Nobody’s blinking

In my last post on Greece
(https://thenextrecession.wordpress.com/2015/06/06/ten-minutes-past-midnight/),
I said it was ten minutes past midnight for the Greek government and the Eurogroup credit institutions in getting an agreement to release outstanding funds so that the Greeks can meet their obligations to repay the IMF and the ECB loans over the next few months.  Remember all these tortuous negotiations are not about ‘bailing out’ the Greek people but simply to avoid the Greeks defaulting on their government debts to the ‘Troika’ (the EU, the ECB and the IMF).  None of this money will go to improve or maintain real incomes, public services and pensions for Greeks.

As I write , with less than two weeks to go before the Greeks must make another payment to the IMF, there is a total impasse, with each side waiting for the other to blink and concede.  And nobody’s blinking.

Alexis Tsipras, the Greek prime minister, has now vowed not to give in to demands made by the Troika, accusing them of “pillaging” Greece for the past five years and insisting it was now up to them to move.  “One can only suspect political motives behind the fact that [bailout negotiators] insist on further pension cuts, despite five years of pillaging,” said Tsipras. “We are carrying our people’s dignity as well as the aspirations of all Europeans. We cannot ignore this responsibility. It is not a matter of ideological stubbornness. It has to do with democracy.”  On the other side, the IMF negotiators went home to Washington, implying that no deal was possible with the intransigent Greeks, while the Eurogroup dismissed the latest set of concessions from the Syriza government last weekend within 45 minutes

The reality is that Syriza has already dropped many of its ‘red lines’ supposedly not to be passed since the election of the new government back in January (see my post, https://thenextrecession.wordpress.com/2015/04/28/greece-crossing-the-red-lines/). The 47-page document sent by the Greeks to the Troika last week now includes VAT rises, phasing out of early retirement along with further pension reform, measures to further deregulate the product market, primary surplus targets reaching 3.5% of GDP from 2018 onwards, an increase in the “solidarity tax” on income, the continuation of privatisations and the ‘liberalisation’ of the energy market.

But now it seems that the Syriza leaders will go no further and have balked at two further demands from the Troika; namely further cuts in pensions that would affect many of the poorest Greeks and a 10% rise in VAT on electricity with similar results. That is just too much. After, Syriza has now agreed to austerity measures of more than €2.5bn, more than the previous Conservative government had been negotiating.  But extra measures are being demanded because the long negotiations have damaged the economy and government revenues even more.

The Troika has agreed to lower the government surplus target for this year to 1% of GDP, 2% for next year but then head back towards 3.5% by 2018.  But even this small ‘concession’ will be too much for the Greek economy to bear.  It still means €3bn of austerity measures this year alone and cuts in pensions of up to €900m (0.5% of GDP) this year and €1.8bn (1%t of GDP) next year.  Tsipras and Varoufakis would face a massive revolt within the ranks of Syriza if it concedes any further.

The callous disregard of the poverty of Greeks, particularly the old, is shown in the statement of IMF chief economist Olivier Blanchard in a blog post (http://blog-imfdirect.imf.org/2015/06/14/greece-a-credible-deal-will-require-difficult-decisions-by-all-sides/).  Blanchard blithely pontificates “we believe that even the lower new target cannot be credibly achieved without a comprehensive reform of the value-added tax (VAT) – involving a widening of its base – and a further adjustment of pensions.  Why insist on pensions? Pensions and wages account for about 75% of primary spending; the other 25% have already been cut to the bone.  Pension expenditures account for over 16% of GDP, and transfers from the budget to the pension system are close to 10% of GDP.  We believe a reduction of pension expenditures of 1% of GDP (out of 16%) is needed, and that it can be done while protecting the poorest pensioners”.

But Blanchard’s demand will not protect the ‘poorest’ pensioners as it involves a cut in EKAS, the pension fund for those on lower incomes. A recent poll revealed that 52% of Greek households claimed their main source of income is pensions. This is not because so many people are ‘gaming’ the system and drawing on pensions; it is more because so many Greeks are unemployed without qualifying for benefits or employed but not being paid. If pensions are cut further, a lot of Greek households will really suffer at a time when the economy will likely continue to shrink.  10,000 Greeks have taken their own lives over the past five years of crisis, according to Theodoros Giannaros, a public hospital governor, whose own son committed suicide after losing his job.

The myth that Greeks are all living off the state and sunning themselves on the beaches with their early retirement pensions – something peddled by the Troika and politicians in norther Europe to their electorates – is just that, a Greek myth.  Yes, pensions amount to 16% of GDP, making Greece appear to have the most expensive pension system in Europe.  But this is partly because Greek GDP has dropped so much in the last five years.  Moreover, Greece’s high spending is largely the result of bad demographics: 20% of Greeks are over age 65, one of the highest percentages in the Eurozone.  If you adjust for this by looking at pension spending per person over 65 , then Greek pension outlays are below the Euro average

Greek pensions

Indeed, the ‘Greek problem’ is not an extravagant public sector employment and pension system, but the failure of Greek capitalism to perform.  Greek capitalism expanded before the Great recession, not through productive investment and successful exporting, but through huge foreign borrowing for investing in property and construction (mostly corruptly) led by Greek oligarchs.  When the credit bubble burst, Greek capitalism took an almighty plunge leaving the Greek people holding a sick baby.  The Greek GDP took off in the second half of the 90s. At its peak in 2008, it had grown by 65%, cumulatively. But by 2013, GDP had fallen back to its 2000 level (see http://www.voxeu.org/article/what-went-wrong-greece-and-how-fix-it .

Real GDP, normalised to 100 in 1990

Greek real GDP

During the ‘euro-boom’ years, the growth rate averaged 4.1% per year and it was mostly explained by (non-ICT) investment. The equally dramatic fall since 2008, -4.4% per year on average, was largely due to labour shedding.  Greek workers paid for the failure of Greek capitalism with their jobs and incomes.  Because corrupt and feeble Greek capitalism just engaged in property and speculation, relative to Germany, between 1990 and 2008 Greece accumulated a 23% ‘productivity gap’ that persisted and increased in the bust period. The consequence was a huge ‘competitiveness gap’ for the Greek economy. Between 1990 and 2009 the Greek economy experienced a 35% loss in competitiveness, meaning that wage costs (and prices) rose much more rapidly than in its trading partners in the run-up to the crisis.

Total factor productivity, normalised to 100 in 1990

Greek TFP

The public sector had to ‘bail out’ the failing banks and the collapsing economy by borrowing hugely.  It could only do so by borrowing from the IMF and the EU governments.  But then it was in the grip of the devil.  The Troika demands huge cuts in public spending so that their loans could be repaid.  The level of austerity imposed was about 9 percentage points of GDP – unprecedented in the amount and and intensity (over just three years). Since 2009, government revenues have risen from 37% to 45% of GDP while public expenditures fell from above 50% to 45%.

Greek public employees (‘000).

Greek public employment

 

But the huge cuts in wages and employment were still not enough to turn Greek capitalism round.  Exports of goods and, in particular, services (tourism), rose by much less compared to other European countries which went through more successful ‘stabilisations’ (Ireland, Spain, Latvia, Portugal).  Following the bust in 2009 wages crashed, but prices did not. In a few years, most of the gains in real wages obtained since 1990 were gone.  Poverty and inequality rocketed.  So Greek labour has paid to re-establish the profitability of Greek capital – but to no avail.

Greek export recovery

The problem is that Greek capitalism is just too feeble to recover on its own.  Most Greek firms are very small (well below 10 employees) and their size makes them unable to access foreign markets.  This lends the lie to those in Syriza who argue that help to small businesses is the way out for Greek capitalism.  What is really needed is the development of high productivity,  innovatory sectors  – and that will only be possible through the state.   Greek exports are concentrated in low and medium-tech goods, such as fuels, metals, food products and chemicals.  According to the Atlas of Economic Complexity, developed at Harvard University, the 2008 gap between Greece’s income and the knowledge content of its exports was the largest in a sample of 128 countries. By 2013, Greece ranked 48th in the Atlas’s index of complexity of exports – by far the lowest of any developed country in Europe.

The Troika has spent its time trying to squeeze labour even more through ‘labour market reforms’ (freezing minimum wages, ending collective bargaining, having part-time contracts, easy dismissals etc) when the the reforms that are really needed are with Greek companies themselves.  What should be done is to break the corrupt grip of the oligarchs in the major corporate sectors who monopolise the economy and control investment and prices.  This concentration of power in the hands of a few has blocked innovation and growth.  In Greece, the power of these ‘insiders’, the oligarchs, have stopped proper tax collection or investment.

The terrible irony is that more fiscal austerity measures will only result in a deeper depression and an even higher public debt ratio (probably going above 200% of GDP).  Syriza accepted the 1% primary surplus target for this year.  That is likely to require fiscal measures three times as large to reduce the debt ratio, as the economy could be 5% smaller as a result of the austerity measures and the debt to GDP ratio would jump 9% pts!  That’s why the IMF may want more austerity but recognises that it will only work if it is accompanied by the writing off of some of the existing debt (as long as they get paid first!).

As Blanchard put it: “the European creditors would have to agree to significant additional financing, and to debt relief sufficient to maintain debt sustainability. We believe that, under the existing proposal, debt relief can be achieved through a long rescheduling of debt payments at low interest rates.  Any further decrease in the primary surplus target, now or later, would probably require, however, haircuts.”  But the Eurogroup won’t countenance that, as it would be ‘letting the Greeks off’ when others like Ireland or Portugal got no such help.

What is clear now is that if no agreement is found by 30 June, Greece will default on its IMF repayments.  This has already been announced by some Syriza ministers.  It would be followed by a default on ECB repayments in July.  The negotiations over existing ‘bailout’ package would be over as the four-month extension would pass.  With default, even if only ‘technical’ as the IMF would allow ‘30 days grace’ to pay, the ECB would consider the Greek banks insolvent and so end its emergency liquidity assistance.  With deposits disappearing out of the banks, the government would have to introduce capital controls to stop the flow.  Within a few weeks, the government would not be able to pay its workers their wages or meet the pensions outgoings.  That would force the government to introduce a ‘parallel’ currency, namely IOUs to pay, which would soon be worth less than a euro by some margin. The impossible triangle will prove impossible: Greece in the euro; a reversal of austerity and Syriza united in government.  One or more of these corners will fold.

The Left inside Syriza consider this the opportunity to take over the banks, reverse the privatisations agreed to and to exit the euro forthwith.  It may well be.  But 80% of Greeks want to stay in the euro and they will need a lot of persuading that Grexit is the right way forward.  If Grexit just means a currency devaluation without moves to end the control of the economy by the oligarchs and foreign multinationals, then it can only mean bankruptcy for many small businesses, huge inflation and deeper depression for some time.

The path of default and devaluation by Iceland did not end austerity.  On the contrary (and against the impression given by Keynesian Paul Krugman), Iceland is second only to Greece in the world in the size of its fiscal austerity measures since 2009.  In Iceland, real primary expenditures fell by 12.7% between 2009 and 2012 by slashing current expenditures, transfers, maintenance and investment, and by freezing public sector wages and benefits for a period of four years, during a time when inflation soared due to the 50% depreciation of the króna. VAT was raised to 25.5%, which at that time was the highest in the world!

Iceland austerity

Would Greece outside the euro recover eventually?  It depends on what happens to the economy inside Greece: does it stay in the hands of Greek capitalists or can labour take over; and also it depends on whether the rest of European labour can mount a successful campaign for a pan-Europe plan for growth.  Under capitalism, the dark cloud of a new recession is on the horizon.  If that materialises, the very existence of the Eurozone is threatened.

41 Responses to “Nobody’s blinking”

  1. Karl Martel Says:

    Reblogged this on Reconstruction communiste Comité Québec and commented:
    The terrible irony is that more fiscal austerity measures will only result in a deeper depression and an even higher public debt ratio (probably going above 200% of GDP). Syriza accepted the 1% primary surplus target for this year. That is likely to require fiscal measures three times as large to reduce the debt ratio, as the economy could be 5% smaller as a result of the austerity measures and the debt to GDP ratio would jump 9% pts! That’s why the IMF may want more austerity but recognises that it will only work if it is accompanied by the writing off of some of the existing debt (as long as they get paid first!).

    As Blanchard put it: “the European creditors would have to agree to significant additional financing, and to debt relief sufficient to maintain debt sustainability. We believe that, under the existing proposal, debt relief can be achieved through a long rescheduling of debt payments at low interest rates. Any further decrease in the primary surplus target, now or later, would probably require, however, haircuts.” But the Eurogroup won’t countenance that, as it would be ‘letting the Greeks off’ when others like Ireland or Portugal got no such help.

    Would Greece outside the euro recover eventually? It depends on what happens to the economy inside Greece: does it stay in the hands of Greek capitalists or can labour take over; and also it depends on whether the rest of European labour can mount a successful campaign for a pan-Europe plan for growth. Under capitalism, the dark cloud of a new recession is on the horizon. If that materialises, the very existence of the Eurozone is threatened.

  2. eurogate101 Says:

    Brilliant post.Shame there will not be any more on Greece.

    About this triangle stop austerity-Syriza support-stay in Euro:

    Why would the ECB all of a sudden decide that previously solvent private sector banks (before moratorium) would all of a sudden be insolvent (after moratorium). It is the State that would declare a moratorium on its debts – and perhaps only a section of them (the ones owed to EU institutions).

    It is not in the interest of the ECB to pull the plug on the Greek banks as long is there 350bn euro outstanding via loans and ECB liquidity support to EU countries and institutions alone. That would be suicide to stop liquidity support to banks. That would force an exit from Euro. Local currency would be introduced, losing value quickly against the Euro. The moratorium would turn into a write-off.

    Better to support the banks, pretend further that they are solvent, and see whether Greece can get out of a moratorium situation using the Euro.

    I also see no need to introduce capital controls. The money is largely abroad or under matresses already, given the instability experienced over last few months.

    I would argue the relatively more stable environment following declaration of moratorium would bring capital back to Greece, and make banks more liquid.

    Here is an outline of my thinking.

    https://radicaleconomicthought.wordpress.com/2015/06/16/endgame/

    • sartesian Says:

      “It is not in the interest of the ECB to pull the plug on the Greek banks as long is there 350bn euro outstanding via loans and ECB liquidity support to EU countries and institutions alone. That would be suicide to stop liquidity support to banks.”

      Well, then since the ECB has just (28 June) pulled the plug, refusing to expand ELA, apparently Draghi and company have embraced suicide.

      What was it Marx said about the “irrationality of capitalist production”? That’s the thing, capitalism just doesn’t always act in the way the “enlightened” think it must.

  3. sartesian Says:

    So what’s your alternative, Michael?

  4. Davies Says:

    Who do you consider to be the oligarchs in Greece? Some clarity would help. Thanks.

  5. Mike Ballard Says:

    Raising the VAT (GST as it’s known in Australia) is the preferred solution for revenue flow to capitalist governments. Meanwhile, real wealth continues to increase, courtesy of the increasing output per hour of labour and fictitious wealth rises with rising prices frothing over real value, and then the bursting bubble ‘necessitates’ further rises in regressive taxation to fund capitalist government.

    Piketty’s got a point. Tax the wealth of the bourgeoisie in order to save the wage system from its own contradictions. But that’s an unsavoury political position to take as the capitalists themselves want to hog the wealth the workers’ produce and will fight any attempt at raising taxes on ‘their’ wealth with propaganda campaigns in the capitalist media claiming that such moves would destroy jobs. Of course, what the capitalists will never tell workers is that their accumulation of wealth depends on workers taking these jobs.

    Workers have to realise that wage system does not operate in their interests. Workers have to realise that the wealth they produce should, by rights, belong to them. Until workers realise that, they will bondage and discipline of their masters, the owners of the wealth they produce.

  6. RDS Says:

    “The problem is that Greek capitalism is just too feeble to recover on its own. Most Greek firms are very small (well below 10 employees) and their size makes them unable to access foreign markets. This lends the lie to those in Syriza who argue that help to small businesses is the way out for Greek capitalism. What is really needed is the development of high productivity, innovatory sectors – and that will only be possible through the state.” Your conclusion here does not follow from your observation. Implementing SYRIZA’s original Keynesian demand-side economic program would not require penetrating foreign markets with Greek goods and there would be plenty of room for growth of small and medium-sized enterprises if the big oligarchs that currently dominate the economy were broken up or reigned in.

    • sartesian Says:

      You’re both wrong: what’s needed is not the development of high productivity, innovatory sectors… through the state, but rather the expropriation of capitalism and its state, which Syriza now represents.

      “If the big oligarchs that currently dominate the economy were broken up or reigned in…”? Sure thing. And if Bruce Jenner had been born a woman who wouldn’t have need surgery.

      Last week RDS was arguing how the EU and the markets were recognizing the wisdom of a Keynesian demand-side economic program. This week it’s “if only the oligarchs….” That’s precisely what political economy is… wishful thinking.

      • RDS Says:

        Yes, we must expropriate the mom-and-pop enterprises with their ~10 employees to save Greece!

      • sartesian Says:

        Nope, you have to repudiate the debt in its entirety, place all aspects of public welfare– health, education, transportation– under the control of peoples’ assemblies; neutralize the armed forces, by breaking the command and control function of the officers; seize the central bank; impose immediate capital controls on the flow of funds and property; generate workers committees, etc.

        BTW– what happened to last week’s optimistic assessment; that vote of confidence in Keynesian economics?

      • RDS Says:

        No point in seizing banks that are either insolvent, empty, or filled with worthless currency. Imposing capital controls would only stop further outflows but the banks are nearly empty as it is.

  7. matthewrusso9 Says:

    “What should be done is to break the corrupt grip of the oligarchs in the major corporate sectors who monopolise the economy and control investment and prices. This concentration of power in the hands of a few has blocked innovation and growth. In Greece, the power of these ‘insiders’, the oligarchs, have stopped proper tax collection or investment.”

    Can we get more precise on the economic and social basis of the “Greek oligarchy”? I can think of shipping (and perhaps tourism) as one important sector, but it is mystery how such a weak capitalism can foster such strong oligarchs. Unless it is shown that these capitalists carry on an entirely parasitic existence, then mystery solved.

    Later, foreign capital is brought into the picture. More concrete info here would also be useful.

    It’s clear that the Troika’s actions are pure politics, designed to destroy the Syriza government and reverse the results of the January elections. It is possible for what is in practice “a government for the management of Greek capitalism” to also act to begin the reversal of the so-called “neo-liberal” counterrevolution. That is precisely what the Troika fears. That’s all that is really at stake here. We are not talking about the inevitable compromises made in the course of a forward-moving process, we are talking about at least reversing the counterrevolution and regaining the momentum of “the minimum program”. Stop worrying us with the negative economics of Iceland, Argentina, or Russia in the past; the *worst* outcome lies at the end of the track we are on today: bad economics *and* bad, perhaps even fascist, politics. In this situation, bad economics / good politics that appears as a defeat for the permanent counterrevolution is infinitely preferable.

    My pessimism is based on the fact that, despite the immensity of the 2008 crisis, there has been no significant reversal of the permanent counterrevolution. I hope I am proven wrong and we get this minimally good result, as the left wing “manager of capitalism” is forced to act against the “place” it has been assigned. In this case, let’s not then engage in the old artificial counter-positions of minimum and maximum programs. There is, after all, a concept called the transitional program to link the two together. But first we must have momentum in the correct direction.

  8. sartesian Says:

    And this: “What should be done is to break the corrupt grip of the oligarchs in the major corporate sectors who monopolise the economy and control investment and prices. This concentration of power in the hands of a few has blocked innovation and growth. In Greece, the power of these ‘insiders’, the oligarchs, have stopped proper tax collection or investment.”

    is just nonsense. “Break the corrupt grip of the oligarchs”…. as opposed to the grip of “honest entrepreneurs”? The concentration of power have stopped proper tax collection and investment? Meaning what; without the so-called oligarchs taxes would have been collected; investments would have been made.

    Come on. The historical development of Greek capitalism is precisely that– the historical development, and not the product or result of the machinations of corrupt oligarchs– not that they don’t maneuver; not that they aren’t corrupt– but their corruption, their machinations are inherent in, immanent to, essential to, representative of, Greek capitalism as a whole.

    The essential and Marxist categories of class, of class relations, of the conflict between means and relations of production, of the necessity for social revolution withers away in this parable of “corrupt oligarchs” “suppressing investment.”

    During the Asian financial crisis of the late 90s, the ogres were then called “speculators” not oligarchs. Served the same purpose, though, “economics” as such was/is not seen as the antagonisms in the social organization of labor power; but a “moral” exercise– entrepreneurs/investment/industry=good; oligarchs/financiers/tax dodgers= bad.

    That ain’t Marxism; that’s Disneyland for the Adam Smith Set.

  9. vallebaeza Says:

    Reblogged this on Econo Marx 21.

  10. purple Says:

    If Greece left the EU it would not be allowed to recover. It would be destabilized by the big powers in Europe in much the way Russia has been. Of course, with Greece being a tiny country with no ability to fight back.

    Speaking of the IMF, Asia did nothing but flourish when it de facto kicked the IMF out. It’s a totally discredited a yes criminal organization.

    • sartesian Says:

      Is there no alternative? If thousands can be mobilized throughout Europe to express solidarity with Syriza, can’t thousands be mobilized in Greece to demand repudiation of the debt? To set up popular assemblies to PREVENT the transfer of money from municipalities, and service administrations like hospitals and sanitation to the Syriza government so it can pay the debt?

      What is truly evident is that REFORM is no alternative; that it is used solely to obstruct the prospects for a social revolution.

    • RDS Says:

      Leaving the EU is a non-starter and so is seizing the banks, unfortunately. http://www.nytimes.com/2015/06/26/business/an-echo-of-argentina-in-greek-debt-crisis.html

      • sartesian Says:

        TINA– either submit to a system that has already reduced living standards in Greece some 40 percent, or……….things are going to get worse.

        Yep, nobody would ever question your grip on reality.

      • RDS Says:

        Things are going to get worse in either case. This is why Tsipras made the right move to put the Troika’s blackmail up for a referendum — whichever way the people go, they will be behind Tsipras and SYRIZA.

      • sartesian Says:

        So if things are going to get worse in either case, and Tsipras did the “right thing” by rejecting agreement and calling for a referendum and urging for the rejection of the troika’s terms, and the agreement does get rejected, then what?

        Rejection of the Troika’s terms will do what? Make things better? Make the troika more inclined to what? Make compromises? You were proclaiming such compromises were being made by the Troika two weeks ago. Your suggestions, such as they are, amount to self-contradictory nonsense.

        Two weeks ago, the EU was seeing the wisdom of compromise. Two weeks ago, the “market” was making its “will” evident.

        Now we’re at the point where the Syriza government has not only been unable to negotiate any debt relief; not only has agreed to stiffening terms on pensions; etc., but has taken absolutely no action to prevent the flight of capital from the country, a flight that is facilitated by the ECB through its ELA.

        So the simple question is: repudiate, not the Troika’s terms on, but the DEBT, itself. yes or no?

        Do you think Greece should repudiate not the conditions imposed by maintaining the debt, but the debt itself, which according to a Syriza committee of parliament is “illegal, illegitimate, and odious.”

        A simple yes or no will suffice. I suspect however you will slip into another extended period of silence.

      • RDS Says:

        Sure, they can repudiate the debt and then no institution will lend a red cent to Greece for the next 5-10 years and their banking system will crash like America’s did in the 1930s.

      • sartesian Says:

        So then you vote YES on the referendum, right? Accept the terms, right?

      • RDS Says:

        Obviously not. No one here is championing the Troika’s interests, except maybe you with your call to split and destroy SYRIZA.

      • sartesian Says:

        On the contrary, comrade Tsipras is championing the Troika’s interests: http://www.ft.com/intl/cms/s/0/e82e0256-1fcb-11e5-ab0f-6bb9974f25d0.html#axzz3edtkr1Xu

      • RDS Says:

        Yes, I’m sure the IMF and the Troika are thrilled Tsipras didn’t send them the $1.6 billion that was owed on June 30! I can’t wait for more insightful commentary from you sartesian. The internet doesn’t have enough bandwidth to accomodate your infinite wisdom.

      • sartesian Says:

        Tsirpas just agreed to accept the Troika’s terms with some “minor” revisions. He did that because he doesn’t think he can win the referendum. Get it? All your pontificating about “non-starters” and staying in the eurozone has reached its illogical conclusion, with the prime minister himself, flipping like a flag on a pole, and giving a gymnastic display the likes of which was last seen when Spiro Agnew acknowledged his guilt, pleaded no contest, and asserted his innocence all at once.

        Let me know when that comet arrives to take you to the rapture. I wouldn’t want to miss sending you a fond farewell.

      • RDS Says:

        Doesn’t matter since the Troika won’t make such revisions. Your understanding of bargaining positions is just as faulty as your reading comprehension ability.

      • sartesian Says:

        and BTW Greece has 29 more days to make the 1.6 billion payment. So another simple yes or not question for you. Now that Tsirpas has voted yes on his own referendum, do you advocate making the payment?

        And then we can move on and consider the tactical stupidity, strategic inadequacy, and programmatic incompetence of a party that attempts to a) agree to the terms of an agreement after the agreement has expired b) pursues yet another bailout after the previous two have inflicted such carnage on the Greek people.

        I’d say Tsirpas is a fine model of a revolutionary democratic socialist.

      • sartesian Says:

        Try answering the simple questions before you speculate on what the Troika might or might not do.

      • RDS Says:

        They’ve already said they won’t accept Tsipras’ gambit. Pay attention, please.

      • sartesian Says:

        “Gambits” “bargaining positions”? Syriza has got as much bargaining power as a Sonderkommando in a death camp.

  11. capitalistcrisis Says:

    Interesting that Greece has a higher percentage of over 65s than the EU average. Probably due to the high number of young workers who have had to emigrate to find work. Barbara

  12. sartesian Says:

    Apparently, somebody just blinked. Guess who?

  13. sartesian Says:

    RDS (who as predicted, has gone silent): “No point in seizing banks that are either insolvent, empty, or filled with worthless currency. Imposing capital controls would only stop further outflows but the banks are nearly empty as it is.”

    Well apparently Syriza has not bothered to avail itself of your revolutionary, democratic socialist insight, as it has imposed capital controls.

    And now the banks are not “nearly empty,” unless of course you think 100 billion is near emptiness. Oh and the currency is not worthless. It’s the euro, remember. Let’s not get ahead of ourselves. The euro is not yet a worthless currency. OTOH, your “radical” “democratic” “socialism” is.

    • RDS Says:

      “Well apparently Syriza has not bothered to avail itself of your revolutionary, democratic socialist insight, as it has imposed capital controls.” Except for the fact that it was you, not me, that you proposed capital controls — I merely noted that capital controls would not get Greece out of the Troika-imposed straightjacket and guess what? I was right — it hasn’t. And the currency I was referring to was your proposed Drachma, not the existing currency. Please get off the internet and invest in a reading comprehension class, you’re only embarrassing yourself in these exchanges.

      I’m also glad nobody in Greece is listening to your counsel to “break with Syriza” — splitting Syriza would return the pro-Troika parties to power. Can’t say I’m surprised you’d prefer this outcome given how you can’t even read much less understand a complicated situation like current day Greece.

      • sartesian Says:

        Brilliant. You can’t even read your own statements, can you. Can’t blame you though. If I spewed such ignorance, I’d like to forget it too. Just for accuracy’s sake, here’s what you wrote:

        “No point in seizing banks that are either insolvent, empty, or filled with worthless currency. Imposing capital controls would only stop further outflows but the banks are nearly empty as it is.”

        You stated that the banks were empty or filled with worthless currency. That’s your “economics.” Cash reserves in Greek banks are currently estimated at a around euro $150 billion. That’s more than zero and in a currency that is convertible to the US dollar, the Swiss Franc, the renminbi, and/or gold.

        You are never as comfortable as you are in repeating in your own ignorance, are you RDS?

        As for breaking with Syriza— the logic of your previous support for Syriza, as preferable to repudiating the debt, declaring bankruptcty and breaking with the eurozone means you should be advocating a “YES” vote on the referendum. A “no” vote, as the European Commission has made clear, means Greece is out of the Eurozone– that is out of the Eurozone after 5 months of claiming it could negotiate relief from austerity while staying in the Eurozone; out after 5 months of making payments; after 5 additional months of capital flight; after 5 months when the “primary surplus” has begun to turn negative; after 5 months when the economy has once again begun a contraction?

        So where are you now RDS? Still advocating that Syriza make the payments on the debt lin order to stay in the Eurozone? Still want municipalities and agencies to forward cash reserves to Syriza so it can a) pay the debt b) fund the military? Still supporting the worse than tragedy, worse than farce, but pathology that is trying to “save capitalism from itself”?

        Syriza is a failure; on its own terms. It could not do what it pretended to could. You want to continue to engage in this charade of “reform” of “collaboration” of EUROPE?

        Your revolutionary democratic socialism is like the Holy Roman Empire. None of the three.

      • RDS Says:

        “You stated that the banks were empty or filled with worthless currency.” Was referring to if the Drachma was restored as you propose. Again, learn to read, learn to think. Let me help you — start here: https://www.marxists.org/archive/trotsky/1938/05/think.htm

      • sartesian Says:

        Not to put too fine a point on it, but you’re as dishonest as you are ignorant

        The discussion, which can easily be reviewed above said nothing about reverting to the drachma. Here, let me help you by reproducing what was written:

        SA: “You’re both wrong: what’s needed is not the development of high productivity, innovatory sectors… through the state, but rather the expropriation of capitalism and its state, which Syriza now represents.

        “If the big oligarchs that currently dominate the economy were broken up or reigned in…”? Sure thing. And if Bruce Jenner had been born a woman who wouldn’t have need surgery.

        Last week RDS was arguing how the EU and the markets were recognizing the wisdom of a Keynesian demand-side economic program. This week it’s “if only the oligarchs….” That’s precisely what political economy is… wishful thinking.”
        ___

        RDS: “Yes, we must expropriate the mom-and-pop enterprises with their ~10 employees to save Greece!”
        _________

        SA: “Nope, you have to repudiate the debt in its entirety, place all aspects of public welfare– health, education, transportation– under the control of peoples’ assemblies; neutralize the armed forces, by breaking the command and control function of the officers; seize the central bank; impose immediate capital controls on the flow of funds and property; generate workers committees, etc.

        BTW– what happened to last week’s optimistic assessment; that vote of confidence in Keynesian economics?”
        __________

        RDS: “No point in seizing banks that are either insolvent, empty, or filled with worthless currency. Imposing capital controls would only stop further outflows but the banks are nearly empty as it is.”

        _________________

        I draw the careful reader’s attention (that lets you out, HRE) to the phrase “but the banks are nearly empty as it is.” IS is the present tense of the verb “be.” Real time, as of June 26 when you responded.

        Let me know if you find any mention of the drachmas, of “drachma reserves.” Let me know if you find anything anywhere I’ve written advocating a return to the drachma.

        Look real hard. Learn to read, indeed.

        Smug and dishonest, that pretty much sums up HRE.

        Read that OK can you?

      • sartesian Says:

        Oh, and now that we’ve established that neither of us was talking about drachmas, that there are euros 150 billion (estimated) held by the banks, do you now think the banks should be seized and capital controls imposed?

        Yes or no will do.

        And if you get in the swing of answering honest questions honestly, try this one:

        Repudiate the debt to the IMF, the ECB, the Greek Loan Facility, the Stabilization Fund, etc., yes or no?

        Expect you’ll be too busy to answer.

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