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And Ireland and Greece February 27, 2015

Posted by WorldbyStorm in European Politics, Irish Politics.
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A telling criticism from the SBP editorial on the government approach in relation to Greece.

The Irish government is a bit-player in all of this drama, but has a seat at the table. Its approach so far has been to follow the rhetorical line set by the creditor countries. Taoiseach Enda Kenny and finance minister Michael Noonan have urged Greece to follow Ireland’s example of negotiating incremental concessions to the bailout agreement over time in the hope of reducing the pain of the implementing austerity.

The SBP disagrees:

This is a mistake. To show solidarity to weaker countries is the essence of the European ideal. Many countries seem to have forgotten that. As a former bailout economy and the fastest growing in the eurozone this year, Ireland should offer support and encouragement.

And it makes a broader point, which is also often forgotten.

Instead the line from Dublin has been that Athens must honour its debts fully as Ireland has done. Athens’ interests are Dublin’s, in the long run. The Greek crisis has the potential to endanger the European project. Anything Dublin can do to help solve this will only be to the common good.

Things are stableish across Europe at the moment, but that’s not guaranteed, and more importantly this crisis is going to be followed by future crises. Dublin’s reticence, no – actually what is an aversion – to engaging positively and supportively in relation to Greece, may well come back to haunt it.

Not so fast! That emerging Fine Gael ‘narrative’ over austerity February 23, 2015

Posted by WorldbyStorm in Economy, European Politics, Irish Politics.
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According to Henry McGee Fine Gael have a pre-packaged explanation for why their approach to ‘austerity’ has been correct…

For several years now, critics of the compliance path pursued by the Coalition, and Fianna Fáil before it, have railed that it lacked the bottle to face up to Frankfurt or Brussels. In recent months, Sinn Féin has ramped up this argument. Gerry Adams claimed his party would have put in the hard yards – and all-night negotiations – to come back with a better deal.
Until now, such theories were not tested because they lacked laboratory conditions.

But…

Until now, such theories were not tested because they lacked laboratory conditions.

And then:

But then Greece happened. Alexis Tsipras and Yanis Varoufakis found to their cost last week their force was not so irresistible after all. Syriza’s gambit has backfired on them and, by corollary, has backfooted anti-austerity parties here.

Except there’s one small fly in the ointment…

Still, [Michael Noonan] did concede the Government never directly asked for debt write-down – the circumstances surrounding this admission are sure to be tested.

Ooops.

Statement from the CPI. February 22, 2015

Posted by WorldbyStorm in Economy, European Politics, Irish Politics, The Left.
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21st February

The crowing from the establishment and its tame media about forcing a climb-down by SYRIZA over the Greek debt and the continuing austerity programme barely disguises the complete contempt that they have for the people.

It matters little whether one thought that SYRIZA would inevitability have surrendered to the demands of the European Union or had hoped they would stand up and challenge it and defend the Greek people and blaze an alternative direction from within the European Union and oppose the IMF. Those who are anxious to advance the people’s interests need to reflect more seriously about what these past few weeks have demonstrated.

One of the lessons must be that the treaties governing European Union have in effect outlawed not only a radical people-centred solution but have effectually outlawed even tame Keynesian policies, and that the controlling forces are determined to solve the crisis of capitalism at the expense of the working people.

A second thing is clear: that people can vote at the national level for whoever they like, but this is not decisive, as the European Union will impose TINA (“There is no alternative”) and the economic and political straitjacket of what is in the interests of capitalism.

The debt is still the weapon of choice to be used against the people; democracy has been trumped by the overriding needs of European monopolies and the big finance houses and banks.

Those in Ireland who still labour under the illusion that the European Union can be transformed into something that it is not, need to look long and hard at the events of the last few weeks. The blocking minority that is built in to the EU decision-making process means that the big powers—those with real economic power and therefore real political power—can block anything that is not in the interests of the monopolies and finance houses.

The Irish government, once again demonstrating its abject servility towards imperialist powers, did nothing to support the Greek people apart from expressing a vacuous sympathy, and voted to defend the interests of the ruling class.

Those who continue to peddle the illusion, whether here in Ireland, in Greece or in Spain, that they can solve the people’s problems within the confines of the European Union and controlling mechanisms such as the euro are only leading our people down a blind alley. There are simply no solutions to be found to debt or austerity within the European Union.

The struggles of the Greek people have exposed the true class nature of the EU and its institutions. They have shown that it can be resisted – a lesson that needs to be learnt by working people throughout Europe.

From the Communist Party of Ireland.

Divergent narratives on Greece February 21, 2015

Posted by WorldbyStorm in Economy, European Politics, The Left.
9 comments

This from Slate…

…despite some stern posturing from Germany on Thursday, Athens even seems to have won some concessions.

and this from the Guardian.

A deal that allows the eurozone policymakers, the International Monetary Fund and the government of Athens to keep talking next week is the first stage in a clampdown on anti-austerity sentiment.

Which is more accurate will, presumably, become clear over time.

Another piece on Greece, and Ireland… February 17, 2015

Posted by WorldbyStorm in Economy, European Politics, Irish Politics, The Left.
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Funny to read Megan Greene – who I think is a broker or financial analyst – in the SBP saying the following:

The new Greek government, led by opposition party Syriza, is doing what no other peripheral country in Europe has had the gumption to do: it is resisting a bailout programme that has caused the country’s economy to shrink by 25 per cent in five years and, as prime minister Alexis Tsipras has highlighted, sparked a humanitarian crisis on the ground.

And:

Rather than play nice and push through the final measures of Greece’s existing bailout to receive the roughly Ђ7 billion left to be transferred to Greece, the government has made new demands. It refuses to extend the current bailout programme, due to expire at the end of this month. Instead, the government would like to scrap the bailout altogether, disband the so-called troika of international lenders (the European Commission, ECB and IMF) and come up with an entirely new plan for returning Greece to growth and debt sustainability that does not include austerity measures.

She continues:

This makes sense to any reasonable economist. Syriza has been a little fuzzy about the details of its proposal so the fiscal numbers may not add up perfectly yet, but generally it’s hard to disagree with finance minister Yanis Varoufakis when he says that the bailout medicine is killing the patient. Just look at Greece’s unemployment rate (25.8 per cent in November 2014) or poverty statistics (25 per cent of children are going to school hungry) if you need tangible proof.

Because all that flies in the face of what we hear from our own government and other eurozone governments. Of course as noted at the weekend by Noel Whelan it is simply not in the interest of those governments, most of which have a right of centre political and economic stripe to sustain an approach which questions and undermines the approaches taken by them in the last five or more years. Greene believes that a deal will be done, face saving or otherwise and that Greece will be given more positive terms. Hard to know, the rhetoric being what it is at the moment. But perhaps a lot of it is just rhetoric.

Pat Leahy looks at this from another angle in the same paper:

The phrase “nothing will be the same again” is one of the most comically hackneyed in all of journalism (and that’s saying something). But if Greece leaves, or is pushed out, no phrase summarises things better.
I have no hotline to Chancellor Merkel’s office, but I know that German officials have been communicating to their Irish counterparts – and reportedly to other countries – that they believe a Greek exit is a “containable” event. It would be a disaster for Greece, the Germans believe, but manageable for the rest of Europe.

And:

The containable exit theory is disputed by many economists, though I think its more important opponents are political – who argue that a Greek exit changes the political character of the European Union irrevocably.

And what of this?

Standing behind it is the political judgment that other EU governments must not reward the political extremes in Greece – both as a matter of principle, but also to defend the political centrists in governments in Spain, in Portugal, in Italy, in Ireland, and beyond that, in the rest of the EU.

One has to love the idea that the approaches taken have been ‘centrist’ or indeed that Syriza are all that extreme. But Leahy isn’t finished making an argument, for he continues:

And this is the weakness of the German determination to support the political centre. The political centre which has ruled Greece since the restoration of democracy in 1974 has manifestly failed. It has failed not just in the years of euro-plenty that preceded the crisis; it has failed to reform Greece since the crash and the arrival of the troika.

Difficult to argue with that.

For one example, despite promises, there has been no meaningful reform of the ludicrously inefficient Greek tax collection system. …Their [Syriza’s] most revolutionary pledge was not the stuff about ending austerity but promising to change the corrupt political and administrative culture of Greece.
Greece’s troika programme has failed not because it didn’t implement deep enough austerity, but because it didn’t actually reform the Greek economy.
Perhaps Syriza won’t or can’t succeed in the profound reform that the country needs if it is to function as a modern European state. But rather than forcing Greece out of the euro in the first weeks of the most reformist government the country has ever elected, it might make sense to give them a chance to try.

Whether that sort of analysis will work its way through to the eurozone governments and inflect their approach to Greece is an open question. But it certainly is far from incorrect.

Yet more on Greece… February 14, 2015

Posted by WorldbyStorm in Economy, European Politics, Irish Politics, The Left.
26 comments

…some interesting points from Noel Whelan in the IT yesterday, not least the following:

…because Greece is now the case study for the choice between anti-austerity politics and centre-right politics.

And this intrinsically political aspect is determining much of the response to Greece in the last week.

While the outcome of this Greek saga is not yet clear, what is clear is that the response of EU governments, including our own, has as much to do with domestic politics in states as it does with euro-wide economics.
The centre-right governments in charge of most of Europe have no interest in seeing this new left-wing Greek government succeed. These are the politicians typified by Jean-Claude Juncker, currently head of the European Commission, who famously said when commenting on how the current economic crisis could be solved: “We all know what to do, but we don’t know how to get re-elected once we have done it.”

In that sense the RoI government is merely an exaggerated reflection of a broader European sentiment at government level.

Meanwhile does anyone have a clear handle on the state of play as it stands at the moment. There’s a notable effort to make insinuations of a breach within the Greek government, or at least a difference of opinion as seen here:

Although Varoufakis gave tentative approval to one formulation, this was withdrawn at the last moment after calls he and Dragasakis made to Athens.
German minister Wolfgang Schäuble had already left for Berlin. As the talks ended in stalemate, participants noted privately that the direction issued from Athens had severely undermined Varoufakis’s authority. He appeared deflated, said one observer.

All manner of spinning going on…

A telling thought on Greece. February 12, 2015

Posted by WorldbyStorm in Economy, European Politics, The Left.
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Writing about Greece Shona Murray has a revealing quote in the SBP at the weekend:

In Germany, chancellor Merkel and Schдuble have not been drawn publicly on the political implications of the Syriza victory, but sources in the Merkel administration say they “find disturbing” the cooperation between far-left Syriza and its right-wing, populist coalition partner, the Independent Greeks.
“This is hampering democracy,” one source said. “The middle of society is being left out of decisions being made by the very right and very left.”

Whatever else it is simply untenable to suggest that Syriza is the very left, in the sense that it now commands a sizeable chunk of the Greek electorates support. But doesn’t that say a considerable amount about the view of democracy? Somehow it was entirely acceptable when New Democracy in Greece government in tandem with the rump PASOK and the even more rump Dimar? One doubts that Merkel et al characterised that as the very right with the somewhat left and fretted about the ‘middle of society’.

Nor, did we hear any criticisms of the seat boost mechanism that delivered ND and now Syriza to power. Strange that.

Greece and a Grexit… February 12, 2015

Posted by WorldbyStorm in Economy, European Politics, Irish Politics, The Left.
72 comments

Pat Leahy has a good overview of the Greece situation in the SBP this weekend and outlines it as follows:

The Samson Strategy is not something that is only occurring to the Greeks now.
According to Channel 4 reporter Paul Mason, who has reported extensively from Greece and interviewed leading Syriza figures, the new government will not flinch from exiting the euro if it cannot secure a deal they believe ends austerity inside it. Syriza calls it the “Samson Strategy” and it is prepared to push down the pillars of the palace to end their own “slavery”.

Whereas:

On the German side, along the axis that links the chancellor’s office in Berlin to ECB headquarters in Frankfurt, the line is firm and, as yet, unyielding.
Greece must keep its word. Countries must abide by the rules to which they have agreed. Solidarity has already been shown. To give in to Greek demands would be to encourage the extremes everywhere.
Backing up this hardline is a belief that a Greek exit from the eurozone is something that could be contained. The real losers would be the Greeks, they think.
The level of sympathy for the Greeks in Germany is minimal. Why must Germany always pay?

What’s fascinating is that there’s no admission that the structures of the eurozone were so poorly put together that there was no real oversight of individual member states and how they were doing. In other words Greek governments – with the help of pliable private sector international companies were able to cook the books largely untrammelled by any external considerations. And it gets worse. The adherence to a very specific ideological approach – low regulation, low income taxation, etc, and a belief in this as the only way to economic growth, also blinded the analysis from outside. We see a very similar dynamic in relation to this state during the 2000s where in the face of growing evidence that the economy was heading into significant trouble there was if anything a greater acclaim for the Celtic Tiger and its supposedly inevitable triumph.

And bundling all that together is a sense that Germany remains wedded – despite the strengthening consensus to the contrary – to a very specific right wing economic approach to be applied, come what may, to Greece and elsewhere in the eurozone.

That this has already unravelled conceptually, given that alternative views have achieved the status of a trope at this point, and politically given the arrival of Syriza, there’s a certain degree of wishful thinking on the part of Berlin (and others).

So perhaps Germany, and others, have to pay, because the vehicle they constructed was not fit for purpose from the off.

And the political push back, first in Greece, soon perhaps in Spain, and elsewhere, is of no small consequence, as Leahy notes. Which raises a significant question. As he puts it, was there another way?

As can be seen from the Taoiseach’s and the Irish government’s increasingly hardline pronouncements on the matter, the European stand-off is a matter of huge contemporary political importance here.
Greek finance minister Yanis Varoufakis is eyeballing the president of the ECB over support for the Greek banks in the way that Brian Lenihan and then Michael Noonan both did over the planned burning of the infamous bondholders.
Both men, believing they had no other choice, blinked first, accepting huge costs for the Irish taxpayer.

And Leahy asks, what if they were wrong, and continues:

Bluntly, if Syriza gets its way, it destroys much of the government’s economic narrative. And without that narrative, there is no route to re-election for Enda Kenny and his increasingly nervous coalition.
The Irish response to the ECB’s ultimatums was cautious and risk-averse. But Varoufakis’s hand is different. He and Tsipras have a hint of desperation about them which makes them unpredictable and, to the Germans, dangerous.

He also asks:
The only possible compromise now is a debt extension, rather than a writedown – a long way from what Germany deems

acceptable and a very long way from what Syriza promised Greek voters.
And even if such a deal were available, above the concerns of other eurozone governments, it’s not clear Syriza could or would sell it at home.

I’m beginning to wonder if a Greek exit is the only path forward. Syriza is caught in a bind itself, but it’s a bind that allows it room for movement, whereas for Europe there’s much less room given the rhetorical and actual adherence to the orthodoxy.

And the very desperation of Greece’s plight paradoxically strengthens their hand. A banking collapse in Athens, caused by the withdrawal of European support, would certainly crash the Greek economy. But for many Greeks, it has already crashed. They have nothing left to lose. They elected Syriza on precisely that logic.
Greeks say they want to stay in Europe, the polls say. But the election results say they want a different euro, and a different EU. That may not, however, be on offer.

And if they do exit the euro that in and of itself will have enormous repercussions, well beyond the actual economic weight and importance of Greece within the eurozone.

A political endorsement… February 11, 2015

Posted by WorldbyStorm in Economy, European Politics, Irish Politics, The Left.
152 comments

From the IT this evening…

The rise of Sinn Féin in opinion polls in Ireland and a similar surge of support for Podemos in Spain is “the best help” that can be given to the newly-elected Syriza government in Greece, a leading member of Syriza [Stathis Kouvelakis] said tonight.

And, from Senator David Cullinane:

“We have to be prepared to want to go into government, to lead an anti-austerity government in the south. There are people on the left who won’t be part of that, but we are certainly organising,” he told the meeting.

From Archon… thoughts on the potential sale of Aer Lingus February 11, 2015

Posted by WorldbyStorm in Economy, European Politics, Irish Politics.
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Many thanks to the person who forwarded a photocopy of a piece Archon of the Southern Star newspaper.

ARCHON

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