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Greece… and an insight into power relationships May 28, 2015

Posted by WorldbyStorm in European Politics.

Here’s an article that caught my eye in the Observer at the weekend. Heather Stewart suggests that given the continuing crisis in relation to Greece and a situation where:

Alexis Tsipras, Greece’s combative prime minister, is facing yet another week of fraught negotiations as he and his team struggle to agree a shopping list of economic reforms stringent enough to appease the country’s creditors, but different enough from the grinding austerity of the past five years to satisfy the Greek electorate.


And all the while, bank deposits will leach out of the country, investment plans will remain on hold and consumers hammered by years of austerity will continue living hand to mouth.

Not mad keen on the word ‘consumers’ there but… the broader sense of the article is I think correct.

She continues:

Change the actors – and the stakes – and it’s a tired plotline familiar to many governments across the world. According to Eurodad, the coalition of civil society groups that campaigns on debt, there have been 600 sovereign debt restructurings since the 1950s – with many governments, including Argentina for example, experiencing one wrenching write-off after another.
Many of these countries plunged deeper into recession as a result of the uncertainty and delay inherent in this bewildering process and the punishing austerity policies inflicted on them, with a resulting collapse in investor and consumer confidence.

And she points to a very very useful contradiction at the heart of the international order.

Yet while the world’s policymakers have expended countless hours since the crisis of 2008 rewriting regulations on bonuses, mortgage lending, derivatives and too-big-to-fail banks, little attention has been paid to what should happen when a government is on the brink of financial meltdown.
Sacha Llorenti, the Bolivian ambassador to the UN, is currently touring the world’s capitals trying to change that. “We’re not just talking about a financial issue; it’s an issue related to growth, to development, to social and economic rights,” he says.

Stewart makes an excellent point as to why the UN, unlikely as it may seem, may be precisely the venue for some movement. She notes that as against the IMF the UN general assembly ‘isn’t dominated by the world’s major powers’. And this translates into interesting political dynamics.

When Argentina tabled a motion calling for the UN to examine the issue of sovereign debt restructuring last autumn, 124 countries voted for it; 11, including the UK and the US, with their powerful financial lobbies, voted against; and there were 41 abstentions.
Llorenti, who is chairing the UN “ad hoc committee” set up as a result of that vote, says the 11 countries that objected hold 45% of the voting power at the IMF. He believes they would prefer the matter to be tackled there, where they can shape the arguments: “It’s a matter of control, really.”

Is this a surprise? No, of course not. But it is a rare insight into just how nakedly the interests of the ‘major powers’ are pursued when it comes down to it.

Moreover what Llorenti and others want isn’t the last word in radicalism, an important aspect in itself in pointing to just how loaded the game is against most of those involved and particularly those who seek alternatives whether within or outside the orthodoxy. The example of Greece itself demonstrates how difficult it is, indeed how close to impossible, to push even mildly back against the dispensation. How one fashions genuinely radical counter-measures is difficult to determine, not – of course, that the effort shouldn’t be made.

The proposals he is pushing – drawn up by the UN’s trade and development arm, Unctad – would create something like a bankruptcy procedure for countries. As a starting point, troubled governments would be given a standstill on repayments – something Tsipras is having to fight tooth and nail for – while talks with creditors take place.

And it’s not as if there’s no recognition that this is necessary – even from some of those who cleave to a non-left position:

At a lively seminar to discuss the proposals in the European parliament earlier this month, Unctad’s Richard Kozul-Wright said: “Bankruptcy rules are a key part of any healthy, democratic, free-market economy.” One MEP after another expressed anger and frustration about the damage inflicted on the Greek people by the eurozone’s botched bailouts.

And meanwhile, as Stewart notes, for Greece there’s no respite, and the hypocrisy and sheer futility of the current process imposed by the EU, ECB and IMF continues apace:

As Syriza MEP Stelios Kouloglou put it in Brussels: “We are pretending this is a sustainable solution, which it is not: it’s getting worse and worse.” Instead of the hated troika of the IMF, European Central Bank and Brussels, he said, “we’re facing another troika, made up of blackmailing, threatening and ultimatums”.


1. CL - May 28, 2015

It does not seem possible for Tsipras to satisfy both the Troika and his own left faction. But at this point there is little road left. This suggests a Merkel intervention for geostrategic reasons to keep Greece in the EZ, in the EU, and in NATO?


Gewerkschaftler - May 28, 2015

Could be CL – we’ll see who blinks first.

Merkel has at least two major foreign policy fronts in which she is loosing ground and loosing allies – the post-Snowden fallout which still rumbles on her, and the Ukrainian situation, not the mention the wider Eastern European problem.


2. Gewerkschaftler - May 28, 2015

Well, so far we haven’t seen the cave-in from Syriza that the European elites (and much of the dogmatic ‘hard left’) banked on, despite the bombardment from the MSM and Troika Gauleiters.

Which is a cause for hope, I believe.

Ronan Burtenshaw had a good piece in Village magazine where her rightly points out that many (me included) in Syriza had underestimated the unanimity and ruthlessness of the politicians-for-capital and central bankers.

There seems to be some surprise in the party [Syriza] ranks at the degree of ruthlessness displayed by the institutions. Some had earnestly believed that more allies could be found in the battle against austerity. Others simply thought that Europe’s elites would be forced to stick more closely to their stated support for democratic legitimacy and a degree of social justice in the economy.

In fact, these elites, particularly those around Merkel’s government in Germany, are much more politically and strategically astute than they had been given credit for. The discursive trick of left-populists, not just in Greece but Spain too, of trying to box them into a corner by holding them to their stated principles has not succeeded in shifting the political terrain.

As Ioannou says, much of this has to do with a complicit media. “Today the institutions will say, ‘stick to the agreements, you’ve signed them’, tomorrow they’ll blatantly break the agreements to disperse funds and the press will simply report the situation as if there is no hypocrisy and we are to blame”.

However, set against that domestic support remains strong in a country with very little left to loose:

In their first month of power more than double the number who voted for SYRIZA in the election said they supported the government’s battle in Europe.

Despite this eroding somewhat in recent weeks, with the media particularly turning on the leftists after they attempted to break the power of the oligarchs, they remain around fifteen points ahead of their right-wing opponents in New Democracy. This is twice the margin with which they won the election only a few weeks ago.

The question is (assuming that Syriza won’t compromise on their red lines) whether the fear of the instability unleashed by a disorderly exit of Greece from the Euro outweighs the brutal desire in the elites to keep punishing in the Greek people for daring to speak up for European democracy, and pointing up the bankruptcy of the austerian consensus.


CL - May 28, 2015

Soon it appears there will be a denouement, (of sorts), and perhaps an answer to the question: Is it possible to have soft Keynesianism,-a la Varoufakis-in one Eurozone country?


Pasionario - June 1, 2015

The answer is no. Within the EU maybe, but not within the Eurozone. If you don’t have control over your own currency, then, roughly speaking, you can’t control how it’s spent.

It will be chaotic in the short run but I really hope the Greeks will have the guts to pull out and go it alone. But the longer they leave it, the worse it will be.

If Grexit and unilateral default were followed by any improvement at all then the whole rotten edifice of the Eurozone would start to tremble.


Gewerkschaftler - June 1, 2015

It is a founding myth of the Grexit school within Syriza and further afield that Greece would ‘have control over its own currency’.

Alternative views of the currencies of small nations are available – e.g. that they will be used as speculative footballs by the usual suspects, that larger economic blocs could use the tiny currency for political purposes to continue punishing the Greeks etc.

‘Control’ is something no small or even medium sized nation has in the current formation of global capitalism. Not over its currency or anything else much.


Pasionario - June 1, 2015

Of course a small country with its own currency doesn’t have absolute control, but it does have some control (whereas small Eurozone members have none at all). In particular, it can impose capital controls, devalue, and monetize debt. No-one should assume any of those measures are cost free. But they do imply a degree of economic sovereignty that Greece does not currently possess.


3. Gewerkschaftler - May 28, 2015

Another cause for some hope is that the Syriza government has held out so far, without collapsing or splitting.

This I think had something to do with the gains made by the anti-austerity left in Spain during the municipal elections.

It’s important to us all the the current Syriza government survives with honour and respect the Greek democratic will.


4. CL - June 1, 2015

-Writing for Le Monde in a tone of furious defiance after the latest set of talks reached an impasse, Mr Tsipras said the eurozone’s dominant players were by degrees bringing about the “complete abolition of democracy in Europe” and were ushering in a technocratic monstrosity with powers to subjugate states that refuse to accept the “doctrines of extreme neoliberalism”.-

Liked by 1 person

Gewerkschaftler - June 1, 2015

Which illustrates why the assumption that Tsipras will cave in (by the MSM and by elements of the left) is not necessarily a good bet.


Michael Carley - June 1, 2015

“Fiat justitia ruat caelum”


Gewerkschaftler - June 1, 2015

Amen to that. To mix our classical languages.


Michael Carley - June 1, 2015

Or he might just be putting his hands on the pillars of the temple.


5. Gewerkschaftler - June 1, 2015

Elena Panaritis has withdrawn. I think this indicates that party democracy is alive and well within Syriza.


Gewerkschaftler - June 1, 2015

Sorry – withdrawn as Greek representative to the IMF, I mean.


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