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Greece should replace the EU Oligarchs’ banks with a public option, from Peter Myers

(1) Greece should replace the EU Oligarchs’ banks with a public option -
Michael Hudson
(2) Austerity for the Bankers - Michael Hudson
(3) Eurozone Central Banks should finance government infrastructure
spending - Positive Money economists

(1) Greece should replace the EU Oligarchs’ banks with a public option -
Michael Hudson

 From Ellen Brown <> Date: 1 July 2015 at

On Greece and Europe: What is Called “Negotiation” is a Demand for Total

By Michael Hudson

Global Research, June 28, 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

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.

Instead of selling out, Tsipras has given Greeks enough time to pull out
their savings from the banks and convert them into euro notes (domestic
circulation of which has risen by 13 billion euros), or into “hard”
assets such as cars (or even boats) with a resale value.

This is the Delphi Declaration in support of Greece in its confrontation
with The Institutions. (emphasis added)


On Greece and Europe

European governments, European institutions and the IMF, acting in close
alliance with, if not under direct control of, big international banks
and other financial institutions, are now exercising a maximum of
pressure, including open threats,  blackmailing and a slander and terror
communication campaign against the recently elected Greek government and
against the Greek people.

They are asking the elected government of Greece to continue the
“bail-out” program and the supposed “reforms” imposed on this country in
May 2010, in theory to “help” and “save” it.

As a result of this program, Greece has experienced by far the biggest
economic, social and political catastrophe in the history of Western
Europe since 1945. It has lost 27% of its GDP, more than the material
losses of France or Germany during the First World War. The living
standards have fallen sharply. The social welfare system is all but
destroyed. Greeks have seen social rights won during one century of
struggles taken back. Whole social strata are completely destroyed, more
and more Greeks are falling from their balconies to end a life of misery
and desperation, every talented person who can leaves from the country.
Democracy, under the rule of a “Troika” acting as collective economic
assassin, a kind of Kafka’s “Court”, has been transformed into a sheer
formality in the very country where it was born! Greeks are experiencing
now the same feeling of insecurity about all basic conditions of life,
that the French experienced in 1940, Germans in 1945, Soviets in 1991.
At the same time, the two problems which this program was supposed to
address, Greek sovereign debt and the competitiveness of the Greek
economy have sharply deteriorated.

Now, European institutions and governments are refusing even the most
reasonable, elementary, minor concession to the Athens government, they
refuse even the slightest face-saving formula there might be. They want
a total surrender of SYRIZA, they want its humiliation, its destruction.
By denying to the Greek people any peaceful and democratic way out of
its social and national tragedy, they are pushing Greece into chaos, if
not civil war. Indeed, even now, an undeclared social civil war of “low
intensity” is being waged inside this country, especially against the
unprotected, the ill, the young and the very old, the weaker and the
unlucky. Is this the Europe we want our children to live in?

We want to express our total, unconditional solidarity with the struggle
of the Greek people for their dignity, their national and social
salvation, for their liberation from the unacceptable neocolonial rule
the “Troika” is trying to impose on this European country. We denounce
the illegal and unacceptable agreements successive Greek governments
have been obliged, under threat and blackmail, to sign, in violation of
all European treaties, of the Charter of UN and of the Greek
constitution. We call on European governments and institutions to stop
their irresponsible and/or criminal policy towards Greece immediately
and adopt a generous emergency program of support to redress the Greek
economic situation and face the humanitarian disaster already unfolding
in this country.

We also appeal to all European peoples to realize that what is at stake
in Greece it is not only Greek salaries and pensions, Greek schools and
hospitals or even the fate even of this historic nation where the very
notion of “Europe” was born. What is at stake in Greece are also
Spanish, Italian, even the German salaries, pensions, welfare, the very
fate of the European welfare state, of European democracy, of Europe as
such. Stop believing your media, who tell you the facts, only to distort
their meaning, check independently what your politicians and your media
are saying. They try to create, and they have created an illusion of
stability. You may live in Lisbon or in Paris, in Frankfurt or in
Stockholm, you may think that you are living in relative security. Do
not keep such illusions. You should look to Greece, to see there the
future your elites are preparing for you, for all of us and for our
children. It is much easier and intelligent to stop them now, than it
will be later. Not only Greeks, but all of us and our children will pay
an enormous price, if we permit to our governments to complete the
social slaughter of a whole European nation.

We appeal in particular to the German people. We do not belong to those
who are always reminding the Germans of the past in order to keep them
in an “inferior”, second-class position, or in order to use the “guilt
factor” for their dubious ends. We appreciate the organizational and
technological skills of the German people, their proven democratic and
especially ecological and peace sensitivities. We want and we need the
German people to be the main champions in the building of another
Europe, of a prosperous, independent, democratic Europe, of a multipolar

Germans know better than anybody else in Europe, where blind obedience
to irresponsible leaders can lead and has indeed led in the past. It is
not up to us to teach them any such lesson. They know better than
anybody else how easy is to begin a campaign with triumphalist rhetoric,
only to end up with ruins everywhere around you. We do not invite them
to follow our opinion. We demand simply from them to think thoroughly
the opinion of such distinguished leaders of them like Helmut Schmitt
for instance, we demand them to hear the voice of the greatest among
modern German poet, of Günter Grass, the terrible prophecy he has
emitted about Greece and Europe some years before his death.

We call upon you, the German people, to stop such a Faustian alliance
between German political elites and international finance. We call upon
the German people not to permit to their government to continue doing to
the Greeks exactly what the Allies did to Germans after their victory in
the First World War. Do not let your elites and leaders to transform the
entire continent, ultimately including Germany, into a dominion of Finance.

More than ever we are in urgent need of a radical restructuring of
European debt, of serious measures to control the activities of the
financial sector, of a “Marshal Plan” for the European periphery, of a
courageous rethinking and re-launching of a European project which, in
its present form, has proven unsustainable. We need to find now the
courage to do this, if we want to leave a better Europe to our children,
not a Europe in ruins, in continuous financial and even open military
conflicts among its nations.

Delphi, 21 June 2015

The above declaration was adopted by nearly all participants in the
Delphi conference on the crisis, on alternatives to euroliberalism and
EU/Russia relations, held at Delphi, Greece on 20-21st of June. It is
also supported by some people who were not able to be present. The list
of people who signed it follows [see complete version on GR]. In it
there are not only citizens of EU countries, but also of Switzerland,
USA, Russia and India. Many distinguished American scholars seem to be
more sensitive as regard the European crisis, than the … political
leaders of EU themselves! As for Russians, it is only normal and natural
to bear a great interest for what is going on in EU, as EU citizens bear
also an interest for what is going on in Russia. All participants in the
Delphi conference share the strong conviction that Russia is an integral
part of Europe, that there is a strong interconnection between what
happens in EU and in Russia. They are categorically opposed to
anti-Russia hysteria, which in fact is nothing less than the preparation
of a new, even more dangerous cold, if not hot war.

(2) Austerity for the Bankers - Michael Hudson

Greece: Austerity for the Bankers

February 24, 2015

By Michael

Michael Hudson says Greece’s Finance Minister Varoufakis is proposing
austerity on the banking class rather than on the working class to
balance the budget.

SHARMINI PERIES, EXEC. PRODUCER, TRNN: Welcome to The Real News Network.
I’m Sharmini Peries, coming to you from Baltimore.

The four-month extension secured by the Greek finance minister, Yanis
Varoufakis, on Friday came with the condition that Greece provide a list
of measures to quell the concerns of its international lenders,
especially the German banks represented by the finance ministers in
Brussels, who feared that Athens might bail on the promises to cut
spending and implement austerity measures. So, on Sunday, Athens
provided that list.

Now joining us to discuss the tabled plan is Michael Hudson. He is a
distinguished research professor of economics at the University of
Missouri-Kansas City. His upcoming book is titled Killing the Host: How
Financial Parasites and Debt Bondage Destroyed the Global Economy.

Thank you so much for joining us, Michael.


PERIES: So, Michael, these international banks represented by the
finance ministers now in Brussels, when they were in crisis and we the
public treasury bailed them out, they had no problem with that. Why are
they now refusing to assist Greece at a time of need when in fact some
politicians and even the troika is being more receptive to what Greece
is saying?

HUDSON: Because what’s at issue really is a class war. It’s not so much
Germany versus Greece, as the papers say. It’s really the war of the
banks against labor. And it’s a continuation of Thatcherism and

The problem isn’’ simply that the troika wants Greece to balance the
budget; it wants Greece to balance the budget by lowering wages and by
imposing austerity on the labor force. Instead, the terms in which
Varoufakis has suggested balancing the budget are to impose austerity on
the financial class, on the tycoons and tax dodgers. He proposes that
instead of lowering pensions for workers and retirees, instead of
shrinking the domestic market, instead of pursuing a self-defeating
austerity, we’re going to raise two and a half billion euros from the
powerful Greek tycoons. We’re going to collect the back taxes they owe.
We’re going to crack down on illegal smuggling of oil and the other
networks and on the real estate owners that have been avoiding taxes,
because the Greek upper classes have become notorious for tax dodging.

Tis has infuriated the banks. It turns out the finance ministers of
Europe are not all in favor of balancing the budget if it has to be
balanced by taxing the rich, because the banks know that whatever taxes
the rich are able to avoid ends up being paid to themselves. So now the
gloves are off and the class war is back.

Originally, Varoufakis thought he was negotiating with the troika, that
is, with the IMF, the European Central Bank and the Euro Council. But
instead they said, no, no, you’re negotiating with the finance
ministers. And the finance ministers in Europe are very much like Tim
Geithner in the United States. They’re lobbyists for the big banks. And
the finance ministers said, how can we screw this up and make sure that
we treat Greece as an object lesson, pretty much like America treated
Cuba in 1960?

PERIES: Hold ld on for one second, Michael. Let’s explain that, because
Yanis Varoufakis, the finance minister of Greece, is very well-briefed
and very well-positioned to negotiate all of this. Now, why did he think
he was negotiating with the troika when in fact he was negotiating with
the finance ministers.

HUDSON: Because officially that’s who he’s negotiating with. He took
them at their word. And then he found out–and yesterday, James
Galbraith, who went with him to Europe, published in Fortune a
description saying, wait a minute, the finance ministers are fighting
with the troika. The troika and the finance ministers are fighting among
themselves over what exactly is to be done. And to really throw a monkey
wrench in, the German finance minister, Sch?uble, said, wait a minute,
we’ve got to bring in the Spanish government and the Portuguese
government and the Finnish government, and they’ve got to agree.

Well, the position of Spain is to keep its Thatcherite neoliberal party
in power. If Greece ends up not going along with austerity and saving
its workers, then Spain’s Podemos Party is likely to win the next
election and the ruling elite will be out of power. So Spain’s leaders
are trying to make sure that Varoufakis and the SYRIZA Party is a
failure, so that it can tell the working class, ”You see what happened
to Greece? It got smashed, and so will you if you try to do what they
do. If you try to tax the rich, if you try to take over the banks and
prevent the kleptocracy, there’s going to be a disaster.”

So Spain and Portugal want to impose austerity on Greece. Even Ireland
has chimed in and said, my God, what have we done? We have imposed
austerity for a decade in order to bail out the banks. Even the IMF has
criticized us for going along with Europe and bailing out the banks and
imposing austerity. If SYRIZA wins in avoiding austerity in Greece, then
all of our sacrifice of our population, all of the poverty that we’ve
imposed, all of the Thatcherism that we’ve imposed has been needless and
we didn’t have to do it.

So there’s a whole demonstration effect, which is why they’re treating
Greece almost as a symbol for labor saying, wait a minute, we don’t have
to impose austerity, we can collect taxes from the tax dodgers.

Remember a few years ago when Europe said, Greece owes 50 billion euros
in foreign debt? Well, it turned out that the central bank had given to
the Greek parties a list of tax dodgers. It was called the Lagarde list
(for Christine Lagarde, head of the IMF), featuring Greek tax dodgers
who had Swiss bank accounts. These Swiss bank accounts added up to about
50 billion euros. So in a sense, Greece could pay off the debt that it’s
borrowed simply by moving against the tax dodgers.

But this would be at the expense of the Swiss banks and the other banks.
So in effect the banks would be paying themselves. And they don’t want
to pay themselves. They want to squeeze income out of labor and let the
tax dodgers and the Greek tycoons succeed in stealing from the
government. So, in effect, the troika – not the troika really, as much
as the finance ministers – are backing the tax dodgers and tycoons in
Greece that SYRIZA is trying to move against. And the IMF is for once
taking a softer position. Even President Obama has chimed in by
apparently calling German Chancellor Merkel and saying, look, you can’t
just push austerity beyond a point, because you’re going to push them
out of the euro, and you’ll push them out of the euro on SYRIZA’s terms,
where SYRIZA can then turn to the Greek population and say, we did what
we promised here. We stopped the austerity. We didn’t withdraw from the
euro; we were driven out as part of the class war.

PERIES: Michael, earlier you were also making an analogy between what’s
going on in Greece and what happened to Cuba.

HUDSON: Cuba under Castro created an alternative social system. He
wanted to spread the wealth around (it was a Marxist system in his way).
He wanted to get rid of the crooks around Batista who were running the
country, the rich who didn’t pay taxes, and he wanted a social
revolution. So the American government worried that if Cuba succeeded,
there was going to be a revolution all throughout Latin America. Latin
Americans could realize that they can take over the American sugar
companies, the American banana companies and make the rich pay the taxes
and the corporations pay the taxes and the exporters pay the taxes, not
simply labor. We can unionize labor, we can educate it – and if Cuba can
educate labor, that would be a disaster for the neoliberal plan, because
if labor’s educated and has a program, it will realize that there is an
alternative to Thatcherism.

This is the problem that Varoufakis wrote about in an article earlier
this month in The Guardian on how he came out of the Marxist movement.
He said, the problem that we’re facing in Greece is that if we withdraw
from the euro, if we’re forced out, there’s going to be an economic
trauma. The left wing throughout Europe, as in America, doesn’t really
have an economic program. It has a political program, but not really an
economic program. So the only alternative to SYRIZA with an economic
program are the New Dawn movement and the neo-Nazis. And what Varoufakis
is worried about is that he’s not only contending with the European
finance ministers on one front; he’s also contending on the Greek front
with the right-wing parties that are the nationalist parties, like Marie
Le Pen in France – the parties that are saying, yes, we have an
alternative: withdraw from the euro.

But it’s not the kind of withdrawal and alternative that the left wing
would have, because there really isn’t much of a left wing in Greece,
apart from the small SYRIZA party, certainly not Papandreou’s socialist
party, and certainly not the nominally socialist party in Spain, which
is a Thatcherite party, and it’s certainly not the British Labour Party,
which has gone the way of Tony Blair.

So the problem is that Varoufakis has about four months to educate the
Greek public in the fact that, yes, there is alternative, here’s what it
is. The alternative to neoliberalism doesn’t have to be right-wing
nationalism. There is a socialist alternative, and we’re trying to work
out as many arrangements we can, so if we’re driven out of the euro and
if the banks go under, we have a fallback plan. He can’t come right out
and say this is the plan right now, because it has to be made very clear
that it’s the finance ministers of Germany, Spain, Portugal, Ireland,
and Finland that are driving Greece out, not the IMF, not the European
Central Bank, and not even centrist governments.

PERIES: Michael, thank you so much for joining us on The Real News
Network today, and we’ll be following this story at The Real News. So do
join us very soon again.

HUDSON: It’s always good to be here. Thank you.

PERIES: Thank you very much for joining us on The Real News Network.

(3) Eurozone Central Banks should finance government infrastructure
spending - Positive Money economists

From: Positive Money <>
Date: Sun, 29 Mar 2015 15:19:47 +0000

1) Economists calling for "QE for the people"

We managed to coordinate a group of 19 eminent academics, among them
Lord Skidelsky, Ann Pettifor, Steve Keen, Victoria Chick and David
Graeber, to sign up to a letter which was published in the Financial

The letter states that 'traditional monetary policy no longer works' and
argues for the Quantitative Easing programme in the Eurozone to be
replaced with an alternative approach.

Better ways to boost eurozone economy and employment (FT)

Written by Positive Money on March 27, 2015.

It is time for the European Central Bank and eurozone central banks to
bypass the financial system and work with governments to inject newly
created money directly into the real economy, reads the letter in
Financial Times, 26th March 2015, signed by 19 prominent economists:

Victoria Chick, University College London

Frances Coppola, Associate Editor, Piera

Nigel Dodd, London School of Economics

Jean Gadrey, University of Lille

David Graeber, London School of Economics

Constantin Gurdgiev, Trinity College Dublin

Joseph Huber, Martin Luther University of Halle-Wittenberg

Steve Keen, Kingston University

Christian Marazzi, University of Applied Sciences and Arts of Southern

Bill Mitchell, University of Newcastle

Ann Pettifor, Prime Economics

Helge Peukert, University of Erfurt

Lord Skidelsky, Emeritus Professor, Warwick University

Guy Standing, School of Oriental and African Studies, University of London

Kees Van Der Pijl, University of Sussex

Johann Walter, Westfälische Hochschule, Gelsenkirchen Bocholt
Recklinghausen, University of Applied Sciences

John Weeks, School of Oriental and African Studies, University of London

Richard Werner, University of Southampton

Simon Wren-Lewis,University of Oxford

Here’s a short extract:

     There is an alternative. Rather than being injected into the
financial markets, the new money created by eurozone central banks could
be used to finance government spending (such as investing in much needed
infrastructure projects); alternatively each eurozone citizen could be
given €175 per month, for 19 months, which they could use to pay down
existing debts or spend as they please. By directly boosting spending
and employment, either approach would be far more effective than the
ECB’s plans for conventional QE.

You can read the whole letter here.

This approach is the same as Positive Money’s “Sovereign Money” proposal.

Sign the petition!

Tell the future Prime Minister of the UK that money creation should only
be used in the public interest.

Peter Myers