Mathew D. Rose: Greece – It’s a Revolution, Stupid!

Yves here. As Greece’s struggles to secure relief from impossible-to-pay-debt that served to prop up otherwise insolvent French and German banks, and to be permitted to implement measures to reduce distress and restore growth, more and more observers are recognizing that this is really a struggle over democratic self-control versus rule by an unaccountable technocracy with inflexible rules, using finance as their enforcement weapon. This speech in the European Parliament today by UKIP leader Neil Farage (hat tip Chuck L) echoes some of the themes of Mathew Rose’s post. Rose also explains how the many Germans justify the counterproductive destruction of a society that they have turned into a vassal state.

By Mathew D. Rose, a freelance journalist in Berlin

I fear most people have become so fixated on the Greek debt and the fate of the Euro, that they have completely ignored the political dimensions of the current conflict in Europe, shich are no less dramatic. The ongoing dispute between the German and Greek governments is nothing less than a democratic revolution against German hegemony and the attempt of the Germans and their paladins in the EU to dictate Greek domestic policy. It is a struggle by the Greeks to re-establish national sovereignty. What is more, this is the first time in the history of the EU that a political party with true leftist credentials has led a member nation. For reactionary Germany, with its neoliberal agenda, that is intolerable. This conflict is profound, if not existential, and thus could well be intractable.

The Greek people have made a decision to liberate themselves from a repressive regime of austerity and its incumbent humanitarian disaster. The Germans on the other hand refer to the developments of the past five years in Greece as a success. Yes, it has been a success in the sense that the Germans and French were able to rescue their banks and leave the Greek people to foot the bill. It was even more successful in that Greece was stripped of its political and economic autonomy – with the assistance of the quislings Antonis Samaras and Evangelos Venizelos.

The German government has never wanted democratic reform in Greece, leaving the perpetrators of the Greek financial crisis, the political and financial elites unscathed. Success has meant Greece being reduced to a vassal state, raising the market above all other values, where multinational corporations, including German companies, could take over profitable state assets cheaply and German tourists could enjoy cut-rate holidays or buy holiday homes at bargain prices. What occurred in Greece with the bailout is an occupation, not with troops and panzers, but by financial means.

Following the recent elections in Greece, Germany and its EU compradors are making it clear who is in charge. The Germans are currently not offering any compromise, but iterate the same blunt demand: Greece has to accept what is being dictated; in other words, capitulate or be annihilated. This time it will not be the Wehrmacht und Luftwaffe that are to force the Greek nation into submission, but a weapon just as lethal: national bankruptcy.

What has been a true disgrace is the role of the German people, who sincerely believe that they are the “Good Guys”, championing democracy and justice wherever they tread. There is a saying in German that should not to be underestimated: “Am deutschen Wesen mag die Welt genesen” (The German character will heal the world). In Germany, where the banks are held in awe, the government is dictated by vested interests and the Germans lay claim to a very high social morality, the true reasons for the so called Greek bailout – saving German banks – would not do.

Thus the government, assisted by the media, utilised old political tools: nationalism and racism. The financial crisis in Europe and Greece was no longer a narrative of profligate, lying, cheating, corrupt private banks, but of profligate, lying, cheating, corrupt Southern Europeans. It is surprising, if not shocking, how prepared the Germans, many of whom normally possess a very high political acumen, were prepared to embrace this discourse. A climdown by the German government in what has become such an emotionally laden issue will be difficult.

Add to this, that no nation has profited more from the Euro crisis than Germany, catapulting it to its new hegemonic role in the EU. According to the Bundesbank the German government had by the conclusion of 2014 saved 152.4 billion Euros in debt payment due to the low interest rates it pays for credit since the crisis began. The depressed value of the Euro, also a product of the crisis, has been a boon for Germany’s export oriented economy and returns from overseas investments. Thus the Germans have ignored the humanitarian crisis developing at its doorstep.

Unfortunately nationalism begets nationalism and this may well become the fulcrum of future developments. Whereas banks and the EU are rather elusive opponents, Germany is not. Europeans, like their German counterparts, are well versed in nationalism. Thus being able to concentrate their ire upon Germany – and the current intransigence of the German government towards Greece is augmenting this mood – there is a potential political backlash developing.

Greece has played its political hand brilliantly. They have presented a humanitarian and democratic programme, gaining the moral high ground, then going on to offer compromises and plans to put these into action. They have exhibited the true spirit of the European Union. The Euro Group, led conspicuously by Germany, demands a perpetuation of their imposed austerity programme.

The problem is that Syriza is not a Social Democratic party that has no scruple about selling its voters down the river. They appear to be sincerely committed to democracy and reform – and prepared to fight for it. Despite the current Greek government having not named the German government as the problem, which the media does anyway, the perception of many Europeans is of the return of the Ugly German on the political stage.

This may well have a decisive role in the negotiations in the upcoming weeks. Should Germany come down too hard on Greece or even drive it into bankruptcy and out of the Euro, this will give all the anti-austerity political parties in Southern Europe a fillip. They, as Germany before them, will be able to convert an economic conflict into a nationalistic one, simply from the opposite perspective: the repressive, greedy, power hungry Germans once again plundering Europe as they did seventy-five years ago. This will be utilised by the left as well as the right. Soon Germany may not only have to deal with the Greek government, but the Spanish, Italian, French and Portugese as well.

As a historian I know better than to speculate upon history repeating itself, but there is something eerily disturbing concerning the current situation. Whoever I speak with and in most Anglo-Saxon media, everyone analyses the situation with Game Theory, apparently rather modish these days. According to them, the Greeks and Germans will pull up at the brink, anything else would be madness. 101 years ago, this was the same thing being said in Europe concerning the Germans with regard to the conflict between Austria-Hungary and Serbia.

Then World War I broke out.

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  1. Benedict@Large

    I’ve been saying since the Greek crisis began that this had the markings of war, and for the very reasons here. Greece literally cannot function with Germany’s idea of what it should do, and repeating this twenty times does not make it moreso. Meanwhile the Germans have always been too stuck up to admit they were (and are) wrong. There really is nothing hard about any of this, as long as you leave out German ego.

      1. Schofield

        Not when they’re intent on following a Hayekian line and “de-nationalizing” the creation of money to put it in the hands of unaccountable and irresponsible Fat Cat bankers as Ann Pettifor so ably points out in her book Just Money.”

    1. NotTimothyGeithner

      At least from the German perspective, the EU isn’t set up to tax the wealthy which means new funding has to come from the bond market, printing, or taxes on local Germans. All of these solutions are taxes on the 99% in Germany, and Germany is under a grand coalition right now. No group is popular.

      Where is the funding going to come from? Austerity has angered the whole continent, but the European governments would have to agree to end capital flight and tax the wealthy to avoid government collapses.

      Merkel is clearly devoted to the wealthy. This whole Greek issue is about German bank exposure, but any other funding solution ends her government putting Germany and the EU into chaos.

    2. washunate

      The interesting question might be war with whom?

      Germany’s geopolitical situation doesn’t care so much about the Greeks, a small nation at the edge of the continent. It’s the Americans that are the big picture worry, the basic decision of whether to continue enabling the Anglo-American looting or stand up to it. I do have a little sympathy for the Germans as they are in a not too dissimilar position from educated liberals and intellectuals in the US. They’re middlemen, living more comfortably than the masses, but not the top power. However, since they aren’t resisting, they bear responsibility for condoning the system. Indeed, as we are seeing in the Greek drama, it’s the middlemen, not the top dogs, inflicting most of the day to day pain. That’s exactly how it is in the US, where the major pain points, like the two-tiered justice system, are generally enforced by people making $100,000 a year, not people making $100,000,000 a year.

      It’s easy for an outsider to see that the long-term interest of Germany/the US professional class is to turn on their feudal lords now, while they still have options – because of course, they’re next – but that’s awfully hard to do in practice when you’ve got it so cushy in the meantime.

      1. NotTimothyGeithner

        No one has the armies or logistics for war much less the popular support. Flooding places with weapons is one thing, but even then, they are limited by fuel, choke points, and such. Iraq was surrounded in 2003 and had a military suffering a decade of decay and a leadership expecting the U.S. to leave when they didn’t find wmds.

        Look at the NAF in the Ukraine, a few thousand guys can stop, cut off, and wipe out superior numbers who can’t move against Soviet Era and modern weaponry without air support. The Junta’s air force is gone. The NAF can’t go on the offensive beyond sympathetic regions for the same reason. Right now, they rely on established supply routes. If they went elsewhere, they need a whole separate apparatus.

        In WW2, the Germans never tried IEDs. Why? They called them mines, and the U.S. and the other allies had divisions of guys just to defuse mines including Mel Brooks. Elvis was an MP. Given what happened in Iraq, there just aren’t enough people in the current armies to allow armies to move.

        As for NATO air power, those planes need maintenance, forward bases, and haven’t gone up against modern anti-aircraft weaponry in a while. Populations are already teed off about defense spending and domestic austerity.

        Despite all the propaganda, only 41% of Americans think we need to counter Russian aggression in the Ukraine by sending weapons. That poll is already loaded. Before you say wait until the propaganda heats up, Obama compared Putin to Ebola and ISIS in the SOTU.

        1. weinerdog43

          “In WW2, the Germans never tried IEDs.” Well, not exactly. My Dad saw several of his buddies get nailed by ‘bouncing bettys’. Pretty horrific because once tripped, the canister flew up about waist high before blowing up. You can imagine what area of the body is subject to such a device and I think it’s pretty cringeworthy.

          Anyway, your point is still well taken. I don’t think most Americans are foaming at the mouth to ‘teach Putin a lesson’.

          1. Cugel

            The entire point of the U.S. creating a professional military after Vietnam was that the Vietnam experience proved conclusively that the U.S. simply could not fight colonial wars by drafting people. The popular resistance proved too great. Wars from then on had to be be “contained” – that is they had to be able to be fought without the civil population being inconvenienced to any great extent. The public basically made a deal with the ruling elites that they could fight their wars with a professional military, not a draft, so long as we get to stay largely out of it. The professional military follow orders, and it may impose hardships on them, but they “volunteered” for this. The minute the elites start imposing serious costs on civil society, the entire political consensus supporting their wars collapses. (As it did with the Iraq war). Thus, the entire emphasis on fighting bloodless (i.e. few American casualties) wars using aircraft and drones, which are “fire and forget smart weapons” – so that the victims can’t shoot back, and Obama’s obsession with drones and refusing to put “boots on the ground.” Because “boots on the ground” is how American casualties ramp up. And there’s ZERO popular consensus in favor of fighting endless wars in the Middle East – especially if it involves American casualties. At best these wars are tolerated – until the costs to us become too great, and then there’s a backlash as there was against Bush.

            1. NotTimothyGeithner

              There is also a sense Western forces are invulnerable. Much of the West’s military bravado is based on blind faith in wonder weapons. The ieds had to be portrayed as the work of sneaks and given a fancy acronym to justify why the U.S. wasn’t controlling the roads in Iraq and Afghanistan.

              During the red line incident in Syria, there was a leak detailing a conversation where Gen. Dempsey had to explain to Secretary Skull and Bones that Syrian air defense can shoot down our planes or hit our ships. The neoliberal/conservative born believes slapping a property of the US AIR FORCE sticker makes a weapon or tool magic.

        2. washunate

          Yeah, that kind of logistics requires mass mobilization, which generally requires a clear enemy – something current American geopolitics lacks. But if such an enemy could be conjured up, I don’t think it would be particularly difficult to do another round of mobilization. (not saying it would ‘work’ in a military occupation sense, just saying there’s no domestic opposition in the US to bigger and bigger government).

          So the tricky thing for Germany to consider is whether America would want to make an independent Germany, or perhaps a closer Franco-German partnership, or perhaps a German-Russian detente, into a major threat that must be stopped.

          Because then the issue isn’t NATO warplanes and warships going up against Russian anti-air defenses and electronic countermeasures and so forth. Rather, it’s what will the Good and Glorious Americans do to the Traitorous and Duplicitous Germans, an entirely intra-NATO affair. Financial repression? Confiscation of overseas assets? Cut off of seagoing commerce? Sabotage of communications systems? What about power and water systems? Disclosure of sensitive government meetings and documents? Those are the logistics that must keep the more strategically minded Germans up at night, more so than the logistics of mass armies sweeping across central Europe.

          1. NotTimothyGeithner

            There is opposition. The push for arming rebels and Democratic “smart” wars is an acknowledgement large wars won’t be tolerated. Syria didn’t give up when threatened because they saw Iraq and Libya. Obama’s threats probably did more to strengthen Assad than anything else.

            They would have to pay for that kind of mobilization which would undermine the point of permawar. The only people with money are the parasite class, or by paying for the labor and new soldiers, they would be dramatically altering the class structure.

            There is no enemy. Even with Iraq, they had to create a mysterious Authorization bill and lie about the costs. Seeing Russia as an enemy requires not knowing where t b email Ukraine is or Russia’s population. The Obot, Pearl, from the other day kept going on and on about Russia’s size. It’s less than 1/3 the population of the EU. It’s like saying the Canadian/Mexican alliance is a threat to the U.S. As the story goes on, people will stop buying it.

      2. Seamus Padraig

        They’re middlemen, living more comfortably than the masses, but not the top power.

        Yeah, it was always like that. Think of the old plantations in the south. ‘Old Massa’ wasn’t the heavy. He just sat back on his porch, drinking his mint-julip tea, raking in the money. The bad guys, the enforcers, were the crackers. They were the ones wielding the whips, making the slaves work. See? Nothing has really changed, has it?

        1. washunate

          Right on.

          Although, in my more romantic moods, I like to think that we’re learning a little bit as a species as we go through these periods. Perhaps our present time of upheaval and preventable suffering won’t be quite as bad as plantation slavery and WWI. Progress, a tad at least, on an intergenerational scale….

          And then I remember that more people are enslaved in the world today than in the 19th century, and wonder how anyone can stay sane in our insane world.

    1. Newtownian

      The picture of Moe Larry and Curly doing their thing is a beautiful metaphor. (note that the link seems to have changed a little)

    1. bh2

      Add to that this amusing comment: “This speech in the European Parliament today by UKIP leader Neil Farage (hat tip Chuck L) echoes some of the themes of Mathew Rose’s post.”

      As UKIP leader and MEP, Farage has been repeatedly and bluntly predicting this coming tragedy for nation states under the Euro regime (and for Greece, in particular) for many years, so the correct phrasing would be that any similar “themes” in Rose’s post echo Farage.

  2. LenX

    Thanks so much for the continued coverage of this crisis. Mathew Rose has it just right. There are much broader implications here than just a dispute between an upstart “far left” party and the Euro zone. A year from now, there will likely be new governments in Spain (Podemos) and Portugal (the Socialists) that are far more supportive of Syriza’s position. The leaders of both these parties (Pablo Iglesias and António Costa) have spoken favorably of Syriza and against austerity. Even if the EU manages to humiliate Greece, this crisis won’t end.

  3. Nameful

    The one thing everyone talking about the Greek crisis seems to forget is that historically Greece is a bad debtor. More than half of their post-Ottoman years were spent either in default or debt restructuring. It makes a hard case against trusting any Greek government promises of repayment without requiring some tangible guarantees. That is why I would be as wary of anyone calling Greece the victims as I am of anyone calling Germany the good guys. Both parties are trying to lie and cheat here – well, ‘speculate the context in their favor’, to be politically correct :)

    1. NotTimothyGeithner

      If Greece is a bad debtor, why make loans? Should we raise a fund for people who loan money to crack addicts? Never mind shenanigans by EU officials to bring Greece in or domination by the English for much of that time or the second world War and it’s affects on Greece.

      1. jaymos

        I believe that under basle II, European sovereign debt required no risk capital. Therefore, from a return on equity perspective, the spread is free money. Until it isn’t.

    2. BillC

      Takes a lying (or negligent) lender to give money to a lying borrower. And which one is better situated to judge the ability of the borrower to repay? Just as true for the EU as for the TBTF banks. It’s time to stop blaming solely the often-desperate addicts for the sins of the pushers.

      1. Cugel

        “The Southern Europe moochers are taking the hard earned Euros from the industrious and hard-working German people to support their indulgent consumption, so they must pay it back. A deal is a deal.” German propaganda in a nut-shell. All of it blatant lies that never touch the truth at any point. The loans were never made to “the Greek people” but to bail out German bankers, so it was in truth an attempt by German bankers to force the Greek people to repay German bank losses. This truth is too much for the German people. They simply can’t understand it. And thus we see endless amounts of empty moral posturing and swaggering bullying. We see similar lies in the U.S., but at least everybody here realizes that the bank bailout of 2008 was not made to “the people.” Everybody, from far left to far right, is angry and hates the bank bailout.

        1. Seamus Padraig

          Well, some Tea Party types have invested considerable effort in blaming the blacks for the mortgage crisis that triggered the crash. The whole thing seems eerily similar to the dynamic that has taken shape between the Germans and the Greeks. The latter are invariably accused of being lazy, shiftless and irresponsible. And to be sure, there’s a measure of truth to that in both cases. The problem is that these grievance complexes totally distract people from the main problem: the big banks.

    3. bdy

      Whether the correct narrative is double-dealing banks, dead-beat borrowers or both, the facts remain:

      Greeks are for the most part in poverty, and the contract in place to (ostensibly) alleviate that poverty is making things worse.

      Germans are by and large doing okay, and that contract is making them wealthier.

      Under the current debt repayment structure, Greece will never be able to meet its obligations. Rather, the debt continues to grow. (Never mind the stupidity of a lending practice that charges more and more to parties less and less able to pay . . .)

      The changes that Syriza proposes will help alleviate the suffering of the Greek people, increase demand, and reduce systemic risk for bondholders – also reducing their expected returns (returns that will never, ever be realized under Germany’s position – although that’s not such a bad thing for a lender when it’s a symptom of infinite expected returns from perpetually compounded debt).

      Accepting Syriza’s proposals would likely lead to a drastic reduction of the power of the Troika and the threat it poses to sovereignty and self determination. I want that, but let’s face the truth. It won’t happen until it’s 80% of some Teutonic, Flemish or Norse social democracy crying “Uncle”. And don’t mistake the Greek stance as being anything other than that kind of capitulation. A 1.5% surplus is insanely conservative with amok unemployment. Any cursory look at YV’s posts on NC shows he is fully aware of that, and not posturing. Rather, he’s “okayokayokayokayOKAY! We’ll pay you back and we’ll try to stick to your ‘deficits are bad’ thing . . . just . . . if you privatize everything to foreign investors and make employment impossible by cash-crunch, then what are we going to pay you back with?” Germany responds by continuing to twist a broken arm. Idiots.

      Washing hands and saying “to hell with both sides” is de facto support of the wealthier side. Fairness has little to do with who is lying about the fraud that made the mess, and everything to do with whom policy disempowers from taking care of themselves.

      This is the financial equivalent of the U.S. self-perpetuating war. Unpayable debt breeds unpayable debt the way violence breeds violence. Whoever-has-the-biggest-bank-wins is no way to run a continent.

      1. Carla

        “Never mind the stupidity of a lending practice that charges more and more to parties less and less able to pay . . .”

        Here in the US, we have a name for that industry. We call it Payday Lending. Payday lenders seem to make money hand over fist charging 300, 400, 500 percent interest on an annual basis; the biggest of the TBTF banks own some of these companies. When there are enough poor people, apparently this pays handsomely. And we sure know how to create an ever-increasing supply of poor people.

        Perhaps we should say “Never mind the stupidity of a lending practice that destroys the society that created it.” But then, as the bankers say, IBG-YBG.

    4. Dan Allen

      The Greece as liars and bad debtors, perennial deadbeats, is a quick story peddled to shuffle Euro taxpayer money to the banks.

      Here’s why:

      1. Greece hasn’t defaulted since the Great depression, and even then, they paid that money back and then some in the 1950s. It’s been 80 years since a Greek default.

      2. The Rogoff paper that shows Greece in default for its entire history prior to that has done Greece a great disservice. Greece had 5 previous defaults.

      They are:

      One, the initial loans given to fund the Greek rebellion against the Ottomans in 1821. That was a very long war and Greece wasn’t even functioning as a state until 1832, when they began paying back that long defaulted loan. This was the default of the 1820s.

      Two, the Great Powers didn’t want to lose the Ottomans. So they handed Turkey a large sum of money for lost Greek possessions, and they charged the loan to Greece. Te Greeks never signed and foreswore this “loan,” never paid a single dime of it. Yet this is charged as a Greek default. This was the default of the 1930s.

      Three, the Great Powers decreed that Greece needed a royal from one of the noble houses of Europe. No one wanted to become that royal. So, finally, a Bavarian Prince was given a huge loan to pad his mattress, with the money supposedly coming from the Greek people. Paupers and peasants. The King, realizing he was going to move into a ramshackle home in a dusty sheepherding village (such as Athens was at the time) departed for Bavaria with the money, and returned only for communal blessings. This was the default of 1842.

      Four, in 1878, Greece settled all outstanding debts (paying at very very high interest rates). From 1878 until 1893 is the only period in Greece’s early history from 1821 onward when it was not in a state of default until the 1930s. In 1893 Greece took its first ever loan from foreign banks and defaulted in 1898. The 1890s until the 1910s were the time of the Balkan Wars.

      Five, Greece defaulted in 1932 during the Great Depression, a time of many defaults around the world.

      Six, 2012.

      From the Great Depression until 1912, Greece hadn’t defaulted.

      But there is one country that defaulted spectacularly in the period, notably the 1930s, 1940s and 1953.

        1. Irrational

          ditto – always suspected the R&R book left out some important details to present their smooth conclusions, but never did dug (shame on me!).

    5. Carlos Fandango

      Don’t give me lazy, profligate Greeks, that line is old and stale. After joining the Euro the Greek fiscal defecit was used to import capital goods, including a lot of German made military toys. With low interest rates they levered up to buy ever more expensive houses and import BMW cars.

      There’s no difference between Greeks and anyone else. British, American, French…. They all took as much credit as the irresponsible bankers were so eager to offer. It’s very simple everywhere…… if the banks offer the credit, some mug will take it. Debt is like an addictive drug, it should be managed and regulated prudently, not left to the absurd idea of a free market, with leering, sleazy salesmen ramming it down everyones throat.

      You don’t advertise heroin with smiling advertisments of a happy family skipping through a sunny park, so we shouldn’t be so damn blasé about banks pushing debt.

      1. hunkerdown

        Yeah, Don’t give him that line. Give it to me, you arrogant, miserable authority-lusting masochistic infant-slave, and see how far it gets you. I’ll just make you cry, you know.

  4. Mario Medjeral

    Why not assume that Germany wants Greece out and perhaps Italy, Portugal & Spain too eventually? A controlled dismantlement as proposed by the National Bank of Poland. (english).
    They suggest to drop the ‘non-competitive’ members, create a new union of ‘competitive’ members and this new union to create strong ties with the USA via the ‘new free trade agreement’.
    Wonder who in the US wrote this for the National Bank of Poland…

    1. OIFVet

      I love the Poles. They try so hard to compensate for feelings of inferiority with macho bravado, and for servility with the imitation of independent action. Trying so hard to be part of the “club” that they don’t hesitate to drop on their knees and service the cool kids, to paraphrase Sikorski. They forget that, as a male chauvinist pig college buddy of mine put it, “I don’t kiss a girl after she sucks my…”

    2. Carlos Fandango

      Germans are very wedded to the idea of an export surplus, they lost WW2 so they are only tolerated as a junior member of the Anglo American “screw you” financial dominance club. They need their export markets. Having a large industrial export sector is their premier policy, it gives them prestige and a sense of security, it’s like crack cocaine to them.

      1. Seamus Padraig

        But how much longer will their mercantile model last when all their customers are going bankrupt? And now, just to screw things up even more, the Germans have been snookered into sanctioning Russia, too!

        1. Kyle

          It’s not the industrialists, they just drank the Kool-aid. Even though they’re partly responsible because of their squeeze on labor they’re just trying to survive hence the looting of their companies/shareholders as a symptom. Plus they still squeeze labor by moving plants overseas. It’s the bankers and their captive economists and politicians pushing the philosophy of austerity. Imagine if you were sitting on enormous amounts of cash with virtually no place to invest with a reasonable return. For every dollar you can get pulled from circulation, the value of your pile of cash increases due to scarcity. In a frank deflationary environment this escalates extraordinarily. Make sense?

    3. Xender For PC

      There’s no difference between Greeks and anyone else. British, American, French…. They all took as much credit as the irresponsible bankers were so eager to offer. It’s very simple everywhere…… if the banks offer the credit, some mug will take it. Debt is like an addictive drug, it should be managed and regulated prudently, not left to the absurd idea of a free market, with leering, sleazy salesmen ramming it down everyones throat.

  5. steviefinn

    I do hate it when I agree with Farage, but even a broken clock is right twice a day. As for the Germans – they have been led to believe much worse things & most people everywhere it seems, are happy enough to accept the nicely wrapped & prepared scapegoats for them to condemn & feel superior to.

    1. Newtownian

      Yes that was weird to watch Farage’s pretty open statement to the effect that “Syriza may be mad ultra lefties but their my kind of mad ultra-lefties”. Of course Farage is in election mode and knows a free catch when he sees one.

  6. Peter Principle

    “Am deutschen Wesen mag die Welt genesen” (The German character will heal the world)

    That’s right up there with “Arbeit macht frei.”

    1. hunkerdown

      I wonder if any of the Greek cabinet would dare to call them out like that. It’s highly undiplomatic. But diplomacy is nothing more than elite self-justification, really, and one suspects the bloodless talk is precisely intended to euphemize the blood they’re drinking.

  7. peter de haan

    Reading the Dutch online papers and reader comment sections, it’s obvious that ‘we’ are Germans now. It’s not that we are ‘bad’ people or mean to throw others under the bus. It’s simply that the mainstream media has been very successful in framing the issues. The level of reporting is atrocious. It’s a them-against-us kind of atmosphere in the simplest of terms; WE lent you the money and YOU will have to pay us back somehow. Why should WE bail you out if you’ve been lazy and can’t even collect your taxes (and I may have my pension be at risk, or whatever). People are just clueless. Simple Thatcherite messages (such as a nation’s budget is like a family budget) strike a chord. National banks are seen as ‘ours’, even though we probably don’t own a penny worth of stock.
    It wasn’t always like this. In the 70’s and 80’s, when I still lived there, there used to be a reasonable level of critical thought and a wide variety of opinions on international and economic matters. People have dumbed down and it’s horrible. The issues at stake are huge and it goes to the heart of our democracy with sovereign nations being upstaged by bankers and financial imperialism (besides the military kind). For common people to be duped into siding with oppressors is downright sad.
    Thanks goodness for alternative and independent media. These are currently only drops in the ocean and I don’t know what it will take for common folks such as myself to start taking notice of alternative points of view in significant numbers. I’m only seeing it getting worse and it’s depressing. If someone sees light at the end of the tunnel, please make my day!

    1. Carla

      Peter, I can only suggest, share this post in particular, and Naked Capitalism as your go-to blog in general. Then tomorrow, do it again.

    2. tommy strange

      For what it’s worth Peter, all my german (and austrian) friends are completely pissed off on how the german govt is acting. And that most germans are going along with the propaganda. There is a large militant libertarian left there…but like here, you can’t see it ‘above ground’, until a focus and large action takes place (occupy didn’t surprise me a bit…I knew it was going to happen,just not with such large usa sympathy though)
      Still take my comment with a grain of salt. Since the 80’s I’ve been in left bands, and anarchist circles, so my euro friends come from the same punk left circles. In SF, where I live….there is absolute rage going on underneath…and we are organizing….you just won’t know it until we become huge enough to , at the least, attempt a bay area general strike. ….

      1. peter de haan

        Yes Tommy, it was quite similar in Holland as in Germany (anarchist and punk left circles), but whereas in the past it was quite out in the open and could count on a lot of empathy, this is no longer the case. Amsterdam was once a laboratory for alternative, libertarian left experimentation. No more.

        With project Europe, and even before that, the rich promises of ‘globalization’ (as policy makers came to define it) came knocking on the door. That wasn’t a democratic choice. You had to abide, or else your companies would go under in the face of world competition…or so the story went. There would only be ‘small’ price to pay for this great gift, and that would be the gradual breakdown of the social safety net (to create an ‘investor-friendly’ climate, beneficial to all). Lo and behold, times were good for a while (if you weren’t crippled, a ‘guest’ laborar, etc.). People got jobs and houses, excited to live the good life. They became believers, ever more willing to continue on this road of riches and trading away the welfare state by popular vote.

        Now, I had always thought that the inevitable economical crash, combined with the sharp rise in social upheaval, inequality and injustice would eventually turn back the clock and swing the pendulum the other way. Is there any better wake-up call than what happened in 2008 and since? What the hack happened with the neoliberal right having won many elections in Europe and bankers still running the show?? I totally underestimated the power of the ‘gospel’ to insulate itself from such an economic disaster. I also totally overestimated people’s capacity to see the wood through the forest, despite the uneven playing field in media world.

        Of course, you can only push people so far, and Syriza, Podemos, etc. are exactly the type of parties and movements that I had hoped for and expected (as well as fascist groups, unfortunately), but the European North, supported by its own largely ignorant population, seems to be quite willing to let Greece hang dry. I think this is what’s most depressing: There was/is this historic opportunity to revert the neoliberal power grab. I thought that they had made a tactical mistake by pushing for severe austerity after such a crisis of their own making and subsequent public handouts (to banks). European citizens would never stand that for that, or so I thought. We aren’t the US.. yet, with such a rich tradition of left-wing parties and movements? Naomi Klein may well be right with her Shock Doctrine, but never within European borders, right? Boy, was I ever wrong.

        1. Carlos Fandango

          Unfortunately it seems people have to recognize they are suffering before they act. For the last thirty years I have been watching as one neoliberal reform after another has relentlessly eroded my job security, my retirement prospects, my working terms and conditions, my healthcare and welfare options.

          For twenty years I didn’t notice the crapification as I was getting promoted with pay rises, I got excited over a few pissy stock options and house prices were going up, plus I was busy raising a family. Once the merry go round stopped, (I’m over 50 and surplus to corporate requirements), I had time to reflect and see how relatively shite everything had become since I started working in the early 80’s. Even so in absolute terms, small people (like me) may be better off than before, what really annoys me is the injustice of being the one doing all the actual work, whilst the 0.1% selfish, nasty, conceited, low integrity, scumbags have taken all the gravy. I fear my kids are going to have to work like dogs, in insecure work, for peanuts with no respite until they are 80.

          Other people just don’t see the injustice and danger yet and are not willing to act. The elite damn well know they are skating on thin ice, hence the doubling down on security.

    3. Dan Allen

      I was talking to a Dutch acquaintance recently who made a big deal about the fact that Indonesia had finally paid a long ago loan (from the 1930s)? And he said that Greece would have the same requirement vis-a-vis Europe if it defaulted. He meant, Greece would be required long into the future.

      In that same conversation, I mentioned the loan (I am not talking war reparations) that Greece gave Germany both before WW2 and the forced loan during WW2. With almost no recognition of the Indonesia repayment, he cited some rule of international law in which forced war loans were not subject to repayment, but rather they fall under reparations compacts because the lender never actually agrees to the loan.

      1. peter de haan

        I also remember an episode in which the Dutch government (always proud to show how benign we were providing international aid to poor countries) was threatening to cut off aid to Indonesia because of human right abuses by the then Suharto government. If I remember well, it was to do with the starvation program and slaughter of the East Timorese by the Indonesian army. The context is important in that Indonesia had of course been a Dutch colony and right after WWII the Dutch tried to re-colonize the country, but the US would have none of it. Anyway, there were historical ties and a large portion of Dutch ‘developmental’ aid always went to Indonesia, supposedly out of a moral obligation we still owed the country, or so we were to believe. So then when the Dutch threatened to cut off aid, Suharto said something in the tune of: Fine, I don’t want your bloody aid anymore. Who do you think you are? Then in no time whatsoever, the Dutch corporate owners panicked and had the government apologyze to Suharto. If he could please continue to accept our aid? All that so-called aid was of course used in all sorts of dodgy and corrupt schemes, kickbacks, etc. to obtain fat contracts for our multinational companies. There were a number of great lessons for me in that episode.

    4. Panagiotis Atmatzidis

      Dear Peter,

      Unfortunately the situation in Greece is not very different. People compares ms. Merkel and mr Scheuble to Hitler. The political parties of the local oligarchy (PASOK, ND and Potami) are playing the double agents, supporting prior government decisions in subtle ways, but getting quickly back saying that they “support” the current government for his choice to ask for better terms.

      The people though approve (81% according to “official pools) the current government stance. It is said by another pool that 73% wants to stay within the Euro. It is not clear which % of the population is ready to accept German terms in order to stay within the monetary union. The feeling I have is that it’s not the majority. In Greece right now about 35% of the population lives under the margin of poverty (3 to 5 family members live with less than 600 EUR per month). Then there are Goldan Dawn and KKE (communists) which together form a ~ 11-12% of the population which are anti-EU by all means. Add to that the “pissed off” part which is fuelled by far-right and left-supporting media, and you have a % that goes IMHO goes above 55%. Note that this 55% has not bank deposits hence. There are people who “miss the Drachma”.

      Greece might default or not. Time will tell, I can’t read Scheuble’s mind but Varoufaki’s believes that a Greek exit would start a course of action which ultimately will hurt the German exports in a very significant way, producing unemployment even in countries like the Netherlands and Germany. Which in turn will give raise to far-right populist, who will exploit the current situation.

      What I don’t understand about the centres of power in Brussel is, what exactly they foresee for the years to come. There is a general malaise in Europe. Even if it’s not going to explode the next 2 years, which given the pools is highly unlikely, even if Greece suffers the worst possible scenario here, I don’t think that French and Spanish voters will be “afraid”. Because France and Spain (even Italy) are not like Greece. They are not “small” countries. Especially France.

      Although as you say the Dutch population see themselves as “we vs them” which is silly, 18 bigger/stronger countries bullying a failed state like Greece… But I don’t get the feeling that Italians (the population), French and Spaniards or even Portuguese view Germans as “friends” of any sort. At least no the majority.

      I’d like to share some views on a possible exit: Greece has a weird population spread. Almost %50 of the Greek population lives in Athens. For them it will be terrible. It already is terrible actually, I’m not sure how much worst it can get. But for the rural Greece it’s not going to be that hard. Most people here own houses with crofts and whatever you plant on the ground, grows. I mean physically people will not “get hungry” because even small houses are mostly self-sufficient. So I can say with certainty that you won’t see “food rallies” in cities except Athens and Thessaloniki. Now if the government fights local corruption, I think (more than think, I hope), that in some way we will keep-up floating. I voted for SYRIZA, but truth to be told I never expected a stance that firm and I’m very proud for my government (for the first time in my life) no matter what happens.

      Thanks for your comment, it was very interesting.

      Wish all the best, goodnight from Northern Greece :-)

    5. Jeremy Grimm

      Regarding your observation about alternative and independent media — I too am thankful they have filled a great void. They are only drops in the ocean. I like the retort from the movie “Cloud Atlas”: “But what is an ocean but a multitude of drops.”

  8. RLS

    While it is true that Varoufakis and Syriza have not invoked the concept of odious debt, in concept at least this is an accurate depiction of what this debt is. From Wikipedia: “In international law, odious debt, also known as illegitimate debt, is a legal theory that holds that the national debt incurred by a regime for purposes that do not serve the best interests of the nation, should not be enforceable. Such debts are, thus, considered by this doctrine to be personal debts of the regime that incurred them and not debts of the state. In some respects, the concept is analogous to the invalidity of contracts signed under coercion.”
    The fact they are not repudiating this debt but only asking for terms that will not create a perpetual nation wide debtors prison should be a source of relief not consternation to the predatory lenders that helped create this situation.

    1. Yves Smith Post author

      I’ve seen this notion mentioned but in fact this is a “legal theory” that has no support in any court I know of, and I similarly have not seen it referenced in any scholarly work. I’d put this in the category of a meme, I hate to tell you. It might have been viewed as a valid argument in the past but it isn’t treated as one any more.

      1. tim s

        It may be time for that to become part of “legal theory”, which is a living theory after all. The balance has to be regained at some time if this whole edifice is not to implode.

      2. Seamus Padraig

        In fact, Yves, wasn’t the concept of ‘odious debt’ first invented after WW2 in order reduce or eliminate Germany’s war debt?

    2. Calgacus

      Here is a paper, The Concept of Odious Debt in Public International Law that gives some history. Refers to situations and cases like Taft’s Tinoco Arbitration, familiar to anyone who has ever dipped a toe into international law, traces the concept back to Grotius, has a good number of references. The wikipedia article needs work.

      Greece’s ‘Odious’ Debt: The Looting of the Hellenic Republic by the Euro, the Political Elite and the Investment Community by Jason Manolopoulos appears relevant.

      1. Panagiotis Atmatzidis

        Dear Sir,

        In order for Greece to pursue the path of “odious debt”, which has been proposed by the very popular (in Greece) documentary Debtocracy, we need to bring to justice the families who caused the public debt.

        Greece is an oligarchy and these families still have extremely deep roots, unfortunately, in Greece. The Papandreou family for the first time in 75 years will not have any family member in the parliament. But that’s mostly because G. Papandreou’s actions, in his entire career as a politician, could be justified only by psychiatrists. He is considered the destructor of Greece and made a new party which didn’t pass the 3% soil required to access the parliament by Greek law. Still though, bringing Papandreou and Karamanlis into trial, is nearly impossible as of today.

        Hence a discussion about “odious debt” can not be made IMHO, since those who created the debt one way hold still very much power, so much that even the current government – even if it wanted to – is not in a position to eradicate without causing massive backlashes.

        1. Yves Smith Post author

          You can’t argue a legal theory that courts do not recognize. You could make the same case regarding Argentina’s government debt, since it was largely incurred by a military junta that looted the country. Argentina didn’t even bother because it was clearly a non-starter.

  9. Dino Reno

    Both the NYT and the WSJ have called Syriza rebels, radicals, leftists and marxists. Everything but democrats in the land where it all began.

    1. Chauncey Gardiner

      I agree, Dino. Unfortunately, so did Mr. Farage in the video clip with his comments about Varoufakis’ attire and appearance.

      What did the German-dominated troika and global “elite” think was going to happen with their repeated “Privatize the Profits, Socialize the Losses” policies that transfer the losses caused by their control frauds and looting onto the backs of their victims, especially when their victims have themselves been made insolvent by the actions of the looters and are now being commanded to sell (“Privatize” is the antiseptic term du jour) public assets to pay the looters?

      The solution here is simple and relatively inexpensive: Abandon austerity, write down the debts, and increase public spending.

    2. Yves Smith Post author

      The problem is that “Syriza” in Greek apparently does mean “radical left”. So they handed international opponents a talking point.

      1. OIFVet

        They failed to hire Frank Luntz as a consultant when coming up with the name… It is amazing, though, how well the propaganda has managed to give negative connotation to all things left. I actually admire Syriza’s decision to take the name anyway. I doubt that they were unaware of the negative connotation elsewhere in the West, and I think that they were playing to the Greek electorate where “radical left” is, refreshingly, not a slur. The one problem is that they are hardly radical (as you have taken pains to point out), unless we take into account just how far to the right everything has shifted these days in which case yesterday’s mainstream left is indeed today’s “radical left”.

        1. NotTimothyGeithner

          Luntz is overrated. Good ideas sell themselves as long as people stand by them. The right and neoliberals need garbage messaging to muddy the waters and polish turds.

          Lefties candidates have a problem here not because of their policies but because people believe the Democrats share those values.

        2. Dan Allen

          The chose the name probably because, as with all acronyms, you also want it to stand for something. The SY stands edge and the RIZA stands for grassroots. Just like poststructuralists are fond of talking about rhizomatic structures. The RIZA acronym in Greece gets people thinking of rhizomes–which is a common enough word.

          The actual acronym though does stand for Radical Left.

          I should also mention that, because of the Greek historical dislike of gov’t (dating all the way from the Ottoman period, to the fascist interwar period, to the Colonels, and now the kleptocrats, not to mention the mind-blowing inefficiency and ineptitude, oh and the patronage) Leftist parties in Greece (other than KKE) really emphasize these grassroots structures.

  10. Petey

    “According to them, the Greeks and Germans will pull up at the brink, anything else would be madness. 101 years ago, this was the same thing being said in Europe concerning the Germans with regard to the conflict between Austria-Hungary and Serbia. Then World War I broke out.”

    I’ve been beating the drum about WWI analogies for a bit now, and one caveat to that particular take:

    Between 1905 and 1914 there were almost yearly episodes of severe brinksmanship, sometimes even involving armies being mobilized, and each time, it was essentially impossible to tell in media res if any particular episode of brinksmanship would lead to war or a peaceful settlement. (That’s pretty much the very point of well-played brinksmanship.)

    In retrospect, of course, each episode of brinksmanship got peacefully settled, until 1914, of course, when it led to war.

    So, I don’t have any strong opinion on whether or not this episode of brinksmanship will lead to war or not. I’d weakly tend to assume it ends with Varoufakis and Schauble shaking hands for the cameras after signing a piece of paper, since that’s the rational choice for all parties, especially since the parties aren’t actually very far apart on their bottom lines, and since I think there are significant divisions in the EZ coalition on going to war. But there are obviously major forces in play that could make it go in the other direction.

    (Worth noting that in 1914, the ultimate decision maker on going to war, who ended up being Moltke, not the Kaiser or Chancellor, was actually quite pessimistic about the outcome. So rationality, even in the most narrow sense, doesn’t always win out.)

  11. Theo K

    You write: “(…) the Germans have ignored the humanitarian crisis developing at its doorstep”. Berlin also chooses to ignore the officially published fact that the “German success story” of the last 10 years more than doubled the percentage of German citizens living close or bellow the poverty threshold. The German government has chosen sides long ago.

    This war is not only about the “lazy cheating Greeks” who have to pay their debts, imposed on them through violation of EU treaties (remember the “no bailout” provision?) and the IMF Charter (only lend to countries with a serviceable debt). Which, by the way, was followed by illegal subsidies to the banking and finance sector, when they were allowed to unload their (risk premium bearing) Greek bonds to the central banks and the ECB, i.e. to European taxpayers.

    It is also about a country-member (with a GDP more or less equal to that of the city of Madrid) threatening the neoliberal set-up of the entire EU. If they give in to the Greeks, citizens in Germany, Italy or Spain might get the crazy idea that social justice is not impossible and decide to vote for it next time they have the chance.

    1. Seamus Padraig

      Quite right. Neo-liberalism has not benefited the majority of Germans either. But sadly, that only makes them even more resentful towards the Greeks now. The general sentiment here (I’ve lived in Germany for 8 years) is that, ‘we had to pay our dues with Hartz IV, etc., in order to main our competitiveness, so why can’t you selfish, lazy Greek just suck it in and do the same’. Very depressing, but that’s how it is.

  12. Katniss Everdeen

    “What has been a true disgrace is the role of the German people, who sincerely believe that they are the “Good Guys”, championing democracy and justice wherever they tread.”

    Where have I heard THAT before????

  13. lee

    Hey, it’s time for some chillingly patronizing New Rules!

    According to Jacob Kirkegaard, Peterson Institute for International Economics (

    “I think we are in what I would call the political theater season, so to speak, because you do have a Greek — a newly elected Greek government that was elected on a lot of promises of a lot of things they would do.

    And many, including myself, would argue that many of those election promises are at odds with, shall we say, economic reality. So you are in a situation where the Greek government is going to have to renege on many of those promises…..

    And what it means is that you, a newly elected Greek government, have to accept that, in a currency union, you are not a fully sovereign government and you’re not a fully sovereign country. You have to play by the rules. And part of these rules are, you know, agreeing in theory, or in practice, that there is an existing program.”

  14. OIFVet

    They make their own economic reality, and the rest of us have to live in it. Or so they think, which is really at the root of this fight that Greece has entered. Mr. Kirkegaard seems to think that his masters will win this fight. I am certain that they will lose, it’s only a question of how long before they do lose. The flunkies such as Kirkegaard will be the first to face the pitchforks, it will serve him well to remember that.

      1. OIFVet

        I like the woman with the empty pan. Empty pots and pans make for great visuals and weapons (literally and metaphorically speaking). I think quite a few protests and revolutions have featured women with empty pots, and those are indeed quite empty these days around the world.

  15. brian t

    This entry was posted in Banking industry, Doomsday scenarios, Economic fundamentals, Europe, Guest Post, Politics, Social policy, Social values on February 18, 2015 by Yves Smith.

    Why wasn’t it also posted in “Moral hazard? Those two words are also conspicuous by their absence from this piece. Is it really a “loan” if you know you’ll never have to pay it back?

    1. BillC

      Is it really a “loan” if you know you’ll never have to pay it back?

      And just who is “you?” I’d suggest that everyone in the loop — lenders, borrowers, and the borrowers’ Goldman Sachs “advisers” (“co-conspirators” would be more apt) — knew damn well how these loans would turn out, and were paid handsomely for their perfidity. It’s only the Greek 99% who weren’t in on the deal. As Forence Reece asked musically in 1931, which side are you on, brian t?

    2. bdy

      Is it really a loan if you know you’ll never have to pay it back?”
      Is it really a loan if you have to pay infinity euros to square up?

  16. Ulysses

    The Germans took the life of my paternal grandfather in 1945. They have never “paid back” my family, or many millions of other families, for the devastation their immoral devotion– to an immoral ideology– caused. Nor, for that matter, have they paid any financial reparations to Greece– or any other nation that suffered huge financial damages from their illegal and immoral occupation. For an apologist of German bankers, like yourself, to throw around a phrase with the word “moral” in it makes me literally sick to my stomach!

  17. Santi

    Varoufakis is careful not to frame the problem as a clash between nations or even classes, and tries to frame it as a problem of economic efficiency. He is always insisting that the “current programme” is a complete failure and saying (page 14) things like:

    This government’s task is to carry out the deep reforms that Greece needs to arrest the combined forces of deflation and negative debt dynamics, bring about investment-led recovery and, thus, maximise the net present value of our debt repayments to our creditors.

    See also his last tweet:

    US Treasury Sec did indeed tell me that nonagreement would damage Greece. He added that it would also damage Europe. Advice to both sides!

    The reason is that fueling nationalistic fires will not help getting a solution. He wants to actually get the maximum value of the situation, this is one of the obvious cases where a win-win can be attained, as debt-deflation brings idle resources, such as unemployment, closed factories and empty housing. Things that can be avoided.

  18. Oregoncharles

    I’m very pleased to see my previous comments about Germany’s role in this crisis so roundly confirmed. Indeed, it looks more and more like a replay of the Nazi Occupation, and that cannot turn out well for Germany. Granted, it may not for Greece, either – the first one certainly didn’t. But not for Germany, either.

    I wonder what the odds really are of a major political overturn in Europe? They look very strong from here, but I haven’t seen anything that puts numbers to it. Yves, an overview of that would be very welcome. Not that anything is very sure at this point.

  19. Cugel

    The proper analogy is 1932, not WW I. The Germans are demanding that Syriza govern (by bureaucratic decree without any measure of popular support) like Heinrich Bruning and they are refusing. The obvious parallel that Varoufakis makes between the rise of the Nazis and Golden Dawn, is too clear to miss, unless of course you are a German apparently. But, if Greek society is collapsing with 25% unemployment under 1.5 percent budget surplus, what on earth do these German imbeciles think would be the situation with 4.5% budget surplus and perhaps 50% unemployment? Of course it will never reach that point, because there will be a revolution. Apparently the Germans are too blind to care, but the rest of Europe is not going to like watching Nazis rise to power in one state after another. First Greece and then France? Is that Merkel’s plan?

    But, the difference is that Syriza is fully aware that they cannot hope, like the fatuous German Communists of 1932, that enough chaos will automatically vault the left into power. Thus, Varoufakis’ constant statements that he is not trying to destroy the Common Market but save it from itself.

  20. alex morfesis

    WW3 is STILL DEAD…great article…but…ww1 came about for reasons other than some future yugo taking two shots at the Arch-dunce-este…you do know the prince was foolish enough to continue on his way that day after he had escaped an attempt…THAT DAY…brave or stupid…you decide…Cabrinovic bounced a grenade and it missed but luckily the Arch-dunces driver was trained at the same school JFK’s Dallas driver was…and his driver not only came to a full stop…after Sofia and he were shot, the driver continued as if nothing had happened…or so the story seems to be…

    but…WW1 had more to do with the Panama Canal and JP Morgan trying to corner the shipping world with IMMC…he was smart enough not to enjoy his Private Promenade Deck on the Titanic that fateful first trip…did he know, did he suspect…or was he just lucky…Oil and shipping and electricity…WW1…Russia, Romania and Turkey all lost control of the oil fields…or i should say, the Pasha and the Romanovs…the world went from a semi nomadic existence to one of noise, lights and global warming…

    who is the equivalent of JP Morgan whose death might lead to the creation of the FED and the use of military instead of monetary…??

    One has to have a military to fight a war with…no one in europe has anything that even marginally can be called more than a parade brigade…

    although we live in a world of computer screen capitalism…there is no computer screen war…at least for those who bother stepping outside once in a while…

  21. Berial

    Wasn’t it Thomas Jefferson that’s attributed with saying banks are more dangerous than standing armies?

  22. dbk

    As per usual, kudos for the excellent guest post by Matthew Rose.

    A few observations:
    As fine as the comments and astute as commenters are (again, as per usual), few appear to me to be addressing the thesis of Rose’s post: this government is not your garden-variety of Social Democrats-calling-themselves-leftists. They’re leftists. Varoufakis’ most recent piece in The Guardian (short version of a lecture delivered a year or two ago) sums up his own circuitous route to sui generis Marxism – actually, he’s an outstanding example of a fairly typical type on the Greek left – and allows readers to understand the strategy Syriza is pursuing.

    As I understand it, the new Greek government is offering the first profound challenge to the EU, one which Varoufakis likely would have preferred be delayed for months, even years: do individual nation states (members) retain control of their fiscal policy, or has this been surrendered to the central organs of monetary policy? The EMU is a monetary union, but Germany is effectively dictating members’ fiscal policy. Can a monetary union which is not a fiscal union dictate fiscal policy to members? If so, then the very concept of the rights of a nation state is brought into question. To put it slightly differently, can a monetary house fiscally divided against itself stand?

    1. Santi

      I would say Varoufakis and Tsipras are both socialdemocrats in the old sense of the word, and not your current corrupt neoliberals tagging themselves as socialdemocrats as in (in order of disappeareance from the political map) PSI, PASOK, PSOE, PSF (not sure about PD and PSP).

      One could think about the Syriza program as a Keynesian antithesis of the austerian Neoclassical “bailout programme”, and as such it deeply challenges the incumbent “common sense”. The modest proposal that Varoufakis, Holland and Galbraight wrote implies a Europe-wide change in policies. There is no way that Greece alone can implement it. At most they can practice social damage control until a new majority is built around them, Podemos governing in Spain (God helps us if PP and PSOE are able to govern in Grosse Coalition four more years) and a number of countries like Portugal, Italy(?) France(? would have to change too much)…

      What Syriza is trying to do is to get some time while a new “hegemony” is created in Europe, it looks a long term job. But we need to do it, and with 25% unemployment, both Spain and Greece have the resources (me included) to work on it. The indignados movement was fueled by unemployed cultural workers (teachers, doctors, journalists…) having too much idle time, and we are not getting better, but rather worse.

      About the point you bring, I’m not sure how monetary union and separate fiscal policies can be made to work, the Euro cannot be saved without fiscal transfers.

  23. Gaylord

    There is a broader perspective that most people seem to miss, which is the fact that not only German banks but all Western banks are bankrupt and headed for collapse. The reason is dwindling resources and the ecocide that has resulted from our rapacious consumption of them (particularly cheap oil). This is highlighted by the impossibility of meeting the demands of the capitalist growth machine on a finite planet. As soon as Quantitative Easing becomes a bandaid on a festering wound, and when the financial sector becomes a dominant source of fake GDP, you know this regime is collapsing. We saw the beginning of the collapse in 2008, and the system is poised for another worse crash that will bring about the worst depression in history — one that is perpetual. There will be widespread hunger and death, masses of people displaced, and environmental catastrophe on an epic scale. Climate scientists already have pointed to the evidence that runaway climate change has been triggered. Adding war into the mix will only accelerate human extinction.

    I should think humans are intelligent enough to realize that our only habitat is about to be destroyed if we don’t immediately change direction. Capitalism has failed utterly and completely and so must be discarded. We had better remove the incentives and directives for building weapons and bombs, stop enabling hoarding of wealth and fighting over ownership, and start devoting all our resources to caring for basic human needs and preparing for the onslaught of ecosystem destabilization.

    Or maybe our egocentric nature guarantees the ultimate confrontation through nuclear war, so that a nuclear winter will simply end the human experiment to demonstrate to some future alien space probe that our species did not evolve and therefore did not deserve to continue its existence on this rare oasis in the universe.

  24. Quantum Future

    To DBK – I’ll give you extra bonus points for identifying the individual that made this quote:

    Give me control of a nation’s currency and I care not who makes the laws

    It wasn’t a Boyscout Troop leader was it? Central Banking conquered the globe. Problem is bankers make loans. They are not proficient at fiscal policy.
    For the EU to have actually succeeded it should have started with an online debate platform followed by a political union and then monetary union. Neither the EU nor the US are operating as Republics. The possibility of a global Republic may as well reside in another dimension by such still believing it possible. I speak to a minority of readers here.

    The EU will restructure the debt of Greece. The beaurocrats of Brussels are doing a Kubaki dance to save
    face by dragging the inevitable out. That will happen globally, one way or the other by producers checking out or war. People only do things for two primary reasons. The opportunity to benefit or fear of loss. The in your-face lawmaking to induce fear all the time inevitable destroys confidence.

    Thank you for listening to my viewpoints. Time is valuable.

Comments are closed.