"Whaaat..? The store next door is closing down..?
We're closing down too...!!!!
HURRY! Up to 60% off."
We're closing down too...!!!!
HURRY! Up to 60% off."
- The EU-IMF are blackmailing the greek PM: “If you don't get the additional measures that we demand, there will be no next loan installment and we will leave the country to default on its debt.”
- The most powerful workers' unions – who are still supporting the government - are blackmailing some of the parliament members: “If you vote the additional measures that the EU-IMF demands, you'll never be re-elected again”. As a result... - ...some parliament members are blackmailing the PM: “If you suggest that the Parliament has to vote for additional measures we will vote against this and the government will fall.” - The Left is blackmailing the government: “If you vote for additional measures, we will organize continuous demonstrations and strikes and will immobilize the country.” At the same time, the greek PM is blackmailing (who?) by saying that “if our party doesn't win the upcoming local elections, I will call an early national vote” only a year after the last one. Sometimes I wonder if all this is the result of stupidity or if it is all done on purpose. I'm - by nature - against conspiracy theories, but I can't see a third reason why everything's been going so bad. It seems like no one is truly aware of the significance of the country's situation:
As things are right now, it's obvious that the current government can't function properly. They have done a few things that showed the EU-IMF they can get the job done, but still we are far from seeing any actual results. There is a lot more to be done and they've dangerously slowed down their pace, in fear of the consequences. To me the only solution is the formation of a coalition government – as it happened back in 1989 – so as there will be no more space for blackmailing in the interior. They would have to work hard and united for the next 3-4 difficult years, until the country gets some stability and then everyone can go back to their different opinions and do what they think best. Unfortunately, I don't see this happening. The greek politicians for once more prove to be short in front of the circumstances. I would accept failure if Greece was in an irreversible situation. But it really makes me sad and angry to see that even though there is a chance for (a painful) salvation, the country falls apart day after day, just because our “leaders” are so short-sighted and fear their responsibilities.  Here's a picture of the statue of George Canning, on Canning square, central Athens. Recently someone wrote on it the phrase “Our first loan”. Please let me explain:
The Greek Revolution against the Ottoman empire, started in 1821. In the beginning, it didn't look like a large scale revolution at all, as it was mostly taking place at a small part of Peloponnissos, in southern Greece, and it didn't worry the Ottomans. The Greeks had unimportant military power and no support from abroad, in terms of diplomacy, finances or weapons. Only when, later on, the British and the French decided to offer this support to the Greeks, it seemed likely that the revolution would be successful and that a new Greek state would be founded. Until then though, the 3 european Great Powers (British Empire, France, Russia) don't seem to care about the revolution. But in 1823, George Canning, who was then the Foreign Secretary of the British Empire takes a sudden turn and recognizes Greece as a sovereign country. We don't know if Canning liked the greek people, but we know that he saw greeks as a good chance for Britain to step in the eastern Mediterranean – against the Ottoman naval monopoly in the area. You see, at that time the Brits had to ask for the Ottomans' permission to get their cargo back and forth to India. Right after the recognition of the Greek state by the British Empire, Canning offers the greeks 2 loans to “help” the revolution. The first loan was given on November 1823. The greeks took 472.000 british pounds and the overall interest was 69%. The second loan was given on 1825, and was 1.032.000 british pounds, with an overall interest of 93%. One would say that Canning probably didn't like the greeks... Whatsmore, at this point, there is yet no real greek government, but rather a bunch of non-elected rich greeks (ship owners etc.) who have decided to represent the greek people in Europe. So the actual money Greece got was 1,5m pounds. But still, only 0,5m pounds made it to the country's treasury. The rest was shared among the negotiators of the loan, the british bankers, the greek ship owners and to other “hidden costs”. These 2 loans were called the “Loans of Independence” - a phrase that is a paradox by itself. The most well known example of the splurging that took place is the wages of Lord Cochrane who served as a Rear Admiral in the Greek Navy (he also served in the navies of Chile and Brazil, during their own wars of “independence”). His yearly wage was 57.500 pounds which according to the historian Dertilis was equal to a 50-years income for a middle class family at that time”. I don't know if it matters to anyone, but except for countries that once belonged to the British Empire (Australia, Canada etc.) the only places on earth named after Canning are this square in central Athens, a street in Buenos Aires, Argentina (which was renamed lately) and a street in Rio de Janeiro, Brazil. This is an interesting coincidence, since all 3 countries have gone through IMF programs in the last decade. Back to today, when another story of independence unfolds before our eyes: The chairman of Eurogroup (that is the meeting of the finance ministers of the Eurozone) Jean Claude Juncker, stated that both the German and French governments knew about the greek debt crisis but did nothing to stop it, and that they intentionally left Greece to get where it stands now. It was of their interest to keep quiet, because Greece had money to spend, even if it wasn't its own money, especially to buy weapons from them. (take a look at Turkey's PM statement on the subject) It was of their interest to let Greece get a step before bankruptcy, so they can now buy Greece's state enterprises cheap. The exact statement of Juncker: (copying from the French Press Agency, AFP) Eurogroup chief Jean-Claude Juncker said Friday that Greece's financial woes were well known among top EU officials but kept quiet until the crisis erupted last year. "It was quite obvious that one day Greece would have to face this kind of problem, and we knew that this problem would occur," Juncker told a forum on the sidelines of the International Monetary Fund and World Bank meetings in Washington. Juncker said German and French officials along with European Central Bank chief Jean-Claude Trichet had for some time been discussing "the perspectives of what was not at that time known as so-called Greek crisis." "I could not go public with the knowledge that I had," he added. "The Greek crisis could have been avoided, but not starting last year, starting two or three decades ago," the European finance ministers chief said. Juncker said he tried at one point to seek a solution to the problems with an unnamed Greek prime minister who told him: "I am governing a country of corruption." Now remains the question, “whose fault is what happened to Greece?” Of course it's a matter of how a country manages its finances, and Greece certainly doesn't deserve a prize there. But on the other hand, which country would have made it, if by the moment of its creation is obliged to pay back loans of interests up to 90%? One would say, “then why did they get the loans?” If they hadn't got them, the revolution wouldn't succeed and no Greek state would ever exist, which is fine with me. After all, it doesn't matter whose fault it is. It matters who pays for it. Maybe you thought that, since we didn’t post anything new for so long, we had probably decided to let this blog die. Maybe we thought so too. But if you knew how things work in Greece, you would know that summer season is a time when everything slows down. Besides school vacation, business slows down, there’s no sports, the tv program slows down, even the news on the most “serious” tv networks prefer to talk about lighter subjects. So, why would this blog be an exception? One could say that this summer wouldn’t be as relaxed as every other. However, this summer proved that greek people give (for the time being) a higher priority to its relaxation than it does to its worry for the future – or should I say for the present? Of course tourist season always gives a boost to the economy and to the moral for 3-4 months. Now we have to face the rest of the 8-9 months before the next boost comes.
In the psychology of the economy, there’s been something moving lately. In this summer there have already been 2 major financial deals that show there is some interest taken in for investments in Greece. The first is about the cargo business of Piraeus port (the largest of Greece, second largest in the Mediterranean), which will from now on be ran by Cosco (the Chinese state shipping company) and the second is about a second port, an energy hub (Astakos) and a part of the old and deserted airport of Athens, where the Qatar Investment Company plans to build a hotel-casino complex. What’s interesting is that both of these moves come from outsider countries (given the eternal western dependency of Greece) that see Greece as their chance to break in the EU market. If these 2 moves turn out to be successful it will be a very positive development, as Greece (a member country of the EU and of the NATO) will get to have significant financial relations to countries with developed/developing economies that need Greece as much as Greece does. But this all will be seen – if ever - in the future. For now, there have been thousands of businesses closing down and a massive 120.000 new unemployed people since last January. Meanwhile, job listings are less and less and many people, especially young have already moved to northern EU countries (Germany, Sweden etc.). The government, except for trying to collect taxes (which is already proved by history that they can’t do successfully) is making an effort to put economic and social life in a primary order. This seems to be even harder than collecting taxes, as it was the same party that, back in the ‘80’s, created this monstrous state and spoiled the people by giving them money – money that had been borrowed. And now it’s the same party (some times even the very same persons) that blaim the people for the problems the country now faces. Here’s a very comprehensive article on Greece from this month’s Vanity Fair by Michael Lewis. (if you haven’t lived in Greece, this article will help you understand aspects of everyday life that I would need a lot of time and space to write about – and still you would think I’m exaggerating) P.S.: On my article of May 8th I was pointing: "Greece looks like a part of land where suddenly 12 million people are trapped in it and they have to find a way to set up a community from scratch. And each one of them has something different in mind, each one with their own definition of “victory”." Michael Lewis in his article says something that sounds similar: "The structure of the Greek economy is collectivist, but the country, in spirit, is the opposite of a collective. Its real structure is every man for himself." This week has passed peacefully, with less and smaller demonstrations than last week. This can be up to 3 reasons: A. After the government passed the austerity measures, people got over the initial shock and is now looking to find a way to deal with the new situation. B. People temporarily withdrew from the streets just waiting for a spark to get back to the streets again. C. Workers' unions are mostly controlled by pro-government people, so they choose not to pull the strings but rather keep their reaction to a “symbolic” level. I also believe that the fact that 3 people died during a demonstration 10 days ago have caused a feeling of nervousness to the majority of people. Then, another issue is that we are just getting into tourist season (when 18% of the greek GDP is produced) so a lot of people are making an effort to put themselves and businesses together, hoping to get the best out of it. Meanwhile, hotel bookings have been very low compared to the last few years, both because of the instability of the country, as well as because of the economy being bad in most EU countries too. There have already been 17.000 hotel bookings canceled, just for hotels in Athens and we're only in the middle of May... Even still, for the first time since we got in this crisis there has been a little optimism. Not in the sense that “this will turn out to be good” but more likely “we'll finally make it, no matter what”. I don't know how rational this optimism seems to be, but we really need it. If there's one reason I tend to believe this, is that it's mostly said by older people who have been through hard times in the past. All of us, younger than 40-45, have mostly been grown up in a bubble, so all this seems like a mountain in our eyes. A picture which I think describes perfectly people's psychology at this point is something I saw when I went outside the bank where the 3 people died. There were lots of flowers, candles, notes, and people passing by, standing there for a while. One would think that when you are in such a place you probably leave a flower yourself, you think about stuff, most likely in silence. What was weird is that people were fighting! Not particularly about something that had to do with the 3 dead, but about politics, the demonstrations, what should be done now. It was really an awkward situation. Like being at a funeral and finding a reason to fight. I couldn't really follow what they were saying, there were 2-3 different fights going on at the same time. A good thing is that we have started talking to each other, having real conversations. I'm not talking about the fights here, I mean civilized conversations. In Greece we weren't used to this. Our dialogues seemed to be more like 2 parallel monologues. These days it's been quite usual to see people talking about the economy, the country's economy or their household's economy and not being dogmatic at all. They say their opinion but they are also listening to the other person with respect. It may not sound like such a big deal, but before that you could tell that people wanted to talk about stuff only with people with which they knew they would agree with. Despite all that, up to now it doesn't look like there is something going wrong in the real economy. I don't know how things were in other countries that were only a step before going bankrupt, but still it looks weird having bars and restaurants full of people, drinking and eating. A friend who's a bar tender told me today that his boss told him that when there's a crisis people tend to drink more. My question is, weren't we drinking a lot already? Something I heard and thought it puts it right: “Greece looked like a client in a restaurant who keeps ordering stuff so that the check will never come”. There have been a lot of discussions going on lately, saying that what happens now is the beginning of the end of capitalism. Those who are more optimistic (or pessimistic, depends which side you look at it) are already wondering what the new economic system will be like. I don’t believe that what Europe is coming through is a crisis of capitalism in general. I think it is a crisis of “toxic” capitalism. Capitalism (either we like it or not) is an economic system and like all systems, it has some basic rules. Some of them are: A) to make profit through the exploitation of human labour. B) the sense of economic risk C) competition Maybe there are a few others, which I’m too stupid to understand, but let’s just work with these 3. These 3 rules combined are the definition of “healthy” capitalism. This term may sound a bit paradoxical to some of you, but let’s just use it for simplicity. What brought us to this crisis is the violation of these 3 rules. “Toxic” capitalism is looking for easy and fast profit. Which means, to make profit without any human labour involved. Basically it’s gambling: instead of investing some money in a company –looking forward to making profit out of the human labour of the people working for it- I buy stocks of a company today, only to raise the price of the stock and sell tomorrow. This way I make easy money but I’m a problem to the other shareholders, but also to the company itself. This tactic is violating rule A. The same way that common people can invest some money in the stock market, investment banks invest huge amounts of money in countries, buying bonds etc. But what happens when, being an investment bank, I don’t invest in german bonds because the german economy is reliable (“healthy” capitalism), but instead I invest in Greece just because I can gamble and make money easier? Who are the shareholders who lose from my gambling? Simply the country’s citizens. And the company is Greece. Then, there was this other method, investors putting money on several prospects. It goes like this: I buy some investment products, in US dollars. Then the US dollar is rising towards the Euro, I resell it to some other investor. So, I make some profit by selling it, but also by currency exchanging. This is making money out of thin air, but let’s says that there’s still a bit of risk in such a move. What if an investor puts money on 2 prospects, maybe even contradicted to each other? Among gamblers there is the term known as “house edge”. House edge means that whatever result there is in a game, the house always has a profit, even a small one. Now, back to investments, when I put some millions on one prospect, my move is mistaken as “honest” by the market. So, due to mass psychology, some people will always follow my move. But they can’t see the other few millions I put on the opposite prospect, so usually they end up losing their money. This is violating rule B. Some of the American investment banks (that have been torturing Greece lately) own rating agencies. Rating agencies are the ones that every now and then give a rate to the investment products of countries (among other stuff). A note here: American rating agencies have the right to rate EU-countries’ investment products, while European rating agencies are not recognized by the US. It’s as simple as “you need us, we don’t need you”. So it’s more than obvious that American investment banks have the pie and eat it too, as far as EU economy goes. When a rating agency (which has an investment bank behind it) is downgrading e.g. greek investment products is as if the investment banks were saying they don’t want to lend Greece any money. This makes the rest of the investment market cautious, so no one wants to lend Greece and as a result loan interests rise. This is called “self-fulfilling prophecy”. To give a better picture on how real this is, right after Greece signed the aid agreement with the IMF, rating agencies downgraded greek investment products to "junk" category so the chairman of the European Central Bank (the equal to the Federal Reserve Bank in the US) said that the ECB will still buy greek bonds, despite the bad ratings. The ECB just confessed that rating agencies play their own game, and since we, as the EU, need to keep the Euro strong, we don’t care about their ratings. This is ridiculous: the same group of countries that have been asking the rating agencies their opinion on their investment products, now say that they just don’t care about their opinion. This is violating rule C. Because eventually, US investment products are not in fair competition to the EU-countries investment products, since the rating of EU-countries investment products are in the hands of their competitor! Some people say that capital doesn’t have nationality. I say, it shouldn’t, but it still does. The Obama administration lately voted new laws concerning the freedom of banks to do certain moves, but only within the US. They can still do their gambling outside the US. In a sense, they'd better do so, for American economy to get over the recession. Obama only wanted to make sure that there will be no new collapse in the real estate or any other market in the US. These “toxic” tactics that made the Lehman Bros collapse and took with it so many other banks as a domino, also affect the psychology of the real market, unemployment etc. In other words Obama told the banks “do whatever you want, but not in our own yard”. The conclusion is that this crisis concerns Europe, not just because “that’s life” but mostly because there was a concrete intention behind it all. (Of course there is a crisis of capitalism as a system, but in my opinion it has to do with environmental issues more than with anything else) One would say “but why do the investment banks do this to Greece instead of to Germany?” The answer is that in Greece they found more vulnerable ground. The rating agencies may be gambling with countries but they also need to be considered reliable. If they downgraded the german or the french investment products they would lose some of their reliability. So they are looking for someone who’s on the brink of the abyss anyways and then they start pushing. It’s obvious already: by the next day that Greece signed the aid agreement, the rating agencies have been attacking Portugal and Spain, as the 2 next weakest EU economies. Besides, by hitting the PIGS (Portugal, Italy, Greece, Spain) they are sure that Germany gets the message too. What really happens now is an attack of the american economy against the EU economy. EU was in deep slumber, it’s decision making system is too slow, it hadn't forethought of means to protect itself against such an attack. What’s worse is that the EU still has some contradicted interests in its body. Maybe they trusted the Americans more than they should have. The goal for the american economy is to step n the EU economy. Greece is the Trojan horse of the Americans, used by the IMF. It proved that the IMF wasn’t necessary, neither its money, nor its know-how. Greece is getting a 110 billion euros financial aid, of which only 30 billion come from the IMF. But as we’ve already seen in the article Introduction to the IMF, the point is not for the IMF to get its money back – they now this will never happen. The point is the exploitation of soon-to-become ex-public sector businesses, energy, natural resources. Greece will not collapse – as a country, I don’t know about the society – because they don’t want us to collapse. They are just proving us for once more that our collapse is in their hands and they wanted us to beg before they come to save us. As a country we have been on the brink of the abyss for a while now, but I’m sure we can live with this. What if society is on the brink of the abyss too? That’s something I don’t know if we can live with. We all have been recognizing it. Me, my friends, relatives, you could hear it been acknowledged by the people at the nearby table at cafes that there would come a day when this whole lie will end. We are not some isolated country, like Australia or something. In the last 20 years we saw all these desperate people, the Iraqis, the Serbs, the Palestinians, the Albanians, the Bulgarians getting through hard times. We couldn’t ever imagine being in their position. We lived with the certainty that “this would have never happened here”. We thought that we’d already passed through all the shit in history, the world war, the civil war, the dictatorship. And that from now on we are on auto pilot and that things can only get better, infinitely. We may have all been saying that this lie will end some day, but we weren’t thinking how it would end. Because we used to think like, ok, we are already the crappiest country in the EU, so things can only gradually get the northern European way. We never thought that there were worse examples to follow. I have a friend in Serbia, and I was telling her about this whole situation. She said: “You worry too much. We had the same problems here and at the same time there was a dictatorship and the NATO bombings.” For a moment I felt lucky. People are demonstrating, everybody’s mad. What’s worse is that there’s no one to trust. What’s even worse is that from now on, we don’t have the right to decide for ourselves. The prime minister admitted it yesterday in the parliament when the opposition accused him of taking such harsh measures. He said “don’t blame me, blame the IMF”. Basically, we are under economic occupation. As a citizen of this country there’s no way to send any message to the people of the IMF. I can’t vote for them, I can’t vote against them. I can either follow their instructions or leave the country. If chaos prevails, we will probably be under physical occupation too. EU regulations say that if a member country can’t guarantee social peace, then a mixed EU force is liable to put this country under control. If you ask me, I don’t mind some money taken away from me, but only under the condition that we will set up a really just society. What I can’t stand is to see for the rest of my life all these people who brought us here being free to live among us. People say we should send them to jail, some say kill them on national betrayal. I don’t want them to be put to jail, I’m against the institution of jail. I want the state to confiscate their property and send them to exile. I want them to have to go to another country and earvn their living. If this could happen, I wouldn’t mind working for 10 years in return for just shelter and food. But right now there’s no self-possesion among the people. Everybody talks about the same stuff all the time, usually they fight. Then they go to the demonstration together and take it all out on the cops. Last Wednesday, 3 people were suffocated to death when a few demonstrators set a bank building on fire. The next day, the cops got unreasonably violent against some peaceful demonstrators. There could have been more people dead, as stun grenades and tear gas canisters were thrown in the middle of the squeezed crowd and people almost got stepped over by others. Greece looks like a part of land where suddenly 12 million people are trapped in it and they have to find a way to set up a community from scratch. And each one of them has something different in mind, each one gwith their own definition of “victory”. A real-life Survivor reality show. Let the 3 people who died rest in peace and let’s all of us who go to these continuing demonstrations try to do whatever possible so that no other life gets in danger, at least as long as our own lives are not in danger too. | Εδώ η ιστορία της ελληνικής ΔΝΤ-περιόδου γράφεται από τους ηττημένους. Σε πραγματικό χρόνο. Ακολουθήστε στο twitter: @deltanutau __________________________ Α real-time record of the IMF-era of Greece . Αρχείο / ArchivesOctober 2012
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