Getting the digs into Greece… June 30, 2015Posted by WorldbyStorm in European Politics, Irish Politics.
Pat Leahy has another excellent piece in the SBP at the weekend which asks why is the Irish government so keen to criticise Athens? In some ways it is not a huge puzzle. Despite a nominally social democratic component the instincts of this government are reliably right of centre on economic thinking (it has been breath-taking, albeit not exactly a revelation, just how willing the LP has been to accede to the orthodoxy economically. And one has to wonder just what mechanisms or resources inside that party there are to generate thinking on economics?). And given that that reflects European thinking small wonder that they are happy to attach themselves to the overall approach.
This has led to complete absurdities. Leahy notes that the Taoiseach in a bid to be the best European around (I paraphrase) came out with some bizarre stuff:
Last week he said at least two things that required further explanation, to put it kindly.
When asked by reporters if Ireland would support debt relief for Greece, he responded bluntly: “No.”
Officials later clarified that Ireland would indeed support debt reprofiling – or stretching the repayment periods and lowering the interest rate on debt, generally thought to be a form of debt relief. It was debt forgiveness, officials explained, that Ireland would not contemplate.
Kenny also said that Greece should follow Ireland’s example in correcting its public finances with growth-friendly measures. Here, he asserted that Ireland did not raise income tax.
“In Ireland’s case, we did not increase income tax, we did not increase Vat, we did not increase PRSI, but we put up alternatives to those measures proposed in order to keep a pro-growth policy and make our country competitive, grow our economy and provide jobs for our people,” he said.
To which Leahy responds:
Well, perhaps. The rates of income tax might not have been increased. But Ireland certainly increased taxes on income.
Ask everyone who pays the Universal Social Charge.
But as was noted by 6to5against, VAT increased too – in December 2011 from 21 to 23%. But I suppose such details are irrelevant.
Leahy makes the point that Dublin is merely articulating openly an attitude that is held widely in the EU, and he sums it up like so:
The political atmosphere and personal relationships around the Brussels negotiating table are toxic. But that is not the biggest problem. The biggest problem is that the two sides remain divided by issues of substance.
Let Schäuble and Yanis Varoufakis, the Greek finance minister, sum it up.
“We cannot allow any member state to spend money without limit and other member states to be liable for it,” Schäuble said on Friday at a conference in Frankfurt.
The same day, Varoufakis told RTE’s Morning Ireland: “When they say that they want more pro-growth measures, what they effectively are saying is we should reduce the minimum wages, we should reduce the minimum pension further . . .
“To do this in a country where one million families rely on a single pension because everyone else is unemployed, instead of intervening in employer pension contributions, is quite absurd, and it is a proposition that I am simply not prepared to put to my parliament.”
What’s most curious about all this is that we know – indeed the SBP editorial itself argues this – that the EU/IMF approaches are futile in relation to Greece, that they cannot work economically and that what is asked of that state and its citizens is both impossible and counterproductive.
The editorial says:
The Greek people have endured massive austerity, and it has not worked, because their economy is nowhere near as open as Ireland’s is, and is without the basic tax-gathering structures to be able to balance the books as we have.
Their negotiating positions have, at times, been unfortunate and haven’t worked out. But precisely the same thing can be said of Ireland.
And yet, on it goes. Testing the EU and the eurozone to breaking point, and perhaps beyond. And to what purpose? It is impossible not, now, to regard this as ideological and political masked as the inevitable. As and when that latter is demonstrated to be manifestly incorrect one can only assume the ramifications will be considerable.
1 comment so far
A viral video by a German satire show educates people about the true situation of the Greek reparations claim.
Greece to have a Referendum June 27, 2015Posted by irishelectionliterature in European Politics.
Following an emergency meeting of his cabinet, Tsipras said his leftist-led government had decided a package of austerity measures – made in a last-ditch effort to avert default – would be put to popular vote. The referendum will take place on Sunday 5 July.
Greece, Ireland and the EU June 23, 2015Posted by WorldbyStorm in European Politics, Irish Politics.
Pat Leahy has a good overview of the Greek crisis, at least in regards to its political complexion in the SBP this weekend. Not least where he draws the clear political implications for this state in all the machinations of the past week and longer. He notes that:
The rhetoric on either side has hardened in recent days. Perhaps that is in anticipation of a deal at the last minute. Or perhaps it is a sign that no deal is possible. If that is the case, the eurozone is on the brink of fracture.
And he makes this point which I think is crucial.
That would be an historic event, and one which could lead to all sorts of unforeseen consequences, many of them nasty for Ireland. The German-inspired hard line is a consequence of the determination in Berlin to protect the parties of the democratic centre from populist insurgents in the rest of Europe: in Spain, in Italy, in France – and in Ireland. I think this is a mistake. Those parties will have to make the case for themselves. And remember it is the centre that has failed to govern Greece properly, not the radicals.
This is something that is far too under considered in the orthodox analyses. It was the supposed ‘moderates’ and respectable parties which oversaw the cooking of books prior to and during Greek accession to the eurozone and subsequently allowed for fiscal processes which intrinsically favoured those outside the Greek equivalent of PAYE. It was their approaches which Syriza was elected to remedy and yet – as is the way of such things – it is Syriza which is being blamed at this point.
Leahy suggests that Ireland may have taken a better course. We shall see. A lot depends on whether and if a ‘deal’ is done and what the terms are. No wonder Noonan is getting antsy. Something better than was delivered to this state – even if logically the Greek situation is much much more difficult – will have inevitable political implications.
At the very least, the trials of Greece demonstrate that the “to hell with the ECB” approach is not without cost. And, possibly, ruinous cost.
It seems clear to me that events in Greece look like bolstering the government’s position, and severely undermining the case of the radical left and Sinn Féin. That may be horribly unfair on the minnows of the world, like ourselves. But that does not mean it is not true.
This seems to me to be a somewhat dubious proposition. Greece cannot make a deal which doesn’t have some give in it for them. Comparisons with our ‘deals’ will be educative.
But even if Greece leaves the eurozone, perhaps particularly if it does, and subsequently the EU, it is at the very least arguable that the ramifications, for all that we’re told they are going to be limited to us and others, may prove equally ruinous which would suggest that from the off the ECB/IMF line was utterly inappropriate for the sort of ‘union’ that we and others supposedly enjoy.
And that being the case…
An ideology uncontained… June 16, 2015Posted by WorldbyStorm in Austerity, British Politics, Economy, European Politics.
In a wide-ranging analysis of Britain’s performance in the decades before and after 1979, economists at the University of Cambridge say the liberal economic policies pioneered by Thatcher have been accompanied by higher unemployment and inequality.
But, more importantly:
At the same time, contrary to widespread belief, GDP and productivity have grown more slowly since 1979 compared with the previous three decades.
It’s always been remarkable how tenaciously the trope of productivity and growth increasing under Thatcherism has taken hold, and how uncritically it has been received both on right and parts of the left, and former left. I suppose that’s the thing with narratives, they provide massive simplifications that allow for reiteration of certain points, whether accurate or not.
There was one area that there was change… but… a double-edged sword this:
“Financial liberalisation was the sole aspect of the liberal market reforms introduced into the UK, initially in 1971-73 and more consistently from 1979, which materially increased the rate of economic growth,” the paper said.
“The freeing up of finance led to a huge, and eventually unsustainable, expansion of household borrowing. This temporarily accelerated the growth of consumer spending and hence GDP and of house prices, but in 2008 contributed to a banking crisis and the longest recession for over a century.”
Important, perhaps, to note that it was the ideological approach that led to the more recent events rather than ‘Thatcherism’ as such
But note again how the crisis of the last decade has not seriously undermined the broader narratives about economics and enterprise despite – by any rational reading – suggesting that those narratives are fundamentally incorrect.
Greece… this time for real? June 15, 2015Posted by WorldbyStorm in Economy, European Politics.
It’s sure looking that way, isn’t it, as ‘negotiations’ break down.
Talks on ending a deadlock between Greece and its international creditors have ended in failure, with European leaders venting their frustration as Athens stumbles closer towards a debt default that threatens its future in the euro.
European Union officials blamed the collapse on Athens, saying it had failed to offer anything new to secure the funding it needs to repay €1.6bn to the International Monetary Fund by the end of this month.
Last-ditch talks aimed at breaking the impasse between Athens and its international creditors have collapsed in acrimony with European Union officials dismissing Greece’s latest reform package as incomplete in a step that pushes the country closer to leaving the eurozone.
What had been billed as a last attempt to close the gap between Alexis Tsipras’s anti-austerity government and the bodies keeping debt-stricken Greece afloat was halted late on Sunday after less than an hour of negotiations in Brussels.
Perhaps something can be patched up over the next few days or so, but Grexit here we/they go?
Again, the Observer had it, even given a somewhat chiding tone, just about right last week.
Austerity and the UK and elsewhere June 11, 2015Posted by WorldbyStorm in Economy, European Politics.
Heather Stewart in the Observer at the weekend had some good analysis in a piece entitled ‘Austerity isn’t ‘good housekeeping’: it’s dogmatic, risky and unjust’.
She notes that:
It’s a measure of the triumph of the pro-austerity argument in Britain that George Osborne presented his latest round of cuts in the Commons last week – a down payment on the £25bn he plans to make over the next three years – as a “culture of good housekeeping” in government. Austerity as common sense.
And this has effects, which she points to:
…there are already warning signs that parts of the public services are creaking. He cited a sharp increase in waiting times at hospital accident and emergency departments, and rising violent assaults in prisons as staff numbers are cut, as examples.
..the belt-tightening is likely to be profoundly unfair. Osborne has repeatedly said his cuts plan will involve a £12bn reduction in the welfare bill. Since pensioners are protected, and out-of-work benefits are a relatively small part of the £250bn social security budget, much of the burden is likely to fall on low-wage workers and their children – through reductions in tax credits or housing benefit, for example
And there’s the problem that it doesn’t work:
…more austerity is risky at a time when recovery appears to be fragile against a background of the bubbling eurozone crisis.
The argument that sucking demand out of the economy through public spending cuts could jeopardise growth may have been trounced in pre-election debates – but that doesn’t mean it isn’t right.
All this is true. It is causing problems – ones that are deep rooted and will persist across years and potentially decades. It is deeply unfair. It is in and of itself counterproductive and the Tory victory does nothing to alter that fact (and one can point to the fact that
And yet, and yet, part of me reads all this and goes… well of course it’s dogmatic! This is the Tories, after all. What did people expect? This isn’t a glitch as they see it, it’s a feature. Elsewhere in the Guardian there’s been some comment on the idea that the Tories aren’t the epitome of evil or are wrong all the time. Perhaps not. But it’s somewhat irrelevant and more to the point it betrays a misunderstanding as to the nature of their political project.
Often people, particularly liberal minded people, and some on the left, seem to think that all the political labels and categories are merely badges for what is essentially good intentions – that we’re all in this together, as it were, and everyone wants pretty much the same destination.
The reality is, of course, anything but that. One doesn’t have to see the Tories as the epitome of evil to see that the fundamental strands that infuse and inflect their philosophies as being wrong, reactionary and so forth. Just to be clear this doesn’t mean that on an individual basis all are like that, there are some counter-intuitive strands as well extant in that body of thought. But functionally it means that their approach to society is one which most progressives – one would hope – would realise as being entirely in opposition to our own project.
Perhaps David Cameron is a more liberal minded person than many/most in his party, perhaps the manifesto was a tilt to the right in order to consolidate party unity at a time when coalition with the LDs was still a feasible outcome, and in the knowledge that such a coalition would abrade some of the sharper edges. Perhaps so. And yet this is the party that in the actual coalition of the last five years implemented, by way of example, grievous measures in social welfare in relation to provision of benefit and so on, oversaw measures that explicitly supported those who were better off, I needn’t go on, surely?
An untrammelled Tory party is a genuinely disturbing entity. And it is untrammelled and governing on, as was made clear in a recent Guardian Politics podcast, the most right wing programme in two decades.
These things matter. These things are intrinsic to the Tory party.
Stewart is closer to the mark in the following:
So the cuts are larger than Osborne and his colleagues let on; they may threaten the quality of cherished public services, place an unfair burden on those who can least bear it, exacerbating inequality – and jeopardise the very economic growth which is ultimately the best way of tackling the deficit.
Labour’s proto-leaders are right to try to learn the lessons of the campaign and seize back the language of “aspiration”. But they must not abandon the central insight that austerity is not a necessity, but a political choice.
A pity the Labour Party was unable to make that case in the last five years. But as ever they cede ground to the right and then are amazed when the right captures yet more and runs with it.
More on Greece. June 9, 2015Posted by WorldbyStorm in Economy, European Politics, Irish Politics.
Just to add to what was posted yesterday on Greece, the Observer business editorial has some harsh words for Brussels and the IMF on what is taking place in relation to that state.
While much of what the radical leftists want seems unreasonable – especially the slow pace of pension reform, which in effect would allow tens of thousands of people in their late 50s to grab early retirement – it is the demands being made by Brussels and the IMF that are unconvincing and, worse, untenable.
Running a larger budget surplus is only going to destroy Greece, not build it up. As US economist Joseph Stiglitz and many others, including former IMF staffers, have pointed out, the troika of creditors badly misjudged the economic effects of the programme they imposed in 2010 and 2012.
They believed that by cutting wages and accepting other austerity measures, Greek exports would increase and the economy would quickly return to growth,” Stiglitz said last week. “They also believed that the first restructuring would lead to debt sustainability. The troika’s forecasts have been wrong.”
But as is the way with orthodoxies the error is repeated, even exacerbated.
The current proposals repeat the same mistake. Seven years after the crash, the Greek economy is still 25% smaller than it was at its previous peak, 10% of households have no electricity and youth unemployment is running at more than 50%. Tsipras and his finance minister, Yanis Varoufakis, may specialise in needling their creditors, but the troika also need to take into account the fact that Syriza has formed a legitimate, democratically elected government and cannot be told that its electoral programme is irrelevant.
It is beyond belief that these basic facts are not admitted and acknowledged in the current discussions between Jean-Claude ‘Alexis is my friend’ Juncker and the Greek government.
In any other context this would be regarded as a society and a state close to the edge. That it is a European economy, an integral part of both the EU and the eurozone, almost beggars belief. It raises fundamental questions as to the nature of what that EU and that eurozone are about if they are happy to acquiesce to the impoverishment of citizens of the area. Indeed not just acquiesce but to seek measures that will in every way make the situation worse.
And the Observer doesn’t pull its punches.
So Lagarde and European commission president Jean-Claude Juncker must be the ones to table further compromises. Neither was in charge when the first Greek bailout set all sides on the current disastrous path. They should explain to Ireland and Portugal, also suffering austerity, that Greece is too weak to survive more bloodletting.
But Ireland and Portugal are not going to rock this particular boat. It’s a sort of anti-solidarity – something by the way that the Labour party here should have its feet held to the fire about on a continual basis.
One further point. For those, and we see them in various places, who bemoan the Syriza government’s approach, it is at the least educative to see how they have managed to hold off the EU and IMF even partially across quite some months now. It would also be educative to compare and contrast with the previous Greek administration whose approach was one of acceptance of the demands of the EU and IMF.
Greece… and an insight into power relationships May 28, 2015Posted by WorldbyStorm in European Politics.
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.
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”.
Even by its words shall we know it April 20, 2015Posted by Tomboktu in Africa, European Union, Human Rights.
1 comment so far
Most of the attention has rightly been on the presence or absence of meaningful action, as against words, to prevent further drownings in the Mediterranean Sea. But the words of some of the institutions do reveal.
Thorbjørn Jagland, the Secretary General of the Council of Europe, had this to say on twitter:
Anne Brasseur, President of the Parliamentary Assembly of the Council of Europe, issued a press statement that was given a headline that expressed the horror of what happened:
At a global level, the UN High Commissioner for Refugees said the following:
New Mediterranean boat tragedy may be biggest ever, urgent action is needed now
Whatever power they have to force Europe’s institutions to act (damn all, in truth), those leaders recognised the awfulness of what has happened.
The EU has stronger powers to act. The words its leaders have used reveal that we need to be alarmed.
Martin Schulz, the President of the European Parliament, gave the first sign that the human response was second to a careful policy position. The headline on his statement said:
At least the first sentence of his statement recognised the nature of what happened:
“The renewed tragedy off the Libyan coast, in which possibly up to 700 people have lost their lives, leaves me speechless
But the European Commission’s statement is shocking for the way it hedged the central, awful fact of what had happened. Here is its headline
And even when it does get around to mentioning human lives, in the third sentence of the statement, it avoids the awfulness of what happened:
These are human lives at stake, and the European Union as a whole has a moral and humanitarian obligation to act.
By the time that statement was issued, 700 lives were no longer “at stake”: they had been lost.