Varoufakis

It takes a Greek to save Europa

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Originally published in Ron February 11, 2016

 


Europa, in classical Greek mythology, was this Phoenician princess babe that drove lusty Zeus absolutely bonkers.

A trickster par excellence, Zeus turned into a white bull, lured Europa into riding him, and before she could escape, dove into the Aegean Sea and carried her off to Crete. The product of their inevitable lovemaking was King Minos. So keep in mind that Europa is the Minotaur’s step-grandmother (more on the Minotaur in a minute.)

Prolific lover that he was, Zeus in the end always came back to his wife, Hera. But this time, not before bestowing selected gifts upon Europa. One of these gifts was Laelaps, a hound that never missed his prey. Then, one day, fate ruled that Laelaps should go after the Teumessian fox – which according to divine design should never be caught.

Imagine Zeus’s predicament. After racking his divine brain, Zeus finally found an easy way out; he turned them both into stone and cast them into the night sky.

We can always draw on the psychedelic bacchanalia of classical Greek mythology to find graphic illustrations to the turmoil of our times. Imagine, for instance, Europa’s elite – Mario Draghi and co. – racking their brains in Laelaps meets Teumessian mode trying to solve the eurozone riddle. 

And imagine as well a new Minotaur eating modern Europa’s newborn sons and daughters.  

Meet DiEM25

Now to a new tale in the heart of Europa.

Seven months after resigning as the finance minister of Greece, self-described “erratic Marxist” Yanis Varoufakis is resurfacing (out of the Aegean Sea?) with a bang.

This past Tuesday, at the Volksbühne Theater in Berlin, Varoufakis launched a new project: the DiEM25 (Democracy in Europe Movement 2025), whose aim is to ultimately transfer power from Europa’s unaccountable, fiercely authoritarian elite and distribute it – fairly – among European citizens.  

Greek myth? Why not? And exactly when Europa badly needs a new foundation myth. Varoufakis bets that the movement will eventually reach a “basic consensus” on what to do to really introduce democratic practices into how the European behemoth is run. And then, onwards to parliamentary democracy, via elections.

The diagnostic by Varoufakis would resonate among every sound minded EU citizen. It features unaccountable European elites; “big finance” and “big industry” forming the “unholy cartel” that is the “main driver of EU policy”; the European Central Bank (ECB) propping up the “cartel” by printing money like there’s no tomorrow through quantitative easing (QE); Italy as the new Greece, suffocated by its debt repayments; the fallacy of the theoretically apolitical ECB controlling interest rates across vastly disparate countries; and the Mafia behavior of the Eurogroup (comprising the 19 finance ministers of eurozone members).  

Not surprisingly, the fallacy of this “model” of running the eurozone has produced devastating unemployment and facilitated the rise and rise and rise of the extreme right.

The concept of DiEM25 is inspired by what people across Europe should have done in the 1930s, before the ascension of Nazism and fascism; a pan-European, trans-political democratic movement. Varoufakis identifies all the toxic trends of the 1930s in the current, abysmal turmoil engulfing Europa.

He wants DiEM25 to be more than “just a think-tank and… an internet community”.

At the same time he’d like the movement to be essentially leaderless. And there’s the rub; Europa may not need heroes, but as it stands it definitely needs true leaders.

Chairperson of the German party 'Die Linke' Katja Kipping listens to Greek former Finance Minister Yanis Varoufakis during an event to mark the official launch of the Democracy in Europe Movement (DiEM) in Berlin on February 9, 2016. © AFP Photo

Chairperson of the German party 'Die Linke' Katja Kipping listens to Greek former Finance Minister Yanis Varoufakis during an event to mark the official launch of the Democracy in Europe Movement (DiEM) in Berlin on February 9, 2016. © AFP Photo

Meet the new Minotaur

Considering the current intellectual void all across Europa, Varoufakis at least is shaking up the torpor. Everything one needs to know about the deep causes of the 2008 global financial crisis has been dissected in his seminal book The Global Minotaur (Zed Books; check out the updated 2013 edition.)

The Minotaur metaphor is indispensable to understand the “model” – defined as “controlled disintegration of the world economy” – imposed upon the whole planet by former chairman of the Fed, Paul Volcker. Starting in the go-go 1980s, this “chaotic, yet strangely controlled flux,” as Varoufakis defines it, translated into foreign investors sending billions of US dollars to Wall Street every day, thus financing the US’s twin deficits – and feeding the Global Minotaur.


Greece's former Finance Minister Yanis Varoufakis addresses a news conference to introduce the so-called DiEM 25 (Democracy in Europe Movement 2025) at the Volksbuehne theatre in Berlin, Germany, February 9, 2016. © Fabrizio Bensch

Democratizing Europe: Varoufakis launches new movement to save EU from ‘disintegration’


So we’re back, once again, to Greek classical mythology. King Minos of Crete asked Poseidon for a bull as a sign of divine endorsement. He promised Poseidon he would sacrifice the bull in the god’s honor. Yet he didn’t. Punishment, thus, was inevitable.

Talk about creative punishment. The gods, using Aphrodite’s expert qualifications, had Minos’s wife, Queen Pasiphae, fall madly in love/lust with the bull. Using various props built by the legendary engineer Dedalus, the queen managed to get pregnant. The product was the Minotaur: half human, half bull.

When the Minotaur became huge and uncontrollable, Minos told Dedalus to build a labyrinth. The only way to appease the Minotaur in his labyrinth was to offer human flesh. And here we get into Minos from Crete getting his revenge on Athens; King Aegeus of Athens had killed Minos’s son after he won all the contests at the Pan-Athenian games. So after a brief war with Athens, Aegeus was forced to send seven young boys and seven unwed girls to be devoured by the Minotaur every year.

This – in myth – was the set up for a regular foreign tribute that kept the Minotaur well fed. Nowadays, or until 2008, this was the set up of Pax Americana. But unlike the myth, where Theseus – the son of Aegeus – eventually slaughtered the Minotaur, what doomed the new monster were the lowly subprime racket and a tsunami of CDOs and CDSs.

Varoufakis could not but be attracted to a remix of the Minotaur metaphor; a periodic one-sided tribute – in US dollars – from the whole planet enabling the hegemonic ‘Exceptionalists’ to project power across the seas. This Minotaur is now dying, the world is still encumbered with its rotting carcass, and no one knows what beast is to rise next.       

For now, it’s time to fight another, lesser Minotaur; a monster devouring its step-grandmother Europa’s children by autocracy, austerity, unemployment and fear. And once again, it takes a Greek, not a hero by any means, to show Europeans the way.

 


Pepe Escobar is an independent geopolitical analyst. He writes for RT, Sputnik and TomDispatch, and is a frequent contributor to websites and radio and TV shows ranging from the US to East Asia. He is the former roving correspondent for Asia Times Online. Born in Brazil, he's been a foreign correspondent since 1985, and has lived in London, Paris, Milan, Los Angeles, Washington, Bangkok and Hong Kong. Even before 9/11 he specialized in covering the arc from the Middle East to Central and East Asia, with an emphasis on Big Power geopolitics and energy wars. He is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007), Red Zone Blues: a snapshot of Baghdad during the surge (Nimble Books, 2007), and Obama does Globalistan (Nimble Books, 2009).

The Syndicate takes over Greece

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Published on Yanis Varoufakis Blog on July 22, 2015

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Europe’s Vindictive Privatization Plan for Greece – Project Syndicate

For the Project Syndicate site click here. Or…

ATHENS – On July 12, the summit of eurozone leaders dictated its terms of surrender to Greek Prime Minister Alexis Tsipras, who, terrified by the alternatives, accepted all of them. One of those terms concerned the disposition of Greece’s remaining public assets.

Eurozone leaders demanded that Greek public assets be transferred to a Treuhand-like fund – a fire-sale vehicle similar to the one used after the fall of the Berlin Wall to privatize quickly, at great financial loss, and with devastating effects on employment all of the vanishing East German state’s public property.

This Greek Treuhand would be based in – wait for it – Luxembourg, and would be run by an outfit overseen by Germany’s finance minister, Wolfgang Schäuble, the author of the scheme. It would complete the fire sales within three years. But, whereas the work of the original Treuhand was accompanied by massive West German investment in infrastructure and large-scale social transfers to the East German population, the people of Greece would receive no corresponding benefit of any sort.
Euclid Tsakalotos, who succeeded me as Greece’s finance minister two weeks ago, did his best to ameliorate the worst aspects of the Greek Treuhand plan. He managed to have the fund domiciled in Athens, and he extracted from Greece’s creditors (the so-called troika of the European Commission, the European Central Bank, and the International Monetary Fund) the important concession that the sales could extend to 30 years, rather than a mere three. This was crucial, for it will permit the Greek state to hold undervalued assets until their price recovers from the current recession-induced lows.
Alas, the Greek Treuhand remains an abomination, and it should be a stigma on Europe’s conscience. Worse, it is a wasted opportunity.

The plan is politically toxic, because the fund, though domiciled in Greece, will effectively be managed by the troika. It is also financially noxious, because the proceeds will go toward servicing what even the IMF now admits is an unpayable debt. And it fails economically, because it wastes a wonderful opportunity to create homegrown investments to help counter the recessionary impact of the punitive fiscal consolidation that is also part of the July 12 summit’s “terms.”
It did not have to be this way. On June 19, I communicated to the German government and to the troika an alternative proposal, as part of a document entitled “Ending the Greek Crisis”:

“The Greek government proposes to bundle public assets (excluding those pertinent to the country’s security, public amenities, and cultural heritage) into a central holding company to be separated from the government administration and to be managed as a private entity, under the aegis of the Greek Parliament, with the goal of maximizing the value of its underlying assets and creating a homegrown investment stream. The Greek state will be the sole shareholder, but will not guarantee its liabilities or debt.”

The holding company would play an active role readying the assets for sale. It would “issue a fully collateralized bond on the international capital markets” to raise €30-40 billion ($32-43 billion), which, “taking into account the present value of assets,” would “be invested in modernizing and restructuring the assets under its management.”
The plan envisaged an investment program of 3-4 years, resulting in “additional spending of 5% of GDP per annum,” with current macroeconomic conditions implying “a positive growth multiplier above 1.5,” which “should boost nominal GDP growth to a level above 5% for several years.” This, in turn, would induce “proportional increases in tax revenues,” thereby “contributing to fiscal sustainability, while enabling the Greek government to exercise spending discipline without further shrinking the social economy.”

In this scenario, the primary surplus (which excludes interest payments) would “achieve ‘escape velocity’ magnitudes in absolute as well as percentage terms over time.” As a result, the holding company would “be granted a banking license” within a year or two, “thus turning itself into a full-fledged Development Bank capable of crowding in private investment to Greece and of entering into collaborative projects with the European Investment Bank.”

The Development Bank that we proposed would “allow the government to choose which assets are to be privatized and which not, while guaranteeing a greater impact on debt reduction from the selected privatizations.” After all, “asset values should increase by more than the actual amount spent on modernization and restructuring, aided by a program of public-private partnerships whose value is boosted according to the probability of future privatization.”

Our proposal was greeted with deafening silence. More precisely, the Eurogroup of eurozone finance ministers and the troika continued to leak to the global media that the Greek authorities had no credible, innovative proposals on offer – their standard refrain. A few days later, once the powers-that-be realized that the Greek government was about to capitulate fully to the troika’s demands, they saw fit to impose upon Greece their demeaning, unimaginative, and pernicious Treuhand model.
At a turning point in European history, our innovative alternative was thrown into the dustbin. It remains there for others to retrieve.

Read more at http://www.project-syndicate.org/commentary/greece-privatization-plan-public-assets-by-yanis-varoufakis-2015-07#HHZZL9E3voHpScF5.99

Greece: No Plan B

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Snippet:

…I took a break from the Greek Souvlaki Kabuki Theater last week, after being thoroughly saturated with this nonsense for the last month, beginning about the time that Souvlakis stormed out of negotiations with the Euroclowns and the Tsipras called for an impromptu referendum on the terms being offered to them in order to get fresh input of Funny Money they would never see, but merely go to pay interest on old loans that are steadily accumulating over time here.

In what should have been a fairly predictable outcome, the Greek population soundly reected the proposals in a 61-39% majority, but according to Brit Prep School Butt Boy Ambrose Evans-Prtchard Alex the Less than Great did not predict that, but rather thought they would lose this referendum and then Syriza could go ahead and sign the slavery contract with the approval of the slaves. Unfortunately for Alex his pollsters got this wrong, leaving him in the unenviable position of having to go back to the bargaining table once again, this time himself without Souvlakis running interference…

For the rest, LISTEN TO THE RANT!!!

Yanis Varoufakis Intervention

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Published on Yanis Varoufakis Blog on June 28, 2015

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As it happened – Yanis Varoufakis’ intervention during the 27th June 2015 Eurogroup Meeting

The Eurogroup Meeting of 27th June 2015 will not go down as a proud moment in Europe’s history. Ministers turned down the Greek government’s request that the Greek people should be granted a single week during which to deliver a Yes or No answer to the institutions’ proposals – proposals crucial for Greece’s future in the Eurozone. The very idea that a government would consult its people on a problematic proposal put to it by the institutions was treated with incomprehension and often with disdain bordering on contempt. I was even asked: “How do you expect common people to understand such complex issues?”. Indeed, democracy did not have a good day in yesterday’s Eurogroup meeting! But nor did European institutions. After our request was rejected, the Eurogroup President broke with the convention of unanimity (issuing a statement without my consent) and even took the dubious decision to convene a follow up meeting without the Greek minister, ostensibly to discuss the “next steps”. 

Can democracy and a monetary union coexist? Or must one give way? This is the pivotal question that the Eurogroup has decided to answer by placing democracy in the too-hard basket. So far, one hopes.

 

Intervention by Yanis Varoufakis, 27th June 2015 Eurogroup Meeting

Colleagues,

In our last meeting (25th June) the institutions tabled their final offer to the Greek authorities, in response to our proposal for a Staff Level Agreement (SLA) as tabled on 22nd June (and signed by Prime Minister Tsipras). After long, careful examination, our government decided that, unfortunately, the institutions’ proposal could not be accepted. In view of how close we have come to the 30th June deadline, the date when the current loan agreement expires, this impasse of grave concern to us all and its causes must be thoroughly examined.

We rejected the institutions’ 25th June proposals because of a variety of powerful reasons. The first reason is the combination of austerity and social injustice they would impose upon a population devastated already by… austerity and social injustice. Even our own SLA proposal (22nd June) is austerian, in a bid to placate the institutions and thus come closer to an agreement. Only our SLA attempted to shift the burden of this renewed austerian onslaught to those more able to afford it – e.g. by concentrating on increasing employer contributions to pension funds rather than on reducing the lowest of pensions. Nonetheless, even our SLA contains many parts that Greek society rejects.

So, having pushed us hard to accept substantial new austerity, in the form of absurdly large primary surpluses (3.5% of GDP over the medium term, albeit somewhat lower than the unfathomable number agreed to by previous Greek governments – i.e. 4.5%), we ended up having to make recessionary trade-offs between, on the one hand, higher taxes/charges in an economy where those who pay their dues pay through the nose and, on the other, reductions in pensions/benefits in a society already devastated by massive cuts in basic income support for the multiplying needy.

Let me say colleagues what we had already conveyed to the institutions on 22nd June, as we were tabling our own proposals: Even this SLA, the one we were proposing, would be extremely onerous to pass through Parliament, given the level of recessionary measures and austerity it entailed. Unfortunately, the institutions’ response was to insist on even more recessionary (aka parametric) measures (e.g. increasing VAT on hotels from 6% to 23%!) and, worse still, on shifting the burden massively from business to the weakest members of society (e.g. to reduce the lowest of pensions, to remove support for farmers, to postpone ad infinitum legislation that offers some protection to badly exploited workers).

The institutions new proposals, as expressed in their 25th June SLA/Prior Actions document, would make a politically problematic package – from the perspective of our Parliament – into a package that would extremely difficult to push through our Parliamentary caucus. But this is not all. It gets worse much worse than that once we take a look at the proposed financing package.

What makes it impossible to pass the institutions’ proposal through Parliament is the lack of an answer to the question: Will these painful measures at least give us a period of tranquillity during which to carry out the agreed reforms and measures? Will a shock of optimism counter the recessionary effect of the extra fiscal consolidation that is being imposed on a country that has been in recession for 21 consecutive quarters? The answer is clear: No, the institutions’ proposal is offering no such prospect.

This is why: The proposed funding for the next 5 months (see below for a breakdown) is problematic in a variety of ways:

First, it makes no provision for the state’s arrears, caused by five months of making payments without disbursements and of falling tax revenues as a result of the constant threat of Grexit that has been wafting in the air, so to speak.

Secondly, the idea of cannibalising the HFSF in order to repay the ECB’s SMP-era bonds constitutes a clear and present danger: These monies were earmarked, correctly, for strengthening Greece’s fragile banks, possibly through an operation that deals with their mountainous NPLs that eat into their capitalisation. The answer I have been given by senior ECB officials, whose name will remain unsaid, is that, if need be, the HFSF will be replenished to cope with the banks’ capitalisation needs. And who will do the replenishing? The ESM, is the answer I was given. But, and this is a gigantic but, this is not part of the proposed deal and, moreover, it could not be part of the deal as the institutions have no mandate to commit the ESM in this manner – as I am sure Wolfgang will remind us all. And, moreover, if such a new arrangement could be made, why then is our sensible, moderate, proposal of a new ESM facility for Greece that helps shift SMP liability from the ECB to the ESM not discussed? The answer “we will not discuss it because we will not discuss it” will be very hard for me to convey to my Parliament, together with another package of austerity.

Thirdly, the proposed disbursements’ schedule is a minefield of reviews – one per month – that will ensure two things. First, that the Greek government will be immersed every day, every week in the review process for five long months. And well before these five months expire, we shall enter into another tedious negotiation over the next program – since there is nothing in the institutions’ proposal capable of inspiring even the faintest of hopes that at the end of this new extension Greece can stand on its own two feet.

Fourthly, given that it is abundantly clear that our debt will remain unsustainable by the end of the year, and that market access will remain as distant then as it is now, the IMF cannot be counted upon to disburse its share, the 3.5 billion that the institutions are counting as part of the funding package on the table.

These are solid reasons why our government does not consider it has a mandate to accept the institutions’ proposal or to use its majority in Parliament in order to push it through and onto the statutes.

At the same time, we do not have a mandate to turn down the institutions’ proposals either, cognizant of the critical moment in history we find ourselves in. Our party received 36% of the vote and the government as a whole commanded a little more than 40%. Fully aware of how weighty our decision is, we feel obliged to put the institutions’ proposal to the people of Greece. We shall endeavour to spell out to them fully what a Yes to the Institutions’ Proposal means, to do the same regarding a No vote, and then let them decide. For our part we shall accept the people’s verdict and will do whatever it takes to implement it – one way or another.

Some worry that a Yes vote would be a vote of no confidence in our government (as we shall be recommending a No vote), in which case we cannot promise to the Eurogroup that we shall be in a position to sign and implement the agreement with the institutions. This is not so. We are committed democrats. If the people gives us a clear instruction to sign up on the institutions’ proposals, we shall do whatever it takes to do so – even if it means a reconfigured government.

Colleagues, the referendum solution is optimal for all, given the constraints we face.

  • If our government were to accept the institutions’ offer today, promising to push it through Parliament tomorrow, we would be defeated in Parliament with the result of a new election being called within a very long month – then, the delay, the uncertainty and the prospects of a successful resolution would be much, much diminished
  • But even if we managed to pass the institutions’ proposal through Parliament, we would be facing a major problem of ownership and implementation. Put simply, just as in the past the governments that pushed through policies dictated by the institutions could not carry the people with them, we too would fail to do so.

On the question that will be put to the Greek people, much has been said about what it should be. Many of you tell us, advise us, instruct us even, that we should make it a Yes or No question on the euro. Let me be clear on this. First, the question was formulated by the Cabinet and has just been passed through Parliament – and it is “Do you accept the institutions’ proposal as it was presented to us on 25th June in the Eurogroup?” This is the only pertinent question. If we had accepted that proposal two days ago, we would have had a deal. The Greek government is now asking the electorate to answer the question you put it to me Jeroen – especially when you said, and I quote, “you can consider this, if you wish, a take or leave it proposal”. Well, this is how we took it and we are now honouring the institutions and the Greek people by asking the latter to deliver a clear answer on the institutions’ proposal.

To those who say that, effectively, this is a referendum on the euro, my answer is: You may very well say this but I shall not comment. This is your judgement, your opinion, your interpretation. Not ours! There is a logic to your view but only if there is an implicit threat that a No from the Greek people to the institutions’ proposal will be followed up by moves to eject Greece, illegally, out of the euro. Such a threat would not be consistent with basic principles of European democratic governance and European Law.

To those who instruct us to phrase the referendum question as a euro-drachma dilemma, my answer is crystal clear: European Treaties make provisions for an exit from the EU. They do not make any provisions for an exit from the Eurozone. With good reason, of course, as the indivisibility of our Monetary Union is part of its raison d’ etre. To ask us to phrase the referendum question as a choice involving exit from the Eurozone is to ask us to violate EU Treaties and EU Law. I suggest to anyone who wants us, or anyone else, to hold a referendum on EMU membership to recommend a change in the Treaties.

Colleagues,

It is time to take stock. The reason we find ourselves in the present conundrum is one: Our government’s primary proposal to you and the institutions, which I articulated here in the Eurogroup in my first ever intervention, was never taken seriously. It was the suggestion that common ground be created between the prevailing MoU and our new government’s program. For a fleeting moment, the 20th February Eurogroup statement raised the prospect of such common ground – as it made no reference to the MoU and concentrated on a new reform list by our government that would be put to the institutions.

Regrettably, immediately after the 20th of February the institutions, and most of colleagues in this room, sought to bring the MoU back to the centre, and to reduce our role in marginal changes within the MoU. It is as if we were told, to paraphrase Henry Ford, that we could have any reform list, any agreement, as long as it was the MoU. Common ground was thus sacrificed in favour of imposing upon our government a humiliating retreat. This is my view. But it is not important now. Now it is up to the Greek people to decide.

Our task, in today’s Eurogroup, ought to be to pave the ground for a smooth passage to the referendum of 5th July. This means one thing: that our loan agreement be extended by a few weeks so that the referendum takes place in conditions of tranquillity. Immediately after 5th July, if the people have voted Yes, the institutions’ proposal will be signed. Until then, during the next week, as the referendum approaches, any deviation from normality, especially in the banking sector, will be invariably interpreted as an attempt to coerce Greek voters. Greek society has paid a hefty price, through huge fiscal contraction, in order to be part of our monetary union. But a democratic monetary union that threatens a people about to deliver their verdict with capital controls and bank closures is a contradiction in terms. I would like to think that the Eurogroup will respect this principle. As for the ECB, the custodian on our monetary stability and of the Union itself, I have no doubt that, if the Eurogroup takes a responsible decision today to accept the request for an extension of our loan agreement that I am now tabling, it will do what it takes to give the Greek people a few more days to express their opinion.

Colleagues, these are critical moments and the decisions we make are momentous. In years to come we may well be asked “Where were you on the 27th of June? And what did you do to avert what happened? At the very least we should be able to say that: We gave the people who live under the worst depression a chance to consider their options. We tried democracy as a means of breaking a deadlock. And we did what it took to give them a few days to do so.

POSTSCRIPT – The day the Eurogroup President broke with the tradition of unanimity and excluded Greece from a Eurogroup gathering at will

Following my intervention (see above) the Eurogroup President rejected our request for an extension, with the support of the rest of the members, and announced that the Eurogroup would be issuing a statement placing the burden of this impasse on Greece and suggesting that the 18 ministers (that is the 19 Eurozone finance ministers except the Greek minister) reconvene later to discuss ways and means of protecting themselves from the fallout.

At that point I asked for legal advice, from the secretariat, on whether a Eurogroup statement can be issued without the conventional unanimity and whether the President of the Eurogroup can convene a meeting without inviting the finance minister of a Eurozone member-state. I received the following extraordinary answer: “The Eurogroup is an informal group. Thus it is not bound by Treaties or written regulations. While unanimity is conventionally adhered to, the Eurogroup President is not bound to explicit rules.” I let the reader comment on this remarkable statement.

For my part, I concluded as follows:

Colleagues, refusing to extend the loan agreement for a few weeks, and for the purpose of giving the Greek people an opportunity to deliberate in peace and quiet on the institutions’ proposal, especially given the high probability that they will accept these proposals (contrary to our government’s advice), will damage permanently the credibility of the Eurogroup as a democratic decision making body comprising partner states sharing not only a common currency but also common values.

 

PRESS CONFERENCE PRESENTATION IMMEDIATELY AFTER THE 27th JUNE 2015 EUROGROUP MEETING

The Battle of Yesterday vs Tomorrow

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Published on The Slog on April 19, 2015

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ANALYSIS: Why the standoff between Greece and the EU is really the first major battle in the war between Yesterday and Tomorrow

2day2morrow19415As the days drag on towards some kind of dénouement to what is rapidly becoming the silliest, longest and most empty threat of a death sentence in political history, I continue to be amazed that the Western media are reporting the Greece-eurogroupe ‘deadlock’ as if it was a purely technical matter.

There are only two elements of the ‘crisis’ that concern me: the emotional dimension of an at times infuriating but fundamentally sound culture I’ve loved for over forty years being pelted by a salvo of Brussels sprouts, controlling sauerkrats, and past-sell-by date Frankfurters; and the former politics student’s fascination with the factions and rivalries on both sides.

If you’re a Python nut like me, then you will remember the Life of Brian sequence where Graham Chapman innocently asks the anal splinter-group leader Michael Palin if “we” are the People’s Group for the Liberation of Palestine, and Palin snaps back, “Are you f**king mad? We f**kin’ spit on the PGLOP. We, my friend, are the People’s Army for Palestine Liberation. There’s a world of difference”.

Sadly, a great deal of contemporary in-fighting between Middle East opponents of the US, Israel and NATO have proved in the 36 years since that movie how madness will eventually – somewhere – become reality. But it is also one of the strongest arguments against large States like Europe, China, the US and Russia that the citizens reach a point where a substantial minority no longer feel any affection for the much-vaunted body. For them, it’s more of a cadaver: a giant corpse they simple cannot remember as the flower of their youth.

More and more, this anthropological reality both colours and muddies European affairs.

The current impasse/standoff/crisis/negotiation is not – let’s get this straight for starters – a conflict between the EU and Greece. It is not even a war between national liberty and superstate dictatorship.

Rather, it’s the first battle in what could be a long war between yesterday and tomorrow. And be aware: the battle is no way as simple as ‘EU yesterday vs Greek tomorrow’: this is a battle in which there are more false flags, civil wars around the edges and power struggles going on than in the emerging Nazi Party of 1931.

*********************

Let’s deal quickly with my first concern: although depicted as the punishment of corrupt Greek politicians, backhanding officials and tax-evading taverna owners, none of that is even closely related to the facts. Far from punishing Nia Demokratia, PASOK and their serially unpleasant leaders, the Troika has insisted from Day One that it will only deal with these gargoyles. This is the same principle as hanging the war criminals at Nuremburg….up to but not including rocket scientists the victors wanted on their sides.

Germany largely benefited from corrupt officials (especially during the various insane arms deals with Greece) rather than suffering in any way; and precious few of those Fat Crats have been brought to justice….although Syriza is now on the case.

And finally, small businesses evade tax in Greece because the tax system is corrupt, not through greed in many cases: they know that every pol and bureacrat wants a kafelaki (small envelope). And people evade the Troika taxes today because they see them for what they are: a disgraceful attempt to pick the pocket of the vagrant in the gutter. I live in France now, and I’ve visited Greece between forty and fifty times in the last half-century; everything I see related to le noir francais is exactly the same as in Greece – except for one thing: it’s a far bigger problem in France.

I’m told by some that the desire to evade tax became an act of patriotic resistance during the Ottoman hegemony over Greece, but that was a long, long time ago: more accurate, I think, is the phrase used to me over and over again: “It’s a national sport”….and the trophy is nothing more than sticking it to the depraved elites that have been sitting on real Greeks for decades.

The punishment meted out by the Troika fits not the crime, but the greed, geopolitical ambitions and cynical control freakery of its three prongs – Wall Street, the US/EU, and Berlin/ECB interest groups. This is far from empty conspiracist assertion: the investment banking firms and Hedge Funds got clean away with a fat profit during the initial bailouts, Schäuble stands accused of conspiring with Venizelos to exaggerate the size of debt hole in 2010, a German-controlled and run concept of Fiskalunion has emerged directly from this totally unnecessary mess, the federalisation of the EU has been accelerated, and above all the euro was saved to die another day.

Greece, Italy, Spain and Portugal are on Calvary at the moment, but they’re dying to cleanse a worthless currency of its flaws, not to save anyone’s soul. And no amount of crucifixions from here to Warsaw via Budapest are going to remove the euro’s flaws.

Greece is saddled with an obscene debt and carpet-bombed economic structure because Schäuble wanted to convince the markets of eurozone viability, Trichet’s borrowing controls were hopelessly lax, Goldman wanted to sell credit, Sarkozy was terrified of the effect on his banks, and Berlin wanted – plus ca change – to run Europe using the best alternative to military force: the munnneeee.

There is little difference in general substance between QE and Zirp killing economies across the globe, and ClubMed austerity killing most of the ezone economy: except of course, the one in Germany. Gott in Himmel: perish the thought that such a thing might occur.

*********************

Nobody in the neoliberal owned and controlled press is ever going to accept that version of events, no matter how empirically databased it is. But no other explanation can explain the consistent actions of those in charge of the fiscal policies involved….policies that cannot possibly be related to sound economic actions – or even sound minds.

The mistake many observers and commentators make is to get the motive for the Greek tragedy wrong: get it right, and everything makes complete sense. Read the MSM account, and none of it does.

However, as I pointed out at the start of this mini-essay, there’s no simple tug-of-war going on. The best analogy I can summon up for the moment is to see the EU/ECB/Berlin attack on Greece as akin to Abe Lincoln deciding to attack Samuria-Shogun-Meiji fractured Japan just after the first Battle of Bull Run.

The two ‘sides’ in 2015 square up as follows:

EC vs Eurogroupe vs Frankfurt vs IMF vs ECB vs Berlin vs Paris vs UK

vs

Syriza vs KKE vs PASOK vs Nia Demokrita vs Golden Dawn vs To Potami vs ephiles vs ephobes

Without getting into too much detail, Jean-Claude Junker’s power base is the EC. Inside that, he has an anti-austerity rebuilding fund of allegedly €350bn, whose purpose he has kept deliberately vague. He befriended Alexis Tsipras, and could shaft the eurogroupe royally if he decided to invest it in Greece on a bigger scale than at present. This is because the eurogroupe’s attempt to wrest power from Juncker gets up his nasal orifice – and threatens the Cyprus-style tax evasion racket he runs in Luxembourg.

But the Frankfurt Bundesbank hardliners think the eurogroupe and its ally the ECB will have a disastrous effect on money supply and inflation via QE…plus (they assert) it was a mistake to let the US-controlled IMF and its mathematically dyslexic boss Christine Lagarde loose anywhere in Europe. In Berlin, however, Schäuble wants to have total control over the reins of euro-fiscal policy, and so would do anything to vapourise ECB boss Mario Draghi…while Chancellor Merkel (whom Schäuble dislikes, but who has the electoral appeal he lacks) has similar doubts to me about what Draghi’s really up to: is he working for the euro, or is he working for its replacement, the Dolleuro?

Paris, meanwhile, is infinitely more guilty of fiscal vandalism than Greece (as are Germany and Holland) but is no longer avoiding the consequences of its soi-largesse with quite the ease it was. The French Establishment has been rattled by some of the fiscal disciplinary methods imposed on France after the March eurogroupe summit: but Berlin must beware of pushing too many French voters towards the undiluted anti-EU nationalism of Marine Le Pen’s Front Nationale.

And last but not least, dear old Blighty stuck out there in the island limbo of “Ukip if you want to, but we’re wide awake, and we want out”.

You may think the Sceptred Isle doesn’t count, but I would suggest you’re wrong. At the moment, the Eunatics face threats on four ClubMed fronts, interference from the US, and an allegedly weak Putinesque Russia which suggests that it isn’t either weak or stupid. The last thing the EU elites need is to roil the markets with a secession request from Britain in 2018….even if it is only England by then.

This does, I think, go a long way to explaining why Draghi has of late switched tack, and begun persuading his ‘colleagues’ that the time is not yet quite right for the Greeks to default. Much smart money had been targeting April 26th as the moment of truth for Athens. But yesterday the ECB boss told a Washington audience that he “won’t even contemplate” the possibility of a Greek default on its debt repayments during April, because such an event would throw the eurozone into “uncharted waters.” This from the man who six weeks ago claimed that Greek default would be no more than a gnat-bite on the bum for eurobanks…because this time, the system “is prepared”. Yeh, right: that must be why he arm-twisted the ELA into coughing up the liquidity to help Greece pay off the last IMF kilo of flesh, sorry, installment.

Far more money is now being placed on a Greek default on or after May 9th. And spookily, that just happens to be two days after the UK General Election finishes. I think it would be safe to say that – were a Greek default to throw everything into European bond-spiking confusion before April 26th – there would be a massive Ukip surge, as well as potential pressure on the UK’s George Osborne in terms of borrowing rates. The continued UK national debt explosion is, after all, the Chancellor’s Achilles heel.

So there you have it. Or rather, you don’t: because twixt you, me, the gatepost and the other girls, trying to discern 8 x 8 possibilities producing 64 possible outcomes (when any new left-field factor could make that 4096 scenarios) is the original mug’s game.

Much better, I’d opine, to stick to the basics. And I’ve remained consistent about these since this rapidly dwindling time-window began last February 24th.

Those who would rather have a meteorite collide with Earth than give up on the euro project have far, far more to lose than a nation of 11.5m people who would (in my view) be much better off deserting the euro. But there remains that Greek inferiority complex pride thing of not wanting to be the catalyst of destroying a single market that acts as an economic and political bulwark against American multinational domination of the Globe.

I think that viewpoint to be muddled, but then I’m not Greek, or foraging in the Athens garbage cans. My gut feeling is that Varoufakis underestimated the Cosa Nostra nastiness of those with whom he must deal, and Troika2 underestimated the fatigue of the Hellenic population at large with being made a scapegoat.

Either way, a lot of very sour derivative bets placed on euro success cannot be allowed to trigger an omni-directional bazooka aimed at Wall Street. Sorry to repeat myself, but I still think the high face-cards are in the Greek hand.

Pi Day Circle Jerks & Soap Operas

logopodcastOff the microphone of RE

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Aired on the Doomstead Diner on March 17, 2015

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You Fucked Up!  You TRUSTED US!

A Potpourri of Ranting on the Student Loan Debt Bubble, Brazilian Collapse Issues, Saber Rattling in Europe,  Austrian Banking Collapse Contagion and Topping off the Pi with some Greek Feta Cheese!

Snippet:

…Sadly of course, the Jig is Up on this, and not only are there not sufficient jobs for the recent FSoA Kollege Grads at a high enough pay rate to service their debts, neither are there even enough jobz for the Indian IT grads to make a living at 25% of the pay rate in the FSoA EITHER.

BUT, because there are no decent jobs out there for recent HS grads, EVERYBODY goes to Kollege to study SOMETHING, and Da Goobermint guarantees the loans they take out to do that. The fact that upon graduation at least 1/3rd of this population can’t pay off the gobs of money they borrowed to do it has become a huge stinking mess of a problem now, getting exponentially larger by the day.

Said Loans to these students are not collateralized in any way, and you can’t Repo an education out of somebody’s brain, even if there was any value in doing that. So now you have $1.3T in debt here, a MINIMUM of 1/3rd of which just is not gonna get paid off, no way no how, and a HUGE population of people who face Debt Slavery for the rest of their lives because laws were ALSO passed to make student loans non-discharchable in a Bankruptcy. A typical Fracking Company can go BK and the managers and Geochemists who got salaries paid on the debt issued to them can walk away scot free, but if you took out a loan to study IT networks at the Devry Institute, you cannot go BK, EVAH! You made a mistake, you fucked up, you BELIEVED the lies that were sold to you this would continue in perpetuity, so suck it up and take your punishment!…

For the rest, LISTEN TO THE RANT!!!

Now, back to our regularly schedule Soap Opera…

Greece: Is this the Syriza Game Plan?

Off the keyboard of John Ward

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Published on The Slog on March 6, 2015

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Does the master of game plans have a master plan?

yaniswolfieptMost people who’ve read George Orwell’s 1984 will remember the word ‘newspeak’ he gave to the habit Big Brother had of using one word to describe its antonym. Those suffering in southern and south-eastern Europe will be well aware by now that a consistent trick employed by neoliberals is to use the word reform to mean “go back 150 years”.

In this latest week of surreal mayhem, I’ve seen the term used by the FT, the Wall St Journal, the EC, Bloomberg, the Telegraph and the Frankfurter Allgemeine Zeitung. They all mean the same thing – light regulation, lower taxes and greater wealth inequities; but applying them to Greece is, to say the least of it, surreal: taxed to hell by a Berlin driven Troika from the north – and sat upon by a crooked, wealthy oligarchy above who’ve never been regulated about anything – it’s hard to think of a more inequitable distribution of wealth than in that unfortunate country, given that half the population is skint, and half the young are jobless. In maths, filthy rich divided by zero = infinity. Infinity is it: there’s nothing bigger.

They surely cannot mean ‘reforming’ the oligarchy (although Syriza plan to obliterate it) because they’ve been the group favoured by the Troika from Day One. The Troika can’t have failed to notice that Veryzealous is also very fat with little piggy eyes, and little Antonikis an idiot; but that’s who they wanted on the team.

By ‘reform’, what they mean is selling State assets bought by and owned on behalf of The People to bankers and multinationals they represent in order to continue the greatest shift in social structure ever seen in modern times: the complete transfer of power from the citizen to banks and globalists. In a nutshell, the wealth of labour being given to capital. But not capital invested in an economy dedicated to the greatest contentment of the greatest number: no, to interbank trading, inventing money through the fractional reserve system, and making 1.5% of people unfeasibly rich.

The one gangster acting as top Capo for The Mob in this instance is Mario Draghi. The crooked guy in City Hall is Wolfgang Schauble, who doesn’t entirely trust the Capo. These two singularly unpleasant people led the austerity attack on Greece, and the Varoufakis ambush last Friday fortnight. Draghi is encouraging HNWIs in Athens to get their money out, while Schauble’s spooks spread rumours (alongside the CIA) throughout Greece – all of them suggesting that the Syriza government is just days away from default. They insist that Greece is staring down the barrel of Grexit, but it isn’t because nobody can do that….and the gun isn’t loaded.

So I ask again, why oh why didn’t this alleged master of Game Theory Yanis Varoufakis – who may be a narcissist, but is far from stupid – simply walk out of the ambush on that perfidious Friday?

$$$$$$$$$$$$$$$$$$$$$$$$$$$

None of the excuses I’ve heard for Varoufakis’s behaviour make any sense at all to me. I’m told that, not being Greek, I don’t understand. I’m told he wanted to buy time. Before that I was told Yanis was shrewdly flying steerage all over the EU to get new adherents to the cause. But it isn’t working, is it?

So I’ve been ringing and asking and digging and hypothesising, and oddly enough it wasn’t long – eight days isn’t much time at all – before I arrived at what to me is the only explanation left that doesn’t brand Varoufakis a coward, and Alexis Tsipras the latest Tony Blair on the block. So herewith five points I think significant, from which some informed speculation and dot-joining can emerge.

1. Four months is a ridiculously short period of time to do anything on this scale: the pressure, rumours, financial tightening and orchestrated press speculation are merely there to keep Syriza’s head spinning. Ditto the ‘reforms’ which the Athens government clearly isn’t going to carry out, because they’re antithetical to the Party’s philosophy.

2. Syriza’s leaders know they can’t keep their faded rainbow of leftists in order for four months, during which nothing gets done. The whole thing nearly came off the rails Sunday fortnight when the Party grasped the extent of the Varoufakis climbdown.

3. Earlier this week, Syriza raised E1.3bn in restructuring bonds without any EU or ECB involvement. It’s a drop in the ocean, but it’s something Nia Demokratia never managed. It’s a start, and it suggests to me that the Greek government is dipping a toe in the water while demonstrating that maybe credit is not a closed shop for them after all. (It gives the lie, for instance, to a rather silly piece in The Economist today suggesting that Syriza’s ‘readiness to go so close to the edge has hurt the economy and brought the state close to bankruptcy’. Oh per-leeeez).

4. Yesterday – as the euro began to sink further into the quicksand – Draghi proved how weak his hand really is by raising the ELA limit for Greek banks: the week before last, if you recall, he was threatening to turn off the tap. Varoufakis cannot fail to have spotted this.

5. A senior and reliable London City contact (who would only talk off the record) told me last Tuesday, “The [Greek] crisis has raised doubts about the long-term survival of the euro hugely. Maybe it’s not the same in Berlin or New York, but on this floor the majority of us are absolutely certain that the Troika has far more to lose than the Greeks. Whether the Greeks realise that is another matter”. So in short, we have the neoliberal press insisting that Greece is in trouble, but the sharp end in the City telling the truth. Makes you think.

This is my imaginary piece, dated 7th September 2015, which might perhaps move somewhere nearer to an explanation of WTF is going on:

‘What the Troika – and especially the ECB – underestimated last February was Mr Varoufakis’s willingness to challenge the accepted shibboleths. Initially taken by surprise on Fatal Friday – and puzzled by the frequency with which his Party Leader Alex Tsipras was ringing Merkel in Berlin – on his return to Athens, both men quickly agreed that, while the EU was bluffing, as and when the euro got into trouble they would need a money supply from elsewhere….and they didn’t have that.

‘The ‘deal’ they brought back was a hard one to sell to Syriza, and this was only achieved by taking the most influential members into their confidence about the new Game Plan. This Varoufakis defined as “seeking and then demonstrating independence” – first of all to the markets, then to the media, and finally to the Greek people. Each Syriza minister was in turn briefed to start the sort of reforms the Government (not the Troika) wanted to enact, but muddy the waters with Brussels and Berlin about what shape the reform would actually take. “We must make hay while the sun shines,” he told one intimate, “we have four months of bailout – let’s spend within budget, but in the People’s favour”.

‘The two leaders were also gambling on some situations in the eurozone beyond Greece becoming unmanageable during the four-month interregnum. Austria was a surprise candidate, but by the end of March it was clear that France had no intention of meeting its budget targets or ‘reforming’ to get the deficit ‘down’. Even the suggestion of a Troika coming in ‘to help’ was greeted by howls from the Socialist hard Left and Marine LePen’s Far Right Front Nationale. The gigantic Franco-German split at the heart of the EU was becoming increasingly apparent: the markets were nervous, and the euro continued to tumble. France’s debt bonds spiked, forcing the ECB to surreptitiously buy lots of it. At this point, both the Bundesbank in Frankfurt and the Schauble tendency in Berlin came out of the closet, launching barely veiled attacks on Draghi – who was by now chucking QE at the situation in order to do for European stock markets and banks what three bouts of QE had achieved in the US.

‘As this story unfolded, Varoufakis continued to distance himself from eurozone insanity when talking to lenders. Astonishingly – by stressing that Greece would not get any QE – he made a compelling case for investment in Greece being almost a safe haven. “We will be accountable,” he told them, “the ECB won’t. Our real economic position won’t be hidden behind Draghi’s tricks. Remember how he subordinated you illegally in Cyprus?”

‘It was Italy, however, that changed every game. Already courting Russian support, Italian PM Renzi was also keen to be seen standing on his own two feet: eurosceptic support had been growing, and privately the Italian leader saw the ‘austerity programme’ as insane. But all plans were blown out of the water when (as in Austria) the ‘bad bank’ fantasy became a real live nightmare. Economy Minister Pier Carlo Padoan tried frantically throughout February to accelerate the planned hidey-hole for toxic loans, but the amount was massive even by eurozone standards: Italian banks were sitting on 330 billion euros of loans, the vast majority of which stood no chance of being repaid. The colossal sum was equivalent to a fifth of Italy’s gdp — and had trebled in seven years. This (added to an economy showing no sign of recovery) had by late April switched the lenders’ focus away from Greece towards both France and Italy. Bond yields began to spike….but less so in Greece.

‘When the next major Eurogroupe summit took place in mid-June, Greece remained illiquid – and in default on its IMF loans. But Christine Lagarde had been able – with help from Wall Street and Washington – to fudge the issue. Varoufakis, meanwhile, enjoyed not only irritating Dijessilbloem and Schauble on the Italian and French problems, but also to casually point out that the German electorate was up in arms – and switching in droves to the anti-euro Alternativ fur Deutschland. In turn, the acrimonious atmosphere between the ECB, Berlin and Paris was obvious. And finally, the UK election’s huge popular vote for the europhobic Ukip Party promised a Brexit from the EU within two years

‘The net result of this was hugely increased negotiating power for Athens. In secret session, Yanis Varoufakis cut an amazing deal whereby – in return for some secret ECB-funded debt relief – Greece would pay off 30% of the IMF loan with money raised on the markets….and come off the Bailout Programme within two months. Effectively, the Greek finance minister was offering Lagarde the chance to keep a clean sheet, and not to be a further problem for the already beleaguered EC-ECB axis. Varoufakis returned to Athens a national hero. Wolfgang Schauble, meanwhile, returned to Berlin…and suggested to both Jens Weidmann and Angela Merkel that it was time to go back to the Mark.

‘Two months on, nobody quite knows what either Greece or Germany will do next. But the fate of the euro seems to have been sealed’.

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Personally, I find this analysis sound, but unlikely. It can easily be dismissed as naively optimistic. But on the other hand, if this isn’t the Syriza game plan, then what the Hell are they up to?

Greece “On the Brink”

Off the keyboard of John Ward

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Published on The Slog on March 3, 2015

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One news for the rich, and another for the poor

Greece, it seems, is suddenly in a load of trouble. A clear blue azure sky of eternal hope is threatened by large clouds. Syriza isn’t cutting it. It’s all over bar the shouting. Greece is going to be a pariah “on the same level as Zimbabwe” says the Daily Telegraph. “They’ve got ten days left” a senior journalist told me yesterday.

The situation with Greece is the same as it’s been since mid 2012: the only things that have changed in the last month or so are (1) a government the Troika doesn’t like (2) Draghi suddenly quoting “the rules” to keep Athens out of the QE money-pissing display, and threaten to cut off the ELA (3) the very oligarchy Syriza wants to get rid of withdrawing its banked money – egged on by the ECB – and (4) the Germany-ECB-IMF Troika humiliating the new Greek government. Take all those things away, and the fiscal situation is precisely the same as it was under little Antonikis from Kalamata. The differences outlined above can be summed up thus: a systematic undermining of a Sovereign State’s viability by malign influencers who don’t GAF about the welfare of the largely innocent and impoverished Greek citizenry.

Suddenly, the rules are important. Suddenly, an organisation unaudited since its inception says eurozone regulations must be obeyed. Suddenly, a central bank that raped Cyprus an subordinated holders of Greek bonds says the rules are important. Suddenly, the finance minister of a country (that took Greek money for two submarines and only ever supplied one) tells us that “People simply must obey the rules”.

The first two ezone countries to break the deficit rules were….Germany and France. France has never been within deficit limits since the euro came amongst us. This month they are to be asked by eurogroup what they’re going to do about it. You can bet it won’t involve German tabloids drawing cartoons about frogs, or Merkel and Schauble raising the ante, or Draghi threatening to cut off liquidity. I don’t think we’ll see Pristine Labouffant swanning in to bail out her own cockups when Minister of Finance under Sarkozy.
Yesterday, a huge Austrian secondary bank went belly up. Both Germany and the ECB are implicated negatively in the collapse. Not a single UK or German newspaper covered it.
Also yesterday, Yanis Varoufakis gave five separate interviews, all of them granted to deny that Greece is rapidly running out of money. In the same situation, Samaras told everyone that a golden age of recovery was just around the corner. Nobody reported the facts: that Greece was bailed out by the ECB twice last year under the table…in circumstances I predicted earlier in the year.
And yet, the latest Greek poll shows Syriza getting a 71% approval rating. The other 29% were far to busy exporting their money to Zurich to comment.
Every mainstream UK press title continues to predict an outcome that simply cannot be achieved legally: Greece being “forced out” of the eurozone. Did anyone ever talk of it being forced out under Nia Demokratia and PASOK? “Greece leaving the euro is inconceivable” said the IMF’s Lagarde only last year.
Good little teachers’ pets who are obedient are not expelled by the kindly headmistress. Bad little boys, by contrast, get news coverage that predicts the same Headmistress will throw them out at any moment. Yes, there is indeed one news for the rich, and another for the poor.

Slog Tri-fecta

Off the Keyboard of John Ward

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Published on The Slog on February 27-28, 2015

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RE Note: Slogger JW has been especially prolific of late with quite a bit of good stuff, so I am compiling a few at a time now instead of posting them individually.

GREECE LATEST: HUGE GREEK BANK OUTFLOWS, EURO FALLING AGAINST THE £, BUNDESTAG BACKS GREECE MEMORANDUM

ChambptIf the Varoufakis memorandum ‘deal’ is so respectable, why do none of the players, or their Party bigwigs, or the markets, like it?

There’s a piece in the online magazine Counterpunch at the moment purporting to show how Greek finance minister Yanis Varoufakis has ‘kept Greece in the euro by its fingernails’. Without going over the same tedious ground yet again, nobody can do that, because Greece doesn’t need to cling onto anything: once you’re in the euro, there’s no way out.
The piece continues as follows:‘So, those who think that Varoufakis should have given the Eurogroup an ultimatum (“Reduce our debts or we’ll leave.”) simply don’t understand the nature of the negotiations.  Varoufakis was forced to operate  within very strict parameters. Given those limitations, he nabbed a very respectable deal.’
If I had a Pound for every expert who responded to an injection of reality with “no no, you don’t understand” I’d be a very rich man indeed. QE, derivatives, the gold price, the euro’s value, UK ‘growth’, fractional reserve banking, the Manchester United owning Glazer brothers, ludicrously over-priced bourses, the EC’s finances, and BoJ asset purchases have all been ‘sold’ to me over the years are the best way forward…when they are obvious disaster areas waiting to happen.
In this case, it’s the idea that what Varoufakis signed last week was a ‘very respectable deal’. I’d like to put one simple question to the Game Players: if the deal is so good, why does no side – there are more than two – want it?
The Greek KKE doesn’t want it, 8 senior Syriza MPs don’t want it, and yesterday afternoon Merkel was given a seriously rough ride by her own CDU Upper Circle. I’ve yet to meet a single anti-federalist who likes it…but I’ve been told a dozen times that Varoufakis has “bought time”. He has: but is it peace in our time, or time for things to get worse for the Greeks?
Even the fairly large print of the Memorandum makes YV’s job impossible, and it isn’t helped by the obviously manipulated departure of bank deposits. Four months from now they will be back around the same table, and there is just one thing alone that might make Yanis’s hand stronger: Italy turning to sh*t – which it could do….and ought to do.
But if your main adversary is an Italian crook heading up the ECB, I wouldn’t hold your breath on it. In that four months, there’ll be 24/7 smearing and trolls, manufactured bank panics, and pretty much anything they can think of to take Syriza’s eye off the ball. Last month, a record €12.2 billion left Greek banks: that is more  than any outflows experienced during any of the previous Greek crises and bailouts. Zero Hedge is now confirming the Slogpost of last week when it says ‘the Troika did everything in its power to accelerate the bank run in order to crush any negotiating leverage Varoufakis may have had’.
As for Tsipras himself, his hardest task will be to keep the Coalition together…plus social protests and unrest coming from the KKE and Golden Dawn…both of whom are virulently anti-euro.

I wrote earlier this week that Varoufakis missed his chance to exploit the enormous Bundesbank v ECB v France rift – the thing that will do for the entire EU in time regardless of anything else that might happen. But he failed to call the bluff. That’s all Draghi had: bluff.

Today, with this marvellous deal nobody likes, the euro has fallen further, and now stands at 1.38 to Sterling. If he had walked last Friday, Troika2 would’ve been in l’ordure profonde. There is an old adage that says, “When you borrow £10,000 from a bank, it’s your problem. When you borrow $280billion and can’t pay it back, it’s the bank’s problem”. So far, EU citizens haven’t paid a red cent of any of the funny-money involved in bailing out Greece. Now they will have to…and it could tip at least two of them – Spain and Italy – over the edge. This is the size of the opportunity Varoufakis missed.

On verra. But I remain at a loss to see what Greece has gained here…except the bewildered disrespect of a lot of the neutrals.

At the End of the Day

We’ve just had a sunset here that can’t measure up to West Indian or Greek ends-of-day for awesome brilliance followed by soft red, but will always beat them hands-down for the range of colours involved.

In this sort of late-winter Aquitainian sunset, there are light greys, charcoals, limes, four shades of blue, infinite yellows – and spectacular solid rays that reach up to the heavens. Religiously influenced 19th century paintings of the English sunset made great play with the rays thing, but they all look insipid alongside what I just saw here.

The thing that’s particularly enthralling about the skies in the Lot is that they’re never boring. This enhances the sense, at sunset, of the illusion of Time being played out second by second: it’s a bit like watching a Turner painting observed through the Polaroids of David Hockney. You can’t take your eye off it for even a second, because all is change. As the Buddhist mantra has it, all things are in transition.

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If only the same could be said for Wolfgang Schäuble. You always know where you are with Wolfie: the bloke comes with a cast-iron guarantee that he will always support his inflexible approach with an insane argument. He was on top form in the Bundestag today, asserting to his CDU naysayers that “This is not about lending more money to Greece, it is about continuing with the programme”.

Just to insert the odd undisputed fact here, since 2010 his geliebte programme imposed upon Greece has produced the greatest depression of any Western economy in recorded history. Yet Dr Strangelove insists that Greek recovery will without question emerge from Aphrodite by the waterhole standing firmly at the side of Phoenix among the ashes – neither of whom have any money to consume the goods that the Greek economy cannot produce, because it has no finance.

You really do have to be profoundly mad to stick to that kind of programme.

But in Germany, political rebellion takes place in a way no other country can reproduce. In Germany, the leading CDU rednecks give Merkel a hard time for being a liberal pinko, and then traipse into the Bundestag to vote overwhelmingly for the extension of the Programme. In a German revolution, everyone forms an orderly queue to express dissatisfaction at the soft treatment being meted out to the Üntermenschen who do not grasp their Weltanschauung. Then they obey whatever bonkers bollocks Mutti Merkel comes out with.

It is all terrifyingly similar to Goebbels yelling that “All Jews are Communists, and all Communists are Jews”.

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Now that South Korea’s Constitutional Court has decriminalized adultery, Bloomberg reports that the country’s leading condom manufacturer Unidus shares rose by 11.75% today.

If you’re in any doubt about the importance of this ruling, I should point out that in 2008, actress Ok So Ri acknowledged publicly she had an affair with a singer. So her compassionate actor husband called for the maximum penalty of two years in prison. She got a suspended eight-month term. I’m not the world’s most right-on person, but the idea of this kind of chastity-belt claptrap still existing in the 21st century is not good news. Take a look at Indonesia’s laws against women: they beggar belief.

I do believe in long-term relationship sexual loyalty, but manufacturing crime out of human passion is about as bad as it gets.

That said, I have problems with the share price rise…as I so often do with f**kwitted stock market logic. If you’re marrried and you have an affair involving unprotected sex, presumably your husband knows you’re unprotected. So why would condoms be necessary – especially in the passion of the moment?

I do dislike reducing love to the mechanics of it all. But the problem with bourses the world over is that they’re dominated by daft testerone-fuelled blokes whose left brains are atrophied as a result of none-use.

And on that happy note, I bid you all bon weekend.

Our politicians make a hash of it because they’re bought, not because they’re braindead

mcteeth From Athens to Washington via Berlin, Paris and London, we are getting the wrong policies for us, because they’re not designed to be for us in the first place

Herewith a very small proportion of some major political cockups of recent vintage:

The EU ‘annexed’ former Soviet satellites in central and eastern Europe without giving a thought to what the effect might be in terms of cheaper goods and lower-cost workers.

The EU and US conspired to meddle in Ukrainian politics, and as a result were given a bloody nose by Putin.

The EU created one currency across 18 cultural divides without giving any exit door, and as a result the Greek population is paying for the crimes of the pro-EU oligarchy.

The EU is imposing a mad scorched earth policy on the Greeks in the bizarre hope that the grass will regrow two minutes after the fire goes out.

The EU trampled all over Cyprus, and as a result Putin has completed a bailout deal with them….in return for naval bases there.

The EU created a government structure in which unelected functionaries have all the ‘ideas’ – and the elected MEPs get to rubber stamp them – and hoped that democracy would flourish.

The US blundered into Iraq twice, supported the Muslim Brotherhood in Egypt, bombed Iraq for a third time, supported the rebels in Syria, and then changed its mind to support Bashar Assad and bomb the rebels…all in pursuit of energy control, without ever trying with any consistency to develop beyond fossil fuels.

The UK Prime Minister David Cameron gave a speech in Ankara heaping praise upon closet Islamist Recep Erdogan and referring to Gaza as “a concentration camp”….while Erdogan was busy supplying the unfortunates living in the small State with arms.

Cameron hired Andy Coulson despite being warned by a dozen well-placed people that he’d committed myriad crimes while at Newscorp.

The UK supported Bush in the Gulf War without any thought for the jihadist consequences…leading directly to 55 deaths in London and a wholesale radicalisation of British Islamics.

Successive UK governments allowed immigrants to pour into Britain over a 40 year period, dismissing all naysayers as racists – but without a thought for where they were all going to live….and now dismisses all opponents of their radical house-building policy as tree-huggers.

The UK government supports fracking – despite the calamitous fall in the oil price and the obvious threat to Britain’s already compromised water supply…and thus also increased lack of land on which to build homes to house the migrants they thoughtlessly let in after 1970.

…………………………..

I could go on like this all day. For a week even – and never stop, except for comfort breaks and sleep. Whichever way you cut it, these politician chaps are not very good, are they? Also, they’re incorrigibly corrupt…as the latest revelations in the UK showed only too well this week. And not very bright. Unpleasant when you meet them. Unresponsive. In fact, incapable of seeing the consequences of anything they do. So we need another bonfire –  after the ones for civil servants, lawyers and accountants die down – on which to chuck the politicians.

The current crop of politicians in the West are indeed pretty dire, and woefully lacking in leadership skills or the ability to unite rather than divide. But they’re the product of a culture – nothing more, nothing less.

The one thing all these idiot policies have in common is self-serving lobbyists.

In consecutive order, the lobbying that dictated the disasters listed above came from the US State Department, multinational business, the CIA alongside Silicone Valley, multinational banking, the German Interior Ministry, Wall Street, the European Central Bank, the US oil industry, NATO, Newscorp, the race relations industry, neoliberal employer organisations, and the construction industry.

Now you could argue that a lot of those lobbies are merely part of the political process, but they are not. Only two sets of people should set political policy: elected legislators, and the electorate. The rest – especially Whitehall – are supposed to shut up and pay attention, but they don’t. The same applies to central bankers, bourse districts, and business generally. The policies currently driven by lobbyists fail over and over again because they are about ego and bottom lines, not the needs or Will of the People.

When Jean Blondel wrote Voters, Parties and Leaders in the late 1950s, he described what he called ‘pressure groups’. Their job was to bring to the government’s attention plights and opportunities, not to bribe them: such a thing was thought completely improper then. Today, US, UK, and EU civil servants openly take up positions in banks, multinationals, and energy companies after leaving the bureaucracy. This is a twofold phenomenon: the reward for past favours done, and the ability to show the poachers how to avoid the gamekeepers.

You may choose to believe, for instance, that John McCain is mad. But he is far from that: he is almost exclusively bankrolled by the oil and munitions industries – especially the US areospace business. So instead of ‘mad’, think Middle East, ISIS oilfield attacks, arming the Ukraine, and bombing jihadists. All the wrong policies, and all for the same reason: more munneee for Mr McCain, more contracts for the arms business, and security of supply for the oilcos.

If you take a degraded culture – some would even say a depraved culture – and allow it to produce the politicians…who then get offered free wonga by obsessive multinationals, this is the entirely predictable result. The final result might, one day, be final in the most terrifying sense of the word: greedy little men like McCain starting World War III as a result of selling jets to Iran, or 2D undetectable weaponry to the Israelis, or covert nuclear delivery to the Germans, tactical nukes to African mercenaries, or anybody else – never mind who, business is business kid – that has the munnneeeee.

I’ve been giving Syriza something of a bashing this week (which I think they richly deserve) but the great thing in their favour is the desire to make Greece a more open, honest and accountable culture. It is the ultimate c-word, and the only way real radicals can effect change now. We need a different way of rolling back greed through education and example: what we don’t need is the old Big State Left and Neolib Right ideologies replayed yet again: they don’t bear any relevance to social anthropology, and so I switch off once the empty historical syntax gets trotted out.

Syriza’s form of localism appeals to me because its communal and bottom-up. Sadly, I now fear that the situation will go tits-up before they get the chance to put it into practice. One thing people who don’t ‘get’ Greece can’t grasp is that Syriza’s ‘natural’ franchise of voters is probably under 6%, if not less. It is a loose collaboration of convenience designed to stand up to Brussels and get rid of the Greek oligarchy. Once people think its leaders are just as boneless as their predecessors, Greek politics could easily descend into chaos…perhaps even civil war.

But Tsipras and co still have a chance – albeit a slim one – to tell the EU where to get off, and then watch as the opposing edifice collapses in acrimony. If they do, then four things have to go in Greece: neoliberal drivel, privately funded political Parties, dishonest officials, and lobbying. If they can start to make a go of that alongside communal support and better education, they might just achieve something truly worthwhile for citizens everywhere around the World.

Memo to Varoufakis

Off the keyboard of John Ward

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Published on The Slog on February 26, 2015

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Memo to Varoufakis: Game theory is fine, but this isn’t a game.

Yanis Varoufakis was caught in the headlights last Friday: he should stop denying it

https://hat4uk.files.wordpress.com/2015/02/varoufheadlinghts.pngThe anti-‘deal’ leaks from the ECB, Berlin, the IMF and Brussels have been in full flow since Tuesday evening. It’s all terribly predictable: a clever process of suggesting that – purely out the goodness of their hearts – Troika2 is going to cut Greece some slack….even though T2 has – to tot up the list to date – ‘grave doubts’, ‘major reservations’, ‘worries about the lack of detail’, and ‘concerns about achievability’. There is slack rope, and there is enough rope to hang oneself.

The stench of hypocrisy in all this is vomit-inducing: Greece is being set up to fail, and in the meantime the ECB will continue its covert policy of creating bank cash-flow problems…ensuring that Syriza comes across as a Skid Row lush dependent upon never-ending welfare.

From Yanis Varoufakis, the Master of Game Theory, there has been little since the sign-off beyond rationalisation. In an interview with the Irish Times’s Damian Mac Con Uladh today, Mr Varoufakis gives us:

“Good compromises don’t always satisfy everyone, and leave in a sense everyone somewhat dissatisfied. But the mandate from our party, our government and my prime minister was very straightforward. To get a deal done. So, compromise. The question is if we have compromised our basic principle. And the answer is a big, fat no….Our mandate was to struggle against this black and white, this either/or, and to create a third way….It’s a triumph for democracy and marks the end of automated austerity….Anything is better than confining us to an austerity hole where we shrink every day.”

Compare and contrast that entirely reasonable attitude with this BBC interview on February 3rd:

“”Europe in its infinite wisdom decided to deal with this bankruptcy by loading the largest loan in human history on the weakest of shoulders… What we’ve been having ever since is a kind of fiscal waterboarding that has turned this nation into a debt colony….[the Troika is] a committee built on rotten foundations…Greek democracy has chosen to stop going gently into the night. Greek democracy resolved to rage against the dying of the light….We are going to destroy the basis upon which they have built for decade after decade a system, a network that viciously sucks the energy and the economic power from everybody else in society.”

I’m being ironic: I vastly prefer the second (earlier) Varoufakis to the new relaunch. Today’s Irish Times interview shows Damian Mac Con Uladh giving Yanis an unbelievable easy ride on the subject of a fat, hairy mammoth in the room: the now well-documented way in which the Greek Finance Minister was ambushed by the Euromafia at 4.30 pm last Friday.

I recognise perfectly well that I’m breaking from the optimist pack, but then I do understand the sociopathy of that Mafia better than most Greeks. To be blunt, I think Varoufakis underestimated it; and last Friday, the breathtaking, bullying illegality of their input caught him napping.

I do not believe Syriza has bought time, I think it has sold principles. I’m sure Yanis knows all the tricks of Game Theory, but this is not a game. He is dealing with (as are we all sooner or later) a nasty and yet hopelessly splintered EU oligarchy of far greater venom than any existing in Greece. The division on the opposing side is what he missed.

It’s easy to define, and even easier to evidence: the Germans are fed up of the French, and losing faith in the Americans. That’s a very serious split, because the man with the most unaccountable power in the eurozone is Mario Draghi….who works for Wall Street. The French, meanwhile, bitterly resent the idea that a nasty piece of work like Wolfgang Schäuble will be eyeballing them during March…and if and when FiskalUnion ever comes to pass, telling them what they can and can’t spend 24/7. The idea that Paris has the remotest desire to acquiesce in that arrangement is ridiculous. Apart from anything else, it would hand millions of votes to both Marine Le Pen and Nigel Farage.

On top of that we have a general trend in Southern Europe towards euroscepticism: the continuing growth of Podemos in Spain, and europhobic Berlusconi attitudes in Italy. These can only be encouraged by a flat refusal by Greece to deal with the idiots who caused the problem in the first place.

This is the perspective from Syriza that I find flawed: the much bigger picture. Last week, Varoufakis focused on it, and then lost the plot on Friday. He was a refusenik, but now he’s a pragmatist.

The post I wrote earlier this week laying out the story behind this was taken down by the Blue Meanies. I am therefore eternally grateful to the half-dozen Sloggers who still had it open and used page capture to return the piece to its rightful owner. It is reproduced below for anyone who missed it first time around.

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GREECE CRISIS OPINION: TROIKA RISES FROM THE DEAD AS DRAGHI LEADS THE CHARGE, AND VAROUFAKIS EMPLOYS BRAVE FACE

Conflicting rumours surround the Syriza reform programme approval process tonight, but whatever emerges from this farcical trading of angels on a pinhead, I’m increasingly concerned as details of the humiliation process programme ‘deal’ accepted by Yanis Varoufakis last Friday come to light. I don’t actually think the five-point italic hand-tying target codicils matter a damn to be honest, because they’re all unachievable anyway.

Far more relevant is what EC behaviour has been found acceptable to the Greek Government.

Did you know, for instance, that both the Gang of Four revisions, the Friday ambush, and the ELA threats/leaks to Greek banks were driven by Draghi?

Did you know that – in a direct sideswipe at rehiring Ministerial cleaners – there is a blanket ban under the agreement on any more public sector hiring?

Did you know that, just to rub in really hard that how they think the Greeks shit on their shoes, eurogroup told Varoufakis Friday that they were “handing over the judgement process to the organisation formally known as the Troika” – Draghi’s exact words. This was a direct hit on Syriza’s refusal to deal with the Troika. “Eurogroup will leave the details to this institution, who will present their view to eurogroup” he added.

Varafoukakis told CNN this evening that it was eurogroup who wanted more time to think, not the Troika. That is very, very economical with the truth – and not how other Syriza officials see it. The Troika has made it clear to eurogroup there are things they don’t like. As Naked Capitalism reported yesterday, ‘The Greek government is required to submit a list of reforms to the Troika by the end of day Monday. If it is not approved, the Eurogroup will meet on Tuesday.’

Guess what? Earlier this evening, Greek Channel NERIT announced that the eurogroup has asked Greece to submit a revised reforms list for its meeting Tuesday morning. The Guardian carries the same story.

I’m sorry, but at the minute Yanis Varoufakis isn’t coming out of this very well. For now, I support him to the hilt: but he is either going to resist the EC/ECB/creditors Troika or he isn’t. I know perfectly well that there are many among Athenian opinion-leaders who disagree with me about this. So perhaps – to illustrate the point – I might be allowed to relate an infamous Churchillian anecdote.

In the mid 1920s, WSC found himself seated next to a lady of liberal leanings at supper. Glad to have this arch anti-Communist to herself, the socialite took him to task about strike breaking, dissembling newspaper articles about the working class, and several other genuinely unpleasant dimensions of Churchill’s curate’s egg of a personality.

As ever when in the presence of what he regarded as uppity suffragettes, Winston was cutting and dismissive, telling the woman she should stick to worrying about her children and suitable marriages for her daughters – while remaining grateful for the fact that Britain had unwisely given her the vote.

“Mr Churchill,” said the shocked supper companion, “If I were married to you, I would put poison in your wine”.

“Madam,” Churchill lisped, “if I were married to you, I would drink it”.

Think of this as the “Drop dead” period of Syriza/EU insult exchanging immediately following the election.

Back in 1927, this not entirely auspicious exchange rapidly deteriorated, such that by the time pudding arrived, the lady concerned had reached the end of whatever short tether she possessed.

“Mr Churchill,” she said loudly, “You are the last person in the world I would ever marry”.

“Madam,” WSC responded, “A small part of marriage involves procreation in the bedroom. In order to show you what my real intentions are, under what circumstance would you consent to sleep with me?” The mortified woman hesitated, and then replied.

“There is no amount of money on Earth that would so persuade me”.

“Not even,” asked Winston, “£10 million?”. She laughed out loud.

“Don’t be ridiculous, that’s more than the Poor Relief budget. No woman is worth that”.

“Very well then,” said the future war leader, “Shall we say £500?”

“That is an insult,” she responded, “what do you take me for – a common prostitute?”

“Madam,” said Winston Churchill, “We have already established your profession. At this stage, we are merely haggling about the price”.

Fast forward to 2015: that’s what has been going on since Friday afternoon between Syriza and the Troika.

I don’t buy the “lose the battle, win the war” argument. While the Troika, Wall Street, US economic colonisation, EU fascism and banking sociopathy are indeed the enemy, this is a peace time exchange, not all-out war – yet. A strategic retreat is one thing: preparedness to cling to the driftwood of credibility is merely appeasement.

I’m now informed – in the last twenty minutes by a well-placed Syriza source – that fully eight Greek Cabinet members are opposed to acceptance of the deal. For myself, I feel cheated and made to look stupid by the hidden facts and cynical spin that followed Friday’s little re-enactment of the 1938 Munich crisis. But my feelings don’t matter a jot: let  The Slog’s Saturday post stand as a testament to rushed judgement. More to the point is the reality that an opportunity to call the Troika bluff has been blown.

If Yanis Varoufakis wants to regain his dignity – and keep Syriza together – he needs to think very carefully about what Prime Minister Tsipras should be asked to accept tomorrow…and then sell to his Party. For what will it benefit a man if he buys time, yet sells his soul?

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Great Grexit Goon Game

Off the keyboard of RE

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Published on the Doomstead Diner on February 22, 2015

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As of Friday, for all intents & purposes is seemed as though the new Syriza Goobermint of Greece Kapitulated to the the Krauts, continuing onward with the Bailout regime established by the Troika, although with a face saving caveat that they are supposedly going to renegotiate points over the next 4 months.

That isn’t a bad plan, they do need time to figure out exactly WTF they will do once completely cut off from the Western Baking system, all their local banks FAIL, and they have zero money worth anything to pay their goobermint workers with.

The problem of course here is that they went in with a very Hard line and a Mandate from the electorate NOT to continue onward with the bailout regime under any cirucmstances, and to throw off the Debt Slavery Choke hold held on them by the Krauts. When push came to shove, the Academic Marxists running the Syriza show just could not do that. Why NOT?

The issue here is, these folks want to remain a part of the Industrial Economy, and without credit issued by the Western Illuminati, that isn’t possible. They aren’t willing to sacrifice Modernity for their principles of Freedom. They KNOW that repudiating the debt and exiting the system will throw Greece into chaos and send it down the Failed State route, the first European Somalia essentially.

The people who elected them into office DO NOT grasp that exiting the system will even in the best scenario turn them into a dirt poor agrarian nation unable to afford electric lights, cars or Iphones. They still want to live like Krauts and Amerikans live, and figure they can do that if they just repudiate all the debt and go back to the Drachma.

Like all the previous Goobermints of Greece, the Syriza Goobermint is faced with a Morton’s Fork, where no alternative has a desirable outcome. Capitulating to the Krauts and remaining in Debt Peonage to them retains for a while access to modernity, but it does so at the expense of their freedom and the expense of their own credibility. Telling the Krauts to take a Flying Fuck at a Rolling Doughnut declares their FREEDOM, but it is just the freedom to descend into even more hopeless poverty and failed state status. The absolutely could not fulfill any promises of rehiring all their civil service workers and doubling pensions in any money that would work to buy anything imported from outside of Greece.

They are quite likely aware that Greece depends on copious imports of foreign goods, most particularly OIL and Natural Gas to keep functioning a while longer as an Industrial Economy. They are ideologically opposed to the type of finance system that gets them access to this, but they don’t want to give it up. Really, nobody does in any Industrial Economy, except for the few outlier Doomers who recognize the damage it is doing and who realize this type of economy is doomed no matter what is done on the financial level.

To get themselves elected, the Syriza Pols all had to make a lot of Promises that cannot be kept. The only leverage they ever held was that their Grexit would initiate a cascade failure which would take everyone else down with them, but if they are not willing and ready to be the first ones flushed down the toilet here, that threat is meaningless.

Che-RevolutionIf these folks are to retain credibility, they have to be up front and honest with the folks that elected them into office, and expalin to them that the minute they repudiate all the debt and re-issue Drachma is the minute the Greeks have to let go of all things Industrial, all things imported into Greece from other countries. They have to explain to the Greek population that the Debt issued by the Western Illuminati is what gives them access to the products and services of Industrialization. They need a PLAN to make such a transition off Industrialized products and services POSSIBLE, because without such a plan Greece becomes Somalia in short order.

The problem there is that Marxist Revolutionaries or not, most if not all of the folks running Syriza do not grasp that the entire Industrial Paradigm is collapsing, and they are just at the leading edge of this collapse, the Canaries in the Coal Mine. They want to cut a “New Deal” where the Rich folks in Germany will subsidize the Poor folks in Greece, except the rich folks in Krautland do not want to subsidize Greeks, because now that the economy is no longer really growing, any transfer of wealth to the poor means the rich will take a hit on their standard of living also.

New Deals are only possible when the size of the Pie is GROWING, not SHRINKING. The Great Society program of Lyndon Johnson bought off the underclass here in the FSoA back in the 60s, but only possible because dishing out some bennies to the underclass at that time did not stop the ruling class from scarfing up even greater amounts of wealth still present beneath the earth surface and in the populations of even more desperately poor people around the globe, at least when measured in material wealth.

The situation now is quite different than it was in the 1960s. Globally now, all the cheap energy increasing the standard of living and wealth of the general population has been used up, all that remains now is expensive and difficult to extract energy. All the impoverished populations of the world from Mexico to India to China have all been exploited to the max, and their living environments ecologically destroyed in the process. Now, for anyone to become richer, somebody else must become poorer. The rich do not willingly become poorer, so any and all of the bennies won in earlier times are being rescinded now, the welfare state in all countries that had one is being dismantled.

What the Greeks would like to see is a wealth transfer system to move the wealth stolen by the Krauts over the last 50 years through financial manipulation sent back in their direction, but that cannot occur without the Krauts becoming significantly poorer, which of course they are resisting. Besides this, the Krauts aren’t really wealthy, their wealth is the Greek Debt, which the Greeks can’t repay. The wealth has in fact been burned up here by everyone.

Back in Greece, the Blowback is already occurring, and various Syriza Mps are lambasting Tsipras and Souvlakis for Kapitulating. Souvlakis latest speech with the Newzspeak renaming of the Troika as “Institutions” and calling the Bailout an “Extension” isn’t fooling anybody.

http://2.bp.blogspot.com/_3mEHv2LUGWA/ScK2RbecoxI/AAAAAAAABJA/nBrXAZBsU8w/s400/tarredandfeathered.pngSupposedly, on Monday the Greeks will submit a list of reforms which the Krauts have to sign off on, but the Krauts have already said that there is no way they can sign off on them before Feb 28th, with a review by the full Parliament. On the Greek side, it’s hard to imagine how the Syriza MPs will allow Tsipras to submit a list of reforms the Krauts cold find the least bit palatable.

So despite the apparent Kapitulation on Friday, a Grexit still seems quite possible for next week. They already have New Drachma ready to pitch out here, just in case. What they do not have is any credible plan to back that Drachma with anything. In the event they are forced to issue it, quite likely it sets the record for the fastest Hyperinflating currency of all time.

So, the Grexit Game is not quite over yet for the Game Theorists out there to play with. The New Plan the Greeks are supposed to submit on Monday and the Kraut reaction to it will tell the tale. Anything the Krauts can accept will get Tsipras and Souvlakis Tarred & Feathered in Syntagma Square and ridden out of town on a rail.

Stay Tuned to the Diner Channel for the latest in Updates.

RE

Calvinball in Brussels

Off the keyboard of Cognitive Dissonance

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Published on Two Ice Floes on February 16, 2015

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Yanis Varoufakis - Clean

Yanis Varoufakis: The Straw That Breaks the Ponzi’s Back?

What do you do when your opponent won’t play by the rules? Worse, what do you do when your loan ‘partner’ (aka ‘debtor’) declares Calvinball, where the only rule is there are no rules, and proceeds to go off the deep end? The result, to put it mildly, is utter chaos, at least for those who expect the (self serving) rules to be adhered to. After all, the central bankers’ henchmen admonish, we’re all civilized here. So come back to the table and play nice. “Do it for the kids,” they plead – the epitome of hypocrisy since their stacked deck and tilted playing field does precisely the opposite.

There is an old and familiar saying in the financial world, no doubt a product of game theory brinkmanship, which speaks to the role reversal of power and leverage once the monster debtor owes such an astronomical amount they can no longer pay to service the note, let alone chip away at the principal. The supposedly weak suddenly inherit the Earth, or at least they wield a very long lever along with a fulcrum with which to move the central banker’s world.

It is most likely a safe bet to say those reading this article clearly see the unsustainability of the present day economic system. The vicious cycle of debt requiring ever more debt just to tread water leads nowhere else but into the abyss of inexorable socioeconomic crumble, if not all out chaos and collapse. At the very least we are facing war; the only real question is will it be worldwide and involve a nuclear exchange.

As individual pawns cavalierly exchanged back and forth, one for one, in the same manner high ground is taken, only to be conceded, then taken again in a bloody game of war only those at the top could possibly win, you and I must step back and ask ourselves the only two sane questions left. How did we get here and where do we go from here?

I can’t count the number of times I have heard, read or seen one commenter after another declare with the highest piety their belief that capitalism has been tragically subverted, perverted and co-opted into what it is today. Often the unspoken, but clearly implied, thought is that aside from a few bad apples stinking up the joint, capitalism would be humming along just fine thank you, providing full employment, the proper allocation of capital and apple pie justice for all.

While clearly the above description is an exaggeration, though not by much, when will “We the People” begin to question the basis for our most fundamental and indoctrinated premise, one that declares ‘Capitalism’ is the greatest thing since sliced bread and clearly superior to any other socioeconomic system out there?

When the ideological blinders are removed, or at least cleaned up enough to allow a modicum of peripheral vision, it becomes increasingly clear the present day socioeconomic disaster is not ‘just’ an aberrant case of food poisoning, but rather a fundamentally organic and intimately integrated deliberate flaw ranging all the way from garden to gut. When the body politic grows weaker by the day and various interventions only hasten the degradation, everything must be called into question and preferably not from the grave.

Similar to any team sport, the credibility and sustainability of capitalism depends upon a fair playing field governed by rules applicable to all, policed and enforced by independent referees that rewards the most innovative and talented without exploiting the weak and defenseless. While many will pine on and on about how things used to be so much better during the Golden Age of capitalism, an honest reading of the history of America, ‘Capitalism’ and the monetary system will disabuse most of this notion. Capitalism didn’t just go bad like some two week old fish mistakenly left out of the freezer. Capitalism has been, and always will be, corrupted and co-opted by the rich and powerful in order to form a more perfect union of slave plantations.

When End of Empire comes calling, only the illusion of invincibility, one perpetuated both by those desperately dependent upon the Empire for sustenance and power along with those whose bones the Empire grinds to make its bread, stands between “We the Trampled” and the last of the Empire’s ideological guards. Reduced to the lowest common denominator and groveling at the bottom of Maslow’s hierarchy of needs pyramid begging for handouts and scraps, both prison guards and prisoners find they are sharing the same living quarters while blindly following their assigned roles in the nearly exhausted controlling narrative.

Sadly, tragically, by the time End of Empire is at death’s door, those best positioned to seize the day and thrust their swords into the belly of the beast have lost all hope and any remaining desire to walk point and be the first to confront the decomposing remains of the self savaged beast. The final agonizing death throes and delirium tremens of Empire consume friend and foe alike long before the remains are scattered in the gutter to be picked over by the hovering vultures and newly arrived squatters.

Vultures - CleanThe End of Empire clean up crew on standby.

To battle the beast from within, particularly when the Empire is at death’s door, is utterly futile for the beast is all consuming and totally corrupt. One must be an insider, thus corrupt to the bone, in order to reach the guarded halls of power. Once within the outer gates of hell, the disruptor is thoroughly co-opted and corrupted, thus they have become the problem and no longer the solution. To be anything else means entry is never gained and at best they remain impotent, at worst thoroughly spent.

Similarly, the emboldened and inspired revolutionary faces Hobson’s Choice if s/he is to overthrow the still-mighty-in-the-minds-of-the-native-population Empire. Damned if they adopt the most effective and expedient tactics of resistance, thus seen as indistinguishable from the Empire itself, and damned if they follow the rules of fair play and compassion in the face of a savage and cruel Empire desperate to cling to power, thereby ready and still able to shatter the native population in order to suckle the teat one last time.

But now there appears to be a third path, potentially enabling the man walking point to avoid the road to perdition, a trail and technique that strikes terror directly into the heart of Empire for it assaults the cancer at the core. An ascendant assassin from within, unconstrained by the cloth of corruption, inflamed by revolutionary ideology and armed with the Empire’s own debt weapons reversed for maximum effect, the perfect blunt instrument to bludgeon with.

Held together with baling wire and chewing gum along with heaping helpings of hubris and avarice, the Empire is vulnerable to internal destabilization wrought by those suddenly parachuted in by a population no longer believing or benefiting from the lies and deceit of Empire. A migraine headache repeatedly suppressed by opiates is eventually experienced as an agonizing wakeup call to those ready to do anything to relieve the pain of suffocating debt. The fiat party is eventually recognized as over either by consent or death. The Greeks have opted for consent over death.

For some, nothing settles the mind more thoroughly than the knowledge of certain death. Yanis is blessed (or cursed depending upon your point of view) with the certain knowledge of capitalism’s death. In fact, based upon the little I have learned about this man, he knows capitalism is already dead and the problem we now face is how to keep the decomposing corpse from violently exploding after the buildup of catastrophic internal forces is released.

Essentially Yanis Varoufakis sees himself as saving capitalism from itself with a Greek pinprick to a rapidly thinning cow hide. Wait too long and the cow hide becomes thin latex, then nothing will restrain the controlled demolition. She’s gonna blow, of this Yanis and many others are certain. If true, better now than later.

For decades he labored in relative obscurity doggedly speaking his conviction, credible because of his credentials, condemned as delusional because of his dissertation. Tempered by the impact of countless arrows and continuous stoning, hardened by years of self examination as he fought to understand his flaws and failure to communicate, Yanis is now the right man at the right time in the right place. His only true vulnerability, his Achilles Heel if you will, is the seaworthiness of the ship that ushered in his ascension. No man is an island, entire of itself when surrounded by those weaker of flesh, mind and spirit. Will his newly elected political party hold the red line or will it fold under intense international pressure?

Can the teetering fiat Jenga stack be carefully deconstructed? No, absolutely not, for The Powers That Be (TPTB) are fully prepared to go to the mats and practice a scorched Earth policy if only to deny the victor the means to rebuild in their own likeness. I suspect Yanis understands that holding firm will upset the Ponzi apple cart just enough to force TPTB to madly scramble in an effort to hold the decay at bay and the pieces from flying apart. This in turn will give Yanis and his posse additional time to pivot and attack the firmly entrenched Greek oligarchy, those who are obscenely profiting from the rape and misery of their fellow citizens.

Ultimately the Ponzi continues because those who hold the power all agree to play by the rules in order to collectively benefit from the confidence game. Yanis and company are the wild cards slipped into a stacked deck the powers that be were all but assured was clear of any jokers. With Varoufakis now firmly seated at the table and unwilling to play by the rules or constrained by the common goals of greed and self dealing, TPTB are now locked in a cage match to the death they thought they could contain and thereby never truly saw coming.

After gaining a seat at the table who in their right mind would not bluff, parry, and finally settle for the chance to thrust their beaks into the feast of fiat pie. Even worse for the powerful, the joker never picks up his cards to gauge his hand. Instead, incredibly, he lays them all out on the table as soon as they are dealt for everyone to see, especially by the ignorant and unwashed. The illusion of power and invincibility is slowly being exposed by the upstart Greeks led by Varoufakis.

While for now the fiat fire is contained to the nation of Greek islands, the embers that will ignite a raging inferno are rapidly drifting towards Italy, Spain and France. The arrogant European Union has seriously overplayed its hand and now is no longer certain exactly who is the fool still seated at the table. The only thing Greece has to fear is fear itself for the Emperor has no clothes and this is rapidly becoming apparent to those who wish to see.

The only way to defeat the insanity is to be perfectly and utterly sane, then sit back as the insane spontaneously burst into the flames of a cleansing self immolation.

The EU’s arrogance is simply weakness disguised as strength.

Arrogance - Clean

Eurosummit Breakdown

Off the keyboard of John Ward

Follow us on Twitter @doomstead666
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Published on The Slog on February 17, 2015

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Who did what and why?

As one Troika dies, another is born

Practically every Western press title and news bulletin this morning uses the word ‘defiant’ in relation to Greece’s rejection of the New Troika’s terms, and it isn’t a compliment.

The Greek contingent rejected the ‘deal’ because it wasn’t a deal, it was just the same old same old. But up until 90 minutes before closure, it had been something else. Allegedly drafted and then pushed hard by French finance minister Pierre Muscovici, the first draft (a copy of which Varoufakis still has) offered Greece more time, few targets, and then an attempt at economic growth.

It was taken off the table by yet another Troika – in most cases, remotely: Mariano Rajoy, Wolfgang Schäuble, and of course (no drum roll required) Mario Draghi. During the final day, Spanish PM Rajoy (for purely selfish political reasons, it would appear) scrambled around desperately trying to get the hawks to play more of a vulture role. His ginger-group plus the EC/ECB/Berlin/Frankfurt axis canned the original draft, and insisted on a return to all the original demands.

Then some of them briefed the press pack with pernicious spin about Greece messing them about, moving goalposts etc and being (this week’s insult of choice) “anti-European and irresponsible”. The truth is that, some time around 10.45 am CET, Varoufakis was lining himself up to sign the draft. Getting back to the realities:

– Greece cannot be allowed concessions, because Podemos would immediately demand the same (Rajoy)

– Greece’s load cannot be reduced, because then they might pay it back (Draghi)

– Greece’s flagrantly spendthrift behaviour must not be rewarded, and more austerity is the only answer (Schäuble).

So then – as many of us always suspected – the deal was scuppered by a hardline, corrupt, anti-libertarian Spaniard, a banker whose career is followed by clouds, and who retains his loyalty to Wall Street, and the residue of a tragically failed assassination attempt upon Germany’s top spook.

The only vaguely satisfying things to emerge from this charade are first, that once again the quintessence of controlling fascism that lies at the EU’s heart has been revealed; and second, the Western MSM really do not have a clue about how to handle the Greek attitude.

Four days ago, I wrote in reply to Merkel’s assertion that “Europe’s success is that it will always find a compromise”:

‘The small issue I have with this bollocks is that the movement by either side so far is tiny – in fact, barely above homoaeopathic…. In just 36 hours we have gone from “Drop Dead” to “Let’s compromise”. But where can it go from here? In my view, nowhere: the two sides are incompatible unless one or the other radically invents itself. Neither of them will do that.”

Sure enough, the Brussels Brigade reverted to type with black arts and making up new rules as they went along. And as they promised, Syriza refused to renege on its election commitments.

Watch those markets crash as the bond yields spike. The euro is dead, the EU dream has become a nightmare, and the fundamental attitude split between Berlin and Paris  is once again there for all to see.

Stay tuned.

Knarf plays the Doomer Blues

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