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.

A German Satire On A Greek Stage

Germany is staging a satire in burning Greece. While school children there go unfed and homeless increases in number bankers punish the exhausted Republic by imposing harsh, humiliating conditions to take last cents away from the bankrupt capitalist state in Europe.

“Socialist” Koutsoukos, the Greek deputy labor minister resigning in protest to the EC, ECB and IMF dictated package, accused the troika of “shameless extortion” in its policies towards Athens while Karatzaferis, the extreme right leader and coalition partner, spoke of national humiliation and Greece “under the German boot”. Samaras, the New Democracy leader, said “Today we are in danger of losing our freedom and independence.” With the power of trampling sovereignty bank capital unites “socialists” and far-right in humiliation, subservience and anguish. A satire with a German lead role it seems.

As riot police clashed with protesters on Athens streets five ministers resigned in protest at the scale of the spending cuts and police ringed the parliament building to secure it from citizens’ wrath. Finance minister Venizelos said an unruly default would take the country to the brink of civil war and the country would be bought under colonial terms. He was scared of “total dissolution of the economic, social and institutional web of the country.” This led prime minister Papademos and former prime minister socialist Papandreou to sell out their right and left hearts! The price is a new support package, a haircut of debt, and a population’s plight.

But the rescue cash is not at sight. Wolfgang Schäuble, the German finance minister, demands more. Days back, Merkel, the German Chancellor, turned impatient with her Greek debtors. It is time, she said during a joint press conference with Sarkozy, the French president, for Athens to accept the tough austerity measures being demanded as a condition for a second bailout package. Should Greece reject the demands, she almost threatened, insolvency and an exit from the euro zone could come quickly. Sarkozy lent his tough voice: “They have no choice.” The bank bosses told bluntly: No new bailout unless there are further budget cuts, on top of the already promised austerity measures. Otherwise, Greece will go bankrupt. The Greek government agreed.

On the austerity program, EU demands signed, irreversible, binding pledge from the three coalition partners, regardless of winner in the next election. The austerity-pledge includes chopping out 150,000 public sector jobs, cutting down the minimum wage by 22%, and reducing pensions. It is, in summary, people are to pay, pay for plunder and wrong doings of elites, pay for inefficiency and accounting corruption of dominating interests.

With an emerging underclass, the Orthodox Church feeding 250,000 people a day, 20.9% unemployment, 48% youth unemployment, all Greek families hit by joblessness, 20,000 shelter less citizens, more than 10,000 on Athens pavements, park benches, in metro stations and shopping arcades, doorways and cars, 25% “new homeless” – evicted from home, 27.7% of Greek citizens staying on the brink of poverty and social exclusion, and hard-hit middle class having no savings an acute social crisis is brewing up. Among social groups, Crete Gazette reports, pensioners suffer most from low income and high cost of living while 33% of poor are over 65. Almost 60% of Greeks are afraid of falling into the poverty trap in the next few years. According to the Hellenic Statistical Authority the country’s manufacturing output contracted by 15.5% in December from a year earlier and industrial output fell 11.3%.

Press reports say “[e]ducated professionals, too shamefaced to want to speak, now stand in line with immigrants from developing countries waiting for food handouts from the town hall.” Citing relevant source McClatchy said: In the relief organization Doctors of the World’s Perama clinic more than 80 patients seek help three days a week. To cope with demand, the DW plans to operate the clinic seven days a week. The number in the clinic has quadrupled in the past two years. Eight in 10 patients now are Greeks, four times what it had been. The Greek chapter chief of the DW told McClatchy “The state doesn’t know who’s poor or who’s vulnerable. People used to be able to get money and find a doctor. Now everything is breaking down.” Citing a teacher BBC said: “In schools we didn’t have books up to the middle of the school year and not only that - we have children that do not really care about the lessons, because of all the problems at home.” The narratives, it seems, are from Third World or from any failed state. Helena Smith in a report in The Guardian describes a desperate, unhappy father, life in mess, deep in debt, owing money to butcher, baker and grocer “took the decision to put in an official request for three of his boys and one daughter to be taken into care.” “The crisis had killed us. I am ashamed to say, but it had got to the point where I couldn’t even afford the two euros needed to buy bread,” the father said. The local Deputy Mayor and director of social works said: “Requests for support have shot up. Last year, we sent food to 400 families [..] This year, 1,200 asked for help and they weren’t […] low-income people. Many had good jobs until this year when their shops and businesses closed, but to be asked to take children away was something new.” The deputy mayor visited the poor father’s home and “saw the situation […] the third-world conditions, the poverty and filth, [that they] couldn’t believe […]” Charities, doctors and unions suggest this is not a single case. […] “People are going hungry, families are breaking up, instances are mounting of mothers and fathers no longer being able to bring up their own kids,” said […] general secretary of the civil servants’ union ADEDY. “Until now, there has been a conspiracy of silence around the tragic effects of the austerity measures the IMF and EU are asking us to take.” From cases of newborn babies wrapped in swaddling and dumped on the doorsteps of clinics, to children being offloaded on charities and put in foster care, the nation’s struggle to pay off its debts is assuming dramatic proportions […] (“Poverty in Greece forcing parents to give up their children”)

Archbishop Ieronymos, the country’s spiritual leader, in a letter to the prime minister, a rare public intervention, said: “Homelessness and even hunger […] have reached nightmare proportions. The medicine we are taking has proved fatal for the nation.”

The situation is breeding protest, even from part of the ruling machine. A Bloomberg report said: The Greek Police union called for arrest warrants to be issued for EU, ECB and IMF officials negotiating austerity measures. In an open letter to the troika the police union said: “[W]e warn you that you cannot make us fight against our brothers. […W]e will issue arrest warrants for […] legal violations [including] blackmail, covert abolition or erosion of democracy and national sovereignty.” Mighty bank capital demolishes all barriers and unites all including priest, police and people. Athens braced a 48-hour strike fringed with violent protest, petrol bombs. It’s not only an economic crisis. It’s also a social and political crisis, a crisis in democracy a republic practiced with its dominating class mooring. The dominating interest is now passing over its burden of failure on the people.

In response to these human sufferings the dominating interests now have two memorandum agreements made between the Greek government and the troika, or imposed on the Greek people in a finance-democratic way: The 51-page Greece — Memorandum of Understanding on Specific Economic Policy Conditionality, Feb. 9, 2012, and the 31-page Greece — Memorandum of Economic and Financial Policies, Feb. 9, 2012. Still there will be fresh conditions from financers that Greek people and their elected representatives have to meet before the bail-out is endorsed. Juncker, the Luxembourg prime minister and head of the euro group, did not find “all necessary elements on the table to take decisions […] In short: no disbursement before implementation.” The ECB, as Mario Draghi, the bank’s boss, feels, would not step in to ease Greece’s burdens through a tricky debt swap with private creditors. The Greek republic now has to negotiate a debt relief agreement with private creditors worth 100 bn euro if it is to receive the EU-IMF aid package. If not, Greece could default as early as next month, when 14.5 bn euro in Greek government bonds turn due. The financers are demanding greater sacrifices from Greece, ultimately the people.

The Greek government has urged the ECB to forego profits on its Greek bond holdings. The bank’s governing council discussed the issue. But the ECB sustaining any loss has been ruled out. Profits on Greek bonds would have to pass on to governments when they are realized. The financial bosses are concerned with the issues of “tensions in euro area debt markets and their potential spillover to the euro area real economy.” It is their problem.

In fifth straight year of recession in Greece, a Reuters report said: Protesters compared Greece’s plight to its seven years under military dictatorship. Then, the fact comes to light: money is not less mighty than military, and domination is not only made with weapons; there are mighty arms of money and market to dominate and stomp down democracy, even money’s system of governance.