(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 <info@publicbankinginstitute.org> Date: 1 July 2015 at 05:01 http://www.globalresearch.ca/on-greece-and-europe-what-is-called-negotiation-is-a-demand-for-total-surrender/5458853 On Greece and Europe: What is Called “Negotiation” is a Demand for Total Surrender 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 bondholders. 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) THE DELPHI DECLARATION 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 world. 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 http://michael-hudson.com/2015/02/greece-austerity-for-the-bankers/ 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. MICHAEL HUDSON, ECONOMICS PROF., UNIV. MISSOURI, KANSAS CITY: Thank you. 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 neoliberalism. 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 <info@positivemoney.org> 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 Times <http://positivemoney.us1.list-manage1.com/track/click?u=7396d6c5dc44c9d3b64d8265c&id=d5535af757&e=1236bb7769>. 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. http://www.positivemoney.org/2015/03/better-ways-boost-eurozone-economy-employment-ft/?mc_cid=31b0716d59&mc_eid=1236bb7769 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 Switzerland 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 Australia website: http://mailstar.net/index.html |
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