The EU is determined to crush Greece and enforce austerity

I intended to write this post prior to the Greek referendum but so much has happened recently I hadn't the chance to do it. The referendum result on Sunday was a stunning 61% for No or OXI. A massive rejection of austerity and an outcome which reverberated around Europe, and gave hope to all those who believe in democracy, and believe that democracy should determine how a society and economy should be run, trumping all other interests.

Before the referendum Caroline Lucas said at a Greece solidarity rally in London:

“Austerity isn’t only socially destructive, as we know – it is economically deluded as well. Greece’s government debt to GDP ratio hasn’t gone down as austerity was imposed, it has increased”

Of course she was right. The Troika's bailout and programme of so-called economic reforms, which entail cuts in pensions and worker's salaries, are intended to make the poorest pay for the economic ills of Greece and protect those who caused the global economic crash which opened the door to austerity in the first place  - the banks. In fact the bailout was never intended to help the Greek people but to protect French and German banks which lent recklessly to a corrupt Greek establishment so that they could buy German weapons and goods.

The Greek people voted OXI (no) in the referendum on the humiliating Eurozone offer

Greeks were threatened openly by the Eurocrats in the run up to the referendum, they were told that the financial taps would be turned off by the ECB and they would be ejected from the Euro. Now, in the aftermath of the referendum, it seems clear that unless Syriza accept humiliating conditions no better than those rejected by the Greek electorate, the threats will be carried out. The EU Goliath is determined to crush the Greek David to ensure that no other Eurozone country has the  temerity to even think that democracy can prevail against the interests of creditors. This is a foolish and short-sighted approach which has the potential to cause real and lasting damage both to the Eurozone and the EU itself.

The Syriza government is between a rock and a hard place but there is only one way out - default and a return to a Greek currency. In fact they should have already set up a parallel currency to the Euro to allow taxes to be paid and the economy to function. Their immediate problem is not solvency but liquidity. This is a very hard road but in the longer term it it offers dignity and hope to the Greek nation. The alternative is decades of debt-slavery in the Eurozone.

Greece can lead the fightback against austerity in Europe

Today Greeks go to the polls to vote in one of the most important elections in the country's history. After seven years of grinding austerity imposed by the 'Troika', it looks like Greeks could be about to vote in Syriza, an alliance of radical leftists, who have pledged to write off some of Greece's debt and set the country on a new path. Of course, the media have played this up into some kind of showdown between the leader of Syriza, Alexis Tsipras, and the European Union, in which Greece will almost inevitably have to exit the Eurozone.

But exit, or Grexit as the media love to call it, is not inevitable. Given the suffering the Greeks have had to endure with unemployment hitting a high of 28%, 50% youth unemployment and wages falling 12% year on year, it wouldn't be surprising if the Greeks wanted to leave the Eurozone and go back to the Drachma - but they don't. And why should they? They are as much a part of the Eurozone as any other country and still remember having had a currency that was almost worthless.

In simple terms the Greeks are being portrayed as the feckless ne'er-do-wells who are being bankrolled by the industrious, hardworking Germans but this is a false picture. Entry into the Euro for Greece was political not economic, and the Euro was always bound to create problems for the Greek economy. Couple that with a corrupt government and reckless lending by German and French banks - so that Greece could buy German goods - and its not easy to see that Germany did very nicely out of this Euro-arrangement at the expense of the Greeks. All that has now been conveniently forgotten. Thus I heard on The World This Weekend today a half-baked analysis of Greek 'wrongdoing' - essentially Greek bad, German good - as the BBC lined up pundits to criticise Greece and Syriza. With reporting on this level we might as well be living in the Soviet Union.

Its as well to remember that after the Second World War the Germans were mired in debt and struggling economically just as the Greeks are now, that is until 1953 when the London Debt Agreement was reached and half of Germany's debts were written off. This is often credited with starting the 'economic miracle' which transformed the German economy with output doubling between 1953 and 1963.

We know that austerity in Europe is designed to protect banks from going under at the expense of the people. These are the same banks that contributed to the global economic crash of 2008. Its absolutely unacceptable that people should be made to pay for the epic failures of financial capitalism. We need a programme of Green quantitative easing in Europe for investment in energy efficiency, renewables and public transport, getting millions back into meaningful work. That, not debt-driven austerity, must be the future. Here's looking forward to a Syriza majority government and the start of the historic fightback against austerity.

Talking about a revolution!

Did you know there was a revolution going on? If you had been watching and reading the corporate media you might have got some inkling but hardly the full picture. But lets look at some of the examples; the Arab Spring; Libya, Egypt, Tunisia, Syria, Bahrain, and even Saudi Arabia; Occupy in the USA; Protests in Russia; in Greece with SYRIZA; and in Spain, Italy, Ireland and the UK; Massive student protests in Chile and Canada. Many of these protests have been ignored by the media but this is a real revolution, and it is happening before our eyes if we care to look for it.

There is a revolution going on!

Why is this happening? - it is because the mass of ordinary people globally are sick and tired of  poverty, unemployment, and the cosy neoliberal stitch-up between commercial interests and tame 'free' market fundamentalist politicians and economists, which is destroying our economies and the planet. In our own small way, as individuals, we are all part of this revolution, but we need to come together as part of a wider international movement which can throw-off the sham democracies we live in, and bring about real and lasting change.That change must include democratic control of our economies and decent housing, healthcare, jobs and education for all.

In the UK, we have the "let them eat cake" politics of David Cameron, his banker friends, and his rotten, discredited Coalition government. In the USA, we have a battle between Obama and Romney, the former is marginally less bad than the latter but both are corporate creatures, dependent on big money to get elected. In Europe, we have Merkel and the sterile dead end of austerity, designed to protect the banks at the expense of the European taxpayers. People have had enough!

It is time for radical democratic change,  and the only way that change can happen is for people to channel their anger and throw off their apathy with the 'system', take to the streets, protest, and vote for parties that can bring about that change. The people of Egypt have shown us the way. In the UK, the Green Party is the only mainstream party which opposes the neoliberal paradigm and has the policies to make the breakthrough that people want. But the Party can only do that if it maintains its radical edge, engages with and works with the wider movement, and campaigns hard for change. Simply seeking electoral success is not enough. To make that breakthrough, we need to demonstrate that we are serious about the changes people want, and we must be able to take them with us. In Romayne Phoenix and Will Duckworth I think we have two leadership candidates for the Green Party who can accomplish that task.


Footnote: I will give my detailed views about the Green Party leadership contest in a later post.

We must Occupy the economy

The roller coaster ride of the world economic crisis continues. Elections in Greece and France have shifted the political ground slightly to the left, with a Socialist majority in France, and the spectacular result obtained by SYRIZA in coming second in Greece with about 27% of the vote. But the Eurozone crisis stumbles on and the 'free' market fundamentalists, the architects of the broken economic system, are still in the driving seat. Banks are bust and, under the current system, there is nothing to look forward to apart from years of economic stagnation at best. Meanwhile in the UK, millions are being pushed below the breadline by the governments cuts in benefits, tax credits, and increases in rents.

In 1966, the Marxist economist Paul Sweezy wrote a book, with Paul Baran, called Monopoly Capital, in which he said that the natural tendency of monopoly capitalism was economic stagnation, as capitalists struggled to use the surpluses of capital accumulation, and that they could only achieve this by increases in spend on marketing and defence spending, and increasing debt. Was Sweezy right? Its certainly true that US defence spending in WWII ended the Great Depression, and that a mountain of debt has been used to keep capitalism going in the past 30 years or so.

So what do we do? The market fundamentalists have no answer. They are like the mad person who repeats the same actions over again in Einsteins famous quote:

"Insanity is doing the same thing, over and over again, but expecting different results"

Einstein: described the madness of market fundamentalists

 
So we need an economic alternative. But what is that alternative? Neoliberalism, over the past 30 years has put commercial interests above democratic sovereignty. This has happened globally through organisations like the WTO and the European Union. We need to reverse this process and re-assert democratic control of our economy. This economic change must put governments in charge, actively planning and managing economic development, allow local decision making and create a mixed economy based on  genuine sustainable development to deal with ecological crises and halt endless growth. In the longer term the only answer to the domination of private commercial interests is to put the economy in the hands of the 99%. How can we do all that?

Firstly, we need to nationalise the bust banks that are hoovering up resources which need to be spent on creating jobs. Its a scandal that the UK's bust banks have been bailed out but are still in private hands. This must end, some banks must fold, and we need banks to be broken up to provide finance to small businesses, and local and regional banks which can focus on reviving local economies;

Secondly, we need to take the creation of credit out of private hands and put it under democratic control. Debt creation is too great a power to be left in the hands of private enterprise - this is what caused the current crash;

Thirdly, we need to take control of the big utilities such the energy and water companies, and sectors which rely on massive public subsidy to continue such as the railways;

Fourth, we must institute a programme of investment in our economy to create jobs through green quantitative easing and a Green New Deal;

Finally, and most importantly, we must break the power of the corporations by mutualising the economy, providing the finance to set up co-operatives and giving employees the power to buy-out the companies they work for and control them. This latter measure is crucial in putting economic power into the hands of ordinary people. We need to create a new culture of doing business in which people work together to create successful mutuals which are focused on local communities. Co-operatives have a better success rate than companies and they don't outsource downsize, or export jobs overseas.

Its a little known fact but there was an expansion of mutuals in the USA during the last Great Depression and there are many successful co-operatives both in the USA and here. It is a sector that is already growing. 130 million (yes that is million) people in the USA are now involved in mutuals and if you want to find out more detail read this previous post. You should also take a look at Gar Alperovitz's excellent book 'America beyond Capitalism' which gives practical examples of how the 99% in America are taking control of their economy from the bottom up by creating co-operatives. This is economic democracy in action and something we should celebrate.

Think it can't happen? Well, we have to make it happen. Its likely that the failure of the global banking system is going to mean that states are going to have to take a much bigger role in managing the economy now that the failures of the market have been exposed, and that people are going to be much more willing to trust democratic control and planning after they have experienced the privations of neoliberal austerity. If we want to really cure the malaise of neoliberalism and avoid the stagnation of monopoly capitalism we need to participate in the most important occupation of all, we need to Occupy the economy.

While Cameron schmoozes Murdoch, Greeks and Spaniards are fighting austerity

There are thousands of Spanish and Greek workers fighting to defend their jobs against the dead hand of austerity which is threatening to wreck Europe's economies. You would hardly know about this if you followed the mainstream media, which is instead fascinated by David Cameron's schmoozing of the Murdoch empire, and Simon Cowell's string of girlfriends.

Meanwhile, in Spain thousands of miners have been on strike since the end of May, defending their jobs and communities. In time-honoured fashion the Spanish government have unleashed the police who have been given a free hand to break up the strikes and protests leading to violent clashes. In Greece, striking steelworkers have stopped work for 228 days in their fight to protect their jobs.

So why doesn't this make the headlines? Because it doesn't fit with the media agenda which is the modern equivalent of bread and circuses, designed to distract and manipulate us, whilst pandering to the 'free' market neoliberalism of the corporations and their tame politicians. Its OK to report such clashes in the middle east, in places like Egypt,  because that is considered safe, but in Europe such events are not considered to be "newsworthy".

The big event this weekend is the Greek election and its looking like the Eurocrats have managed to turn the screws enough on the electorate to ensure a government which will support the 'memorandum' which is killing the Greek economy, and causing great pain to the Greek people. If New Democracy and its pro-bailout allies can form a government the Greeks will be ground down even further to protect the banks and the Euro vanity project. We can only hope that SYRIZA and its allies can gain enough votes to prevent this from happening. Since the bailout cannot work, a victory for the pro-bailout parties would be based on fear and ultimately fruitless. Either the terms of the bailout must be renegotiated and the debts written off or Greece will have to default anyway. Whatever happens the European Union has been badly damaged by this attempt to make its people pay for the blunders of the ruling 'free' market elite, who are wholly responsible for the current crisis.

Greece: the frontline in the battle against austerity

In July 2011 I posted on this blog about how 'The Greeks MUST default on 'their' debt'. Getting on for 12 months later that default is looking increasingly likely. The Greeks are being sacrificed for the sake of the Eurozone and the banks. The crucial point is that the bailouts were never intended to help the Greek people. The purpose of the bailouts is to save banks, Greek, German and French banks, NOT the Greek people. The pain the Greeks are suffering is to save bust institutions which made bad lending decisions. Once again, banks are too 'big to fail' but people lose their jobs and go hungry and homeless, or lack access to medicine - that is OK, apparently.

This is appalling and inhuman, and what it tells us is about the kind of economy we live in, an economy where people come a long way second to money, and financial institutions. It also tells us a lot about the EU, and what kind of institution it has become. Angela Merkel had the nerve to talk about Solidarity with Greece. But what is happening is the exact opposite of solidarity. The Greeks are being screwed. It is the Germans who have benefited from years of having a weak currency, the Euro, which has helped them to export. This has been at the expense of Greece and other southern European countries.

In the aftermath of the recent Greek election, now that the parties have failed to form a coalition, the screws are being turned on the Greek people once again. Threatening noises have been made in Germany and elsewhere. There is a clear attempt to bully the Greeks into voting for a coalition in June which will implement to terms of the bailout which have been imposed on Greece. This has come about largely due to the resistance of the SYRIZA coalition which came second in the recent election. Quite rightly, SYRIZA have insisted that the terms of the bailout must be renegotiated because they recognise that the debt can never be repaid on these terms and the Greek economy is being destroyed. Its well worth reading the letter that Alex Tsipras, leader of SYRIZA, sent to Manuel Barroso, President of the European Comission. It is perfectly level headed and points out that the terms of the bailout have to be re-negotiated.

SYRIZA: fighting austerity

So where does that leave us? Another election, in which SYRIZA is expected to gain even more of the Greek vote. And we are today being told that if SYRIZA win Greece will have to leave the Euro. So much for solidarity! The tragedy is that 70% of Greeks still want to remain in the Euro. I can only assume they would feel that it would be a national humiliation to leave. But what could be more humiliating than the position they now find themselves in? A default and a return to the Drachma would be hard. Banks would go bust and close. But the outcome, the longer term would be that Greeks could regain their self-respect, and a much larger measure of sovereignty than they have now. It would be a chance to re-build their economy and it has been done before, most recently in Argentina.

You can be sure that the Eurocrats are shoring up the EU economy as best they can, to protect themselves against a default. What they should be doing is helping the Greeks out of the mess both they and the leaders of Greece have created. Whatever happens, and make no mistake a Greek default could have serious ramifications for the world economy, the EU has been severely damaged by this debacle, which leaves a very nasty taste in the mouth.