Krugman On The Eurogroup's Nonnegotiable Offer To Greece

Krugman, in ‘Killing the European Project’:

Suppose you consider Tsipras an incompetent twerp. Suppose you dearly want to see Syriza out of power. Suppose, even, that you welcome the prospect of pushing those annoying Greeks out of the euro.

Even if all of that is true, this Eurogroup list of demands is madness. The trending hashtag ThisIsACoup is exactly right. This goes beyond harsh into pure vindictiveness, complete destruction of national sovereignty, and no hope of relief. It is, presumably, meant to be an offer Greece can’t accept; but even so, it’s a grotesque betrayal of everything the European project was supposed to stand for.

...

"[E]verything the European project was supposed to stand for" ... in theory. Coercion is coercion, and has never been about any noble principle; usually, as in this case, it's about making already rich entities (people, corporations, nations) richer while giving the already rich an opportunity to moralize against those who are not. The technique employed is not even novel; read Klein's The Shock Doctrine for several other truly horrifying examples within (many of) our own lifetimes.

‘Greece: A Grave Situation’

Michael Nevradakis at Truth Out concludes his eight-part series on the gravity of Greece's situation and the corruption of their media.

As most of the columns Nevradakis writes are about Greece and the series parts are not numbered in their subjects, the best way to read the series is to visit Nevradakis's page on Truth Out. and read your way through his entire opus. I am working my way backward starting with the conclusion of the series, Greece: A Grave Situation With Very Real Consequences.

Greece: Former Deputy PM Delights Bankers, Blames Working People And Kids For Their Own Hunger

Theodoros Pangalos

It's been a while since I've written about conditions in Greece, but believe me, things have not improved for the great majority of Greeks. Via Greg Palast, we learn that Theodoros Pangalos, former Deputy Prime Minister of Greece, an individual who (ahem) looms large in the politics of austerity thrust upon Greeks of ordinary means for the benefit of European banksters, blames the collapsing economy in Greece on lazy, hungry working people and greedy, starving children. Perhaps the population's hunger problem could be remedied if Pangalos (pictured at right) fasted for a week or two...

(H/T BadTux.)

Greece: Same Shift, Different Day

Greece's legislative move toward even greater austerity (with the burden falling on the Greek people, e.g., cuts to pensions and public sector wages) has enabled it to receive further financial aid. A Greek government campaign against tax dodgers, especially those people who have moved money overseas recently, has been launched, in hopes of quieting understandable public unrest provoked by the austerity moves. And the Eurozone finance ministers delayed a decision on releasing the latest 31.5bn euro tranche of bailout funds at least a week, while they decide if Greeks have suffered enough.

FDL's fatster did my homework for me, pointing me to all three of the aforementioned articles.

Seldom have I been so glad the US has its own currency and owes no major debts in any other currency. A glance at Greece will show you why I'm glad. I only wish no one had to suffer in this way, but as my late father used to say, "wish in one hand, spit in the other; see which one fills up fastest."

Greece: Germany Determined To Punish 'Wastrels'

Yves Smith at Naked Capitalism, in a post about the increasing massive failure to solve the "EuroCrisis," points to Germany's apparent determination in the face of the continuing downward spiral of Greece, a spiral which Greek Prime Minister Antonis Samaras compares to the American Great Depression, to force Greek acquiescence to continued severe austerity measures not so much as a solution but as a punishment for imagined bad behavior. Here's Smith's assessment:

But as conditions in Greece become even more desperate ..., German threats are becoming more dire:

“If Greece doesn’t fulfill those conditions, then there can be no more payments,” German Vice Chancellor Philipp Roesler told broadcaster ARD yesterday, adding that he is “very skeptical” Greece can be rescued and that the prospect of its exit from the monetary union “has long ago lost its terror.”

The immediate trigger is inspectors from the Troika are due back in Greece this week to “assess” progress towards meeting targets. Since there is no way for a patient in an intensive care ward to stave himself back to health, it is not at all obvious how Greek leaders can convince their new economic lords and masters that they can do the impossible. The Wall Street Journal sets forth the critical dates over the coming months:

But without a green light from the troika, Athens risks being cut off from badly needed aid and could run out of cash as early as August. It has sought emergency funding from Europe to cover a looming bond redemption in late August.

Greece faces a much more important deadline in September, when international creditors are due to make their next aid payment, which they delayed in June as the elections played out. Extending the deadline could require even more aid to support Greece while it delays more cuts.

An unnamed EU source told Der Spiegel [Greece] won’t reach its goal of lowering government debt to 120% of GDP by 2020 (quelle surprise!). The article states that falling short means Greece would need €10 billion to €50 billion more in funding, which the IMF and certain Eurozone governments (read Germany) will nix.

Smith then examines the economic and political consequences of various courses of action from the perspective of a number of major players; please read those in the original. Smith's conclusion sounds about right to me:

It’s hard to foresee how this ends, but if the powers that be are balking at another €10 billion to €50 billion for Greece, they will not pony up the hundreds of billions that many analysts see as necessary for Spain. The Eurocrats are running out of runway, and there’s no sign of a Plan B. If we didn’t all have a stake in the outcome, this would make for great theater.

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.)

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 />

Greece And The Euro

Ellen Brown of truthout, referencing Paul Simon's clever song "50 Ways to Leave Your Lover," examines five of those "50 ways" by which Greece could remedy its dysfunctional relationship with the Euro and the ECB. In brief, the five courses of action Brown examines are these, taken from her subheadings:

• The Open Marriage: Return to the Drachma Without Abandoning the Euro
• Keep Separate Bank Accounts: Fire Up the Printing Presses at the Greek Central Bank
• Divorce: Turn and Walk Away
• Spousal Support: The Public Bank Option
• The Dowry: Impose a Financial Transaction Tax

Brown concludes with a quote from Mike Whitney, and a delightful reference to the Simon song she started with:

The problems of Greece and the euro zone stem from an arbitrary set of rules that were entered into by agreement and can be changed by agreement. Where there is a will, there is a way. The problem is finding the will, particularly among the Eurocrat leaders holding the reins of power, who may not be looking for an amicable workout. In a June 3 article titled "Europe Moves Closer to Banktatorship," Mike Whitney maintained:

These people are not interested in fixing the EZ economy. They are engaged in a stealth campaign to radically restructure EU society, to unravel the welfare safety net, to roll back the progressive gains of the last century, and to reduce much of the continent to 3rd world poverty. A banking union will further solidify the power of big finance over the individual states, and that is the main objective.

... Greece is a vivacious woman chained to a tyrannical old man. She can dance again if she can be free.

I am far from qualified to evaluate the merits of the possibilities, but the article was thought-provoking, and it reminded me of the one course of action that is simply not an option: do nothing.

Europe: The Floggings Will Continue Until Morale Improves

Paul Krugman quotes Martin Wolf (note: FT requires a free trial subscription, but you don't need it; the quote Krugman includes is sufficient for the point here):

Before now, I had never really understood how the 1930s could happen. Now I do. All one needs are fragile economies, a rigid monetary regime, intense debate over what must be done, widespread belief that suffering is good, myopic politicians, an inability to co-operate and failure to stay ahead of events.

Krugman then notes that the ECB has declined to take any action that might help matters, such as cutting interest rates; the result is an undesirable decrease in inflation. Krugman's conclusion:

I don’t think there’s any conceivable economic logic for the ECB’s decision. It can only, I think, be understood as some kind of refusal to admit, even implicitly, that past decisions were wrong.

Like Martin Wolf, I’m starting to see how the 1930s happened.

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."