The Alternative in Greece

As Robert Parenteau noted by e-mail:

The question is whether enough Greek voters and citizens do (or eventually will) feel the same as a political theorist…at King’s College…in London. The level of discontent is usually indicated by the number of outraged people who mobilize in strikes and marches – “extraparliamentary democracy” is what political scientists used to call it during the flourishing of the Eurocommunist parties in the late ‘70s/early ‘80s – or by the frequency of no confidence votes, especially if accompanied by a declining margins of victory. It was never obvious to me how radicalized Syriza’s base was, or is, or can become. Without a radicalized base that can keep pressing from the left, you tend to get the Mitterand effect, usually in very short order, as capital flight picks up the pace when you begin implementing the program you supposedly got elected upon.

Having said that, Ambrose Evans-Pritchard reports that the Greek parliament is having heated argument over the Troika’s pressure on Greece to stick with its privatization program:

Greece’s Left-wing Syriza government has vowed to block plans to privatise strategic assets and called for sweeping changes to past deals, risking a fresh clash with the eurozone’s creditor powers just days after a tense deal in Brussels…

The new energy minister, Panagiotis Lafazanis, warned that Syriza will not sell the Greek state’s 51pc holding of the electricity utility PPC, power grid ADMIE or state gas company DEPA. “There will be no energy privatisations,” he said.

However, it is important to watch carefully who is sending what signals. The European Commission appears to be most sympathetic to the Greek cause, but the ECB and the IMF, who are making the stern noises about sticking with the current program, have considerable sway over these decisions.

By Stathis Kouvelakis who teaches political theory at King’s College London and serves on the central committee of Syriza. First published at Jacobin, a print quarterly that offers socialist perspectives on politics and economics. Support Jacobin and buy a subscription for just $19.

Let us begin with what should be indisputable: the Eurogroup agreement that the Greek government was dragged into on Friday amounts to a headlong retreat.

The memorandum regime is to be extended, the loan agreement and the totality of debt recognized, “supervision,” another word for troika rule, is to be continued under another name, and there is now little chance Syriza’s program can be implemented.

Such a thorough failure is not, and cannot be, a matter of chance, or the product of an ill-devised tactical maneuver. It represents the defeat of a specific political line that has underlain the government’s current approach.

Friday’s Agreement

In the spirit of the popular mandate for a break with the memorandum regime and liberation from debt, the Greek side entered negotiations rejecting the extension of the current “program,” agreed to by the Samaras government, along with the €7 billion tranche, with the exception of the €1.9 billion return on Greek bonds to which it was entitled.

Not consenting to any supervisory or assessment procedures, it requested a four-month transitional “bridge program,” without austerity measures, to secure liquidity and implement at least part of its program within balanced budgets. It also asked that lenders recognize the non-viability of the debt and the need for an immediate new round of across-the-board negotiations.

But the final agreement amounts to a point-by-point rejection of all these demands. Furthermore, it entails another set of measures aimed at tying the hands of the government and thwarting any measure that might signify a break with memorandum policies.

In the Eurogroup’s Friday statement, the existing program is referred to as an “arrangement,” but this changes absolutely nothing essential. The “extension” that the Greek side is now requesting (under the “Master Financial Assistance Facility Agreement”) is to be enacted “in the framework of the existing arrangement” and aims at “successful completion of the review on the basis of the conditions in the current arrangement.”

It is also clearly stated that

only approval of the conclusion of the review of the extended arrangement by the institutions … will allow for any disbursement of the outstanding tranche of the current EFSF programme and the transfer of the 2014 SMP profits [these are the 1.9 billion of profits out of Greek bonds to which Greece is entitled]. Both are again subject to approval by the Eurogroup.

So Greece will be receiving the tranche it had initially refused, but on the condition of sticking to the commitments of its predecessors.

What we have then is a reaffirmation of the typical German stance of imposing — as a precondition for any agreement and any future disbursement of funding — completion of the “assessment” procedure by the tripartite mechanism (whether this is called “troika” or “institutions”) for supervision of every past and future agreement.

Moreover, to make it abundantly clear that the use of the term “institutions” instead of the term “troika” is window-dressing, the text specifically reaffirms the tripartite composition of the supervisory mechanism, emphasizing that the “institutions” include the ECB (“against this background we recall the independence of the European Central Bank”) and the International Monetary Fund (“we also agreed that the IMF would continue to play its role”).

As regards the debt, the text mentions that “the Greek authorities reiterate their unequivocal commitment to honour their financial obligations to all their creditors fully and timely.” In other words forget any discussion of “haircuts,” “debt reduction,” let alone “writing off of the greater part of the debt,” as is Syriza’s programmatic commitment.

Any future “debt relief” is possible only on the basis of what was proposed in the November 2012 Eurogroup decision, that is to say a reduction in interest rates and a rescheduling, which as is well-known makes little difference to the burden of servicing debt, affecting only payment of interest that is already very low.

But this is not all, because for repayment of debt the Greek side is now fully accepting the same framework of Eurogroup decisions of November 2012, at the time of the three-party government of Antonis Samaras. It included the following commitments: 4.5% primary surpluses from 2016, accelerated privatizations, and the establishment of a special account for servicing the debt — to which the Greek public sector was to transfer all the income from the privatizations, the primary surpluses, and 30% of any excess surpluses.

It was for this reason too that Friday’s text mentioned not only surpluses but also “financing proceeds.” In any case, the heart of the memorandum heist, namely the accomplishment of outrageous primary surpluses and the selling-off of public property for the exclusive purpose of lining lenders’ pockets, remains intact. The sole hint of relaxation of pressure is a vague assurance that “the institutions will, for the 2015 primary surplus target, take the economic circumstances in 2015 into account.”

But it was not enough that the Europeans should reject all the Greek demands. They had, in every way, to bind the Syriza government hand and foot in order to demonstrate in practice that whatever the electoral result and the political profile of the government that might emerge, no reversal of austerity is feasible within the existing European framework. As European Commission President Jean-Claude Juncker stated, “there can be no democratic choice against the European treaties.”

And the provision for this is to take place in two ways. Firstly, as indicated in the text: “The Greek authorities commit to refrain from any rollback of measures and unilateral changes to the policies and structural reforms that would negatively impact fiscal targets, economic recovery or financial stability, as assessed by the institutions.”

So no dismantling of the memorandum regime either (“rollback of measures”), and no “unilateral changes,” and indeed not only as regards measures with a budgetary cost (such as abolition of taxes, raising of the tax-free threshold, increases in pensions, and “humanitarian” assistance) as had been stated initially, but in a much more wide-ranging sense, including anything that could have a “negative impact” on “economic recovery or financial stability,” always in accordance with the decisive judgment of the “institutions.”

Needless to say this is relevant not only to the reintroduction of a minimum wage and the reestablishment of the labor legislation that has been dismantled these last years, but also to changes in the banking system that might strengthen public control (not a word, of course, about “public property” as outlined in Syriza’s founding declaration).

Moreover, the agreement specifies that

the funds so far available in the Hellenic Financial Stability Fund (HFSF) buffer should be held by European Financial Stability Facility (EFSF), free of third party rights for the duration of the MFFA extension. The funds continue to be available for the duration of the MFFA extension and can only be used for bank recapitalisation and resolution costs. They will only be released on request by the ECB/SSM.

This clause shows how it has not escaped the attention of the Europeans that Syriza’s Thessaloniki program stated that “seed money for the public sector and an intermediary body and seed money for the establishment of special purpose banks, amounting to a total in the order of €3 billion, will be provided through the HFSF’s so-called ‘cushion’ of around €11 billion for the banks.”

In other words, goodbye to any thought of using HFSF funds for growth-oriented objectives. Whatever illusions still existed regarding the possibility of using European funds for purposes outside of the straitjacket of those for which they had been earmarked — and even more that they should be placed under the Greek government’s jurisdiction — have thus been dispelled.

Defeat of the “Good Euro” Strategy

Can the Greek side possibly believe that it has achieved something beyond the impressive verbal inventiveness of the text? Theoretically yes, insofar as there are no longer any explicit references to austerity measures, and the “structural changes” mentioned (administrative reforms and a clampdown on tax evasion) do not pertain to this category, a modification which of course needs cross-checking against the list of measures that can be expected to emerge in the coming days.

But given that the target of the outrageous budgetary surpluses has been retained, along with the totality of the troika machinery of supervision and assessment, any notion of relaxation of austerity appears out of touch with reality. New measures, and of course stabilization of the existing “memorandum acquis” are a one-way street as long as the present regime prevails, is renamed, and is perpetuated.

It is clear from the above that in the course of the “negotiations,” with the revolver of the ECB up against its head and resultant panic in the banks, the Greek positions underwent near-total collapse. This helps to explain the verbal innovations (“institutions” instead of “troika,” “current arrangements” instead of “current program,” “Master Financial Assistance Facility Agreement” instead of “Memorandum,” etc.). Symbolic consolation or further trickery, depending on how you look at it.

The question that emerges, of course, is how we landed in this quandary. How is it possible that, only a few weeks after the historic result of January 25, we have this countermanding of the popular mandate for the overthrow of the memorandum?

The answer is simple: what collapsed in the last two weeks is a specific strategic option that has underlaid the entire approach of SYRIZA, particularly after 2012: the strategy that excluded “unilateral moves” such as suspension of payments and, even more so, exit from the euro, and argued that:

  • On the issue of the debt, a favorable solution for the debtor can be found with the concurrence of the lender, following the model of the London agreements of 1953 for the debts of Germany — ignoring of course the fact that the reasons the Allies behaved generously towards Germany do not in any way apply to the Europeans today vis à vis the Greek debt, and more generally the public debt of the over-indebted states of today’s EU.
  • Overthrow of the memoranda, expulsion of the troika, and a different model of economic policy (in other words implementation of the Thessaloniki program) could be implemented irrespective of the outcome of debt negotiations and, above all, without triggering any real reaction from the Europeans, above and beyond the initial threats, which were dismissed as bluffing. Indeed, half of the funding for the Thessaloniki program was envisaged as coming from European resources. In other words, not only would the Europeans not have reacted, but they would have generously funded the opposite policies they had been imposing for the last five years.
  • Finally, the “good euro” scenario presupposed the existence of allies of some significance at the level of governments and/or institutions (the reference here is not to the support from social movements or other leftist forces). The governments of France and Italy, the German social democrats, and finally, in a veritable frenzy of fantasy, Mario Draghi himself were from time to time invoked as such potential allies.

All of this came crashing down within the space of a few days. On February 4 the ECB announced the suspension of the main source of liquidity to Greek banks. The outflow that had already started rapidly acquired uncontrollable dimensions, while the Greek authorities, fearing that such a reaction would mark the commencement of the Grexit, didn’t take the slightest “unilateral” measure (such as imposition of capital controls).

The words “writing-off” of debt and even “haircut” were rejected in the most categorical manner possible by lenders who became enraged even hearing them (with the result that they were almost immediately withdrawn from circulation). Instead of their overthrow, it turned out that the only “non-negotiable” element was that of keeping the memoranda and supervision by the troika. Not a single country supported the Greek positions, above and beyond some diplomatic courtesies from those who wanted the Greek government to be able, marginally, to save face.

Fearing the Grexit more than it feared its interlocutors, entirely unprepared in the face of the absolutely predictable contingency of bank destabilization (the system’s classical weapon internationally for almost a century when faced by leftist governments), the Greek side was essentially left without any bargaining tools whatsoever. It found itself with its back to the wall and with only bad options at its disposal. Friday’s defeat was inevitable and marks the end of the strategy of “a positive solution inside the euro,” or to be more accurate “a positive solution at all costs inside the euro.”

How to Avert Total Defeat

Rarely has a strategy been confuted so unequivocally and so rapidly. Syriza’s Manolis Glezos was therefore right to speak of “illusion” and, rising to the occasion, apologize to the people for having contributed to cultivating it. Precisely for the same reason, but conversely, and with the assistance of some of the local media, the government has attempted to represent this devastating outcome as a “negotiating success,” confirming that “Europe is an arena for negotiation,” that it is “leaving behind the Troika and the Memoranda” and other similar assertions.

Afraid to do what Glezos has dared to do — i.e. acknowledge the failure of its entire strategy — the leadership is attempting a cover-up, “passing off meat as fish,” to cite the popular Greek saying.

But to present a defeat as a success is perhaps worse than the defeat itself. On the one hand it turns governmental discourse into cant, into a string of clichés and platitudes that is simply summoned up to legitimate any decision retrospectively, turning black into white; and on the other because it prepares the ground, ineluctably, for the next, more definitive, defeats, because it dissolves the criteria by which success can be distinguished from retreat.

To make the point through recourse to a historical precedent well-known to leftists, if the Treaty of Brest-Litovsk, under which Soviet Russia secured peace with Germany, accepting huge territorial losses, had been proclaimed a “victory,” there is no doubt that the October Revolution would have been defeated.

If, therefore, we wish to avert a second, and this time decisive, defeat — which would put an end to the Greek leftist experiment, with incalculable consequences for society and for the Left inside and outside this country — we must look reality in the face and speak the language of honesty. The debate on strategy must finally recommence, without taboos and on the basis of the congress resolutions of Syriza, which for some time now have been turned into innocuous icons.

If Syriza still has a reason for existing as a political subject, a force for the elaboration of emancipatory politics, and for contribution to the struggles of the subordinated classes, it must be a part of this effort to initiate an in-depth analysis of the present situation and the means of overcoming it.

“The truth is revolutionary,” to cite the words of a famous leader who knew what he was talking about. And only the truth is revolutionary, we may now add, with the historical experience we have since acquired.

Translated by Wayne Hall.

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  1. Tom

    On the face of it the above analysis is pretty devastating and hard to dispute. On the other hand (just reading the German reactions) I wonder whether the deal is really that bad. After all German austerity advocates are absoluely fuming and major voices on the left think it is not bad. Witness the reaction of Sarah Wagenknecht, the best political mind of the left party.

    1. diptherio

      austerity advocates are absoluely fuming and major voices on the left think it is not bad.

      Same thing could be said for the ACA–but that doesn’t make it a victory for the left.

    2. BillC

      Witness the reaction of Sarah Wagenknecht, the best political mind of the left party.

      Tom, I can find copious material by Fr. Wagenknecht (including her personal Web site), but most of it is several months to a few years old. Could you provide a link to any articles or interviews dealing with the Greek negotiations during the last two or three weeks (in either English or German)?

        1. Cugel

          The essential point that seems to be ignored in all this analysis is the role of the Greek people. They are already suffering 25% unemployment, equal to the depths of the Great Depression, and it’s only going to get worse with well over 50% youth unemployment. No country can sustain that indefinitely. Right now Syriza may be attempting to put a positive spin on their inevitable failure to get the Troika to see reason, but that is only the beginning of the political struggle, not the end of it. If Syrriza won’t fight for an end to Austerity, then it will simply fall apart and lose popular and parliamentary support. What will replace it?

          The center-left Socialists are attacking Syriza, essentially saying “you won power by promising things you couldn’t deliver.” That kind of “we told you so!” argument utterly ignores popular sentiment. They seem to think that an “appeal to reason” can get the Greek people to quietly submit to starving in the streets.

          In short the analogy is to the Heinrich Bruning German government of 1932 which tried to rule by emergency decree (“appeal to reason”) without parliamentary or popular support. That cannot and will not be sustained. So, unless the government is willing to stand up and be ejected from the Euro group then some other party will do so, whether that is a left wing splinter group from Syriza itself or from the right wing, particularly Golden Dawn.

          Greece is probably headed for Nazism in which case the memorandum will be repudiated, the Troika kicked out and then Greece can try and re-fashion itself upon the old totalitarian model with the support of the Army.

          The question is what happens then to the rest of Europe?

          1. MyLessThanPrimeBeef

            We should all fear a radicalized Greece, being so close to the ancient home of the Scythians, Mesopotamia and the heartland of Europe.

          2. MyLessThanPrimeBeef

            We should all fear a radicalized Greece, being so close to the ancient home of the Scythians, Mesopotamia and the heartland of Europe, a convenience stop on the refugees/ migrants/neoliberalism-victims superhighway.

          3. MyLessThanPrimeBeef

            We should all fear a radicalized Greece, being so close to the ancient home of the Scythians, Mesopotamia and the heartland of Europe, being a convenience stop on the refugees/ migrants/neoliberalism-victims superhighway.

            1. Kraut

              IMHO the greek government lost all conceivable support from Germany when they kept being offensive after the elections. During campaining everything goes – after you are sworn in you have to weigh every word and gesture.

              1. Sanctuary

                Yes, how dare they actually try to deliver upon their platform and relieve their people of German-induced catastrophe instead of sitting in the corner and silently dying.

              2. hunkerdown

                German elites deserve a LOT more than mere offense. They deserve to live out the rest of their days under house arrest in a Greek slum with no money and no ability to hide.

                Put your arm down, Dr. Strangelove Schäuble.

          4. danB

            Perhaps someone could estimate how many Greeks will die or in other ways be harmed from various austerity measures in the next several months. I have wondered why this was not done as an appeal to and shaming of the conscience of the world by Syriza while negotiations were underway. And if public cultural treasures and infrastructure are sold off the path to reclaiming them is arduous.

            1. Santi

              The Greek government is not going to delay Pillar 1 of the Tessaloniki program, called “Emergency”. This means stopping evictions of first housing of poor people, subsidy for electricity of poor people and a small extra payment for pensions, IIRC.

              So they are stopping (part of) the death toll. This is in fact the main reason why Syriza is not pushing for a grexit: human suffering would be greatly increased in the short term, and you know what they use to say about the long term…

    3. Ned Ludd

      If you fume about giving a millimeter, the other side will never ask for a centimeter. Back in 2011, in the extended interview segment, Jon Stewart asked Ron Suskind why Wall Street was fuming about Obama.

      Jon Stewart: We keep hearing that Wall Street guys hate Obama. And my sense is, “Why?” They’ve had it as good as anybody in this country over these past 2½ years, probably better. What’s their beef, in this?


      Ron Suskind: It’s interesting. I asked the same question. I talked to a senior Wall Street guy and said, “What gives with this thing with Obama? You know, you’re after him, he’s anti-business. You know, god! – he couldn’t have done more. He basically opened the federal purse for you guys. He saved your skin… And he says, “No no! You see, of course he’s not anti-business. But when we say he’s anti-business he just ends up doing more for us. So we’re going to keep saying it.”

      The neoliberals always demand more. The center-left always demands the opposite: that its supporters settle for less.

      1. Mattski

        In case it’s not crystal clear, this is why the Republican crazies are so useful to Wall Street, too. Wall Streeters may laugh up their noses, sometimes, at the crudity. But they’re useful idiots, and drive the conversation in Wall Street’s direction.

        1. OpenThePodBayDoorsHAL

          Best definition I’ve heard of a Republican: “Someone who can’t enjoy dinner unless he knows someone else is going hungry”.
          Captures the essence.

      2. JTMcPhee

        The People of the Left tend, any more, to be disabled by the empathy and willingness to consider alternatives and absolute idiocy when it comes to recognizing when they are being “had” and some strange congenital weakness when it comes to confrontation and making demands.Left “petitions,” the latest relief valve for what ought to be the kind of pent-up righteous rage that drove the labor movement back in the day, are out there in their thousands, launched by people who always start their petition with “Please consider” and end with “Thank you for your attention.” The measure of these petitions is that they create no change, and while they give the drafter and the clickers on the “sign” buttons an ego-boost similar to the number of Facebook “friends” and “likes,” they don’t generally do squat. People that use and understand power in the real world where the thievery and cruelty actually goes on get a pretty good giggle out of such efforts.

        The Banksters and Filthy-Rich are getting just a little nervous, looking over their shoulders and looking to their private security forces and escape routes and exit strategies. Like the Bourbons and the Nazis and other kleptocrats, they are building “retreats” where they hope to be safe from the dislocations that their business models and practices and perversions of “government” are amassing. They know the spring is being wound ever tighter, and at some point will snap, releasing a lot of energy all of a sudden. But our Left spokespeople are all holding out their hands, palms up for their share of the payoffs, or arms held out with palms forward, facing the aggressive critters from the “Right” in that universal placating gesture used with crazed berserkers and out-of-control children. (Why are these monsters called the “Right,” anyway, given the freight of meaning of that word (correct, proper, “not wrong” and so forth? And why “Conservative,” for obvious semiotic reasons?)

        So we have Barbara Boxer yakking at the Awful Right for daring to shut down “Homeland Security,” that den of monsters and incompetence. And any number of legislators from the Left making “Please don’t hurt us” noises, or actively conspiring in the gutting of the former nation, now just a carcass to be picked over by the more violent predators and scavengers. And it’s not just the leaders who are weak and woeful — just follow places like dailykos and many other “progressive” blogs, where now that they can get same-sex married most places and pot is on the way to an end of Prohibition and women can get into combat roles in the Imperial Army and “a lot of folks” can sign up for a medical policy with a $6,000 deductible and 50% co-pays and limited coverage, all is well,right? Hey, the first two are items that many on the “Right” actually want — closet gays who would like to legitimize their bedroom behavior, and gee,do rednecks and reactionaries smoke dope? So where are the “victories?”

        We have our tokens, Bernie Sanders and Elizabeth Warren, who plump for little marginal changes that we “citizens” take as signs of strength. But that’s about all, folks. Until people start giving the Filthy Rich some real reasons to be concerned about their personal hides, they are just going to keep demanding MORE, until they own it all and can rent it back to whatever is left of the rest of us, for whatever bits of wealth and income they have not “all nice and legally” stolen from the rest of us.

        They DEMAND, get it? And act on it, which is every day harder and harder for us gentle, cooperative, coalition-building mopes to do.

        Us ordinary people have to hope that the militarized police and Imperial forces will mutiny when told to “fire into the crowd” or go do the kinds of sweeps and midnight door-pounding that we “Americans” used to decry when done by the KGB and Stasi and similar bodies.

        1. hunkerdown

          Well, of course. They’re not demonstrating for the cause; they’re auditioning for the royal court in hope that someday they can be the ones saying “We just can’t afford it”. For them, any acts of meaningful dissent would be crapping where they intend to eat (and, delusionally, fancy that they are already eating there).

        2. Oregoncharles

          Wow. where’d you come from? A bit too much truth for one day.

          So what’s our strategy? Let them fester in their bolt-holes, or try to smoke them out?

          And how do we make them bolt?

      3. JTMcPhee

        As to what happens when “things finally go South,” here’s some thoughts.

        For a little look at the thinking of “high net worth individuals, families and corporate executives,” here’s a quick selection of readings:

        1. From the July 6, 2011 WSJ – “Why the Rich Fear Violence in the Streets,”

        2. From the September 4, 29013 Forbes – the Capitalist Tool, we have “Could America’s Wealth Gap Lead To A Revolt?”,

        3. From the July/August 2014 Politico Magazine, there’s a “Special Report” titled “The Pitchforks Are Coming… For Us Plutocrats,”

        4. From the August 20, 2014 Mintpress, another fun piece, “Growing National Unrest Has Many Worried, Even Capitalists,”

        And then there’s the question of what our kleptocrats plan to do to weather the storm – pretty much what all the Grasping Class has always done when the poor can no longer afford bread: “Après moi le deluge,” Take the money and run!

        Advice from the Mirror, “Panicked super rich buying boltholes with private airstrips to escape if poor rise up,”

        And since the devil of survival and profit is in the details, and there are lots of people who are happy to be the “people” that the kleptocrats “have–” here’s an assortment of necessary services for the High Net Worth gang::

        From T&M Protection Services’ web site, “Today’s global executives and other high-profile individuals are faced with unprecedented corporate and personal risks requiring a higher level of security planning, coordination and management. T&M understands that clients require personal protection that does not impede on the protectee’s lifestyle. Under the direction of Joe Russo, the former U.S. Secret Service Special Agent in Charge who led the protection detail for former President Bill Clinton and former U.S. Senator Hillary Clinton, T&M offers a full range of discreet, personal and professional services designed to minimize risk while maximizing protection and mobility….

        And there’s fun reading at Field Security Services’ web site, “…We have also conducted TSCM, and full security reviews on ocean going yachts, executive jets, executive cars and other modes of transport. Our specialist vehicle search service will ensure that personal and business communications conducted in transit are secure and free from compromise. Our service will also ensure that vehicles are free from tracking technology used by criminals and increasingly the press, to track the movements of high net worth individuals, celebrities and other people at increased risk of compromise.

        “We can also advise on security protocols for the storage and use of executive transport and can advise on methods and technology to mitigate the risk of kidnap and extortion…” I guess being filthy rich is not altogether a bed of roses.

        Especially all those worries about money ‘n’ stuff, that exists and has value only as long as there’s a “political economy” around to project it against: “At BFLC, our mission is to help our high net worth clients maintain the stability and wealth preservation they desire. We are experienced in providing tax and business advisory services to high net worth individuals, their businesses, and their families. In an economic climate of uncertainty and constantly changing federal and state tax laws and regulations, our accountants are experts in helping you maintain and improve your financial position. We offer personalized, strategic tools designed to deliver the very best services to protect and secure your wealth.” From BLFC’s site,

        And that’s not even scratching the surface of all the private violent ex-military, ex-security-state armies that are also happy to serve the rich, for an appropriate payday, of course. From a 2012 “Economist,” “Bullets for Hire — The business of private armies is not only growing, but changing shape,” As for what the Crowd thinks is in the future for all of us, look here in Yahoo! from a week ago: “In a postapocalyptic future, how will the rich maintain their private armies when the dollar is useless?”

        If you aren’t doing anything wrong, you have nothing to worry about. Not even “Operation Garden Plot:”:

        1. alex morfesis

          the poor have never risen up…and there is no reason to think the rhyme will change this time…

          marx was funded by the same family that founded philips electronics; Lenins brother had been going at the royal family for the benefit of other russian nobles years before the germans sent vladi in to do his deed; fidel and raul are spaniards (first gen born in cuba) who were born with large trust funds, and never had a bad word to say about that guy that chevy chase kept saying was still dead…there was no che, his really name was earnie lynch…as in merrill….a little town in ireland celebrates their home boy…the old rich have always known this…only the newly minted who don’t have deep ties and roots, those who don’t have any towns or roads named after ancestors…perhaps they are foolishly concerned and have nothing better to do than hand off their hard stolen funds to some yahoo selling them some overpriced nonsense…

          maybe you have not been stuck in someplace after a hurricane or bad snow storm…when the food and fuel are not available for a day or two…

          we live in a just in time world…how exactly are the poor going to drive to the suburbs to chase some “rich” folks, when they hardly have time to see beyond being nickel and dimed…

          let the merry breezes blow…

          1. JTMcPhee

            Nice message of hopelessness, one that subtly or blatantly or inadvertently or foolishly gets into the brains of the Left, and the Poor, from so many sources and authorities. Not many examples, certainly not good ones from the ordinary persons’ perspective, of change from below. But the Spartans had reason to fear the helots, and the Romans had their Spartacus problems, and the rich folks in France in 1789 got the shivers when too much was too much. It took a Class Traitor like FDR to tamp down some boiling unrest in our little exceptional empire, but there was change that’s taken many decades for the greed disease to undo. White folk in America had slave and whiskey rebellions and Bonus Marchers to deal with, which did lead to pieces of change eventually. Say what you care to about Gandhi and Mandela, the Brits and the Boers felt a movement in the Force. I witnessed mutiny in the Army by troops ordered to go shoot some hippies in Chicago. That a leader with charisma and decent motivations comes from silver Spooner’s matters not at all to outcomes. The game is changing thanks to damage to the climate, and even our clumsy military has taken note in its planning documents.

            Nil disperandum! Shoulder to the wheel!

      4. RBHoughton

        Excellent point that should be made over and over.

        Today’s political concession is tomorrow’s right. Once its considered a right, its time for another concession. This is how politicians have been indulging business for two centuries. Bit for you and a bit for me. The major flaw in TTP / TTIP is the exposure of governments to ISDS. Actually the correct political policy towards commerce and industry is to leave it entirely alone

        1. hunkerdown

          Negative externalities are the very business of business in a competitive environment. Not regulating business is akin to not regulating psychopathy. Unless you’re proposing that every business operation have a certain percentage of criminally liable people who can be tried and sentenced (or, better yet, tortured in a black site somewhere) for the business’s malfeasance, are you not just proposing a get-out-of-jail-with-other-people’s-money card for those with enough money to buy a front business?

    4. Barmitt O'Bamney

      Germans are furious that the Troika only managed to cut off Greece’s head, letting the larger prize of severing the Greek torso slip away from them. Some observers think that the damage already done, and soon to be done if prevailing arrangements continue, is bad enough; but that is a minority opinion.

    5. Marc

      Never under estimate the capacity for human beings to believe their own bs rather than admit their mistakes even to themselves. Leftist parties are still trapped in top-down thinking. Wouldn’t the Syriza negotiating position have been improved by calling for demonstrations in the streets instead of looking to the Troika for support? And where is the American left. Obama had no pressure placed upon him from his own base within the democratic party to help Greece. Shame on them.

      1. cassiodorus

        Marc, there is no American left outside of a few academic types talking the talk and a couple of small parties which devote all their energies to maintaining ballot status in a few states. American left? Where are you from?

      2. Tsigantes

        @ Marc
        No need for SYRIZA to call for demonstrations in the streets since 4 pro-government solidarity demonstrations happened during Eurogroup in Syntagma, backed up by 42 more in cities across Europe.

  2. cassiodorus

    Isn’t the real issue here one of how much of “repayment” (what were the figures again? 11 billion Euros due July/ August, 22 billion overall for the year?) is due when, and of how the Greek government is going to come up with this money? Better enforcement of tax collection will only come up with so much in light of the fact that the same folks who are asking for all of this “repayment” are the ones threatening capital flight.

    1. MyLessThanPrimeBeef

      Stadium naming rights or university building naming rights.

      Sell the name Greece to Apple. From now on, it will be Apple-Greece or Greece-Apple.

      It may be hard to swallow, but that’s the neoliberal trend, from stadiums to school buildings to, why not, countries.

  3. charles 2

    The Treaty of Brest-Litovsk only lasted eight months. It was renounced by Germany after it lost a war on another front further west. The Bolshevik managed to get into power thanks to it. What is not to like for a leftist ? The game is far from being over…

    1. cassiodorus

      Greece will be very lucky if its adherence to the “memorandum” only lasts eight months. The Soviet Union, on the other hand, “gave up” a small portion of “its” territory which was in fact ruled by people with no allegiance to the central government and who were to wage a civil war against it in later years.

      1. Tsigantes

        Greece’s adherence to the memoranda has lasted from 2012. This is the first time that some of its “conditionalities” are being changed.

  4. Syzygysue

    Bill Mitchell offers a MMT critique in today’s blog ‘Don’t mention the war! er the Troika …’:

    1. financial matters

      There is definitely a robust discussion of tactics and outcomes within Syriza and Bill Mitchell also takes up the points of Manolis Glezos .

      I like Mitchell’s point “What exactly is a “negative fiscal effect”. Well, for you etymologists, it is neo-liberal Groupthink speak for increasing the fiscal deficit.” (An example of some of the rethinking that needs to occur)

      And Mitchell is decidedly in favor of returning to the drachma “I do not consider an exit to be a disastrous option.” “If the Greek government restricted its supply but were able to require people to demand it – to pay taxes etc – then why would the currency depreciate violently in the period after issue?”

      Also of interest from Mitchell “James Galbraith, who many mistakenly label as a proponent of Modern Monetary Theory (MMT)”. Galbraith wants Greece to stay in the euro which is ok as far as it goes (if there can be fiscal transfers for investment purposes) but he also states “investment funds have to come from better tax collection”

      MMTers don’t see taxes as necessary to fund investment. They are used to tame inflation, direct resources and deal with inequality. (How does a VAT tax do anything useful in a deflationary environment?) (Another area where some rethinking has to occur) (Note though that this applies to a sovereign issuer of currency)

      1. Benedict@Large

        MMTers don’t see taxes as necessary to fund investment.

        True, but only when a country has a fully sovereign currency, which Greece obviously does not. So Galbraith is correct in saying, “… investment funds have to come from better tax collection”, because Galbraith is advocating staying within the Euro.

        What I can’t figure out is why Galbraith, who well understands MMT, even if as Bill says, he’s not from the School, supports Greece remaining in the Euro in the first place? Yes, if the larger forces of the Euro did this, that, and the other, Greece could stay, BUT THEY’RE NOT GOING TO DO IT. Is Galbraith, clearly a world-class economist, really so naive on this one point? The power that (currently) hides itself behind the mantel of Germany has not yet and has no intention ever of ceding anything to anyone, regardless of the cost. These powers have driven Europe (TWICE !!!) to the brink of self-extermination, and are perfectly willing to do it again. Does Galbraith really have to see the bombs falling before he understand this?

        1. Benedict@Large

          I really wanted to work in a Neville Chamberlain reference in that, but I like Jamie too much. :-)

        2. financial matters

          I think that helps get us to the root of the problem. If we consider an entity like California or Chicago within the US. The US doesn’t want to privatize things like parking meters in Chicago, it’s politicians who sell out to large corporations. Similar to what we’re seeing in Greece such as with El Dorado Gold (not Germany) buying assets in Greece.

          It’s not sovereignity per se but what they decide to do with it. MMT alone is no magic bullet, it just helps discuss what is possible. If this can get into the public mind then the public can act on it. Blockadia for instance is gaining support. A party like Syriza with an impressive diverse group of strong leaders is having a useful impact on moving people psychologically away from the neoliberal model.

          1. MyLessThanPrimeBeef

            We get the worst of both when, from time to time, it so happens that the government doesn’t need to tax and yet does, like now.

            Paying 20% or 30% taxes so we can fight inflation, bringing it down from, say, 2% to 1%, is a lot to pay, or from 1% to -0.5%. And evermore, to bring inflation from -0.5% to -1%.

            There is no inflation now.

            I don’t mind keeping my 20% even if I have to spend 2% more, overall, on account of inflation.

            1. financial matters

              Yes indeed.

              Postulating that boomers and gen-Xers are too entrenched in neoliberalism, J.D. Alt is reaching out to millennials. He has some intriguing ideas.

              “Part 4—The Opportunity of a Millennium—is a sampling of how cooperative democracy and modern fiat money can enable the Millennials to actually solve some of the most intractable dilemmas they have been given to live with. I’ll explore five examples (which, I predict, we’ll find are interestingly interconnected):

              Building a Free Lifetime Education System
              Mitigating Climate Change
              Creating “work” in a Hyper-Automated Economy
              Building a Housing Infrastructure that leaves nobody in the cold
              Reversing the Desertification of Planet Earth”


  5. Carlos Fandango

    No point getting the lippy out for Piggy. Syriza just got rendered irrelevant, that’s too bad and personally I feel gutted. It should be obvious now, any real attempt at reform has to strike swiftly at the head of the monster. Day one, nationalise the banks, implement currency controls, batten down the hatches against malicious retribution and prepare for economic warfare with the evil empire.

    The total defeat and humiliation of Syriza is a clear signal (if one was needed), social democratic reforms are no longer going to be tolerated by TPTB. They will roundly trounce any faint hearted socialist upstarts, pleas for mercy will not move them, they will not flinch in their rampage towards a world wide neoliberal hegemony.

    There will be no halting of the neoliberal roadroller without some suffering. Politics just got a lot more radical, we will have to hope for a new breed of reformers with bigger balls to step up to the plate. The empire’s surveillance Death Star nears completion and the sands are running low. I’m not so sad for myself, I’m angry because this is not the kind of selfish assed, over financialised, shit society I wanted my kids to grow up in.

    1. wbgonne

      Excellent comment. Begging the plutocrats doesn’t work. Appeasing the bullies doesn’t work. Fighting works, maybe not immediately, but eventually.

      They got the guns, but we got the numbers.

      — The Doors

        1. wbgonne

          Who called for “violent leadership”? There are all kinds of fighting. But capitulation isn’t one of them. Neither is wishing on a star. Nor lying about what is happening. Should the plutocrats genuinely feel threatened in their positions, their response will likely be violence. I think it naive to doubt that. OWS is a harbinger. As the quote says, the plutocrats have the weapons but we have the numbers. That’s why we can win without violence.

          1. Mattski

            The middle class fears violence, the catastrophic loss of privilege. The poor live these things. To the degree that they have middle class dreams themselves, they may also capitulate. This is a danger in the way that leaders of poor people’s movements are often better educated, more middle class. I

          2. hunkerdown

            Trouble is, Mr. Morrison from the Laurel Canyon gang was just making sure the Man won. Guns’ll fix the numbers real easy, but it doesn’t work at all the other way around. There WILL need to be violence committed against vested authority (the concept, not the person), against bourgeois-normativity, against property, against the notions of prestige and property themselves, and against pretty much most of modernity. The hanging, drawing and quartering of the suits can come later if needed — and unless you have a better, more palatable way of taking them out of the conversation and making them never even think of entering it again, I hope you can come up with one — we don’t have the privilege of outsourcing our dirty work like the rich have had since antiquity.

        2. Carlos Fandango

          Careful Lambert, I was never proposing physical violence…. Just bold legislation.

          Proposing physical violence would be an act of terrorism……. Which is a thought crime don’t ya know?

          Sigh……If only the poor hoi poloi knew just how much shit they were in….

          1. Kurt Sperry

            Is taking physical violence off the table completely differ strategically from Syriza taking Grexit off? Either could be framed as preemptive capitulation or as extreme prudence in light of the likelihood of terrible outcomes. Both may be off the table but they are always right there underneath it waiting for their moment and everyone knows it. Pretending they aren’t does make the conversations more comfortable though.

    2. Doug Terpstra

      Agree, excellent comment. Democracy is the now-vanquished enemy of neoliberalism; any manifestation of it is abhorrent to the global regime, to be eliminated with extreme prejudice.

      But the worst of this IMO is the Obama phenomenon, convincing the victims to enjoy the inevitable rape and to voluntarily pay for the rapist pig’s makeup. It’s the brazen dishonesty as the post says that is worse than the surrender itself, that Syriza turns out to be another Trojan horse turned on the Greeks themselves. It seems the World Socialist Web Site nailed the “far-left” party quite precisely weeks ago already. It will be instructive to see if Yanis Varoufakus participates in what now appears to be a calculated political deception.

    3. NOTaREALmerican

      Nice, now if only I could get this translated without any neo’s so my normal friends could under who is screwing them:

      Let’s see..

      The total defeat and humiliation of Syriza is a clear signal (if one was needed), social democratic reforms are no longer going to be tolerated by TPTB. They will roundly trounce any faint hearted socialist upstarts, pleas for mercy will not move them, they will not flinch in their rampage towards a world wide ___________ _________

      There will be no halting of the ____________ roadroller without some suffering. Politics just got a lot more radical, we will have to hope for a new breed of reformers with bigger balls to step up to the plate. The empire’s surveillance Death Star nears completion and the sands are running low. I’m not so sad for myself, I’m angry because this is not the kind of selfish assed, over financialised, shit society I wanted my kids to grow up in

      It’s always so much better when the peasants getting roadrollered know who is actually driving the roadroller. But the “who” has to easily repeated to other peasants, and understandable, so they can create stories to tell each other that make sense: e.g. That goddam ___________ in the roadroller just crushed my dreams, man!!. We need to do something about those goddamn ____________

      See? Neo-liberal just doesn’t cut it, sorry.

    1. Santi

      A transcript of another radio interview where he says something that intrigued me:

      […] to create a four-month bridge during which we achieve the following:
      First, the cancelation of the recessional measures and the implementation of a transitional program we ourselves have made, one the Greek society will be able to withstand. This will help us negotiate during this four-month period a new contract between us and our partners with the goal of solving this system of three equations with three unknowns.

      I googled for the three equations with three unknowns and I found this Levy Institute working paper (PDF) titled “An Outline of a Progressive Resolution to the Euro-area Sovereign Debt Overhang: How a Five-year Suspension of the Debt Burden Could Overthrow Austerity” where they say:

      “In this regard, equation (3) (in particular for the EA countries in the prevailing monetary context, which is solely focused on inflation targeting with very limited room for debt monetization) defines a minimum level of primary surplus that sooner or later will become a critical fiscal condition. In the current social correlations of power in the developed capitalist economies, this condition is welcomed by the capitalist bloc, because it sets permanent pressure on the promotion and guarantee of fiscal austerity, privatization, conservative reforms of state administration, the dismantling of the welfare state and disintegration of social benefits.”

      So this is the (economic) framework that Varoufakis is using for the discussion about debt sustainability. This shows that the policies Syriza is currently pursuing, in the expectation of further changes in those “correlations of power” are social-democratic in the good old sense of the word. something that, as Podemos’ leader Pablo Iglesias has repeatedly said about the PSOE (or PSF, PSD…) programs in the late 70’s, nowadays sound like extreme, radical and revolutionary.

  6. wbgonne

    Yup. The SYRIZA government is an embarassment and should be hanging its head in shame — or better yet, resigning — instead of doing even more harm by foisting this lipstick-on-a-pig betrayal on the Greek people. It is clear now that the SYRIZA leadership is toxically cynical. Shades of Obama. The real question is whether the Greek people fall for it like the American people have.

  7. Jose

    In the end, the “Game Theorist” could only produce a suurender move.

    “Parturient montes, nascetur ridiculus mus” (Horace)

  8. YankeeFrank

    For all the trumpeting of Varoufakis’ expertise in game theory, he apparently wasn’t aware of the most basic precept, which is you never broadcast to your opponent how far you are willing to go. He made it all too clear he would not do anything that could force Greek off the Euro. Without that threat, a/k/a leverage, the troika knew all they had to do was simply stand firm and Syriza would cave. That’s what they did and that’s how Syriza reacted. The whole thing was utterly pointless.

    1. Shash

      Two reasons I can think of that Varoufakis’ game theory background didn’t work:

      One, he himself rejected the idea of “playing games” with Europe’s future. He wanted this to be an honourable above-the-table brainstorming and not a multi-cornered self-interest-dominated bargaining session. He may even have believed this to be possible, and may have believed it himself.

      Second, Game Theory postulates “rational players”. Not a bunch of crusty, moralistic old men for whom cutting off the nose to spite the face always feels like a great idea.

      You can only play a game when there’s a game to be played…

    2. Lambert Strether

      I’m drawing a blank, here. Did Yanis claim to be using game theory, or was that a claim made for him by our famously unbiased international press? I’m guessing the latter; maybe readers can refresh my memory.

        1. MyLessThanPrimeBeef

          Maybe I’m mistaken, but I thought life among humans was all about games, all the time, even though we didn’t always call them games, in the loose sense of the word, game.

          More technically, the more one can apply game theory to life, the more useful one claim the theory to be. So, one is constantly trying to model real life experiences to the theory. I am sure one can try to model this most recent negotiation using game theory and try to see if one can exploit it.

          1. hunkerdown

            Game theory focuses mainly on competition and payoffs. It’s interesting in this society precisely because this society is ridiculously gamified. We need social games to play that aren’t pretexts for consuming fun and producing unworthiness and shame.

            (Speculative fiction buffs, anyone know of a good story that reimagines the proverb as, “he who does not play shall not eat”?)

            1. MyLessThanPrimeBeef

              In Zen, there is a saying, attributed to Master Baizhang, who established a set of rules for Chan monastic discipline called the Pure Rules of Baizhang, that goes like this (similar to what you posted): One day without work is one day without food.

              I guess that was in response to some lazy monks who thought manna would drop from above while they navel gazed all day long.

              1. hunkerdown

                Yeah, yeah, and 2 Thessalonians 3:10 (and wherever it might have appeared in the OT) too. Note the word play.

                I think the original was in response to soi-disant managers — but now soi-disant managers turn it around to justify their personal parasitism.

          2. Santi

            He meant this in two senses:
            * he was not bluffing, the negotiation for him was no poker game. In fact he delineated very clearly Greece’s red lines, with very little margin to change them
            * aim to find a solution that is a win-win, i.e., no zero-sum game, but rather a cooperative search of mutual benefit.

        2. MyLessThanPrimeBeef

          Maybe I’m mistaken, but I thought life among humans was all about games, all the time, even though we didn’t always call them games, in the loose sense of the word, game.

          More technically speaking, the more one can apply game theory to life, the more useful one claim the theory to be. So, one is constantly trying to model real life experiences to the theory. I am sure one can try to model this most recent negotiation using game theory and try to see if one can exploit it.

            1. hunkerdown

              If you get that far, it means your comment has (probably) been submitted. It, along with the others, may take a few seconds to get through Cloudflare and back to viewers. Try reloading in a minute; you should see your post.

    3. Doug Terpstra

      Pointless indeed, (almost) as if the game was fixed, following the Obama school of negotiation — preemptive capitulation.

      1. hunkerdown

        I think the tell will be whether they do circle back and ask voters what they would have Syriza do, rather than assume the usual liberal authoritarian posture.

        Then, it wouldn’t be a unilateral action anymore, would it?

  9. dingusansich

    The question is whether enough Greek voters and citizens do (or eventually will) feel the same as a political theorist…at King’s College…in London.

    Well spotted.

    Bear in mind that the author of the Jacobin piece, Stathis Kouvelakis, alludes to Lenin twice, first by way of Brest-Litovsk and then in a sidelong reference—”the truth is revolutionary”—in the final paragraph. Lenin was not a reformer; Lenin was a revolutionary. He did not follow the masses; he led a party that eventually dominated them. Be careful what you wish for.

    Greece in 2015 is not Russia in 1917. The historical analogy is at most a rhyme, and a slant rhyme at that. However putting aside the Leninist romance, Kouvelakis’s point seems to be that Syriza is not radical enough, and if it is to keep its promises, it needs not only to follow but to lead. To do that it must tell the truth about defeats, not lies about victories. Otherwise its election as a party of the moderate left will look less like November than February 1917.

    Easier said than done. Much easier.

    1. Ned Ludd

      The full quote is “To tell the truth is revolutionary.” It dates back to Ferdinand Lassalle, who died in August 1864 (hence, predating Lenin). It is sometimes attributed (incorrectly) to Antonio Gramsci.

      1. dingusansich

        Ah, another flower in the bouquet of attributions. However note what Kouvelakis says:

        “The truth is revolutionary,” to cite the words of a famous leader who knew what he was talking about.

        A famous leader who knew what he was talking about. With respect to the truth as revolutionary. Hmm. Could be he’s talking about Lasalle or Gramsci or even George Orwell. We’d have to ask the guy. My bet’s on Lenin. But it’s a small bet.

        1. Ned Ludd

          Stathis Kouvelakis might think the quote originated with Lenin. Or Kouvelakis may be mistakenly referring to Gramsci. He could also be referring to Ferdinand Lassalle, who founded ADAV, which I think was Europe’s first socialist party.

  10. Jkiss

    Syria campaigned on staying, as Greeks wanted, to do otherwise would have lost the election.
    Tina until a majority want to leave… Imo, this vote is changing.
    However, must tell truth to Greeks that
    A. They got nothing, and
    B. Things will get worse as they run primary surplus.

    Then, sack yanis, who might anyway resign on account of A above.
    Next, bring in mosler.
    Next, Quietly get ready for exit.

  11. Kraut

    The main illusion was to assume that the fight would be Europe vs. Germany. It actually became Greece vs. Europe. The reason for this was the first bailout, which made France, Spain, Italy and all the rest lenders to Greece. That was a clever (or maybe evil) twist back then!

    1. hunkerdown

      Oh, absolutely; most, if not all, international relationships and agreements are designed to bail everyone into everyone else’s private affairs. There’s a pretty good case this was by design, to reinforce against the domino theory.

    2. BadBentham

      Pretty correct : The whole European elite has a lot to lose in the game, namely power, and especially in countries like Spain or Portugal. France is by no means better, but is at least only interested to improve its own position vs. Germany, while at the same time keeping the FN at bay, which makes her kind of an ally.

      In my perspective, the “Spartans” from Syriza might succeed if they hold out long enough that the other peoples movements in Europe connect with them, what the elites of course will try to prevent at all costs. Then, maybe, future historians might claim that the battle with the Troika at the Thermopyles was lost, but it was a necessary price to pay to win the battle of Salamis, and thus the war, for Europe later on.

      After all: The closed ranks of the European system were to be expected, and Greece in itself is in a terrible weak position, where the only real “threat” of Grexit at this -unprepared- point means kind of economical suicide, and losing all later potencial political allies, what Syriza was certainly not elected for.

      Two problems I see personally in many Leftists: One is the lack of realism, the other an utterly annoying defeatism and sectarianism. Even before Syriza was elected, it was “not radical enough” , and now it is described as “weak” and “phony”. While it imo still deserves every support it can get. After all, as terrible as it is from a humanitarian perspective for the Greek people, at least Syriza has now bought 4 months time to prepare its politics. Only then would I dare to start to draw definite conclusions.

  12. susan the other

    Varoufakis’ first response to the new terms was that at least now Greece has open negotiations. So it is just as draconian, but the Greeks are making themselves heard. And he knows he put together an offer that was the only solution to the situation. So Greece cannot be blamed now. Varoufakis knows that Greece can’t pay the loans back because the Greek economy is in permanent negative territory. There is no money and there will be no money in the future for repayment. It’s what Michael Hudson always says: If it cannot be repaid it will not be repaid. What the Troika just did was insure that the creditors will never be repaid because there will never be any money to repay them. It will take them a while to admit they were wrong. And Schaeuble will die first. And by then the situation will be 10 times worse than it is today. And speaking of things we’re (here in the US) not informed about, what went on in Greece between the FinMin and Jack Lew?

    1. Doug Terpstra

      Alas, it can be repaid and will be repaid by the fire-sale of public assets, air and seaports, lands, islands, and tourism assets. That’s the intent of the Troika — looting Greece’s commonwealth, its crucial means of self-sufficiency. That’s why the privatizations were explicitly specified to continue and why Syriza’s capitulation was a serious betrayal.

      1. hunkerdown

        Anyone heard anything from Defense Minister Kammenos lately? Last I heard from him he was talking about Kougi…

      2. BadBentham

        You wish. ;) Even under Samaras, from the ordered sales of Greek property in height of 50 Billion Euro less than 2,5 Billions were actually realized, what leads German politicians and newspapery to notorious hyperventilations about the “horrible Greek bureaucracy”. Now, as I see it, the “official” enforcement status, their legal framework, of the Troika is gone, and all 3 institutions have to act on their own behalf, what should hopefully suffice to further slow down their progress. And if the Greek government decides now to sell property, it does it at least on its own. And not par ordre de Mufti from Brussels.

  13. susan the other

    Here’s another thing. Syriza and all preceding Greek governments have/had trouble collecting taxes. Because Greeks don’t trust the government and believe taxes should not be paid. I think I love this boycott mentality. Not because I’m anti-government – I’m pro-government, good government. But because it will be impossible for all the neo-liberal overlords to socialize their losses. And they can’t put all the refuseniks in prison because prisons are so expensive to operate. Now that is interesting.

    1. BadBentham

      Yeah. Actually, my own claim is that Libertarian Anarcho Capitalists ought to love this country from the heart. Also, it is a pretty fine example how “deregulation” looks like in practice, even with those close to 1 million people working for the state. The only thing really missing for sheer happiness seems to be 25 different concurring currencies in the country that could spice stuff up. – Back to seriousness: The mentality is totally understandable. The government works hand in hand with the oligarchs, who came to their wealth after 1945, also with quite some help from outside, that pay no taxes at all, while a lot of people in the government understand their posts in the very “classical” way as benefices. So it is rather evident that Average Greek Joe is on one hand howling with the wolves, grabbing for himself what he can, while he on the other has an utter distrust for the political actors. Add to this that PASOK, who started as Socialist reformers, quickly after its election made up its own corruption department, on top of the already existing one, in the bureaucracy, also to maintain their political power in society, and you get an idea how Python-esk living in Greece must look like…

  14. Kyle
    “Critics say there is no necessary reason why privatisation should boost the Greek economy or help to balance the budget, deeming it Troika ideology.”

    I find it curiously odd that a lender would require a borrower to sever from sources of revenue. Given that Schauble is squealing like a pig about to lose his bollocks over this, one wonders if he, or even members of the troika itself, has any connections to the beneficiaries of such privatization. Might we suspect similar relationships as are represented by Biden’s son’s ventures in Ukraine? Greece’s lenders make much of the corruption in Greece, but might we suspect a case of the kettle calling the pot black?

    1. Benedict@Large

      There’s nothing odd about it. The lender wants to sever the borrower from sources of revenue when the lender wants the pledged asset more than he wants to be repaid.

      This is nothing more or less than primitive accumulation, 21st Century style. Once the assets are gone, the borrower loses any ability to provide for itself other than as labor provided to the lender at whatever price the lender is willing to pay. On our better days, we recognize this as slavery.

      1. hunkerdown

        Or, as here and in Argentina, when the lender uses that debt as the basis of peonage and wishes the debt to remain perpetual. Same as any other religion.

  15. Kyle

    Wealth of Nations

    “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.”

    I’m quite aware of the common rationalizations. I don’t think collusion should be so readily dismissed. That being the point of the comment.

  16. nohomehere

    Smoky The Bear says! The fire hazard level is High! Extremely Dry Conditions exist for lack of liquidity! All it takes is one hot spark to flare up ! US Federal Forest Reserve service says harvesting or a controlled burn to get rid of the dead and rotting under brush is sometimes a good idea but only when the winds are just right! The ( EURO Land ) park is closed until futher notice!

  17. fosforos

    This whole article is a stream of revolutionary-sounding verbiage that certainly sounds suitable from a mag whose title celebrates that disastrous speechifier, Robespierre. A perfect example: “To make the point through recourse to a historical precedent well-known to leftists, if the Treaty of Brest-Litovsk, under which Soviet Russia secured peace with Germany, accepting huge territorial losses, had been proclaimed a “victory,” there is no doubt that the October Revolution would have been defeated.” “there is no doubt” that whatever words were used in the resolution justifying Lenin’s capitulation the historical outcome would have been no different–moreover, in retrospect it is clear (though it then was not yet clear for a few years) that before 1925 the Bolshevik Revolution had been defeated and buried in a mausoleum on Red Square. What made the treaty a disaster was that (by driving out half the soviet majority, the left-SRs) it instituted the one-party state whose degeneration destroyed soviet democracy and instituted Stalin’s restoration of statified capitalism in the 1930’s. Only subsequent historical reality can establish what, after the fact, there can be “no doubt” about. In 1918, when the German army faced defeat on its western front and needed very speedy transfer of its army across Europe and when England, through the Lockhart mission, was offering military assistance to resistance against Germany, all the left-communist and SR advocacy of revolutionary war needed to be valid was the possibility of a few months of resistance, including guerrilla warfare (when Kutuzov could no longer fight Napoleon conventionally, his guerrilla tactics quite effectively destroyed that invader). Greece gave up nothing of importance (Lenin gave away the Ukraine), won the time needed to start implementing its program (the most important part of which, by the way–tax collection from the oligarchy–is at the very least nominally supported by “Europe”–and to make it politically clear everywhere in Europe that if Greece is to be exited that will be entirely the doing–and the political responsibility before their electorates–of the established “Center Right” and “Center Left” parties all of whom have their nickers in a twist at the prospect of confronting the whole variety of “populist” parties in upcoming elections. Jacobin indeed.

  18. Jkiss

    Mitchell blog today post should be prominently linked.
    Syriza accepts neo.lib idea, must stay in euro at all costs…
    Time for Syriza to split, exit group to explain mmt solution and run on exit platform.
    A few more years of depression/deflation will bring change…
    Greece deflation now running at over 1 pic/month!

  19. Calgacus

    Without a radicalized base that can keep pressing from the left, you tend to get the Mitterand effect, usually in very short order, as capital flight picks up the pace when you begin implementing the program you supposedly got elected upon.
    Parenteau’s email seems to subscribe to the usual, but entirely wrong story of Mitterrand’s socialist program. Supposedly Mitterrand’s naive Keynesian expansion was a failure. He was then forced by the might of international capital, capital flight to his “tournant de la rigeur” – turn to austerity. As shown by Parenteau’s mention, this always-misunderstood episode still has great relevance – e.g. to Greece. But it is hard to draw good lessons from fictional history.

    Alain Parguez & Jean-Gabriel Bliek’s 2008 Mitterrand’s Turn to Conservative Economics- A Revisionist History building on Robert Eisner’s 1983 Which Way for France?, the result of a study Eisner undertook for the French government, are must-reads.
    The real story, as Eisner says, is that the initial expansion was a success. It was terminated because of an obsession with trade deficits and the foreign sector, logically accompanied by “devaluation” of the importance of the domestic sector, of cultivating your own garden. Bliek & Parguez explain how this was NOT a reaction, but something planned from the beginning, and inspired by “traditions of an Austrian- influenced right-wing economic philosophy and a Marxist ideology grounded not in John Maynard Keynes but in principles very similar to the right’s.”

    In France, and often elsewhere the Left is often (usually?) on the right (to a substantial degree) of the Right! It deceives itself with a bogeyman of an omnipotent “market” that dooms independent national action – in practice, any action at all – to failure. In reality, Mitterrand was the real bogeyman who destroyed his own fake socialism – and the primary instigator of the Euro suicide pact to boot. But the Left tells itself that these fairy tales prove that a mythical international rescue is imperative, necessary. And with this comfortable counsel of despair and impotence it becomes a religion waiting for a Messiah that never comes, while his votaries collect dues from the ordinary faithful, of course.

  20. Sibiriak

    Calgacus: “And with this comfortable counsel of despair and impotence it becomes a religion waiting for a Messiah that never comes…”

    I followed you regarding the “real story” about Mitterrand’s turn to the right, but, just so I am clear, what exactly are you saying is the illusory “Messiah” (“mythical international rescue”) in “the Left’s” mythology?

    1. Calgacus

      Sibiriak: Rescue from international solidarity and cooperation, worldwide revolution, etc. In other words, somebody else doing the work. The hardest work of all being to liberate ones one mind from oppression, confusion and such hopelessness. There are numberless nonsensical pieces written by “Leftists” stating that such and such situation was doomed to failure, it proved that action on a national level was futile. Blah, blah, blah.

      Such things, such help can be necessary – if the bad guys are shooting at you, blockading you into starvation! But only then. The Left oppresses itself with crazy ideas that minimize its own capabilities, the domestic capacity of a nation. The only thing where Yannis Varoufakis, Syriza & NC deserve criticism is with this kind of idea, this conviction of impotence. Which is not based on any reasonable economic logic or historical experience, but is more of a psychological condition of depression. Kant said “Sapere aude” & Hegel enumerated ad nauseam the phenomenological contortions that thinking goes through in order to avoid thought. This is much the same.
      Greece can decide to exit austerity all by its lonesome. If it provokes expulsion from the Eurozone, from the EU, that is what it does. It will not cause starvation. It will not cause collapse, and logic and experience suggest that after a short transition, the outlook will be good.

      1. financial matters

        I agree with what you are saying as usual. But would like to add that Yves has created a blog site where perhaps some of the best economic discussion can take place.

  21. philippe kieffer

    A very interesting 30 min interview of Yannis for those of who speak Greek.

    The fudge in the agreement is being presented as deliberate by both (or all if you prefer) parties to the negotiation for domestic consumption (Greece, Germany & Co, IMF etc…). Of course all parties have been interpreting the agreement in their own way to their respective audiences in the last few days.

  22. Yannis


    “Full retreat”..

    One of the first new laws which will pass in the next days is the protection of indebted houseowners who can´t pay their mortage to the banks.

    Just imagine this “full retreat” in the USA after the lehman-crash,fannymae and what ever names there have cost millions of american families their homes.

    And this is just one example of the “full retreat” of the just 3 weeks old Syriza-government.There are many more I could name:

    The coupling of the surpluses the greek state can achieve in the next years with the amount of the paybacks to the IMF,ECB etc.

    The measures (“food stamps”,free eletricity etc for some 300.000 families) against the extreme poverty caused by the social spending cuts.

    The re-activation of the state TV ERT and the reemployment of some hundreds of more left-leaning/independent journalists who have been dismissed.

    No more cuts to pensions,wages etc,etc..I could name some more.All these no “victories”;


    Your blog is called “naked capitalism” should not dress capitalists again when they just lost a shoe.It could be just the start for the rest of their clothes.

    Greetings from thessaloniki,Yannis

    1. Santi

      I think that until the proverbial 100 days are spent it would be difficult to assess the deal. For the moment Varoufakis is basically saying, with the “creative ambiguity” mantra, that he will do as promised.

  23. Yannis

    Our biggest fear was that Tsipras would indeed step back in “full retreat”.But there are hints that he and his party are really playing “hard”.

    I wont tell you much but if this is the case there will be many huge scandals involving the biggest multi-nationals (banks,defence-companies,politicians of germany,france,USA,UK),right a few minutes back Tsipras also announced that there will be a official investigation in the way the nation got into this debt trap.”Odious debt” will also be an issue.

    There are some weapons in our arsenal.But some one must have the will to use them.Maybe this is the case with Tsipras and Syriza.Let us hope so.

  24. jkiss

    I’m sure everybody on this site strongly supports what you have been trying to do to support the Greek people under impossibly difficult circumstances. However, tactics come from how you see the world and your options, and some here disagree with what seem to be your assumptions:
    A. You seem to think that you can extract sufficient funds sufficiently quickly from oligarchs and others that you can maintain a 1.5% surplus without pushing the economy further into depression, raising unemployment, and hastening the Exodus of your young.
    B. You do not seem to accept that, as Billy Mitchell posts, you must run a 10% of GDP deficit for years, as the US did do in 2010-2012, in order to bring about the anemic growth the US enjoys today (and which IMO is about to reverse because deficit is now sub-3% while we import 4% while saving 4%.)
    C. You assume that drachmas would drop from any initial value immediately on issue… and yet on the first day the number of drachmas available would, as Mitchell says, be small and in high demand if government only accepts their own currency for payment of taxes, as is true of all currency issuing governments. IMO if drachmas were set at equal to 1 euro on issue, they would for at least a time trade at a premium to the euro, and would decline precipitously only if excessive amounts were issued and/or government tried to spend them to purchase foreign goods (as Weimar Republic did when they tried to purchase gold on foreign markets to meet reparation agreements to other foreigners.) Of course, collecting taxes is critically necessary to maintaining the currency’s value within you borders, as is true of all fiat currencies.
    D. You seem to think it would take a long time to bring back the Drachma. IMO this could be done quickly, over a short bank holiday; print Euros with your current equipment but add a D after the Y (Euros printed in Greece have a Y), plus maybe adding DRACHMA, and maybe using a different color ink (if this does not affect the ATM”s.) Then, later, at your leisure, swap Euro/Drachma notes with more traditional looking Drachmas. So residents must have the new currency to pay taxes and the currency is immediately dispensed from ATM’s.

    Southern Europe is a great laboratory experiment demonstrating the bankruptcy of neoclassical economics… every prediction from IMF and others has been wrong as they wait for the confidence fairy to pick up the massive slack. Greece could be an equally great counter example, showing that a small country without significant exports can achieve full employment within the constraints of modest real assets (you have plenty of manpower to repair roads, but asphalt is an import.) Oil, the lifeblood of modern economies, would be a real problem, which perhaps could be finessed with a loan from Russia, anyway sympathetic, that could eventually be repaid if the loan does not turn into a gift) as tourism returns. Plus, there are gas assets to be developed…

    You have no doubt been so busy you don’t have time to turn around. If you have a little breathing room at the moment, perhaps you will consider a plan B.
    My suggestions:
    Read Billy Mitchell’s recent and previous posts on Greece, linked on NC.
    Ask Warren Mosler (also linked on NC) to consult. He has previously advised groups in Europe, and certainly has the means to travel to Europe and offer suggestions of how to optimize an exit.

    A last thought: IMO the EZ will not change, depression will if anything worsen in southern Europe. Germany cannot continue exporting goods to neighbors without financing the imports, i.e. not at all sustainable. If true, the EZ is doomed and will eventually break apart, whether one by one in the south or Germany in the north. The breakup will mean a deflationary shock, reduced trade and investment from today’s low numbers, and rising unemployment. This means that an early exiter will enjoy at least the modest level of demand (tourism) that comes from a stagnant Europe, and will have the chance to rebuild its own economy before the deluge. And otherwise your residents will soon enough once again resort to protest that itself is off-putting to tourists.

    Everybody here hopes you will find good luck. Many think there is none to find within EZ.

    1. Yves Smith Post author

      “Yannis” is a common name in Greece. This is not that Yanis. And he is not trying to impersonate Varoufakis. I don’t know why readers are assuming that.

  25. Kyle

    “…there will be many huge scandals involving the biggest multi-nationals …”

    Kick @ss and take names Yannis. There’s nothing civilized about starving people to death.

  26. Alan Harvey

    With its characterization “Throw Syriza on the fire with the Neoliberals,” this piece does nothing to illuminate the way forward. This agreement is not going to be the final word. Varoufakis is right to claim the negotiations are continuing.

    The violent and inflammatory response from the left may actually strengthen the Greek hand. At a minimum, the entire play draws the lines brightly between the Neoliberal Troika and the real interests of the people in whatever country. The play is now on center stage, with strong actors. The longer it goes on, the better.

    Insistence on austerity, and the preposterous claim that it is leading to recovery, will be ever harder to sell (or stomach). Did we really expect that the finance-centric powers would do what is reasonable, based only on humanitarian impulses? Or that they would cave in the first battle?

    Beyond this, bailing out of the euro will require the broad support of the Greek population, a population which once was strongly against the move. Hardball by the Troika will give the Greeks their own TINA, “There is no alternative.”

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