Greece: Could Syriza Win?

Ari Paul, reporting for The Nation, examines the possibility:

Greece’s new center-right government is set to impose fresh austerity measures in the fall, including further privatization of utilities, railways and ports. With unions already angry over wage and pension cuts, more work stoppages and demonstrations are expected. Three ministers have already resigned their posts, including a deputy labor minister who said the ruling coalition has no intention of keeping its campaign promise to renegotiate with the Troika (the European Commission, the European Central Bank and the International Monetary Fund), which had insisted on more austerity as a condition of continued aid to avert bankruptcy.

The government is already unstable. With labor’s help, the people could bring it down, observers say, giving the once-marginal Coalition of the Radical Left (Syriza), the biggest opposition group in Parliament, a chance of forming a labor-backed government opposed to the Troika’s demands.

...

Paul then examines the relative strengths of Pasok (the Panhellenic Socialist Movement, the traditional party of labor in Greece) and Syriza (which Paul refers to as the "radical left"), the difficulty of persuading labor voters to switch their votes, the likelihood of strikes and work stoppages, etc. ... things which hardly ever happen in America due to the weakness of our labor movement, but which are more common tools in Europe.

As usual, I am in no position to comment on the desirability of such a change, but I'm sure l'Enfant will tell us.

New! Greek Austerity... Now With... Privatization!

One would think it was bad enough that the New Democrats in office are not, contrary to their campaign promises, pursuing a renegotiation of the draconian terms of their bailout. Their creditors warned them that such a request would be turned down. So, in a move that is to me inexplicable politically, the leading party in the ruling coalition isn't even going to try. But as I said, that's not the worst of it.

No, Prime Minister Antonis Samaras says they're going to privatize everything.

Americans, how do you like your Postal Service, with its new, longer delivery times and its ever-increasing postage rates? That's an example of privatization. Or how about the privatized prison systems of most states, in many of which police have been quietly instructed to fill up the jails despite a decrease in crime in the last decade or so? How do you like having family breadwinners serving often mandatory terms for possession of small amounts of marijuana, just so the privatized prisons can make a profit? How do you like the outbreaks of violence in some prisons, attributable in part to the employment of inadequately trained, underpaid guards? Is it possible the Invisible Hand of the Market is raising its invisible middle finger at all of us?

Greece's New Democratic leadership is contemplating privatizing the railways, elder care and child care. Good luck with that, I say: every intrinsic governmental function that has been privatized in the US has ended up providing lower quality and quantity of service for no less money. The more that issues of economy of scale affect a given service (e.g., medical care), the more the cost of privatization goes up. Greeks, take it from Americans: privatization is a bad deal for your public tax money.

(H/T Enfant de la Haute Mer for the various links. Read her post for more information and a lot more links on the economic situation in Greece.)

Greg Palast: The Euro As An Instrument Of Class Warfare

The indomitable Greg Palast, an American with a seemingly steady job at The Guardian, explains how economist Robert Mundell, formerly of the University of Chicago and now of Columbia University, inventor of the concept of supply-side economics, pushed the creation of the euro as a way of obstructing nations inclined to use Keynesian methods to combat recession. Palast quotes Mundell:

...

"It's very hard to fire workers in Europe," he complained. His answer: the euro.

The euro would really do its work when crises hit, Mundell explained. Removing a government's control over currency would prevent nasty little elected officials from using Keynesian monetary and fiscal juice to pull a nation out of recession.

"It puts monetary policy out of the reach of politicians," he said. "[And] without fiscal policy, the only way nations can keep jobs is by the competitive reduction of rules on business.

He cited labor laws, environmental regulations and, of course, taxes. All would be flushed away by the euro. Democracy would not be allowed to interfere with the marketplace – or the plumbing.

...

(You can safely ignore the remark about the plumbing, or read Palast to find out why plumbing is an issue to union-hating Mundell.) More on the euro and Mundell:

Mundell explained to me that, in fact, the euro is of a piece with Reaganomics:

"Monetary discipline forces fiscal discipline on the politicians as well."

And when crises arise, economically disarmed nations have little to do but wipe away government regulations wholesale, privatize state industries en masse, slash taxes and send the European welfare state down the drain.

In other words, power is centralized in Europe's wealthiest nations, and the rest (Greece, Spain, Ireland, etc.) can do little within the confines of the euro to avoid austerity programs, ineffective though they may be, forced upon them by the banksters of the euro. A nation without its own currency can find its back to the wall and no effective response. And this, according to Palast, is exactly what Robert Mundell intended the euro to accomplish. How about that... a real live conspiracy that may be more than just a theory!

Of course, Palast predicted that the 2008 US presidential election would be stolen by the GOP, so his record is not perfect... or is it? Did Republicans allow Obama to win as a kind of scapegoat, after whom the nation would elect an effectively permanent Republican majority? But that's another conspiracy theory (although one which IMHO deserves serious consideration), and we will have to deal with that possibility later.

(H/T Michael Moore , with the usual reservations about linking to his front page.)

ADDED: Thanks to L'Enfant de la Haute Mer, in comments on this post, for pointing us to David Dayen's post on FDL about two weeks ago. Dayen writes about Iceland's experience, how it dealt with mortgage debt, how the fact that it has its own currency (the krona, not the euro) made all the difference in its ability to cope. Dayen:

,,,

But there’s another major reason that Iceland has fared better than its neighbors, one I didn’t get to talk about on the show. Iceland wasn’t in the euro. As a result, they had the ability to manage their own currency. And they predictably and smartly dropped the currency in value. Right now, the krona sits 20% below the euro, even as the euro has plummeted lately. And that makes Icelandic exports competitive, which includes tourism. They have not had to live with another country’s monetary policy.

...

His point, which is much like Palast's, is summarized in his post's title: "Iceland’s Lesson for the World: Control Your Own Currency and Help Your People".

What Kind Of Economics Did You Say?

From Paul Krugman, in a post about his own inefficacy in deflecting the current horrible turn in economic policy both in the US and in Europe despite his having been right about almost every aspect of it:

Meanwhile, Ed Balls — who I gather was nearly forced out of a leadership position by the Very Serious members of the Labour Party — has been right all along, and now has a great term for the failed policy prescription: since it was advocated by Cameron, Merkel, and Sarkozy, he calls it “Camerkozy” economics. Well done.

Well done indeed!

Krugman's Wrap Of Greek Elections

Krugman's perspective sees "Greece as Victim". There is much substance in this short op‑ed, which takes the position that Greece's fundamental problems are not primarily internal and stem rather from attitudes in the economically powerful nations in the euro zone: major failures in the framing of the currency itself, failures not soluble by any amount of Greek austerity. Here's a sample:

...

On the other hand, many things you hear about Greece just aren’t true. The Greeks aren’t lazy — on the contrary, they work longer hours than almost anyone else in Europe, and much longer hours than the Germans in particular. Nor does Greece have a runaway welfare state, as conservatives like to claim; social expenditure as a percentage of G.D.P., the standard measure of the size of the welfare state, is substantially lower in Greece than in, say, Sweden or Germany, countries that have so far weathered the European crisis pretty well.

So how did Greece get into so much trouble? Blame the euro.

...

As so often happens here in America, the banksters in Europe are flinging poo like a great ape. Don't let it hit you! Use some judgment in how much credence you give to the self-interested emissions of northern European leaders.

Chart Of Greek Election Results

Thanks to Enfant, we have a pie chart, which she kindly translated into English. If I'm not mistaken, "Conserv." is New Democrats, "G.D." is Golden Dawn (radical rightist). The inner pie shows fractions of votes; the outer ring shows seats in the parliament. In the Greek parliament, the party with the most votes is awarded an additional 50 seats.

Due to serious illness in her family, Enfant may be absent from the threads for a while. We send her our best hopes and prayers in these difficult times.

Greek Elections - Live Update - UPDATED

... in English, from The Guardian.


Be sure to click the
    This page will update automatically every minute: On
link on the Guardian page.

It's about 5:10PM in Athens as I write this. Polls close in two hours. This blog post will "float" to the top for a few hours while results are reported.

UPDATE: from the Guardian live blog, something under an hour ago (all times are London time; commentary is in blog order, newest on top):

8.26pm: Samaras has just made his speech.

... [Main points of speech presented here; please read at The Guardian.]

He summarised his speech in English:

His party would honour commitments to the EU.
It was a victory for all Europe.
A call for all political parties that share objectives to form government.
Sacrifices of Greek people will be reflected.
Determined to do what it takes and do it fast.

8.16pm: Not a smooth start. Samaras is poised to make his speech but is having problems with the microphone.

8.13pm: Amid a busy press scrum New Democracy leader Antonis Samaras has arrived in Syntagma Square in Athens, ahead of a victory speech.

8.09pm: The parties in Greece it seems have accepted a win for New Democracy in Greece.

Alexis Tsipras from Syriza has reportedly called Antonis Samaras to offer his congratulations.

It seems that Syriza may be planning to mount a strong opposition rather than wait to see if New Democracy can form a coalition government. Even if it fails.

Now they have the pleasure [/snark] of forming a government; that's the nature of parliamentary democracy. It looks like Greece will be committed to austerity; I don't see how that can work, but I will await Enfant's commentary on the result.

AFTERTHOUGHT: here is one thing presumably all Greeks can be happy about:

Greece pulled off an unexpected win against Russia in the European Championships.

If you think sports obsession is a primarily American phenomenon... think again!

UPDATE: Krugman has an analysis that makes sense to me. "And then what?" indeed!

Greece: Elections, Currency, Threats From Lenders

The Parthenon, or
The Greek Economy
After Enforced Austerity

Of course I don't have information on all those things apart from what is in the news. According to Laurence Knight of BBC News, Greek elections are on Sunday; a growing number of Greeks are withdrawing their money from banks (in euros, I presume), "the radical left-wing upstarts of Syriza" (Knight's description, not mine) are poised to become the biggest party in the parliament (though not necessarily a majority), and Germany and other lenders are saying to Greece, again in Knight's words, "Vote Syriza and you are out." Ah, tradition! It's good to see Germany as committed to democracy as it has always been. [/snark] The fun never ends in euro-land...

AFTERTHOUGHT: this is my second post in a week containing a photo of a building with a lot of columns. (The other was the US Supreme Court building.) I suppose what my highly admired high school English teacher once told me is true: "Steve, you have an edifice complex." <grin_duck_run />

Krugman: It's 'Not A Greek Problem' - UPDATED

Paul Krugman refers us to Tim Duy of Fed Watch on Economists' View regarding the European Central Bank's attempt to transform, for public consumption, a Europe-wide problem into a Greek (or Spanish or Irish) problem... which in Krugman and Duy's view, it emphatically is not. Krugman:

The morality play the Germans like to tell about how the crisis countries got into trouble isn’t true, but even aside from that, the question is what you do NOW. And the key point is that there is no way out for the troubled countries if Europe as a whole is marked by low growth and low inflation.


Given that reality, lecturing Greek voters on responsibility, while hinting that maybe we’ll ease the terms a bit — oh, and it’s almost time for summer vacation! — just won’t cut it.


We need a conversion experience here, not in Athens, but in Berlin and Frankfurt. Otherwise, the game is almost over.

And Duy:

I thought the last election was supposed to be a referendum on Greece's commitment to the Euro. European policymakers fail to understand that they have provided the Greek people no way out - they are damned if they do, damned if they don't. Even if the Greeks overwhelming[ly] want to remain in the Euro, the austerity program guarantees ongoing recession, and the Greek people are being asked to commit to a program that is effectively already overtaken by events. ...

...

The rest of Europe might not think this is fair, but let's be honest - ultimately, it wasn't fair to bring Greece into the Euro in the first place.

UPDATE: Later, Krugman shows us the "responsible" [/snark] plan for Greece and graphs its results. As he puts it, "Pain without end, amen."