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.
Podemos April 10, 2015Posted by WorldbyStorm in Economy, European Politics, The Left.
Meant to post this up before Easter, but better late than never. Interesting profile here, albeit one that leans particularly upon one individual rather than the overall phenomenon. Still, this made me smile, just a little:
As a professor, Pablo Inglesias was smart, hyperactive and – as a founder of a university organisation called Counter-Power – quick to back student protest. He did not fit the classic profile of a doctrinaire intellectual from Spain’s communist-led left.
As a teenager, Iglesias was a member of the Communist Youth in Vallecas, one of Madrid’s poorest and proudest barrios.
It was at Complutense, where he began to lecture after receiving his doctorate, that Iglesias met the key figures who would help him found Podemos. Deeply influenced by Antonio Gramsci, the Italian Marxist thinker who argued that a key battle was over the machinery that shaped public opinion, this group also found inspiration at the University of Essex.
Is that that unlike the ‘communist-led left’ in Spain – a CP which apparently some other CP’s regard as so revisionist as hardly a CP at all. Speaking of which:
For years he and Monedero had been telling Spain’s communist-led leftwing coalition Izquierda Unida (IU) that it should learn from the Latin Americans and widen its appeal. Now they proposed a broad leftwing movement, with open primaries at which outside candidates such as Iglesias could stand. They received a firm no from IU leader Cayo Lara, who later declared that Iglesias had “the principles of Groucho Marx”. So they created it themselves.
And even this…
Socialism, Laclau and Mouffe argued, should no longer focus on class warfare. Instead, socialists should seek to unite discontented groups – such as feminists, gay people, environmentalists, the unemployed – against a clearly defined enemy, usually the establishment.
…isn’t exactly unknown to approaches taken by a variety of further left forces over the last forty years.
There’s lots of interesting and useful resonances, not least this:
“Those with the power still governed, but they no longer convinced people,” Errejón told me recently.
Paying the price for centuries of contempt March 27, 2015Posted by WorldbyStorm in British Politics, European Politics, Irish Politics, Northern Ireland, Scottish Politics, The Left, Wales.
It’s not necessarily coming, as they say, from a place of love. More like a place of snark, but this is a great line from Simon Jenkins in the Guardian when discussing the shape of the next British Parliament.
British politics is paying the price for centuries of English contempt for the political aspirations of the Irish, Scots and Welsh.
Ain’t that the truth.
Throughout the 19th century Tory (and some Liberal) opposition to even moderate home rule for the “other British empire” ensured a more drastic separatism would eventually triumph.
Actually his line is intriguing because he argues that with SNP support a Labour government is more or less inevitable. Well, we’ll see.
He makes another point, one which given the way in which unionism looms large in the political consciousness is perhaps sometimes forgotten on this part of the island
The lesson of separatism across Europe is the same. For restless Ukrainians, Slovenians, Kosovans, Slovakians, Basques and Catalans, regional autonomy is not a passing fad, to be bought off with a few powers and subsidies. It is a visceral response to the arrogance of centralised power. It is the response that many Britons profess towards the overbearing power of Brussels; yet few in Westminster see themselves as the EU of Great Britain.
Isn’t he forgetting some one or two or three… March 18, 2015Posted by WorldbyStorm in Economy, European Politics, Irish Politics.
“European unity is being strained,” he said.
“People are going through very difficult times. There are some, like many of the protesters outside today, who believe the problem is that Europe is doing too little.
“But the euro area is not a political union of the sort where some countries permanently pay for others,” he said.
“It has always been understood that countries have to be able to stand on their own two feet – that each is responsible for its own policies. The fact that some had to go through a difficult period of adjustment was therefore not a choice that was imposed on them. It was a consequence of their past decisions.”
Past decisions? Really? Would these be decisions (and by the by who made them?) as regards deregulation, the financial sector, low taxes? And would these decisions have been of a nature that the…er… ECB, and IMF and OECD cheerled them? Sure looks like it, for as noted on this site in 2011, the unlikely figure of John Bruton noted:
in a speech to the LSE last month that the ECB didn’t attempt to utilize powers it has under article 14 of its statue to instruct our Central Bank to engage with the ‘fiscal and macroeconomic risks related to the property boom in Ireland’.
There’s more evidence of such lack of intervention, but why would I want to spoil the ECB’s special day? Any further.
And Ireland and Greece February 27, 2015Posted by WorldbyStorm in European Politics, Irish Politics.
add a comment
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, 2015Posted by WorldbyStorm in Economy, European Politics, Irish Politics.
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.
Until now, such theories were not tested because they lacked laboratory conditions.
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.
Statement from the CPI. February 22, 2015Posted by WorldbyStorm in Economy, European Politics, Irish Politics, The Left.
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, 2015Posted by WorldbyStorm in Economy, European Politics, The Left.
…despite some stern posturing from Germany on Thursday, Athens even seems to have won some concessions.
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, 2015Posted by WorldbyStorm in Economy, European Politics, Irish Politics, The Left.
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.
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.
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.
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.