduced which will be a one-off levy of one to five percent of personal incomes, with the highest rates being applied to the highest income brackets. The minimum taxable income threshold will be lowered, although earnings of workers under 30 and pensioners’ incomes will remain tax-free.

Value added tax in bars and restaurants will be raised from 13 to 23 percent.

Despite the draconian nature of the austerity plan, international analysts are sceptical of the results it will bring for the country, which is on the brink of default. Meanwhile, popular discontent is growing and further unrest is feared.

The two-day general strike, in which all the unions joined with a very high participation rate, was a clear sign that Greek citizens are not prepared to accept more spending cuts and higher taxes.

The last straw could be the decision to eliminate 150,000 of the current 700,000 public employee posts. The government intends not to renew the contracts of temporary workers, tantamount to dismissal, and to replace only one in 10 public officials who retire.

All rights reserved, IPS – Inter Press Service, 2011.

This article may not be republished, broadcast, framed, or redistributed without the written permission of IPS – Inter Press Service. Republication of this material without permission from IPS, the copyright holder, constitutes a violation of United States and international copyright laws and may result in legal action.


Filed Under: Economic Crisis, Economic Policy, Europe, Politics, Report, Unrest Tagged With: , , ,

European Authorities Risking Financial Contagion in Greek Showdown; Where Is the U.S. Government?

June 25, 2011 by

Global Geopolitics & Political Economy
This article was published by The Guardian Unlimited (UK) on June 25, 2011.
Read the article in its original form.

By Mark Weisbrot

The European authorities are playing a dangerous game of “chicken” with Greece right now.  It is overdue for U.S. members of Congress to exercise some oversight as to what our government’s role is in this process, and how we might be preparing for a Greek debt default. Depending on how it happens, this default could have serious repercussions for the international financial system and the U.S. (and world) economy.

The U.S. government has a direct and significant role in the Greek crisis because the U.S. Treasury Department has the predominant voice in the International Monetary Fund (IMF). The IMF, together with the European Commission and the European Central Bank (ECB) – the three are commonly referred to as “The Troika” – are negotiating a new austerity package with the Greek government. This package promises more suffering for the Greek people – that is acknowledged by all sides. But the Troika thinks they can ram it through the Greek parliament on Tuesday, with the threat that they will not disburse the next $17 billion installment of Greece’s current loan package, thus putting Greece in a situation of sudden default.

The Troika won the first round of its battle against the Greek citizenry, with a parliamentary vote of confidence last Tuesday; and if the ruling party’s slim majority holds up this Tuesday they will pass the austerity package. But it is a high stakes gamble, and this week’s vote won’t end the instability.

It has been largely forgotten, but there was a Greek debt crisis just over a year ago, in May 2010, that rattled world financial markets. It was exacerbated by the extremism of the European Central Bank, which was also playing a game of brinksmanship back then. On Thursday, May 6, 2010, the ECB refused to commit to buying European government bonds in the midst of the crisis. The idea was that this would be a form of “monetizing” the debt of the weaker Euro zone countries, just as the U.S. Federal Reserve has monetized hundreds of billions of dollars of U.S. government debt in the last few years. This was anathema to the ECB, which is considerably to the right of the Fed. But after a harsh negative reaction in world markets, including a plunging U.S. stock market, the ECB reversed its position four days later and began buying European government and private debt.

Perhaps the European authorities believe they have the tools to stem any panic that may occur this time in response to a Greek default. And as happened last year, they can count on the Federal Reserve to open a swap line of dollars as necessary. But it is worth noting how much the European debt situation has deteriorated over the last year.

At the peak of last year’s crisis, interest rates on the 10-year government bonds of Greece, Portugal, and Ireland were 12.4, 6.3, and 5.9 percent respectively. They are currently at 16.8, 11.4, and 11.9 percent. Credit default swaps for these three countries – a measure of the risk of default – peaked at 891, 460, and 273 basis points in the May 2010 crisis; they are currently at 1,977, 827, and 799.

Clearly the risk of contagion from the Greek crisis has risen significantly since last year.  At the time, a number of economists (including myself) noted that the pro-cyclical policies imposed by the Troika would only worsen the Greek economy and its debt situation. This has clearly come to pass, as the economy shrank by 4.5 percent last year, unemployment continued soaring to more than 16 percent, and public opinion in Greece turned sharply against the austerity measures. A “voluntary” rollover by some of the bondholders, as currently proposed, will not resolve the problem. And there is only so much punishment that the Greek population (or the Spanish population, which has recently seen hundreds of thousands of protesters in the streets in the face of 21 percent unemployment) will take. The Greek government has already laid off 10 percent of its government workers, and the plan that they will vote on Tuesday calls for layoffs of another 20 percent. It also provides for a total of 12 percent of GDP of fiscal tightening for 2011-2015 – a recipe for never-ending recession, for the purpose of trying to pay off an unpayable debt to bankers and bondholders.

A Greek debt default appears inevitable, and the potential for financial contagion is significant. What is the U.S. government doing to avoid a financial crisis, and to prepare for the various contingencies that may be anticipated? One would think that after living through the events that followed the collapse of Lehman Brothers in 2008, some responsible government officials in the United States would be asking these questions.

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This work by Mark Weisbrot, also published by CEPR, is licensed under a Creative Commons Attribution-Noncommercial 3.0 United States License.


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