Counterpunch.png
Greece and Europe
Michael Hudson, Counterpunch, USA, 28 June 2015
Many readers of the European and American press must be confused about what
actually is happening in the negotiations between Greece (Alexis Tsipras and
Yannis Varoufakis). The European Troika (the IMF, European Central Bank and
European Council now object to the name and want to be called simply "the
Institutions") have stepped up their demands on Syriza. What is called
"negotiation" is in reality a demand for total surrender. The Troika's
demand is to force Syriza to go back on the campaign promises that it made
to voters who replaced the old right-wing Pasok ("socialist") and
Conservative New Democracy coalition, or else simply apply the austerity
program to which that coalition had agreed: cutbacks in pensions, deeper
austerity, more privatization selloffs, and a tax shift off business onto
labor. In short, economic suicide.
Last weekend a group of us met in Delphi to discuss and draft the following
Declaration of Support for Greece against the neoliberal Institutions. It is
now clear that finance is the new mode of warfare. The creditors' objective
is the same as military conquest: they want the land, the natural resource
rights and monopolies, and they want tribute (in this case, debt service).
And they don't want sovereign Greece to tax the economic rent from these
assets. In short, the negotiation between The Institutions and Greece is a
bold exercise in rent extraction.
To read the press, one might think that Tsipras and Varoufakis are simply
trying to capitulate, only to be turned down. Even many left observers have
criticized them for taking the positionthat "We want to pay."
What is not recognized is how successful the Syriza negotiating strategy has
been. While most voters opposed austerity, they also initially (and still)
have a fear from withdrawing from the eurozone. Tsiparas and Varoufakis have
walked a fine line and accurately judged unyielding and totalitarian the
Institutions' "hard money" creditor approach would be.
The eurozone's rejection of what obviously is an attempt at reason has
greatly strengthened Syriza's hand to say "NO" to deeper austerity. It would
bring yet more unemployment, yet more emigration, yet more bankruptcy - and
deeper distress prices for the public domain that the Institutions are
insisting be sold off.
On the surface, Syriza's non-payment of the debt that earlier coalitions ran
up (largely by not taxing the oligarchs who supported them) need not cause a
great disturbance in financial markets. After all, the debts to which Greece
objects are those run up to the IMF and ECB, not private bondholders.
Yet the eurozone may turn this non-economic crisis into a political crisis
by following through on its threat to exclude Greece from the eurozone.
Current conditions are such that much larger numbers of Greeks may now
support this position than was the case last January.
At stake is much more than Greece itself. What the attendees at Delphi want
is to rescue not only the Greek economy, but all Europe - by replacing the
euro and the ECB with a less austerity-based monetary ideology. If they are
driven out of the eurozone, they will be able to create a real central bank
(via the Treasury) to monetize deficit spending to revive the economy.
It is clear that what is needed is to replace the IMF with an institution
able to assess the ability to pay debts, and to write down bad debts
accordingly. Such an institution would replace Chicago School austerity and
fiscal policy with a more progressive monetary and tax policy.
If the European Central Bank follows through on its threat to wreck the
Greek banking system, Syriza has put itself in a position to replace the
oligarchs' banks with a public option.
The Institutions evidently hoped that the government will face a no
confidence vote if it is excluded from the eurozone. The reality is that it
would have suffered a no confidence defeat if it had capitulated. Tsipras is
now in a position to explain to voters, "We acted reasonably to do what we
could. Nothing will satisfy them except loss of our sovereignty, our land
and mineral wealth, and our power to tax. The IMF and ECB won't admit their
2010 mistake in not writing down the Greek debts, which stemmed largely from
the falsified Goldman-Sachs-Papademos ploy that got usinto the eurozone in
the first place."
In sum, followers of recent news reports should bear in mind that despite
all the statements of good faith that Greece "wants to pay its debts," the
reality is that there is no money to do so - except to the extent that the
IMF may "extend and pretend" the charade by advancing Greece the IMF's own
money to pay. As matters have turned out, Tsipras and Varoufakis have not
paid foreign debts with Greek money. They have not balanced the Greek budget
by cutting back pensions, nor have they sold off the crown jewels of
publicly owned infrastructure that European banks hoped to finance to their
clients.
From: <http://www.counterpunch.org/2015/06/26/the-delphi-declaration/>
http://www.counterpunch.org/2015/06/26/the-delphi-declaration/
(Includes the Delphi Declaration)
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