Blackmailing Bankers Now Stage A Coup In Greece

Strangulated Greece now experiences a coup by blackmailing bankers. It’s a show of bankers’ democracy, a worst form of democracy in the Age of Crises. It’s an invasion by bankers.

Honorable bankers have imposed their demands on the people in Greece. It’s their reciprocal democratic measure to the Greek people’s practice with democracy. They love to humiliate people, they love to wreck countries, they love to pauperize people. These acts make them rich and powerful.

The conditions imposed on Greece are already public. It’s a regime of measures aimed at punishing the Greek people, hurting their honor. The bankers are laughing with the pride of powerful: We can do whatever we want.

Casting away all veils of shame and hypocrisy they demanded Greek public property worth billions of dollars to be placed outside of Greece. There was a suggestion that $56 billion (about 50 billion euros) of Greek public assets be placed in an independent trust based in Luxembourg, which would be out of reach of Greek politicians, the proceeds of which from privatizations would go directly to pay off debts. An appropriate bankers’ proposal! The arrogant bankers don’t bother the way their demand actually takes shape: A robbery. Alexis Tsipras, the Greek prime minister, has said: We averted the transfer of public property abroad, we averted the plan to cause a credit crunch and the collapse of the financial system.”

The 17-hour Brussels-bargaining shows very significant parts of a part of the world capitalism and a few facts:

1. Division within the bankers’ camp.
2. Weakness and vulnerabilities within the camp.
3. Vulnerability of the eurozone project.
4. The bankers’ brutal character.
5. The bankers’ intolerance with people’s verdict.
6. Democracy is not universal. There are bankers’ democracy and people’s democracy. Bankers’ democracy is dictatorial in case of people. Bankers’ democracy now dictates the legislative assembly of Greece. A flagrant violation. But the bourgeois democratic world doesn’t find there any trampling of democracy.
7. Limit of bourgeois democracy is narrowing down in the Age of Crisis.
8. Sovereignty of countries is defined and demarcated by bankers. Sovereign power of legislative assembly? Bankers don’t bother with it. They need money.
9. There are limit to powers of bankers. They can’t demolish all resistances. They can’t stand slightest resistance. Resistance with a politically aware, organized people under the guidance of a matured leadership and with united front is invincible.
10. Its geopolitical aspect is very significant.

The bankers had to make compromise. It was difficult for them to reach a compromise. They also had to cede a space: A 95 billion dollars (86 billion euros) aid to Greece in the next three years to keep the eurozone intact, to keep Greece within the eurozone.

The hashtag #ThisIsACoup, says an AFP report, is now trending widely among users of internet in Greece, France, Germany and Britain. They claim: “Greece was effectively being stripped of fiscal sovereignty.”

According to the AFP report KostasKainakis, a marketing lecturer in Athens comments: “Germany is destroying Europe once again”. From Britain, AllanSkerratt, a non-partisan retired soldier and ex-teacher opines: “The Germans could not do it with tanks so now they try it with banks [and are] trying to STEAL Greek assets BrITS MUST vote to get out”. Barbara Lochbihler, a member of the European Parliament for Germany’s Greens party, tweets: “They talk about trust. Only to draft a proposal that is pure humiliation. Brilliant idea.” Paul Krugman, the Nobel-winning economist, writes: “The trending hashtag #ThisIsACoup is exactly right. This goes beyond harsh into pure vindictiveness, complete destruction of national sovereignty, and no hope of relief.” “It is, presumably, meant to be an offer Greece can’t accept; but even so, it’s a grotesque betrayal of everything the European project was supposed to stand for.”

It was a bitter struggle in Brussels. There were extreme conservative forces bent on humiliating and punishing Greece for the weak economy’s stand with dignity. Tsipras said: “We found ourselves before difficult decisions, tough dilemmas. We took the responsibility of the decision in order to avert the implementation of the more extreme aims of conservative circles in the European Union.” Nikos Filis, the parliamentary spokesman for the Syriza, said on ANT1 TV Monday: Greece is being “waterboarded” by eurozone leaders. He accused Germany of “tearing Europe apart” for the third time in the past century. The observation tells the weakness within the eurozone. It’s not the German strength; it’s the strength of bankers as they fear their weakness that they like to hide with their show of strength.

A part of the Greek people’s struggle has come to a point. The episode – fight the bankers’ blackmailing and coup – is political. Its financial and economic aspects will appear in a meaningful way if its political aspect is not missed. It’s bankers’ politics. It’s bankers reign. The bankers’ politics is to be faced with people’s politics. People’s solidarity movement in countries should be widened. Bankers reign should be exposed. The most valuable lesson of the incident is political, the question of democracy. The relation between democracy and economy, and control on economy and politics are to be highlighted among the citizens.

It was a steadfast fight waged by the people in Greece although a part of mainstream media is propagating the deal as capitulation. But they deny admitting that the extreme conservative forces within the EU failed to move with their design: Grexit. They know their weak spot. Next time, the people will stand again with the lessons learned. There is possibility that the awakening will be in countries in Europe. Spain is already experiencing the trend.

Greece Faces French-German Pressure And Mounting Human Crisis

Casting away all confusion related to “socialist” stance the French and German bankers’ interests unite to press down Greece while the Greek people face human crisis.

Echoing the German chancellor Angela Merkel’s voice the French president “socialist” François Hollande has told the Greek prime minister Antonis Samaras, in a meeting in Paris, to wait for an EU-IMF-ECB troika inspectors’ report on progress Athens has so far made in privatizing public resources, changing labor market and imposing austerity measures. “There’s no time to lose, […] and the sooner the better,” Hollande said. He offered no concessions to the Greek leader.

Only a few weeks ago Evangelos Venizelos, the leader of Greece’s socialist party Pasok, pinned hopes on the election of Hollande as the best guarantor of the growth policies. In an interview with the Guardian, Venizelos said: Hollande is “by far the best solution.”

But now, with Hollande’s backing Merkel has rejected pleas from the debt-pressed Greek leader for a two-year repayment extension. She said: Germany would await “reliable evidence”, a reference to the Troika report.

Germany is the single largest contributor to two Greek bailout packages. Earlier, Merkel and Hollande met in Berlin and agreed to take a uniform approach: No extra time to Athens, and Athens has to meet commitments of privatization-belt tightening measures in return for the bailout money.

Samaras’ meetings with the French and German leaders have failed to bring anything for Greece but renewed pressure and humiliation. He promised voters that he would request extra time to make additional cuts.

Samaras had to face mocking, humiliation indeed, by a section of the German press. Bild, one of Germany’s most popular tabloid newspapers, interviewed Samaras and asked him to sign a letter of guarantee that Greece will pay back its international loans. It included provisions that he “vows personally” to ensure repayment. The letter mentioned that financial aid provided to Greece will not cause trouble to German tax payers, and Athens will take any necessary measure to exit from the crisis including sales of uninhabited islands if needed. On the question of returning to drachma, the Greek prime minister had to swear in the name of god: “For God’s sake, no. The consequences would be catastrophic for Greece.” It was not a dignified show for a prime minister of a country. But bankers’ power tolerates dignity of none but its. Bild has already published articles mocking Greek politicians, football players and singers.

Leading German politicians, sections of German finance-political elites are not willing to grant more time and money to Greece in its fifth straight year of recession. Parts of the German mainstream media reflect the interest. The German finance minister Wolfgang Schäuble also rejected Samaras’ plea for extra time.

The Troika bosses are due to reach Athens within days to assess Athenian efforts to appease the creditors, virtual owners of Greek life, honor and sovereignty. The bosses will report to the Eurozone finance ministers’ Oct. 8 meeting and the ministers will decide whether to release a $38.8 bn installment, the last in a first series of $152 bn in bailout loans while a second for $173 bn is in limbo until Athens imposes more austerity.

Uncertain Greek economy is annoying many others. Possibility of a Greek default is making the US president Barak Obama anxious as the default could negatively affect his re-election result. Obama and the British prime minister David Cameron discussed the Eurozone crisis during a conference call on Aug. 22. Citing British sources The Independent said: “The Obama Administration is fearful of the fall-out on the US economy if Greece tanks and the ripples affect the Eurozone and world markets.” Obama is “reportedly squeezing European leaders not to do anything that could force Greece out of the Eurozone before the American elections in November.”

Capitalism is really delicate! A far-flung smaller economy can impact politics of a bigger economy.

Continued pressure to slash $14.16 bn and accelerate privatization process is being faced by the unstable conservative-Socialist coalition government in Greece.

To meet the demands of its international creditors, the Greece government, promise-bound to the lenders, have slashed pay, trimmed pension and increased taxes on everything, which have worsened recession in Greece. The draconian measures accompany bailout money loaned to Greece. Without this loaned money Athens would not have enough funds to pay salaries and pensions. Athens has already stopped paying its bills. Recapitalization of Greece’s four largest banks will not be completed until the end of the year, or in early 2013.

State of the German economy is playing a role behind the inflexible German position of bankers and politicians. Concerns about the German economy’s future are increasing. The German Federal Statistical Office recently informed a surplus of $10.4 bn for the first half of the year, which is 0.6% of GDP. In 2011, Germany had a budget deficit of 0.5%. The German labor market remained strong and revenues from wage and income tax increased by 6.3%.

However, economic growth of Germany is largely stagnant. According to the FSO, the German economy grew by 0.5% in the first three months of the year against just 0.3% in the second quarter. Amidst high state and municipal budget deficits the euro crisis has affected Germany’s exports. “Faith in German state finances are an important factor for stability in the current crisis, but that faith is not unshakable”, the Bundesbank, Germany’s central bank, said in its monthly report released in August.

On the other pole, with declining wages, condition of the Greek people has turned unbearable. The face of a human crisis in Greece is coming to public view.

Archbishop Ieronymos, the head of the Greek Orthodox Church, has described austerity measures demanded by creditors as “lethal medicine”. In a letter to the prime minister, Ieronymos wrote: “Homelessness and even hunger – phenomena seen during the war – have reached nightmare levels [....] We must all understand the feeling of insecurity, desperation and depression in every Greek home. This, unfortunately, is continuing to lead to suicide among those who can no longer stand the drama in their family and the suffering of their children.”

A recent central bank of Ireland study has found that the Greeks are making deeper cuts, measured according to GDP, than all other crisis-hit Eurozone countries. Since 2010, Greece has responded to pressure from the IMF-EU by cutting down expenditures and increasing taxes worth the equivalent of 20% of GDP that represents the most brutal austerity program in the EU-history.

“Greece is bleeding”, a Bild headline said. Ta Nea newspaper describes the Greek society as a “society on the verge of a nervous breakdown.” The living condition the creditors created for the Greek people is making deep changes in the Greek society.

In the last three years, quality of life in Greece has fallen down by 30% while pensioners have lost one-fifth of their monthly benefits. Charity funds are being organized in the US and Australia to aid the poor in Greece. With these funds, food is being supplied to scores of Greek homes.

Citing a recent survey by Thessalonica University BBC reported 76% of Greeks would like to emigrate, but for those who cannot afford to start a new life abroad, going back to farming the land is an increasingly attractive alternative. (“ Greeks go back to basics as recession bites”, Aug. 20, 2012) In the face of financial crisis Albanian immigrants, in thousands, seem to be leaving Greece. Their destination is Australia.

Capitalism is a depopulating force. It deports populace. It makes people restless. Its old practice is still being upheld.

In 2011, the BBC report said, the Greek economy shrank by 7% and 2012 could make a similar slide busting thousands of businesses and lying off tens of thousands of people. Around 1,000 Greeks a day are losing their jobs and already the percentage of the population not working is higher than the employed. The present unemployment benefit in Greece is now around $431 a month for only one year, but only those who have up-to-date national insurance contributions are eligible.

Hardship imposed on the Greek people is getting reflected in the number of suicides.

From Athens, Barbara Hardinghaus and Julia Amalia Heyer wrote: “Greece, a country whose Orthodox Church does not condone suicide, has always had one of the lowest suicide rates in Europe. But now, there were 350 suicide attempts and 50 deaths in Athens in June alone. Most of the suicides were among members of the middle class and, in many cases, the act itself was carried out in public […]” (“Troubled Times Wave of Suicides Shocks Greece”, Aug. 15, 2012)

Referring to rising suicide rate in Greece, Wall Street Journal wrote: “The social impact of the economic crisis has become increasingly apparent on the streets of Athens and other cities, while suicide rates have jumped.” (“Greek pensioner commits suicide in central Athens”)

Citing police data WSJ said: “[T]he number of suicides in both 2010 and 2011 surpassed 600 each year, a 20% jump over the rate in 2009, the year before the start of the Greek debt crisis.”

“Painful austerity measures and a seemingly endless economic drama”, the Guardian wrote in late 2011, “is exacting a deadly toll on the [Greek] nation. Statistics released by the Greek ministry of health show a 40 percent rise in those taking their own lives between January and May [2011] compared to the same period in 2010,” This surge in suicides was the highest in Europe during that time period.

The Greek Orthodox Church, it was reported, denies church burials to people who have committed suicide.

There are reports of school students unable to afford food. A program has been initiated in February to distribute early-morning snacks to them in a school. A municipality has documented about 1.9% of all students in the municipality arrive at school without having breakfast. This figure is higher among primary school and middle school students, 2.8% and 2.16% respectively. The education ministry has to introduce similar program in 18 state schools in greater Athens. The program has been introduced following reports by teaching unions that children of unemployed parents were showing signs of malnutrition and are even fainting in class rooms.

Reports of primary school students fainting during classes due to starvation in downtown Athens surfaced in 2011. Primary school teachers union from the districts of Ampelokipi-Erythros-Polygonon in a statement depicted horrifying condition of students. Dimitris Margiolis, a teacher, confirmed that students came to school with torn shoes. In school canteens the number of students buying snacks has decreased.

“The incidence of HIV/Aids among intravenous drug users in central Athens”, citing Reveka Papadopoulos, the head of Médecins sans Frontières Greece the Guardian reported, “soared by 1,250% in the first 10 months of 2011 compared with the same period the previous year […] while malaria is becoming endemic in the south for the first time since the rule of the colonels.” The extraordinary increase in HIV/Aids among drug users is due largely to the suspension or cancellation of free needle exchange programs. (“Greece on the breadline: HIV and malaria make a comeback”, March 16, 2012)

Reveka informed: Following savage cuts to the national health service budget including heavy job losses and a 40% reduction in funding for hospitals, Greek social services were “under very severe strain […]” There was a 24% increase in demand for hospital services “largely because people could simply no longer afford private healthcare. The entire system is deteriorating.” Cases of transmission between mother and child surfaced for the first time in Greece, a phenomenon usually found in sub-Saharan Africa, not Europe. There is also a sharp increase in cases of tuberculosis among the immigrants. Nile fever caused 35 deaths in 2010.

Capitalism is really powerful. It can push down a capitalist society in Europe to the level of a continent ruthlessly exploited and kept dispossessed for centuries by colonial powers! Capitalism also carries a backward force.

Mark Lowen of BBC reported from Athens: Hundreds of citizens queuing in front of municipal soup kitchen is not an unusual sight today. The number of food-seekers has increased. Homelessness has increased by an estimated 25% since 2009. There is the “new homeless” – well-dressed and well-educated. Until 2011 the “new homeless” had a good flat or a nice car, but now they have nothing. Some homeless people lie buried behind subway tunnels and in parks. (“Meeting the ‘new homeless’ on Greece’s freezing streets”, Feb. 4, 2012)

Mark quotes Vicky Kolozi, a former journalist with the state broadcaster ERT, and one of the new regulars at the soup kitchen as Vicky lost her job a year ago and now can’t afford to feed herself and her daughter: “It is hard to feel that I have to depend on this now. I have dreams and when you come here, the dreams go out of yourself. You must accept reality - and the reality is very difficult.”

Capitalism snatches away dreams of ordinary people.

The BBC Aug. 20, 2012 report refers to a young Greek working as a cleaner, but making barely enough to feed his family: father, mother and his fiancé – all unemployed and depend on food handouts to supplement the little they manage to grow in their garden. He and his finance are unable to plan a future together. Starting a family is completely out of the question. (“Greeks go back to basics as recession bites”)

Capitalism takes away future of common people.

The last winter with freezing temperatures was brutal for the poor in Greece as snow blanketed almost all around. An intense, harsh cold intensified the human crisis “gifted” by the finankers, financers and bankers, speculasters, and their ruling system – capitalism. Today’s Greece is a live example of capitalism’s catastrophic power – connected through ideology, economy and politics – that creates havoc in civilization.

Bankers Fiddle While Athens Burns

Athens was in flames. But, stock markets felt relieved. The Greek bank-friendly elites denied to recognize people’s plight and “honorably” embraced humiliating conditions to honor debt.

People in Greece are in anger and anguish. Within 10 hours, about half a hundred buildings were set ablaze in the Greek capital, an act of desperation that germinates as public space is encroached by banks, as democracy in a society is dictated and distorted by global finance capital, and people lose breathing space. Broader section of people was protesting peacefully and violent scenes raged the capital while the Greek parliament was passing a bank-dictated austerity plan to make banks happy. The fact got exposed: bankers pushing for austerity, market welcoming austerity, people standing against austerity, and, bankers standing against people. And, austerity is, in actual sense, pressing down labor, robbing labor.

As the Greek parliament passed the austerity measures demanded by its lenders stock markets rallied. In Athens, shares in Greek banks leaped by 10%. The FTSE 100 went high, Germany’s Dax climbed, in New York, the Dow Jones Industrial Average rose up, the French Cac was up, the Italian MIB bought a higher position, and the euro took upward journey before taking a shallow dip. In the secondary bond markets, 10-year securities issued by Italy, Belgium, Portugal and Spain felt strong. In London, Lloyds Banking Group led the upward jump. The creditors felt assured that their debtor, Greece, is an obedient honorable soul that stands by promise. The Greek government will express their irreversible written assurance within days to avoid bankruptcy. A high moral standing in creditor-debtor relationship where creditor has all the rights to rob and dictate debtor!

The EU welcomed the Athenian parliamentary practice as EC Commissioner for Economic and Financial Affairs Olli Rehn called the vote a show of Greece’s determination to address its finances. And, he condemned the violence. However, the disciplined Greek MPs’ yeah votes were not enough to make bank bosses fully happy. It failed to ensure delivery of second rescue package to Greece. A banker, according to Bloomberg TV, reminded Greece to maintain its credibility with its international partners. It was an exercise with democracy: financiers telling people’s representatives what to table and how to vote!

But that democratic practice was not enough. Athens have to initiate “Additional measures” – more cuts worth 325m euro. Germany has warned: The vote is not enough to guarantee that Greece receives its bailout money. The Bundestag, the German parliament, will take the final decision on Greece. A report on Greece from the Troika – the IMF, EU, ECB – must reach the Bundestag before it decides whether to approve the bailout fund. Moreover, the euro group finance ministers will observe Greece’s compliance with the terms, and there should be conclusive understanding with private creditors over debt restructuring. Legislature of a country supervises legislative doings and wrong doings of another country! It is financiers’ global capital-sovereign practice.

To rationalize passing of the austerity bill, the Greek prime minister Papademos warned that banks would collapse and schools and hospitals would be left without funds unless the bill passed. He straightened fact partially while a partial fact was ignored. Without the austerity measures finance capital would feel uneasy. But Greek schools and hospitals, as main stream media report regularly, are passing through problems for long.

Financial problems, in usual manner, crept into Greek politics. With appointment of unelected ministers under the premiership of unelected Papademos, a banker turned academic turned politician, in the reshuffled cabinet the Athenian bankruptcy-bail out comedy has generated a neo-democratic model in Greece. Parliament members standing against the austerity bill have been expelled. Earlier, before tabling the bill, MPs were warned of not to oppose the austerity bill. The next crisis, as conservative New Democracy party head Samaras told parliament, is likely to come with the coming election within months. He likes to renegotiate the agreements with the troika following the elections. His signing of the pledge to bankers is uncertain although he voted for the bill. Vassilis Korkidis, the head of the National Confederation of Greek Commerce, said in a statement: The country’s political system is failing.

Along with democracy-drama in Greece two interviews carried by German press revealed interesting observations by powerful actors on the world stage. George Soros in an interview has criticized German chancellor Merkel for “leading Europe in the wrong direction”. He warned of another great depression unless funds are not pumped now instead of cutting spending. He was frank. Profit margins will be under pressure, he said. Soros admitted: Markets do not correct their own excesses. He told point blank: Germany was among the first countries to break the euro-zone rules. The Germans were not exactly innocent. Everybody broke the Stability Pact rules. Germany has mishandled the rescue operation by providing the bailout at penal interest rates, which then led to an increase in the indebtedness of Greece. It is only a policy failure on the part of Europe and particularly of Germany, because Germany is in charge. That is why today Greece is beyond rescue. Soros added: People like German finance minister Schäuble don’t seem to understand that the heavily indebted countries are now at a severe disadvantage, because they have basically become heavily indebted in a foreign currency, the euro. Soros tried to identify the root: The euro crisis is a direct continuation or consequence of the 2008 crash. This crisis isn’t over yet and we will have to spend more state money in order to stop the skidding. Otherwise we will repeat the mistakes that plunged America into the Great Depression in 1929. Angela Merkel simply doesn’t understand that. He told in a simple voice: I am concerned about my own interests. Nevertheless, I think that I perhaps understand the financial system better than some of the people who are in charge. In the interview conducted by Georg Mascolo, Gregor Peter Schmitz and Martin Hesse Soros expressed his ambitious intention: I am trying to change [Angela Merkel’s] mind.

More talks are there. Guido Westerwelle, the German foreign minister, in an interview said: Germany occasionally shows a tendency to boast. He was concerned with the attitude. Westerwelle wants a European Germany. He said: We should not believe that we will always be the strong man of Europe. Westerwelle expressed his dissatisfaction with the political impasse in Greece in recent weeks. The German minister told: Greece’s future is in the hands of the Greeks. However he advised the Greeks: [The Greeks] have to demonstrate that they are serious. It isn’t enough to adopt reform programs. Instead, [those] have to be implemented without delay – not at some point in the future, but now. In the interview conducted by Konstantin von Hammerstein and Ralf Neukirch the German minister reminded Greece in a stern voice: There will be no more advance payments. Only actions count now.

Greece, its elites, has to discipline itself, in the manner bank capital likes. But, there is another voice, the voice of the people. Graffiti on Athens walls said: “No IMF-no new [austerity] measures”, “No more IMF! Stop the intervention in Greek sovereignty. If you don’t give democracy a chance, you should expect US!”, “Bosses are killers of the people”. This voice will complicate finance capital’s democratic politics in Greece.

Europe’s Lost Decade!

It is Europe, neither Italy nor Greece, that is now having a tragic appearance. The “attributes” of tragedy are now in Europe’s economy, politics, institutions, diplomacy, and “democratic” practice, in essence, autocracy of bank capital. Finance and political leaders’ HardTalks are revealing the bitter fact, a fact that bares the heart and brain of capitalism.

The world is going to have a lost decade. The IMF chief has made the warning on November 8. George Soros warned a few days back: Europe may experience a lost decade.

Japan’s and Latin America’s lost decades are old stories. Of Africa? Of the poor? Who knows? Probably, it is lost centuries.

Christine Lagarde, the IMF chief said: “The world runs the risk of a downward spiral of uncertainty.” She has warned that the global economy is at risk of being plunged into a “lost decade”.

Amid fear of the escalating euro zone debt crisis making impact on the world economy the IMF chief said: The crisis has resulted in an uncertain outlook for the global economy. “We could run the risk of what some commentators are already calling the lost decade,” she added.

She forecasts: “There are clearly clouds on the […] horizon, particularly in the advanced economies and particularly so in the European Union and the US.”

Only a few days ago, George Soros, the billionaire financier, warned the EU faces an economic “lost decade”, or more. Citing a combination of a bank crisis and a sovereign debt crisis he expressed fear: “Europe is in […] a very serious crisis.” The crisis, he apprehends, “is a political crisis. The euro is in the process of undermining the political cohesion of the European Union.” “This will lead to a long-term economic depression. When you look at similar situations [like Latin America in the early 80s and Japan slightly later] you had a lost decade... I am afraid that this is the outlook for Europe this is the unfortunate reality”, he concluded.

European Commission President Jose Manuel Barroso has warned: The EU was in its “deepest ever crisis”. In an interview with the German daily Süddeutsche Zeitung Barroso said that national governments can’t be trusted to take determined action. Setting rules for a stable euro zone could not only be left to the member states. He has suggested: the EU’s institutions need to be strengthened to stabilize the euro zone. He called for more power for the EU's institutions, arguing that it was an “illusion” to think that the euro zone’s economic policy could be coordinated just by the European Council.

Alistair Darling, the former UK chancellor, has said: The economic crisis facing Europe has become far worse than the banking crisis of 2008 and will see the break-up of the euro if it is not resolved by Christmas. “In 2008 we were facing a banking crisis. Now we are facing an economic crisis, and if it gets worse it will turn into a banking crisis that will worsen the crisis”, he said.

He told the Guardian: The G20 summit in Cannes was “a disaster”. The G20 leaders “appeared to gather on a wet Friday, appear mesmerized by Greece and then were away by 3.30, as soon as they possibly could get out of the place. Sometimes it is better to have no summit than a failed summit”.

Angela Merkel, the German Chancellor, said in her weekly podcast: It would take a decade before the euro zone is in a better position.

Joseph Stiglitz suspects that “we’re going to see a lot of volatility. Whether at the end the euro zone will emerge intact or not, it’s hard at this point to say.” “It all depends on the politics. […T]he political process in some ways is not in tune with the economics. The problems are deep.
I think there is a reasonably good chance that a year from now you would find the euro zone smaller than what it is today”, he added. (“Austerity not the way to go for Europe”)

The macro-scene is grim. Europe’s slow down will bring down exports from the US. Similar fate looms over Asia. The US and the euro zone are the biggest markets for Asian goods. Suffering economies of the US and Europe are slowing down demand for Asian goods. China has already begun experiencing this. A slowdown of Asia’s export oriented economies will have greater negative impact on the global economy.

Not only Asia’s export oriented economies, a few of Europe’s economies are also experiencing the chill. Economists and the Danske Bank are warning that Denmark may be on the brink of a new recession as exports are being affected by the slowdown in Denmark’s traditional trading partners. Danske Bank has reduced its growth forecast for this year to 0.7% from its previous forecast in October of 1.1. The 2012 forecast has also been downgraded to 1.0% from 1.6%. Italy’s financial crisis has yet not showed signs of improvement despite Silvio Berlusconi’s pledge to resign once Parliament passes austerity measures. Markets does not know its reactions to Italian political drama.

Many analyses, ideas and suggestions are now floating on the finance-politics stage. There are talks of hyper-deflation, “kick-starting” the economy, turbo-capitalism that dislikes any regulation inhibiting financial markets’ growth, turbo-Keynesianism, turbo-capitalism’s more accommodating twin, etc. Bankers are encroaching sovereign space of states. Democratic practice is being infringed by bank capital. Suggestions for immediately recapitalizing Europe’s banks are there. The mainstream assumption that financial markets are capable of taking care of all their “good” work now stands wrong. That was an imagination without any roots in reality.

The specter of crisis, “financial crisis”, “economic crisis”, “banking crisis”, and other crises – political crisis, interstate crisis”, institutional crisis, crisis in formation of state, crisis in visualization of EU founding fathers – are now haunting the continent overwhelmed with advanced capitalist economies. Euro, according to Soros, is “an incomplete currency: it had a central bank but no central treasury.” (“The European Union’s Catalogue of Failures”, July 18, 2011) European leaders, Stiglitz said, “didn’t do anything in the 10 years before there was a crisis.” (op. cit.) There are now many similar ideas and concepts in the market of mainstream discourse.

But, what are the roots of the crisis? The MSM simply skips the answer. The MSM constantly declines to look at the base of the crises. As the causes creating these crises the MSM finds “leaders’ lack of farsightedness”, “institutional weakness”, “stubbornness or weakness of this leader or that leader”, etc. But does a leader act according to own choice or preference or whim or knack? Can a leader act on own wishes and can an institution play role on the basis of its own wisdom? Where from the wishes and wisdom enter into head or decision making process? On these, and similar other questions, the MSM stands on a void base, an absolute void.

The MSM has to provide answer to the burning questions: why lost decade visits this country and that continent? Why their wisdom and analytical prowess visit them always after a crisis calls in, and why they fail to identify root cause of all the crises?

The MSM is concerned with securing banks, finance, credit-credibility. Why it fails to put people, their suffering before finance, etc.?

Stiglitz finds politics will determine the euro zone’s shape. No, capitals shaping politics will determine euro zone’s shape. Capitals’ contradictions within itself will determine its accommodating/co-opting capacity and power. Its conflicting interests will shape euro zone, euro zone’s institutions, and politics, democracy and sovereignty in countries in the zone.

Because of limitations imposed by interests of capitals involved in the crisis the dominating capitals will stand against people in respective countries, and as a whole in the entire zone, and squeeze their life to squeeze out all the surplus peoples in these countries are capable of generating. This will sharpen contradiction between the peoples and the capitals in the crisis dominated zone influencing politics in the zone. The sharpening contradictions pose a burning question to the peoples in the continent: will the coming days bring only suffering to them or struggle along with suffering? Answer to the question and actions by them will influence politics of bank capital in the zone.

A Drama In Disarray: G20 Summit In Cannes

The G20 summit in Cannes has concluded in disarray and without details in “agreements”. Leaders were unable to agree upon financing the IMF to help advanced capitalist countries in distress. No G20 state is willing to participate in the euro zone bailout fund.

However, one “achievement” is there instead of a total failure: interventions in two democracies – Greece and Italy – appeared close to coup although a G20 leader disagreed. So, all should agree with the leader: These are not coups de grace, but a mere attempt to change government or press government to listen to interventionists for the sake of markets. Italy and Greece have been made to submit to creditors’ dictation.

The Cannes Crisis Festival, considered a flop by some commentators, saw little progress on resolving Europe’s debt crisis. The leaders, as Angela Merkel acknowledged, had failed to interest any of the G20 state in investing in a new initiative. From her statement it appeared that China and Russia bargained a bit. Russia and China demand IMF to secure their investments. A strange symptom within a world structured along a NATO-WB-IMF-WTO design.

But Cannes summit has failed to raise market confidence. Stock markets in New York, Frankfurt and Paris initially expressed their reaction by moving down.

The continuing eurozone debt crisis dominated summit had the hope to increase IMF resources by $250bn to more than $1tn. But the hope has not touched this material world. The hope has been kept suspended for G20 finance ministers with the hope to be materialized in next February.

The summit communiqué made commitment to move “more rapidly” towards greater exchange rate flexibility, agreed to give IMF more money, welcomed Italy’s “wisdom” to invite the IMF to monitor its reforms, and called on countries with strong public finances to take steps to boost domestic demand.

“Dark clouds, Ban Ki-moon warned at an event with main stream labor leaders in Cannes, “have gathered once again over the global economy. […M]any people cannot even see the light at the end of a long, long tunnel.” With a similar mood, David Cameron said the crisis was having a “chilling effect” on his country’s economy. He hinted at worse to come, describing this as only “a stage of the global crisis”. The UK leader felt that in the interest of his country the eurozone crisis should be sorted out as rapidly as possible.

For playing down failure to make progress on major issues Nicolas Sarkozy tried to appear as a warrior for the cause of Robin Hood tax. Sarkozy expressed his willingness to “fight to defend Europe and the euro” as he said in a post-summit press conference.

Sarkozy said: We cannot accept the explosion of the euro, which would mean the explosion of Europe. He has assured that the G20 had agreed to boost the IMF. He made a forecast: G20 would agree by February. The French leader denied the demands on Silvio Berlusconi represented almost an IMF coup: “We never wanted to change governments, either in Greece or in Italy. That is not our role; that is not our idea of democracy.” However, he said that George Papandreou’s decision not to tell fellow EU leaders about plans to hold a referendum was “shocking”. Barack Obama reminded Greek and Italian parliaments to take decisive action. The US leader praised increased scrutiny of Italy as a step in the right direction.

The summit deliberations showed Britain’s inability to take burden. Cameron admitted that the G20 summit had failed to resolve the eurozone debt crisis. He went on: “I’m not going to pretend all of the problems in the eurozone have been fixed, they haven’t.” Cameron feels, “[t]he problem is that not all of the details... have been put in place.” He assured British taxpayers that increasing UK contributions to the IMF would not put their “money at risk”, and the money would not support a eurozone bailout. He revealed a fact: Contributing money to support the IMF was, as a trading nation, “in our interests”. He also suggested that the issue of increasing contribution to the IMF would not be put on a vote in the Commons. It appears that UK capital does not have interest in euro bail out, but in expansion of global business.

The Greek drama annoyed the Cannes festival as Papandreou announced to hold a referendum on austerity package being pushed through Greece’s throat. The political move panicked markets around the world and the G20 leaders. But dominating capital’s dictation made Papandreou step back. He threw away referendum plan to seek people’s mandate on the austerity plan that includes sell-off of public property. The Papandreou government sought confidence in parliament after alleged horse trading and survived a confidence vote.

Italy with its near-nonexistent growth was an amazing player in the Cannes show. Rome now threatens to carry Europe’s debt crisis up to a level that can fall on the entire earth’s capitalist economy, and make it spin listlessly. Italy’s borrowing rates are rising to the levels that forced the PIG to seek bailout “benevolence” in all its crudeness. With a $2.5 trillion debt Italy has agreed to let the IMF monitor its implementation of austerity program.

But, as a Reuter’s story described, the “fierce pressure from financial markets and European peers” was not a humiliation for Berlusconi as he agreed to have the IMF and the EU monitors. It was reported that Berlusconi “was summoned to a late-night hotel meeting with Merkel, Sarkozy, the IMF director general Christine Lagarde and Obama, where he was instructed to bring Italy under […] IMF surveillance to ensure he implements […] measures, including changes to the labor market, […] the sell-off of state assets.” However, Berlusconi tried to minimize the satiric-political impact of the decision, saying that it had been requested by Italy rather than imposed by world leaders. He boasted: He had invited the IMF to offer advice; he had rejected an offer of IMF funds. He claimed that his country was more solid than France or the UK. “Italian restaurants and vacation spots are always full. Nobody has the sense the country is in a crisis”, said the scandal-ridden Italian leader.

The IMF bosses will audit Italy’s books of accounts to make sure the austerity measures are implemented with brute force. An EC team will also supervise. Moreover, the Media Mughal of Italy with a history of not standing by promises had to make a new promise to European leaders in Cannes, the famous film festival place that sees attractive film figures: a confidence motion within 15 days in Roman Senate. These developments achieved by external and Italian finance elites impacted Italian politics. Desertions from coalition government of Berlusconi have made its life uncertain.

Shall there be horse trading in the country’s political market dominated by the rich? Shall the trade be called democratic distribution of patronage by one of the richest men of Italy? All, from Catholic Church to business, want Berlusconi’s exit. But the democratic warrior knows well that Italy is not Libya. This perception has led him to brush aside the desire of powerful interests. He has already found traitors to the country as he described party rebels. Have ghosts of fallen dictators overshadowed the character of Italian comedy in a Roman Holiday? However, there are all the possibilities of Berlusconi’s Mubarak Moment.

The world now is a bit different whatever the Italian leader claims. The IMF bosses do not only dictate the poor in the South. They are now showing muscles in advanced capitalist countries. Now, after Greek Tragedy and Italy Incident, the ruling elites, many of them are pure robbers and plunderers, of IMF-dictated-poor countries should get “rid” of sense of shame. The founding fathers of the Bretton Woods institutions had not imagined that one day in future their institutions designed to subdue the poor world would discipline advanced capitalist countries. Even, Marx had not imagined. Has something rotten down in the core of capitalism? The IMF is disciplining Ireland, Portugal and Greece, “dignified” capitalist countries not “shameless” like the poor countries.

Russia made a major advance in the summit as the country will be allowed into the WTO, “the biggest step in world trade liberalization since China joined a decade ago.” The step will have implication on present major players in the world trade club. China’s increasing power was evident in the summit as the country resisted calls to allow its currency to appreciate. It now appears that these two countries are making their voices heard in the gathering of the powerful and aspiring-powerful.

The disarrayed drama, the unwillingness to fund IMF, the flexing of power reaching close to coup in advanced capitalist countries, the humiliations, etc. raise a few fundamental questions related to capitalist world system that was in euphoria with a brute onslaught named globalization a few years back.

The Opaque Brussels Deal Shows Germany’s Upper Hand

German capital’s bold face and private bankers’ negotiating power are evident in the Brussels deal the euro-leaders have made on October 27. The summit made Italy, the “brave” warrior in Libya, a caricature while the UK, the Empire’s faithful friend, stood on the sideline. The deal now keeps hope on China. There are yet knots to untie, and the task has been kept for future that signals significant changes on the world stage.

The deal, essentially with private bankers, came out after long wrangling as the power game was with the private creditors. The summit had to negotiate with interests of private banks, represented by the Institute of International Finance (IIF). The EU communiqué sets out a 10-point program for an inner EU institution. Policing of euro is preferred by the euro-leaders, and a police baton will be carried by the EU economic and monetary affairs commissioner. Capital needs disciplining. It cannot always free wheel.

Despite vague in detail the deal is not totally empty. It made the French president feel a sense of relief. “If there was no accord […],” Nicolas Sarkozy said, “it’s not just Europe that would face catastrophe, but the whole world.” Now the leaders are keeping hope on investment by China, Russia and Japan.

But the leaders failed to succeed in making a comprehensive package they were trying for. Two of the key elements of the deal are the recapitalization of European banks, and leveraging the EFSF, increasing its potential available capital to about $1.4 trillion. They hope that it will be capable of financing big countries like Spain and Italy.
Cutting down sovereignty of Greece and Italy is one of the achievements of the summit. Bosses will now check all tax and spending decisions, and ensure implementation of austerity plans in Greece. Athens will be virtually controlled by Brussels bureaucrats, as Rome by Berlin.

Private creditors hold about two-third of Greek debt, which is 360bn euro in total. The leaders have banked on voluntary commitment of private banks. They hope that the private creditors will write off Greece’s 50% of debt, and this act of mercy will reduce the mauled country’s debt to 120% of its annual income, down from the present 180%.
A ray of hope is there for the tormented country: additional financial help from the IMF and the EU. This benevolence will enable Greece to pay its bills until 2014.
The Greek tragedy heroes are now going to land on heavily indebted and slowly growing Italian capital’s domain with its diminishing sovereignty. Italy with $2.6 trillion in sovereign debt outstanding, the fourth-largest debt in the world after the US, Japan and Germany, will now be dictated. Rome will be assigned to carry out this job and that task within a time frame. This is the democratic face of global capital that knows no frontier. It’s capital’s bold, but tragic journey.

Italy’s Libya expedition friends, France and Germany, pressured Rome. Italy publicly turned a caricature. Later, Berlusconi assured in an interview that Merkel had apologized to him, but immediately after, in a statement the German government denied the Italian leader’s assertion that made the Italian comedy much more laughable.
Italy has agreed to reduce its debt level over the next three years from a current level of 120% to 113% of GDP. Rome will also increase retirement age from 65 to 67. In August, Berlusconi promised ambitious reforms to get the ECB to buy Italian debt. But he failed to accomplish any of those.

Berlusconi, who, by his count, has survived 577 police interrogations and 2,500 court appearances related to political and saucy scandals, again had to make pledge to the EU, actually to Angela Merkel and Sarkozy. Probably it was not befitting for a powerful player in the NATO’s Libya Conquer play. After all, the Italian prime minister was close ally of the French power in the expedition, and as a genuine NATO warrior he boldly disregarded calls for help from his former friend Gaddafi. The Italian warrior, however, had no other way but to agree to the pressure mounted on him by the two European powers as French banks have the biggest exposure to Italian sovereign debt, more than $500 billion, and Italy is too big to bail out.

After “sweet” encounter with French and German friends, the billionaire prime minister of Italy will have to face Italian labor now. That will not be an easy game not only for Berlusconi, but also for the entire Italian fuel thirsty elite. Italy’s labor unions are angry with the Italian leader’s pledge. The Roman elites have now pledged to their European friends, philosophers and guides – the German and the French – to allow capital to put burden on shoulder of labor, make cutting down of labor easier for capital. Promise has been made to legalize the drive against labor by next May. The sovereign savior of capital has also pledged to sale assets, public assets. The Italian labor will now find no other way but to respond boldly and widely. A number of lawmakers from Berlusconi’s coalition have signed a letter asking him to stand down.

With one of the worst interest rates among eurozone members and sitting at the top of a list of defaulters Italy’s, the world’s eighth-largest economy, debt rating has recently been down graded by Standard & Poor’s and Moody’s. They have warned of more in future.

Europe now seeks help from China as the Brussels Deal expressed its desire. The continent hopes that the emerging giant will contribute to Europe’s Special Purpose Investment Vehicle, one of the two proposed ways of increasing the firepower of the EFSF. But there are unresolved problems.

There is the already-known opposite pulls. Germany will not allow the ECB to provide unlimited funds in case of a domino effect from the Greek write down impacting Italy or Spain. France likes the ECB to provide the ultimate backstop so that investors are assured that no eurozone country would bust. The opposite views have respective deep interests.

The Brussels deal is the German chancellor’s success story. Merkel dreams of revision of the union treaties and imposition of German political discipline on the Greek public sector. Then, shall that be on a wider domain? She is now competing with Sarkozy for dominant position. The Deal made it clear that France has been forced to give up a few of its position it clutched for the last few months. Germany seems got upper hand. It is competition of fragmented capital united in its global expedition.

There are significant questions related to China’s investment in Europe, and Germany’s bold face. Already, the debt crisis has taken character of political problem with roots deep in areas of capital and society.

Cut Down Ratings And The Split In Europe

With confusing creditworthiness two more countries and many banks in Europe have “achieved” downgraded ratings over the last few days. And, there is a split. The Germans and the French have, temporarily, disagreed to agree. For the financial elites, political implication of these pulls and pushes is in the wings. “There is a high risk that this crisis further escalates and broadens,” Wolfgang Schaeuble, the German finance minister warned.

The sovereign debt crisis now burdened with downgraded rating of Italy and Spain, the third and fourth largest economies in the euro zone, needs financial power of the two European giants, Germany and France, to salvage it. But the giants were split on the question of salvage approach. They have unity of aspiration in rescuing interest seeking capital. But they differ on the rescue path. Ultimately, because of their common interests, they have to agree. They will agree on at least one point: press down people, take away labor’s bargaining capacity, appropriate whatever people have.

Belgium, a former colonial plunderer, owns a public sector debt equal to Ireland. The country has been warned of a downgraded rating. France is also at risk of facing the same reality. If it slips down, a larger problem will appear: financial support for the PIG would tumble. Fitch said: market confidence in Italy had been eroded. Fitch’s rating for Italy is now equal to Malta and Slovakia. The south European state with the largest debts in the euro zone, at 1.9 trillion euros – 120% of GDP, seemed is teetering.

But Franco Frattini, the Italian foreign minister, does not care about those ratings, it seems. He trusts market, which is now ravaging people. A confident Frattini said: “markets don’t care much about the role of Fitch, Moody’s and company.” However, the Spanish economy ministry expressed “respect” to the downgrading decision. It seemed, the political representatives of the financial elites are confused with their tools, domain and approach. A confused mind of “confident” capital!

Moody’s has downgraded credit rating of 12 UK financial firms: Lloyds TSB, a division of part-nationalized Lloyds Banking Group, government-controlled RBS, Nationwide Building Society, Co-operative Bank, Santander UK, and the building societies of Newcastle, Norwich & Peterborough, Nottingham, Principality, Skipton, West Bromwich and Yorkshire. Nine Portuguese banks have experienced the same. Simultaneously, French banks are over-exposed to peripheral euro zone debt.

However, the UK chancellor George Osborne is confident in the viability of his country’s banks. He said: “I’m confident that British banks are well capitalized, they are liquid, they are not experiencing the kind of problems that some of the banks in the eurozone are experiencing at the moment.” During an interview with Radio 4, Osborne expressed his agreement with the governor of the Bank of England, who said on October 6 that the world was facing its biggest ever financial crisis. Osborne said: “Not only have we faced the biggest banking crisis of my lifetime and your lifetime, the deepest recession since the Second World War, but also Britain was at the epicenter of it.” (guardian.co.uk, Oct. 7, 2011)

But the British leader, it seems, considers that the mighty British financial firms are immune to capitalist disease as he expressed during the interview. Probably, he has forgotten that poor Greece is putting pressure on the rich French and the Germans, and there is capital’s globalization, which has made immunity impossible for the big capitals. A Greek default would create catastrophic consequences for the European and global economy. It will be impossible for the British finance capital to escape that consequence.

Banks and financial firms, cruel characters appearing comical at current time, are one of the stakes of the entire system. Capital cannot dream to let these drown. The European banks, as the IMF estimates, need up to 200 billion euros. Paris wants to use the EFSF, the euro rescue fund, to recapitalize its own stake. Berlin prefers to use the fund as a last resort. Market appears as the first choice to the Germans. But, market is not behaving in a way that can be perceived by capital rational.

Greece has also made impact on the Belgian-Franco municipal lender Dexia, which is facing the threat of becoming the first major European institution to fall victim to the eurozone debt crisis. France and Belgium are arguing over respective taxpayers’ share to salvage it. The two countries plan to break up Dexia and provide state guarantees to cover a “bad bank” of assets. To provide state guarantee, they have to use public money, the old, easy escape route, which is virtually stealing public money.

Greece standing on the brink of bankruptcy has created a buoyant investment market, for which capital was counting days. Germany having high stake in Greece is now trying to grab a bigger part of the country by taking the role of advisor there. Already, the German government has voted in favor of a European bailout fund to aid Greece. Germany now has offered its civil servants and banking experts to Greece with the task of showing salvation path: cut down red tape, set up a new state bank, formulate laws, attract private investment, design project finance, etc. The German consultants will bring salvation!

Crisis brings new opportunity. Germany is looking for investment opportunities in Greece. The German economy minister has made a deal during his Athens visit. He brought with him German industry representatives seeking business in Greece, whose ruling elites have put important chunks of public property on sale. A scramble for Greece will not be surprising. It will be a competition that capitalizes bankruptcy. Labor with a huge reserve army there is hard pressed that puts capital in a better bargaining position.

Greece is at a crossroads and will need to implement “much stricter structural reforms” to avoid default, IMF mission chief to Greece was cited as saying by a German newspaper on October 8. It’s an old, global prescription the bosses prescribe. A “much stricter structural reforms” will press the Greek people much strictly, and that is more dispossessions, more hardship, snatching away of bargaining capacity of labor.

Capitals still are trying to act jointly, especially as they face stronger competitors. The heads of the French, German and Italian employers’ lobbies on October 8 called for stronger European economic and political union. They suggested EU’s only “determined” action. “A diverse Europe, composed of many countries, will only be in a position to maintain its economic position and retain its role of political decision-maker in this changing world if it progresses relentlessly toward a political union,” the heads of France’s MEDEF, Germany’s BDI and Italy’s Cofindustria said in a joint letter. They like to follow this path “to confront the United States, China and emerging economies”, as they said. The business leaders are aspiring to build bridge of unity on a foundation split by competition at its core.

But for capitals, still there is no way out from crisis. “There should be no confusion about what is happening. These are desperate remedies for increasingly desperate problems. […] These shifts may be too little and too late – and millions may still pay the price of that”, said an editorial of guardian.co.uk (Oct. 7, 2011)

The people in the UK, as people of other countries, are paying the price. Citing PricewaterhouseCoopers guardian.co.uk informs: British workers going to retire with private pensions will be facing harder days as their pension incomes are substantially less than three years back. Overall pension incomes are now 30% lower than they were three years ago. (Oct. 8, 2011) These facts provided by the main stream cannot be ignored by capital. And, capital cannot ignore the reaction these acts, appropriation at social level, will produce.

Europe And Economy: Looming Dark Clouds

Dark clouds loom over Europe and the US and the time to tackle the problem is short. None but the International Monetary Fund and the UK chancellor make the warning. As desperate capital continues to press people with intolerable burdens Europe, broadly, is now a continent of protests, demonstrations, strikes, and possible political upheavals.

As the UK chancellor George Osborne warned that the time was running out, only “six weeks”, to end the eurozone debt crisis, and the world’s share markets experienced another volatile week, Christine Lagarde, the IMF chief warned: “There are dark clouds over Europe and there is huge uncertainty in the US. And with that we could risk a collapse in global demand.” Lagarde advised countries to collectively “act now”. “We are linked by a common destiny.” She assumes that the “turbulent times” is the bond of unity. She was speaking at the IMF-World Bank annual meeting in Washington. She assures that “there is a path” to recovery, but the path has narrowed down “than it was three years ago”.

But capital is failing to unite. There are voices in Europe to force out of eurozone some countries including Greece. There are also talks of abandoning the zone. Signs of fracture in the bond of capitals’ “unity” should not astonish onlookers.

World Bank President Robert Zoellick’s “confidence is being eroded daily by the steady drip of difficult economic news”, although he “still thinks a double-dip recession for the world’s major economies is unlikely.” He was addressing policy makers at Washington. Zoellick warned: Europe, Japan and the US must immediately tackle their financial problems before it becomes a world crisis. “A crisis made in the developed world could become a crisis for developing countries.”

The IMF said days ago that the global financial system is more vulnerable now since the 2008 financial crisis. “Risks are elevated, and time is running out to tackle vulnerabilities that threaten the global financial system and the ongoing economic recovery,” the IMF said.

In the Slowing growth, rising risks report, the IMF mentioned the urgently need to halt the deepening crisis in the single currency area. The euro zone is expected to have a slower growth in 2011 and 2012 while the emerging markets are expected to attain a much more rapid growth this year: 6.4%. But there is dramatic increase of financial stability risks, the report said. It mentioned geopolitical tensions and vulnerabilities in emerging markets as among others factors that pose threats to global growth. Capitals, one should not forget, cannot operate without creating tensions in geopolitics and making economies vulnerable.

News from the center and near-enter of the globe was not encouraging: the US Federal Reserve’s warning that the US economy is facing significant risks slumped world shares, Moody downgraded eight Greek banks’ rating, rumors circled that Greece was contemplating defaulting on its debts, the G-20’s commitment “to take all necessary actions to preserve the stability of banking systems and financial markets” by November failed to impress investors. Markets declined to listen to leaders, loyal believers of market. The debt crisis in Europe is haunting the market leaders. World markets on September 22 made their deepest dip in more than a month. Fears of a double-dip recession have come back.

The European Commission apprehends “a virtual standstill” in economic growth in the eurozone in the second half of 2011. Jose Manuel Barroso, the European Commission president, warned in August that the sovereign debt crisis was spreading beyond the periphery of the eurozone.

The euro, since officially coming into existence in 1999, is in crisis. With an accumulated public debt reaching 100% of GDP on average in the OECD countries, uncontrollable fiscal deficits, and unemployment, all creations of ruling elites, a permanent bailout fund with about 500bn euros, the European Stability Mechanism, now stands guard against failures. But powerful crisis is declining to surrender. Rather, anguish is brewing up even within establishment. Greece with its debts of 300bn euros, 113% of GDP, the highest in modern history, is feeling that it has been, as the Greek finance minister complained, “blackmailed and humiliated” and made a “scapegoat” for the EU’s incompetence.

Debt rating downgrading of European countries now sounds old news. Italy is the latest one, from A+ to A by the Standard and Poor’s. There are accusations of “political considerations” in grading the rating as Italy has voiced. Now, it is not only the poor PIGS that are feeling the fang of capital. Strong economies including Germany are staring at the horizon of crisis.

Without the continued payments, Greece is set to run out of cash by mid-October. Its debt rating has been cut down seven times since 2009, from A to CC. In last May, Portugal became the third eurozone country to receive a huge EU/IMF bailout - 78bn euros. Its rating has been cut down four times since 2009. With 21% unemployment, the highest rate in the EU, Spain is feeling the grinding weight of freewheeling capital. As its growth has slowed Germany plans to cut the budget deficit by record 80bn euros by 2014. “Poor” Greek capital, considered a junk, is seems planning to pull down the mighty German economy. France plans to cut spending. Romance with Greek banks has created a threat to the French bankers busy to don Napoleon’s coat in Africa. The UK, a proud partner of the Empire, now owns the biggest cuts in state spending since World War II. Eurozone cannot bail out the trans-Mediterranean warrior, Italy, with the highest total debt in the eurozone and stagnant growth. With a collapsed banking system and rating cut down five times since 2009 the Irish Republic is standing as a threat to the British banks. Small Cyprus has not been spared by the powerful bankers.

Capitalism is trying to find out its survival path, eternal growth with finite resource base and a fragile world ecology. The monopoly finance capital is playing; playing with its speculation tools, time, and peoples’ hardship and misery. It declines to admit that its options are running out. It has competition within its camp. But they dream to bury the competitions with nice promises that they know are hollow. They also deny people’s limits of patience, an exercise with ignorance.

Allowing markets function with the least possible government intervention has proved wrong. Now market believers look for intervention. Now, section of mainstream admits that “fundamental principles of capitalism - that human beings are rational and markets behave rationally, and that markets will assign prices - are flawed…. That game is over ….capitalism has essentially hit a wall.” A social matrix of protest is being created.

Cuts in social security, monthly pensions, public sector wage, public investment, subsidies for local government, education spending, family tax benefits, and subsidies to parents, cap on wages and bonuses, increased health care fees, raised retirement age, freezed/slowed down recruitment, frozen salaries, and closing down of schools are the “gifts” financial elites are now presenting to, broadly, the Eurozone people. They have planned to sale out ports, airports, land and mining rights, telephone, water and electricity services, refineries, and many more public assets. It seems the finance elites are going to formally and privately own almost entire countries but the social responsibility. There is also a “golden rule” in the constitution of a country, Spain, to keep future budget deficits to a strict limit. In an European country, France, the highest earners will be required to pay an extra 1% income tax while working people in other countries will “contribute” more by sacrificing much higher portion of their income.

Vigorously unpopular austerity budgets now are degrading life of common people in countries in Europe. Thousands of Romanian police officers went on strike over their pay cut. Protests have spread across Europe. European cities are witnessing marches against new austerity measures. Trade unions are vowing bigger protests.

It will not be astonishing if dominating capitals plan to rely on the emerging economies. But these are not free of capital’s “virtues” – crisis, bubbles and bursts, unemployment, disparity, and anguish. At the same time, countries that rely on selling labor in European markets should take into account of the unfolding situation in the continent. 

Tintin In Belgian Political Wilderness

A bourgeois democracy without an elected government

Crowning a crisis unprecedented in the history of bourgeois democracy essentially fractured Belgium has not yet collapsed. Elections have failed to produce a government there in the country with a history of compromises by its ruling classes. “Belgium is in a coma. The patient is clinically dead”, said a Flemish Christian Democrat.

Failure to accommodate contending interests has come out starkly in the bourgeois democracy with a crown. “Belgium no longer works. It is a nation that has failed”, said Bart De Wever, leader of the New Flemish Alliance (N-VA), the party calling for independence for Dutch-speaking Flanders. By securing 27 seats in the 150-seat parliament N-VA appeared as the strongest political party. In Flanders, a region of 6.5 million people that accounts for almost 60% of the population, 45% voted for the N-VA and other separatists.

Since the June 2010 elections, the ruling classes have produced an unfinished political power equation that consequently generated a world record of a country without an elected government, when economic recovery is fragile, unemployment is hovering around 8.5%, and the euro is in crisis. On May 19, the Chamber of Representatives adopted the 2011 budget submitted by the unelected government. The right-wing Vlaams Belang and the Flemish and Walloon Greens voted against the budget while the New-Flemish Alliance and the Flemish Socialists abstained. A bourgeois practice by a government without a mandate!

Iraq, a few months back, possessed a record without a full-fledged government for 249 days. For 353 days, between July 17, 2003 and July 15, 2004, Cambodia was without government. In 1977, the Netherlands set the European record of 208 days. Belgium had similar experience in October 1978-April 1979. A caretaker government ruled the country termed as an “accident of history” by Yves Leterme four years ago. After the June 2007 election, it took nine months to produce a coalition government. Yves Leterme now rules Belgium with decrees from the monarch although his Flemish Christian Democrat party was routed in the elections in a country whose constitution of 1831 was considered as a model of bourgeois-liberal government.

There are dictations. Standard & Poor’s has threatened that the country’s credit rating could be downgraded if a government is not formed within months. Fitch has also issued almost similar threat to the third highest debt burdened country in Europe with public debt 97.2% of annual output in 2010. But, the financial crisis, and the historic political impasse has not deterred the unelected rulers from sending war planes to strike in Libya in the name of “saving” humanity.

Bifurcation of the country that attracts more than 10% of all logistical foreign investments in Europe (Ernst & Young, Barometer of Belgian Attractiveness) into Flanders and Wallonia, that housed 75,600 persons owning more than $1 million in 2010 of whom 750 to 1,000 were super-rich owning more than $30 million, a 9.8% increase from previous year, (World Wealth Report) is not a contradiction between sunset industries, mainly coal and steel in the south, and sunrise industries, chemicals, high-tech, and services in the north, but the dominant Flemish aspiration, a hunger of a section of a capital. While the world dominating capitals try to trample national borders and finalize its world-winning adventure – globalization – its one part prefers a small corner, a contradiction within itself.

With the shift of power, economic, and consequently political, from Wallonia to Flanders, strong Flemish separatist sentiment is unwilling to feed the less affluent Wallonia. Actually, the section of the capital prefers to free its hands and feet for greater gain. The Francophone Walloons prefer unity. The French, on the other hand, would embrace Wallonia if it secedes and likes to join France. Capitals have respective equations for further accumulation. The question of dominance by a particular language in the country’s socio-cultural life reflects the issue of dominance in an economy that in terms of inward FDI flows was among the top ten ranked countries in 2009.

With one of the most productive workforce per hour worldwide, low real estate costs, tax incentives including reduction of the effective corporate tax rate in many cases to less than 25% and a special reduction of 80% in taxation of royalties Belgium, as Denise Rutherford, president of AMCHAM Belgium said, “has become more attractive for U.S. investment”. (On the occasion of the release of the organization’s 2007 investment report.) The US, the main foreign investor, mostly has poured money in the finance and insurance, and in chemical, automotive assembly, petroleum refining and pharmaceutical sectors. Investment in the service sector including law firms, accounting firms, advertising agencies, computer and management services, public relations, and executive search firms has more than tripled since 2000. The EU’s single-market program attracted many US law firms and lawyers to Brussels.

Having least contradiction with the Empire in the arena of trade and economy, and a close collaborator in the Empire’s activities in Afghanistan, Africa, the Balkans, Iraq and Lebanon the country backs NATO’s central and eastern European expansion. Involved with the Organization for Security and Cooperation in Europe Belgium contributed AWAC crews for surveillance flights over the US. Other than the NATO and EU headquarters, NATO’s military headquarters is also in the country.

Its early occupiers, the Romans, the Spanish, the Austrians, the French, the Dutch, the Germans, have made the Belgians critical of any form of authority. But capital has made the Belgian workers much efficient, squeezing out their labor power most brutally, raising its industrial productivity much higher than the US, Germany and Japan. US dollar produced per hour per worker in Belgium is 55.9 while it is 51.8 in Ireland, 50.3 in Italy, 45.0 in Germany, 42.0 in the UK, 53.0 in Norway, 37.3 in Japan and 49.6 in the US. On the other hand, International Metalworkers’ Federation informs: Belgian worker requires working time to buy beef: 82 minutes, bread: 9 min, chicken: 21 min, fish: 84 min and milk: 4 min. Its principal trade unions either repudiate class struggle or aim to achieve Christian principles or uphold business interests. Its ruling classes have co-opted a section of the labor leadership, and have sent industrial unrest to one of the lowest in the EU.

Now, in the land of “Belgian compromise”, ability to contrive complex solutions conciliating competing concerns, a section of capital aspires to proclaim the end of the country with the national motto “Strength Through Unity” that once crowned a monarch invited in from the House of Saxe-Coburg Gotha in Germany. “[W]e don’t know if it will be possible to reach a compromise between them [the north and the south]”, said Marc De Vos, the head of the Itinera Institute, a Brussels-based policy think tank. (Time, Jun. 14, 2010) Vadim Prozorov, Associate Professor of History, Moscow State University doesn’t “rule out the split of Belgium.” “If the EU suffers more than it does now and the economic crisis affects the basis of the EU, Belgium is one of the first candidates for the split. In such circumstances, it will be quickly discovered that the country […] is not viable.”

On January 23, opposing possible collapse of the country, thousands of citizens in Brussels protested against the political anarchy. On February 17, students in Brussels, Antwerp, Liege, Bruges and Ghent tried to resolve unresolved political contradiction by rallying in defense of their country’s integrity. They named it “Potato Revolution”. A section of people, it seems, stands against a section of capital. There were also other suggestions to protest including denial to shave beard and abstain from making love. But the reality is tough for nourishing love for the European model of federalism, where no “national” party with activity on both sides of the linguistic line exists, where the Christian democrats, socialists, liberals and the Greens are divided along Francophone and Flemish lines. Actually there is no single capital that can dominate the economy, where 73% of the work force is engaged in the service sector and 25% in industry. With a trade union density, as OECD’s Employment Outlook tells, standing around 54% business services offshoring has positively influenced industry-level productivity in Belgium (1995-2004). (Bernhard Michel, “The impact of offshoring on employment and productivity in Belgium”, April 29, 2011)

“In Belgium, we have a split in the political system”, said Philippe Van Parijs, a philosophy professor at Catholic University of Louvain (Time, Jan. 24, 2011) The “split in the political system” of the 20th economy in the world, and the 10th exporter of goods globally, as the WTO informs, has cropped up in the field of an economy of uneven development, one of the attributes of capitalist economy. This feeds a particular form of social psychology. A February report by the US Institute of Peace says that the political elites are now fanning up tensions and exploiting linguistic differences to push a parochial political agenda. “Over the past few years, resentment has only grown between Belgium’s Dutch and French speakers. […] In some Flemish communes … children are banned from speaking French on the playground, prospective house buyers cannot purchase property if they don’t speak Dutch, and locals are encouraged to report businesses that do not employ Dutch speakers. The Flemish […] see the French speakers as feckless, inefficient and even corrupt. […] ‘[…] Belgium is one state composed of two countries,’ says Carl Devos, a political scientist at Ghent University.” (Time, Jun. 14, 2010)

Time asked: how long can Belgium continue to reconcile its conflicting constituents? (Jun. 30, 2010) Requirement and ability of its corrupt ruling class will produce the answer. Till then, Tintin, Suske and Wiske, fox “Reynard”, lion-king Nobel, bear Bruyn and wolf Isengrim will wander in political wilderness created by the ruling classes of the country once Marx once dubbed “the paradise of Continental Liberalism”. The “Flanders’ fields” that witnessed many battles is now waiting for another engagement, not less significant than the older ones.

The dominant capital’s aspiration, Belgium- bifurcation, will not hurt it. Break-up of densely populated Belgium, “located at the heart of one of the world’s most highly industrialized regions and reaching 140 million European consumers within a radius of 300 miles”, will not produce an immediate cataclysm, but will create a intra- and inter-capital chain reaction and political implication, and exemplify a dominant capital’s hunger and limitation, a dwelling with opposites, of a bourgeois democracy.

Greece Gyrates

Greece is now buying time as it gyrates on its debt-axis. The Standard & Poor’s have pushed Greece to the lowest level in the world, lower than Ecuador, Jamaica, Pakistan and Grenada. And, the Greek people are paying prices as the finance oligarchy is putting the burden of the crisis on the working people, and the bankers are preparing to have bigger chunks of public properties. The fear is that a formal default by Greece would widen and deepen the financial crisis.

Citing Standard & Poor’s, a Reuters report informs: Greece is now the lowest-rated country in the world. “The cost of insuring Greek debt is now almost twice as much as the price of insuring Pakistani bonds.” The move is the latest blow for the country. Ratings of four Greek banks – National Bank of Greece, EFG Eurobank Ergasias, Alpha Bank, and Piraeus Bank – will probably be downgraded also. The capitalist European country with a “socialist” government was downgraded by the rating agency on June 13.

Simultaneously, there was a warning: “Any attempt to restructure the country’s debt would be considered a default.” A Greek default could trigger a widespread meltdown having dire consequences in the world banking system. The lower rating has put a massive blow on the government.

The Greek government was not happy with the latest rating. It said, the downgraded rating ignored its efforts to secure funding. The Greek Ministry of Finance said, “The decision ignores the intense consultations taking place … between the same institutions and the IMF aimed at designing a viable solution …” The ministry expressed its willingness, in the name of “all Greeks”, to remain within the euro zone. France’s Credit Agricole that owns the Greek bank Emporiki, and some other banks have stood in favor of rolling over their holdings of Greek debt. Germany’s banking association, a few days ago, backed the idea of private creditors participating in the rescue. A finance-circus is going on.

In this bankers’ game, the finance players are not unanimous on ways to deal the Greek problem. Many of the lenders are the French, German and other banks. Talks between the EU, eurozone countries and the IMF over a second bailout for Greece are facing problems with Germany’s preference of involving private investors. The positions expose competitions. The ECB and the French banks are among the worst exposed to a Greek debt restructuring. The ECB, IMF and EC are demanding control over the Greece economy: to be in charge of the privatization program that will sell out public properties and give the money to the banks.

To ensure continued funding, the Greek government is pushing cruel austerity measures with plans to sell stakes in a number of domestic corporations including the telecom firm OTE, state-owned Postbank and the ports of Athens and Thessaloniki, public pay cuts, civil service redundancy, regressive tax hike, etc. It is part of the “socialists’” privatization program. About 150,000 workers would be thrown out of jobs, and only one worker would be hired for every 10 retirements in an economy, where unemployment is 16% of the workforce. Among the 15-24 year age group, the rate is 42%.

New austerity plans in the shrinking economy with annual rate of 5.5% have sparked 20 days of protests in Athens. About 80,000 protestors have set up a tent city in an Athens square. The workers at state-owned utility PPC announced strikes to oppose the privatization of the company. Demonstrators including workers and students shouted in front of parliament: “Thieves, thieves, thieves”. Polls show that a large number of Greeks are against the policies. These are challenges to the forces of finance oligarchy. General strike is being planned by the Greek citizens.

Spain Spins

The slogans and the signs say the Spain-reality:

“ Liberty , Equality and Corruption. Do we know who our politicians are working for? It's called democracy and it's not it!”

“Real Democracy Now”

“We have the right to dream, and for it to become true”

“Be Indignant”

“For A True Democracy”

“No Corrupt Politicians, Businessmen, Bankers”

“Take the Streets”

“Less Policing, More Education”

“They Call It Democracy, But It Isn't”

Slogans cited above reveal a reality, a reality of indignation and aspiration, and this has put neoliberalism on the dock in Spain . This is a reality neoliberalism is facing in countries. In Spain , the neoliberalism is being implemented under the stewardship of the socialists.

Tens of thousands of protesters, young, old, pensioners, university students, civil servants, immigrants, campaigners for local languages, filled the main squares of about 50 cities including Madrid , Barcelona , Seville , Bilbao , Zaragoza , Valencia for about a week. They are los indignados , the indignant.

Protesters rallied against the country's economic crisis, against its superhigh jobless rate. In a wave of outrage over economic stagnation and government austerity marking a shift after years of patience they took to the streets. They protested against politicians, bankers and authorities' handling of the economic crisis. They defied a ban, the Supreme Court upheld, on political protests, but police was not active to enforce it. The apparent inaction was a political move by the authority. The government feared that an enforcement of the ban order could provoke clashes that in turn could hurt the Socialists. The protest took a political character.

The week-long protest “marks a shift in Spain where up to now people have scarcely protested.” This is the strongest outburst of spontaneous protests since Spain plunged into recession that followed the collapse of the 2008 property bubble. The protesters, known as M-15 as the protests began on May 15, lamented the economic crisis Spain is experiencing. They protested against the indifference of mainstream politicians, who ran Sunday's elections in 13 of the 17 regions and its more than 8,000 municipalities. The ruling Socialist Party is going to digest a big loss in the elections, a political price for following neoliberalism.

The protesters expressed determination to stand against the crisis wrought by capital creating bubbles with illusions. They expressed solidarity by raising arms in an assembly even after midnight in the Puerta del Sol square in Madrid . A protester put a sticker on his boot denouncing the existing democracy. The youth hang banner with the sign “Indignant” on the top of a building in Madrid . They painted caricatures of the main political figures. More caricature is in the wings.

These tell the strong sentiment of the citizens against job insecurity and government spending cuts. Their demands include jobs, better living standards, a fairer system of democracy and changes to the austerity plans. Actually, the demand is for state's enhanced role and responsibility in providing education, health and employment. The educated unemployed are demanding their rightful role in society and production. They are also, according to the BBC, calling for an end to domination of the political system by the two main parties. The demonstrations turned political.

A news agency report said: “ With tents, mattresses, a kitchen, a workshop and even a pharmacy, a protest camp in Madrid has grown into a real ‘urban village' for thousands of young people. Under blue plastic tarpaulins, demonstrators have gathered in the landmark Puerta del Sol square in the centre of the Spanish capital. Many of them have spent several days and nights there, to decry politicians who left Spain with a 21.3% unemployment rate.” There were tents with food, tents for political debates, even a tent for childcare. These were not Don Quixotic exercises.

The Spanish unemployment rate, highest in the eurozone, was in the highest level in the first quarter of the year in fourteen years. A government estimate said on April 21, 2011 that about five million persons were out of work. It is unprecedented. A gift of neoliberalism! The youth unemployment rate is 40%. Some sources cite it as 45%. In areas, it has jumped to 50%. The youth are angry; they are qualified, but there is no work. In terms of employment, it is a Tunisia-situation.

Spaniards' demonstrations crossed borders. News agency reports said: Expatriate Spaniards organized demonstration in London on May 18, 2011. The movement was coordinated through social media and Twitter. Now, it seems clear that it is not only foreign powers that use social media to foment discontent in countries they like to intervene. Protesting people also use it.

Prior to the present demonstration, on April 17, demonstrators made a human barricade in front of police. Their t-shirts bore the sign: “We still got no home”. Their posters said: “no house, no job, no pension”. At that time there were flats for sale in Madrid . But that is beyond the reach of the unemployed. The demonstration was followed by clash with police, injury and arrest of demonstrators.

In the movement, there is no flag or affiliation to any party. The protest, as it appears from the demands and slogans, are also against the unfair political situation that Spain 's ruling class has built up and nourishes. The demonstrators were “asking for a change in the political system.” Some of the protestors wrote to BBC: “We have no option but to vote for the two biggest parties in Spain , who are more or less the same. They are unable to solve any problem, it is just a nest of corruption. We are tired. In short, we want a working democracy. We want a change.” They view the political system that exists as unfair. So, they protest “against the political situation that allows more than 100 people who are accused of corruption across the country to stand in the next elections.” The electoral law in Spain has also turned controversial. It is alleged that the vote computing system benefits the big political parties while leaves the smaller ones without any possibility of achieving any success.

A number of protesters consider their movement as “anti-big political parties, both the one in power and the main ones in opposition. It's an anti-capitalism, anti-market ruled society, anti-banks, anti-political corruption, anti-failed democracy, anti-degraded democracy and pro-real democracy protest.” “The economy and unemployment are key to the protest because that binds all of us together,” said Jon Aguirre Such, a spokesman for the Real Democracy Now, which is one of the organizers of the movement.

The movement took serious political character as the demonstrating youth called on people not to vote on Sunday for the two main parties, the Socialists and the centre-right opposition Popular Party. The rich-poor question has also been raised.

Spain has “built more homes than England , France and Germany combined, of which too many now stand empty. Much of the financing for these superfluous homes was done through still seemingly healthy large Spanish banks like Santander and BBVA. … Santander is connected to the entire global financial system.”

The Spanish movement will not announce neoliberalism's last journey and will not herald emergence of a new politics. But it will widen and deepen political lessons, help emergence of new politics.