Category Archives: Spain

from los indignados to Podemos: Esther Vivas reflects on half a decade of public outrage in Spain

What remains of all our outrage?

Esther Vivas | Público

It’s been five years since the massive occupation of May 15, 2011 that gave birth to the movement of los indignados, 15M. Five years of faltering progress with many advances and set-backs along the way. Five years of a tremendous crisis, civil unrest and mass protest. So, what remains today after such a sustained period of outrage?

15M has changed the way we read and interpret the crisis we are facing. We were all told in 2008 that “we live beyond our means”, and blamed for the present situation, but the movement of los indignados has enabled us to change the story. One of its principle slogans, “no somos mercancías en manos de políticos ni banqueros” (we are not mere things to be manipulated by politicians and bankers), pointed in this direction. 15M said that the banks were the authors of economic collapse, and that most of the political class was also complicit. Los indignados imposed a counter-narrative that challenged the official lie: neither guilty nor responsible, it said, we are victims of an age of corruption.

What began as an economic crisis, soon led to a social crisis and finally, under the impact of 15M and the independence movement in Catalonia, to a crisis of the political system per se, which led people to question the founding principles of the (post-Franco) Spanish Constitution of 1978  and each of its pillars, monarchy, two-party system and our state model. This would have been unthinkable not long ago.

15M connected with the seething social discontent and helped to propel it into the form of collective mobilisation, legitimising protest and nonviolent direct actions, such as camping in public places, or occupations of empty houses owned by banks, like the Plataforma de Afectados por la Hipoteca (or PAH – literally: Platform of People Affected by the Mortgage). Potentially illegal actions were now considered legitimate by a significant portion of public opinion. According to several polls, up to 80% of the public considered that los indignados were right and supported us, despite criminalisation and stigmatisation by those in power.

Two years after Mareas ciudadanas (the citizens’ Tide), the spirit of 15M finally made the jump to policymaking: moving from “no nos representan” to “Podemos” and the claims of “los comunes” , having overcome the difficulty of gaining political traction. Even after pundits had accused the movement of being unable to present a serious political alternative and said that the management of our political institutions must be left to professionals.

The emergence of Podemos came with the victory of five MEPs in the European Parliament in May 2014, which marked the beginning of a new political/electoral cycle; one that has not yet been closed, and that was further crystallized in municipal elections of May 2015 with victories against all odds, of alternative candidates in local government capitals of Barcelona, Madrid, Zaragoza, Santiago de Compostela, Cádiz… followed by the breakdown of two-party politics (in the General election) on December 20th. This political translation of outraged social unrest simply needed two things: time and strategic boldness. These successes had not been anticipated, and without the 15M movement would not have been possible.

Those stuck in “old politics” have been forced to rethink their modes of communication. Some have abandoned ties and put on more fashionable shirts, as step-by-step all kinds of shifts became imperative and the word “change” became ubiquitous in the electoral scene. As if that was not enough, a new party, Ciudadanos (Citizens) was launched, with the aim that social unrest might be railroaded into more harmless channels.

Maybe on today’s upset political chessboard the weakest side is the social mobilisation necessary to any process of change. The bid for institutional participation, the setting up of new political instruments and the sudden and unexpected victories in various city councils took place in a climate of social passivity. However, real change does not come about only through conquering institutions, but through gaining support from a mobilised society. If society does not exert pressure on governments for change, it is the powers-that-be that will, and we know whose interests they serve.

What remains of all our outrage? A regime in crisis, not ready yet to fall but ready to be reconfigured. As the French philosopher Daniel Bensaïd said: “Indignation is a start. A way of standing up and beginning to walk. One becomes indignant, rebels, and then thinks what next.” This is where we are now.

* Article in Publico.es, 15.05.2016.

 This is the name used by the candidacy of Ada Colau, elected mayor of Barcelona on May 2015.

Follow the link below to read the original article in Spanish:

https://esthervivas.com/2016/05/15/que-queda-de-tanta-indignacion/

Esther Vivas is an activist, journalist and the author of several books on food and agricultural policies and social movements; her latest work is The food business: Who controls our food? ( Icaria ed., 2014)

@esthervivas | facebook.com/esthervivas | www.esthervivas.com

**Translation is my own — approved by Esther Vivas

+info: http://esthervivas.com/

I would like to thank Esther Vivas for allowing me to reproduce this article.

Not all of the views expressed are necessarily ones shared by ‘wall of controversy’.

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Filed under analysis & opinion, campaigns & events, Esther Vivas, Spain

Whoops austeritypocalypse! or why unbounded economic reasonableness runs into such trouble…

Q: At the onset of the crisis, the former Finance Minister Papaconstantinou likened the Greek economy to the “Titanic” heading straight for the iceberg. Do you also feel as if you are standing on the bridge of the “Titanic”?

A: No. The “Titanic” sank a while ago. We’re steering the lifeboat and throwing lifebelts to those drowning around us.

This was the response Greek Prime Minister, Alexis Tsipras, gave in an exclusive interview to German magazine Stern1

*

“austerity”, what is it good for…?

As the economies of the western world continue to flounder, with Germany too (Europe’s last remaining industrial powerhouse) reeling just a little from the greater crisis, debt reduction is still regarded as the key component to any recovery programme. To meet these ends, all our governments have been overseeing huge cuts in public services, welfare payments especially gouged, in concerted efforts to reduce their deficits. This death of our societies by a thousand cuts of “austerity” being the recommended cure which mainstream economists have called for, and though alternative voices have no less insistently pointed out that “austerity measures” are inherently counterproductive (since they reduce tax revenues), these dissenting voices continue to be marginalised.

A few years ago Thomas Herndon stepped forward. Herndon, a university student and thus less rigid in his outlook, caused quite a rumpus – as a consequence, he has since been rewarded with his own wikipedia entry. This sudden burst of fame coming after he inadvertently stumbled upon grievous errors in an influential paper entitled Growth in a Time of Debt (published 2010), authored by eminent Harvard professors, Carmen Reinhart and Ken Rogoff – Rogoff, a former chief economist at the IMF.

In their paper, Reinhart and Rogoff had purported to show that whenever national debt is in excess of 90% of GDP, growth is “roughly cut in half”. This correlation had subsequently been quoted by policy-makers across the world, as well as routinely served up as empirical proof that there was simply no viable alternative to our continuing “austerity” programmes. Most notably, perhaps, former EU Commissioner for Economic and Monetary Affairs, Olli Rehn, leant rather heavily on Reinhart and Rogoff’s work.

But then doubting Thomas Herndon decided to check their figures for himself. And, to his own astonishment, discovered that one of the most frequently cited justifications for the imposed “austerity” strategy actually rested upon a few careless mistakes on a spreadsheet!

[Herndon had] spotted a basic error in the spreadsheet. The Harvard professors had accidentally only included 15 of the 20 countries under analysis in their key calculation (of average GDP growth in countries with high public debt).

Australia, Austria, Belgium, Canada and Denmark were missing.

Oops.

Herndon and his professors found other issues with Growth in a Time of Debt, which had an even bigger impact on the famous result. The first was the fact that for some countries, some data was missing altogether. 2

Click here to read more in this BBC news article.

Taken aback by this unexpected challenge from a novice, Reinhart and Rogoff felt obliged to issue a response:

We are grateful to Herndon et al. for the careful attention to our original Growth in a Time of Debt AER paper and for pointing out an important correction to Figure 2 of that paper. It is sobering that such an error slipped into one of our papers despite our best efforts to be consistently careful. We will redouble our efforts to avoid such errors in the future.

Confessing to their blunder, but keen also to defend their professional reputation, they casually added:

We do not, however, believe this regrettable slip affects in any significant way the central message of the paper or that in our subsequent work.

There has since been no halt to the economic gouging and scourging of Europe. Despite the more immediate evidence coming out of Greece, Spain, Portugal, and every other place where such “measures” have been most strongly administered, that prove “austerity” isn’t working. And even when all other factors, social and human factors, are set aside, and success or failure is judged within the exceedingly narrow terms of its proponents, we see that the sovereign debt burdens in all these countries have continued to rise. 3

Given such a lack of success, the response is obviously to double-down. Apply more stringent “austerity”; if the original cuts have failed, then they needed to be deeper. In former times the doctors would just have ordered more leeches, or the priests would have demanded a tightening of the cilice. Tougher love. Just too bad if the supposed antidote is the worst of the poison, because orthodoxy asserts that, poison or not, it is the best and only remedy. The really important thing is to never let mere facts (especially incalculable costs like human misery) get in the way of a damned fine economic theory!

*

 whose debt is it anyway…?

But how did these sovereign debt burdens arise in the first place? Or put another way, the related question might be asked, to whom are the debts actually owed? This second question is rarely broached, but in 2013 award-winning business journalist, Harald Schumann, sought a direct answer to precisely this question. He journeyed across the stricken eurozone countries and poised the question to those working inside the so-called “Troika” (IMF, European Central Bank and EU Commission) as well as significant politicians, economists, lawyers, journalists and even the occasional central banker. The result, a brilliantly constructed documentary entitled The Secret Bank Bailout, is embedded below:

I highly recommend watching the documentary in full, but would also like to offer a brief overview.

Schumann asks which parties were actually rescued by the bailouts, and finds that contrary to what ordinary Germans were led to believe (this is a German documentary originally titled Staatsgeheimnis Bankenrettung) the people living in the poorer eurozone states received barely a penny of this apparent ‘foreign aid’ – our own media perpetuates the self-same falsehood.  Because rather than letting the creditors and the banks absorb their speculative losses, these financial institutions were deemed “too big too fail” and protected. So the bailouts were never used to support the governments, but always passed on to the creditors of major banks, especially ones in Germany and France, who had taken the unwise risks that caused the crisis – the original losses often due to property bubbles in places like Spain and Ireland. (The whole notion of “too big too fail” is, of course, a contravention of even the most basic tenets of free market capitalism.)

And who have been the ultimate recipients of all this bailout money? Well, that has remained a closely guarded secret. We ought to be asking why, of course, which Schumann’s documentary does. He also seeks to penetrate the secret itself.

In the next sections, I will present a further overview comprising highlights of Schumann’s discoveries, and following the same route (then a little beyond it) as he investigated country by country, across the blighted eurozone.

*

 Ireland

The Irish people have been forced to take on 70 billion euros of additional debt to pay off foreign creditors.

Stephen Donnelly, independent Irish MP, says that the ECB held the Irish government virtually at gunpoint:

“The suspicion is that European Central Bank said ‘You will continue to pay these bondholders [the mainly foreign creditors] to whom you owe nothing or we will pull the emergency funding out of your banking system, thereby collapsing your banking system, thereby collapsing your economy.’ To me that is gunboat diplomacy… [with a little prompting] or blackmail. It is a very, very serious threat for a central bank to have made in actually forcing a sovereign nation to surrender its sovereignty to bailout an independent group of investors. Was the ECB acting illegally?”

Brian Hayes, Irish Deputy Minister of Finance:

“Of course that was a position that was foisted on the Irish people as a result of the decisions taken… It was the majority view of the ECB that this money had to be paid back.”

And where did the Irish bailout money go? A full breakdown of the bondholders of Anglo Irish bank is available here. (The list was publicly released by blogger Guido Fawkes.)

Germany has the most with 15 of the bond holders. Who between them hold 5.3 trillion euros.

France is next with 10 bond holders.  Who have an estimated 4 trillion.

Britain is third with 9 who have around 3 trillion.

The Swiss have 6 but who have about 8.5 trillion.

America has only three and hold only a trillion.

Other nations include, Spain, Belgium, Portugal, Holland Finland, Norway, Sweden, Poland, South Africa and Italy.

The bondholders include some of the world’s largest banks: Deutsche, Soc Gen, Barclay’s, PNB Paribas, UniCredit (who don’t appear on the list but own Pioneer Investments) and Wells Fargo (also not on the list but who own European Credit Management). There is also Goldman Sachs and Rothschild Group4

As Harald Schumann says “It’s like a Who’s Who of the financial world.”

Back to Stephen Donnelly:

“No country on earth in history has ever paid that amount of money back without having its own monetary policies… you gradually bleed, year on year on year. And now you really do depend on Europe. There was a quote by Nelson Mandela where he said something like: ‘It is the greatest tragedy of the human condition that we must endure so much pain before arriving at a compromise that we always knew was going to be needed.’”

The first lesson, therefore, is that the solution – any practicable solution – has to include debt cancellation.

*

 Spain

The Spanish people have been forced to take on 40 billion euros of additional debt to pay off foreign creditors.

Harald Schumann confronted Luis De Guindos, Spanish Minister of Finance, with advice he was given Stephen Donnelly that they would be better to let (some of) the banks fail because “banks have to be allowed to fail”. But Luis De Guindos disagrees:

“I think that the Irish situation is totally different from the Spanish situation. As I have said before, the size of the balance-sheet of the Irish banks in comparative terms with the GDP of Ireland was three times larger than the case of Spain. So I think that while in the case of Ireland the cost of recapitalising the banks has been above 20% of the Irish GDP, in the case of Spain we are talking 4% of GDP. So it’s a totally different situation and it’s not comparable at all.”

But economist Juan Rallo disagrees with De Guindos, and beginning with the figures themselves: “The real figure is not 40 billion, but 80 or 90 billion…”

And who are the creditors of the Spanish banks (particularly Bankia)? When Schumann manages to get hold of a list (thanks to “friendly people that help me”) he discovers that Deutsche Bank again features prominently.

Juan Moreno is a lawyer working with the 15M protest movement, who filed the lawsuit for the closure of Bankia to save the Spanish taxpayers from a bailout. When asked if the system would have collapsed, Moreno says:

“If you were to drop Bankia it would probably lead to the collapse of other banks, but not the big banks like BBVA, Santander, La Caixa, [Banco] Sabadell, or [Banco] Popular.”

Back to Luis De Guindos:

“A money market economy with fiat money is unstable. And we have an example that we let the banks go down… it was the Great Depression. It was the worst depression we had over the last century.”

Juan Moreno’s response:

“It’s all scaremongering. I don’t want that, I want numbers. I want to know what would really happen if they were to go bankrupt… With what we know now we would say this bank is beyond saving. We can’t continue to pour billions of euros into it. The creditors must take losses…

“The trial uncovered that the bank figures were falsified by upper management, but now we discover that the same had happened at the lower management levels. So a banking culture developed where employees were rewarded with bonuses so that the upper level did not realise how bad things were at the local branch level… The judge said that there was indeed public control of the bank, but the government supervisors played along. Letting the fox guard the hens is good for nothing.

“They’re all criminals: those in charge of Bankia and the public supervisors. If they’d let the savings banks go bankrupt, we would have found out what the politicians did with the money. Much of the debt that cannot be repaid is money that went to political parties, to city administrations, for work in the autonomous southern regions to companies connected to the government. These revelations would have made the political class disappear.”

So what is Moreno’s advice to the Germany citizens who are paying to prop up this corrupt system…?

“Numbers. The balance-sheet. It’s simple. You have to know the facts and apply the laws.”

*

 Cyprus

Meanwhile, depositors in Cypriot banks (savers as opposed to taxpayers) had more than 6 billion euros seized overnight in a so-called bail-in to pay off foreign creditors. This has crippled many businesses and stifled economic growth in a different way.

Panicos Demetraides, Governor of the Central Bank of Cyprus:

“It’s a change from past bailouts that we have had to bail-in on this occasion [from] uninsured depositors in the two big Cypriot banks. The burden of this bail-in has been borne partly by non-residents, but also partly by residents, Cypriot companies and households. About two-thirds of the burden has been borne actually by non-residents and one-third by residents.”

But as German MP Gerhard Schick (Green Party) explains:

“The European Central Bank allowed the Cypriot Central Bank to give money to banks in Cyprus even though they were insolvent. That’s a real mistake because then non-functioning structures are upheld and taxpayers’ money – and that’s what we’re talking about with a central bank – is endangered. In this way the ECB slowed down the rescue programme and made it possible for many creditors to withdraw their money and invest it elsewhere… The ECB was a creditor acting in self-interest to protect its own money. This conflict of interest should never have been allowed to happen, but it did because central bank money was put into bad banks.”

Back to Panicos Demetraides:

“Certainly the delays offered more informed investors [the chance] to protect their own investments. And they put the less informed investors at a disadvantage.”

Does this mean the ECB allowed other European banks time to withdraw their money? That must be some sort of rumour, says Demetraides. It is a rumour that must persist until there is an independent investigation, but as Gerhard Schick points out:

“The problem is that the ECB is a closed shop, and neither the European Parliament nor national parliaments are really able to call it to account when it breaks the rules.”

Harris Georgiades, Cypriot Minister of Finance:

“For us it was a take it or leave it situation. A decision that we accepted under pressure, and with no time to negotiate extensively. Essentially both of our kneecaps have been broken, and now we are asked to run.”

*

 Greece

Greece entered the crisis with a debt-to-GDP ratio of 110% and with around 10% unemployment. It was then put through an “austerity programme” supposedly designed to tackle the debt. Five years and several thousand suicides later, unemployment currently stands at 30% and debt-to-GDP is at around 180%.

This tremendous spike in debt remains in spite of ‘haircuts’ known as the Greek “Private sector involvement” or PSI, the first announced in July 2011, and quickly followed by PSI Mk2 (after PSI Mk1 failed), which involved a impressive sounding 50% reduction in the face value of Greek government bonds (GGB). 5 But then, as Yanis Varoufakis, current Greek Finance Minister, but as then a lowly Professor of Economics, wrote soon after:

In short, and so as not to overlabour the point, PSI Mk2 is dead in the water. The shenanigans of the shadow banking sector (which, lest we forget, includes not only the hedge funds but also, remarkably, the ‘proper’ banks shady Special Vehicles) plus the predictable deterioration of the Greek economy have put paid to it. The negotiations may go on for a little while longer, the announcement of a brilliant agreement may be made but, in truth, the idea that the Greek haircut will put Greece’s debt-to-GDP ratio back on a course towards 120% has sunk without trace. And if you need hard evidence for this, the European Summit of 9th December provided it even before 2011 was seen off: Officially, Europe’s great and good announced the end of PSI as a policy of the new ESM; Europe’s future central, permanent bailout fund. It had all been a mistake, they seemed to confess. 6

Greece has never been bailed out, only the European banks (well over 90% of the bailout money returning to them), and likewise the ‘haircut’ actually caused more problems than it solved. In particular, it permitted the looting of social security and public pension funds that are mandated by law to invest in government bonds – the following is taken from a special report published by Reuters:

Greece’s pension funds – patchily run in the first place, say unionists and some politicians – have been savaged by austerity and the terms of the international bailout keeping the country afloat.

Workers and pensioners suffered losses of about 10 billion euros ($13 billion) just in the debt restructuring of March 2012, when the value of some Greek bonds was cut in half. That sum is equal to 4.6 percent of the country’s GDP in 2011.

Many savers blame the debacle on the Bank of Greece, the country’s central bank, which administers three-quarters of pension funds’ surplus cash. Pensioners and politicians accuse it of failing to foresee trouble looming, or even of investing pension fund money in government bonds that it knew to be at high risk of a ‘haircut’ – having their value reduced. 7

Click here to read the full Reuters report.

In June 2014, Yanis Varoufakis was interviewed by Harald Schumann. Excerpts would feature in another collaboration between Arpad Bondy and Schumann; their follow-up documentary The Trail Of The Troika (in German, Macht ohne Kontrolle – Die Troika), which plotted another route across the continent in order to show how “austerity measures” have utterly failed to rescue the eurozone economies, and how in the process “the Troika” has also flagrantly breached its own European treaty regulations. Unfortunately, an English version of this more recent documentary is at present unavailable on youtube or elsewhere (so far as I can ascertain – but I will certainly embed a version as and when I find one). Meanwhile, uploads of the various interviews filmed during its making are now freely available, and embedded below is Schumann’s unabridged interview with Varoufakis, of which I have again selectively transcribed some of the answers he gave last summer:

What was the bailout for? The bailout was not in order to bail Greece out. Greece was never bailed out. The bailout loan that was extended in May of 2010 had a very singular, simple purpose. It was to transfer banking losses from the asset books of banks, not only Greek ones, but also French ones and German ones, onto the shoulders of the taxpayers. Initially the Greek taxpayers – because they knew that these shoulders were too weak to bear those losses, eventually it was always part of the plan to transfer them onto the shoulders of the German, and the French, and the Dutch and the Finnish taxpayers. And “the Troika” is here supervising this sinister transfer. [5:45 mins]

Smart people in Brussels, especially in Frankfurt, and of course Berlin, knew in May 2010 that Greece would never be able to repay its debts. They knew that again in the Spring of 2012 when they extended the second loan. They know it again now. In their minds they have already written off a very large bulk of the billions and billions that was given to the Greek state to give to the Greek banks and to give to the rest of the banks. All other things being equal, of course, “the Troika” would much rather more money was repaid than less money. But all other things are not equal. At this very moment in time, as we speak, while the Greek banks have huge black holes that we all know, even though they are not being admitted to, something similar is happening in the rest of the eurozone. Deutsche Bank, Finanzbank, BNP Paribas are skating on thin ice. They will never admit to it. And part of the angst and of the anxiety of the powers in Brussels, in Frankfurt, in Berlin, is how not to admit to the German, to the French, to the Dutch, to the Finnish people, that their banking sector was never really put back on an even keel. 8 [7:15 mins]

In 2010, what they had done was this: they lied to the Greek people and to the German people. They said to the Greek people: We have avoided bankruptcy. And they said to the German people that the Greeks, they were waivered, now we are going to punish them with austerity. But we will lend them the money because European solidarity demands that. In reality, what they were doing was transferring banking losses from the bankers – the European bankers, all of them – onto the shoulders first of the Greek taxpayers and eventually onto the German taxpayers, because the Greek taxpayers could not shoulder all of this money.

So they had lied to the German taxpayers. They said: We are not going to haircut the Greek debt. They were always going to haircut the Greek debt. They knew it. What they did with first bailout loan was to shift that big bulk, a 110 billion, from the bankers’ loss book onto the shoulders of Europe’s taxpayers. And then, after that had been effected, of course then they had to haircut – to do what they said they were never going to do – and who did they haircut? They haircut the small bondholders and the pension funds… So the PSI, the second bailout, the haircut of the private sector, was part of the original process of shifting the burden of adjustment and the cost of the crisis from the shoulders of those who caused it, onto the shoulders of those who didn’t cause it in Greece and in Germany. And all that in the name of European solidarity. And then they wonder why right-wing parties of the extreme part of the spectrum are winning power – or, at least, winning seats in the European Parliament. [21:30 mins]

Asked whether he thought the 2008 crisis had been caused as a result of incompetence or due to a more deliberate act of conspiracy, Varoufakis replied:

It wasn’t a conspiracy. It was a very simple operation: How do we stay in power? Mr [Jean-Claude] Juncker said it. Once he admitted: we know what needs to be done, we just don’t know how to do it and remain in power. Now don’t forget that before 2008, 2010, all parties of government, whether they were Christian-Democratic, Social-Democratic, it doesn’t matter. They had developed this extremely close relationship with the financial sector. They had looked at the financial sector as the cow that would bear the milk from which they would feed all, not only their political parties and careers, but also the welfare state – from the point of view of the Social-Democrats.

There was a kind of Faustian bargain between our politicians and bankers. We will let you do what you want, and you pay us a small amount proportional in order to fund our states. So when the crisis hit – which was completely unexpected for them – they had neither the analytical power nor the moral authority to go to these bankers and say: You know what, you’re out. You’re bankrupt, we’re taking over the banks… 9 [24 mins]

Finally, here was what Yanis Varoufakis, the economist (and not yet Finance Minister) said when asked for “any realistic proposal [to] how the dire economic situation in Greece can be improved”:

Well, we have to stop doing what we are doing and do something quite diferent. And there are two levels at which you should see this, because let’s not forget that once we have a monetary union you can’t talk about the overcoming of the crisis in one part of it in isolation to the others. It would be like talking about how South Dakota would escape the Great Depression in 1933 without the rest of the United States going through the New Deal. So we need a New Deal for Europe… 10 [32:30 min]

But, I have to insist: The solution must be European, because the crisis is European. And there are things we can do within two weeks to end this euro-crisis without violating any of the European Union treaties as long as we have the political will to do it. 11 [34:30 min]

*

there is a better alternative… (and always was)

Q: Your Finance Minister Varoufakis said that he is not afraid of an Armageddon.

A: He said in parliament: if you enter into negotiations, you are not seeking a breakup. But you have to keep a breakup in mind as a contingency. I share this view.

 

Q: So you have a Plan B in case Greece does decide to exit from the single currency?

A: We don’t need a contingency plan because we will stay in the eurozone. But we won’t achieve this objective at the expense of the weak – like our previous government.

 

– Alexis Tsipras in same interview published in Stern magazine.

On April 16th, Varoufakis was invited to speak at a press conference hosted by the Brookings Institute which is based in Washington. In answer to a question about being trapped in a position where the Greeks are left with little alternative but to default, Varoufakis replied:

I would willingly, eagerly and enthusiastically accept any terms offered to us if they made sense. I would have no problem with the Memorandum of Understanding if it was founded upon a reform programme that attacked the worse cases of rent-seeking in Greece, and made the reforms that were necessary in order to enhance efficiency and social justice. If it came for the planet Mars, if it came from Berlin, if it came from Brussels, if it came from Portugal, from Slovakia, I don’t care which, I would have embraced it. The problem we have with these conditions – you know, the take it or leave it conditions – is not so much the authoritarianism, it is that fact that we’ve tried that medicine and it hasn’t worked…

It is almost precisely three years ago since I wrote a post entitled ‘austerity’ or ‘Grexit’: is there really no better alternative for Greece? There have since been more than two and a half years of unrestrained “austerity” (prior to Syriza’s victory), a “take it or leave it” Hobson’s choice, which has deepened the crisis not only in Greece but across the entire eurozone. ‘Grexit’ has never been a realistic alternative, and as Syriza have maintained from the outset, they have no intention whatsoever of ditching the euro. So ‘Grexit’ becomes ‘Grexident’, in other words, an impossibility. Because any accidental Greek exit can only occur if it is accidentally on purpose, and that would mean ‘Grexpulsion’ – a term the mainstream has yet to adopt for obvious reasons.

In Washington, Varoufakis was once again unequivocal about Syriza’s position:

“Toying with ‘Grexit’, which is something we don’t do – we are refusing to discuss it, because as I have said before even worrying about it is like worrying about being hit by a comet in a universe in which comets are attracted to you if you are worried about them – toying with ‘Grexit’ and ideas of amputating Greece is profoundly anti-European because anybody who claims that they know what the effect of a ‘Grexit’ is, are deluded.” [52 mins]

*

Which brings us to an impasse. Accept “austerity” or get out! Jump off a cliff or suffer slow death by a thousand cuts. Is there really no genuine alternative for the Greeks?

Well, the answer to that question actually depends upon what you value. If you think that all debts are sacrosanct, then it necessarily follows that the Greeks must go on paying the banks to their bitter end. That the debt is unpayable doesn’t matter. That the debt is the consequence of so much ineptitude and malfeasance within the banking system doesn’t matter either. The Greeks must cough up because otherwise the chaos will worsen (or so we are again constantly given to believe). But if you value human life above money, and recognise that debts that cannot be repaid will never be repaid, then you can begin to think more constructively. In fact, the alternative becomes immediately and blindingly apparent. Since a debt cancellation will inevitably come sooner or later, the only real question is how much longer must the Greeks be punished in the meantime.

A way-out of all this mess is entirely possible. It doesn’t involve “austerity” and does not necessarily require a Greek exit from the eurozone. What is needed is simply an end to the bottomless banker bailouts and then new money being made available for reconstruction projects and other productive enterprise within Greece, Spain and elsewhere. Such a ‘New Deal’ injection is unlikely to be offered by the IMF, and neither will it be supported by the likes of Angela Merkel. But it can be fought for by the Greek people themselves, and in this battle to stop the wanton destruction of their nation, as fellow Europeans we should stand with them, recognising that the same aggressive financial interests that have already eviscerated Greece, will be pillaging our own lands soon enough.

The paragraphs above are taken from the post I wrote three years ago – yet so little has significantly altered that it remains pertinent enough to repeat it.

Back to Varoufakis who puts flesh on those barest of bones regarding the ‘New Deal’ option for Europe (and presenting the way ahead without any recourse to deficit spending by governments – so heretical to the neo-liberals):

Europe as a whole, the eurozone as a whole, is typified not only by a mountain of great private and public debts, which we do have. But there is another mountain hiding behind it: a huge mountain of idle savings with nowhere to go. And it should be our joint project to energise, to motivate, those idle savings, to help them overcome their great fear that keeps them idle, and channel them into productive investments – not investments into assets, but investments into real productive capacity. Now, how do we do this? Well, we have the European Investment Bank [EIB] that could do this. And we have the European Central Bank which is embarking on quantitative easing. Well, why can’t the EIB fund a major ‘New Deal’ for Europe, that channels investment to the private sectors of the countries and regions within countries that have a major output gap? [44 mins]

The whole of Varoufakis speech at the Brookings Institute and the subsequent Q+A session is embedded below:

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last frenzy of reasonableness…?

Just days after Syriza were swept to election victory on January 26th, economist and former US Assistant Secretary of the Treasury for Economic Policy under Reagan, Paul Craig Roberts, published an article entitled “Is Democracy Dead In The West?” which began:

We will find out the answer to the question posed in the title in the outcome of the contest between the new Greek government, formed by the political party Syriza, and the ECB and the private banks, with whose interests the EU and Washington align against Greece.

Roberts, once known as the “Father of Reaganomics” but more recently a repentant neo-liberalist and outspoken opponent of the financial elites, continues:

The new [Syriza] government wants to moderate the agreements made by previous Greek governments that sold out the Greek people. The new government wants to stop giving away at bargain prices Greek public assets to clients of its creditors, and the new Greek government wants to raise the Greek minimum wage so that the Greek people have enough bread and water on which to live.

However, for the private bank creditors, for Merkel’s Germany that stands behind the banks, for Washington which could care less about the Greeks, for the Greek elites who see themselves as “part of Europe,” Syriza is something to be rid of.

Adding that:

A purpose of the “Greek financial crisis” is to establish that EU members are not sovereign countries and that banks that lend to these non-sovereign entities are not responsible for any losses with regard to the loans. The population of the indebted countries are the responsible parties. And these populations must accept the reduction of their living standards in order to ensure that the banks do not lose any money.

This is the “New Democracy.” It is a resurrection of the old feudal order. A few super-rich aristocrats and everyone else serfs obliged to support the ruling order. 12

Click here to read Paul Craig Robert’s full article.

The question is, who is actually right here? Certainly we ought to acknowledge that elements in Paul Craig Roberts’ more conspiratorial outlook are irrefutable, recognising that Goldman Sachs did indeed deliberately help to hide previous government debt in order to extend credit to Greece. The Greeks were set up; this has been established – details of Goldman Sachs involvement can be found in this previous post.

Varoufakis is diplomatic, arguably too diplomatic. But then, is Paul Craig Roberts unduly pessimistic when he says that Syriza can now do “very little”, and, in either case, is the very moderate and rather modest approach of Varoufakis a good one, pragmatically speaking? Extending a hand of friendship being unlikely to impress “the powerful rich interest groups that rule the West [who] could not care less about the people over whom they rule” (to quote Roberts again, who knows them well, of course). Yet it may be effective in another way, such relentless persuasion and his “frenzy of reasonableness” at least winning the more public battle for hearts and minds. My own view is that Varoufakis (and Syriza) have adopted a sensible stance, which is in fact evidenced by the harsh criticism they have received from both extreme flanks. Appearing too flexible has made him a target for derision from the more radical (and Communist) left-wing, whereas standing his ground irritates his more powerful opponents working within the establishment (who lash out publicly whenever Varoufakis is out of earshot).

Meanwhile, ‘Grexident’, German Finance Minister Wolfgang Schäuble’s own portmanteau neologism (I gather), is now trending on twitter – not literally, of course, because it doesn’t have a celebrity angle. But the hashtag certainly exists and the tweets that include it are mostly German and Greek, alternating like a stack of incomprehensible post-it-notes. And sadly, the word ‘Grexident’ isn’t the only eurozone nonsense currently trending:

Academic-turned-finance minister Varoufakis was called “a time-waster, a gambler and an amateur”, a source privy to the closed-door talks told the news service Bloomberg.

This is according to a Guardian article published on Friday [April 24th] and entitled “Time is running out for Greece, says Eurogroup chief”. The article continues:

Jeroen Dijsselbloem, head of the eurogroup of finance ministers, told reporters in Latvia it was a “highly critical” meeting as Greece had still not agreed a comprehensive and detailed list of reforms.

Although there were positive signs, there remained “wide differences to bridge on substance”, he said.

“We are all aware that time is running out … too much time has been lost.” […]

Dijsselbloem warned on Friday that after the lack of recent progress it would be very hard to consider a new programme for Greece to cover its funding needs beyond June. He ruled out giving Greece an early slice [of] bailout cash. […]

ECB president Mario Draghi also betrayed his exasperation and warned that central bank could impose tougher conditions in return for keeping Greek banks afloat.

Weeks ago, the Riga meeting had been pencilled in as the moment when the eurozone could sign off an aid payment for Greece, but in the event ministers vented their frustration with Varoufakis for Greece’s failure to bridge the gap with creditors.

Just to remind you, Mario Draghi is not only the former vice chairman of Goldman Sachs – directly implicated in bringing the crisis to Greece – but serves as a trustee of the Brookings Institute13

So watching Varoufakis descend into the belly of the beast that is the Brookings Institute and to receive such a warm welcome and nonjudgmental reception, I must confess that I was instantly reminded of the film, Goodfellas, Martin Scorsese’s gangster classic, and of one scene in particular:

“If you’re part of a crew, nobody ever tells you that they’re going to kill you. It doesn’t happen that way. There weren’t any arguments or curses like in the movies. So your murderers come with smiles. They come as your friends, the people who have cared for you all of your life, and they always seem to come at a time when you’re at your weakest and most in need of their help.”

But Varoufakis is not easily daunted, and so, as the Guardian piece describes:

Varoufakis said the talks [in Latvia] were “intense”, but remained confident that the two sides will resolve their differences in time.

“We agreed that an agreement will be difficult but it will happen and it will happen quickly because that is the only option we have,” he told a press conference.

Varoufakis later declared: “We want an agreement and we are willing to make compromises to achieve this … The cost of not having a solution would be huge for all of us, Greece and the eurozone”. 14

In saying so, he is quite correct. Not only the Greeks, but the Germans too, whose major banks are set to carry the heaviest losses in the event of default, ought to be aware of the extreme dangers of such brinksmanship. A basic instinct for self-preservation is what Varoufakis is relying on, but for so long as the banks and other financial institutions remain confident of receiving further bailouts, it is the German taxpayers who ought to worry – as should the rest of us – because so long as they remain “too big too fail” (i.e., untouchable) then bankers like Mario Draghi and co really have nothing at stake. For once the Greeks are unable to shoulder the debt burden, as Varoufakis reminded us last summer, it will be passed on to the shoulders of the Germans and the French.

Indeed, the people of Europe stand to lose enormously if this so-called ‘Grexident’ (in reality ‘Grexpulsion’) leads to ‘Grexit’ and then to ‘Grextagion’ as it will be doubtless be called; as idiotically named as it will have been idiotically contracted and spread. Because, if no compromise can be reached in spite of Varoufakis’ tireless efforts, then sooner then we imagine we may all be standing in the Greek people’s shoes.

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Update:

A weekend can be a very long time in politics…

Unbeknownst to me, on Sunday 26th [the day before I posted this article] Yanis Varoufakis had put out a tweet in which he quoted the words of Franklin D Roosevelt, who famously said “They are unanimous in their hate for me; and I welcome their hatred”, adding simply “A quotation close to my heart (& reality) these days”:

This would be one of his final acts as chief negotiator at the Eurogroup meetings:

Greece moved to inject fresh momentum into problem-plagued talks with creditors on Monday, reshuffling its negotiating team to try and defuse tensions over its outspoken finance minister. […]

In a bid to ease tensions with lenders, the Syriza party-led coalition said the minister of international financial relations, Euclid Tsakalotos, would take over the coordination of the new team. The appointment will see the economics professor, who was raised in the UK, assuming a more active role in face-to-face negotiations with creditors.

So writes Helena Smith in the Guardian [April 27th], her report released a mere two hours after I posted.

Varoufakis told us that before he took the job he had written a pre-prepared resignation letter to carry around with him at all times, just in case he ever found himself sounding too much like a politician. Hopefully this will not be needed, and news that he has been “removed” is perhaps a little exaggerated:

[However,] one well-placed Athens official insisted that Varoufakis’s role had been upgraded “in many ways”. The official added: “To make him resign would be to retreat and the government would never do that.”

Three months after his elevation to power, prime minister Alexis Tsipras has come under extraordinary pressure to remove Varoufakis. Yet last night Tsipras said that his finance minister “is an important asset for the government, and [with creditors] he speaks their language better then they do”. In a wide-ranging interview aired on Greek TV, Tsipras rejected suggestions that his government had any intention of sacrificing the politician. Now that negotiations with creditors were in the final straight, Greece had to reorganise its negotiating team, the PM said. […]

But insiders insisted that the politician still enjoyed Tsipras’ confidence, even if the young premier was now reaching out to the German chancellor Angela Merkel in an effort to reach a political solution.

With his high popularity ratings at home, Varoufakis is credited with internationalising the country’s debt problem and raising questions over austerity economics.

“They [creditors] couldn’t counter his economic arguments rationally so they went for him claiming he didn’t understand eurozone rules and regulations, that his reforms weren’t good enough,” said one official. “Tsipras knows this is not about Varoufakis, but his government, because it has dared to take on the system that is Europe’s neoliberal doctrine. He knows that if one goes the other goes too, which is why Varoufakis is here to stay.”

I very much encourage Tsipras to stick by Varoufakis, certainly in the capacity of his chief economic advisor, if not within government itself. We so very seldom see anyone of such intelligence, integrity and courage in public office. The world needs more politicians like Varoufakis, not less.

Please note that I corrected this update after mistakenly believing that Varoufakis had stepped down from his role as Greek Finance Minister. Apologies for posting the incorrect original version.

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1 From an interview published as “Give us six more months, and we will be another country”, written by A. Albes, F. Batzoglou, A. Petzold, published by Stern on February 18, 2015. http://www.stern.de/politik/ausland/interview-with-greek-primeminister-alexis-tsipras-give-us-six-more-months-and-we-will-be-another-country-2174273.html

2 From an article entitled “Reinhart, Rogoff… and Herndon: The student who caught out the profs” written by Ruth Alexander, published by BBC news on April 20, 2013. http://www.bbc.co.uk/news/magazine-22223190

3 Here are some interesting graphs taken from an wikipedia article entitled “European sovereign-debt crisis”, which show the rise in the levels of Greek, Spanish and Portuguese debt since 1999 as compared to the average of the eurozone:

 

 

 

All three graphs (and others including those for Ireland and Cyprus) show a marked turning point around 2007–8, providing further evidence not only that “austerity” hasn’t worked (even within its own terms of debt reduction), but that the western world is actually faced with a systemic banking crisis that flared up at that time. The debt-to-GDP ratios have flattened towards the end, but even so the downturn is mostly in the projected regions.

And this is from an article written by Tyler Durden and posted on zerohedge from February 18, 2013:

“Beleaguered Prime Minister Mariano Rajoy just broke another record. As if a plague of corruption scandals was not enough, Spain’s debt-to-GDP has now reached levels not seen in over 100 years. As El Pais reports, Spanish debt levels rose at an alarming EUR 400 million per day in 2012 making for the largest annual increase in debt in the nation’s history – all the while proclaiming austerity.”

And here’s another helpful graph that goes along with the article, showing once more that rather than reducing the nation’s debt, “austerity measures” are more closely correlated to the growth of that debt:

 

 

http://www.zerohedge.com/news/2013-02-18/chart-day-spanish-debt

4 These details of a summary of more detailed notes complied here: http://www.golemxiv.co.uk/2010/10/who-are-the-bond-holders-we-are-bailing-out/ 

5 Based on figures taken from an article entitled “Greece’s PSI is Dead on Arrival: An error in search of a rationale but also a failure that may prove a harbinger for the Modest Proposal” written by Yanis Varoufakis, published on January 11. 2012:

Back to the drawing board, our European leaders came up with a deeper haircut in October 2011. They called it PSI Mk2 and even had the foolish Greek PM fall on his sword, to be replaced by a hitherto loyal ECB functionary, so as to ensure that PSI Mk 2 would become Greece’s new light on the hill; a beacon of the last glimmer of hope for a desperate nation. PSI Mk 2 envisaged an impressive sounding 50% reduction in the GGBs’ face value which, in present value terms, would result in a haircut no less than 60% (since the interest rates charged on the new bonds, that would be swapped with the old ones, could not exceed the interest rates charged by the ECB and the EU for the original bailout funds). In other words, holders of GGBs would be hair-cut in two ways: a 50% reduction in face value and an interest rate less than 5% which would cut further into the present value of the old GGBs.

http://yanisvaroufakis.eu/2012/01/11/greeces-psi-is-dead-on-arrival-an-error-in-search-of-a-rationale-but-also-a-failure-that-may-prove-a-harbinger-for-the-modest-proposal/ 

6 Ibid.

7 From a special report entitled “Greeks rage against pension calamity” written by George Georgiopoulos & Lefteris Papadimas, published in Reuters on November 30, 2012. http://www.reuters.com/article/2012/11/30/us-greece-crisis-pensions-idUSBRE8AT0CV20121130

8 Varoufakis adds:

“The one thing if I were, I am not, but if I were the CEO of Deutsche Bank, I would be very wary of the dangers from “the Troika” in Athens that is casting a critical gaze into what is happening to Greek banks. Because if “the Troika” takes a keen interest, it will have to declare that the Greek banks are beyond salvation. And the only possible outcome of that would be nationalisation of these banks.”

9 Varoufakis  adds:

“There is no doubt that there was a great deal of incompetence. Our leaders, and I have to say most of my profession – speaking as an economist – had become steadily lobotomised since the late 1970s. We didn’t have leaders who understood macroeconomics… You just let the markets perform their triumphant trick and everything will be fine. Politicians were convinced of that, their careers went swimmingly, their cosy relation with the financial sector was working out for them beautifully. When the whole thing, this bubble, collapsed, they were found wanting analytically – they didn’t understand what happened – they believed their own rhetoric and when they started realising the truth, at that point they had already misled parliaments and electorates to such an extent that they would much rather die than confess to the sins of omission and commission.” [25:45 min]

10 Varoufakis offers the following example:

Regarding the Greek situation, the Greek debt, for instance. What we need to do is, we need, since the German government is going to find it politically very difficult to go to the parliament in Berlin and say: Well, it was all a mistake, we have to write off their debt. What you can do is you can create euphemisms – you can create what Keynes referred to as bisque bonds, GDP-related bonds. The Greek government could issue particular bonds that it exchanges for the debt that the ESF [European Social Fund] holds. And those bonds could specify that they can last 30 years let’s say. In 30 years they become extinct whether they have been repaid or not. And that the coupons, the repayments, on a year to year basis depend on the level of growth in Greece. So if growth is more than 3% then it specifies particular payment. That way Mr Schäuble will be able to look at his parliamentarians and say: We haven’t haircut it, but the extent to which the Greek debts will be repaid will be linked to our success in helping Greek growth. So you make them partners in Greek growth as opposed to bailiffs who come in and take your furniture away and throw you out on the street. [33:15 min]

11 The details go as follows:

Three things: The first thing we need to do is deal with the banking sector troubles throughout the eurozone. And the way I would do it – because we know we have declared this banking union which is really a term confirms there is no banking union – so what we should do about banks is this: Banks that are found out by the ECB in September (when the ECB assumes the role of the single supervisor of the banking system) to be wanting in terms of recapitalisation to have bad assets that have not been declared so far, they should accept money from the ESM – from the European stability mechanism – directly, not through the governments, directly. And the ESM should get shares, the shareholders should be wiped out and the ECB should appoint a new board of directors – hopefully not from within the country in which the bank is domiciled. This way you Europeanise these banks. In 6 months, 12 months, you resell them – you will resell them with a profit because those shares will be purchased by the ESM at very low prices. And then the ESM gets money back, the European taxpayers get their money back, TARP-like. And you do it step by step. You don’t Europeanise all 6,000 banks. The banks that are in trouble…

The second thing you do is to deal directly with the public debt, which is getting worse everywhere – except in Germany because of the low, low interest rates due to the fact that the crisis is proceeding. The European Central Bank should make a simple announcement tomorrow morning that will cost it nothing, zero. And the announcement is this: From now on, every time a government bond matures, the ECB will service, will pay, for the proportion of that bond that corresponds to the country’s Maastricht compliant legal debt. So in the case of Italy it will be half of it. So the European Central Bank will pay for this, not the Italian government. Now I said it won’t cost the European Central Bank anything, so how can that be if it pays half of it? The answer is the ECB issues its own bonds and sells them to the Chinese, to the Russians, to whoever wants to buy them at very, very low interest rates – because the ECB is such a sterling institution – and immediately opens a direct debit account for Italy. And says to Italy: Look, within ten years, this amount of money has to go in there in order to repay the Chinese. So in other words, what I’m suggesting is that the ECB should play a management role for public debt in Europe that costs nothing, that doesn’t require printing a single euro, and does not violate any treaty. Because ths is not a bailout…

And then we have the big problem of growth. Of investment. We have an amazing dearth of investment in Europe, both in the north and in the south. Even in Germany. So what we need is really a Roosevelt-like New Deal – a very large investment programme. I am not talking about a 100 million here and a 100 million there. We need something between 8 and 9% of eurozone GDP to be invested in productive activities… That would be what we need in order to avert deflation and in order to restart growth in Europe. Now we have the European investment Bank in Europe. The European Investment Bank is three times the size of the World Bank. It could very easily effect such a large scale investment-led recovery programme in Europe. The reason why it doesn’t do it, is because the convention is that 50% of every project is funded from a nation state. The nation state is bankrupt. Waive it. And what should we do instead? We should have either the ECB issuing more bonds in order to support the EIB bonds or something simpler than that. Everyone now, including Mr [Mario] Draghi and Mr [Jens] Weidmann [President of German Bundesbank], are speaking about the need for quantitative easing in Europe. Or at least they are considering it. Now we do not want American-style or British-style quantitative easing because this simply inflates bubbles… Mr Draghi’s worried about quantitative easing because he doesn’t know which assets to buy. German assets? Italian, you know, we are going to start arguing like children amongst ourselves, as to whose assets should be purchased. Bu the European Investment Bank issues European bonds, EIB-bonds. Why not have the EIB effect quantitative easing by purchasing EIB-bonds to such an extent that the EIB ca start a New Deal for Europe programme of 8–9% of eurozone GDP with the ECB buying only its bonds, which are European bonds?  And also they are triple-A bonds. Now that a combination of those three measures would deal with the banking sector crisis, it would create a rational way of managing the Maastricht compliant and legal part of the debt… and you have a massive investment-led recovery programme.

12 From an article entitled “Is Democracy Dead In The West?” written by Paul Craig Roberts, published on January 29, 2015. http://www.paulcraigroberts.org/2015/01/29/democracy-dead-west-paul-craig-roberts/ 

13 From Bloomberg Business (bold highlight added):

Mr. Mario Draghi has been the President of Executive Board and President of European Central Bank since November 2011. Mr. Draghi served as Governor of Banca d’Italia SpA since December 29, 2005 until November 01, 2011. He served as Managing Director of The Goldman Sachs Group, Inc. until January 2006. He served as Director-general of Italy’s treasury. He served as an Adviser to the Bank of Italy, an Executive Director of the World Bank and as a member of the Group of Seven deputies. He served as the Chairman of Financial Stability Board. He has been a Director at Bank For International Settlements since June 2012. He serves as a Trustee of The Brookings Institution. He has been Member Of Governing Council of European Central bank since January 16, 2006. He served as a Member of Governing Board at Banca d’Italia SpA and served as its Member of General Councils. He served as Member of Board of Governors – Italy of Asian Development Bank until November 2011. He served as Director of Bank For International Settlements from September 2011 to November 01, 2011. Mr. Draghi has a Doctorate in Economics from the Massachusetts Institute of Technology.

http://www.bloomberg.com/research/stocks/private/person.asp?personId=13154633&privcapId=5774394

14 From an article entitled “Time is running out for Greece, says Eurogroup chief” written by Graeme Wearden, published in the Guardian on April 24, 2015. http://www.theguardian.com/business/2015/apr/24/time-is-running-out-for-greece-says-eurogroup-chief-jeroen-dijsselbloem

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Syriza must win and be seen to win: we need solidarity across Europe

In current discussions of what Greece might or might not get in the way of concessions from the Eurozone, there has so far been relatively little appreciation of one basic political reality: as far as the governments of Spain, Portugal, Ireland, probably Italy and perhaps even France are concerned, Syriza must fail and must be seen to fail.

So begins an article by neo-liberal economic guru Andrew Lilico in Wednesday’s Telegraph. Why? Well, because of the domino effect. Although no debt deal has been reached so far, if the other Eurozone finance ministers were to agree some kind of a compromise and bailout package with Syriza, then it is a near certainty that other European nations, starting with those suffering the worst of the “austerity”, would follow suit.

Here is Lilico to elucidate further:

The reasons differ slightly between countries. The easiest case to see is perhaps Spain. In Spain, the governing party is the centre-right Partido Popular led by Mariano Rajoy. It is currently facing pressure from a far-left party, Podemos, allied to Syriza. Indeed the Podemos leader Pablo Iglesias even campaigned in partnership with Syriza and, following Syriza’s victory, at his own party’s rally he proclaimed: “Syriza, Podemos – we will win [venceremos]!” Podemos is currently leading in the polls, ahead of an election later this year. The very last thing Rajoy can afford is for Syriza’s approach to be seen to succeed, emboldening and vindicating Podemos.

As for Portugal and Ireland, where the governments stuck to bailout conditions despite the domestic pain, how would they sell concessions to Syriza to their own voters? Suppose they go back and say: “We were suckers. We shouldn’t have made all those cuts. Instead, what we really should have done was to raise the minimum wage, hire back the public sector staff that had been fired, say we weren’t going to pay our debts to our eurozone partners, cosy up to the Russians and tell the Germans they didn’t feel nearly guilty enough about World War Two. Then everyone would have said we were ‘rock stars’ and and [sic] forgiven our debts.” Do you reckon that would go down well?

Lilico is horrified by all this, saying that he worries about “amateurish hard-left lunacy” which might somehow make, what he necessarily concedes is an already terrible situation, worse again. Not that Lilico is an impartial observer. He may write for the Guardian as well as The Telegraph, but that’s just how it works these days. The mainstream left and right merged long ago. So when he suddenly pops up to ward us away from Syriza, remember that he has his own interests to worry about. Potentially serious repercussions for his consultancy firm Europe Economics, which lists as its clients government departments, regulators, the European Commission and the European Parliament. With that in mind, here’s a little more of what he writes:

The best way for [Syriza] to fail would be for it to capitulate utterly and crawl back to Greece with its tail between its legs and a few cosmetic patronising “concessions” such as renaming the “Troika” the “Consultative Committee” (or, if it makes them feel better, the “Symvouleftiki Epitropi”). If it won’t do that — and there’s a good chance that if it did try to do that then the Greek government would collapse, anyway — then things get a bit more complicated. Because if it’s bad and dangerous for Syriza to succeed inside the euro, it would be disastrous for it to succeed outside the euro.

In short, Syriza must not be allowed to succeed under any circumstances, and although he may claim to speak “from the perspective of [the] eurozone governments”, it is more accurate to say that Lilico speaks here from the perspective of the bankers and the super-rich. For instance, in the hypothetic instance of Syriza’s success, Lilico predicts a calamity. This is what he foresees:

[Syriza] would nationalise the banks and many other industries, print money to cover public spending, overthrow property rights and impose wealth taxes in a desperate attempt to obtain revenue, and many other crazy things. 1

All these, at least to the mindset of Lilico and his powerful ilk, are “crazy things”. Thus, imposing every kind of tax on wealth becomes, ipso facto, a crazy thing. And as for “print[ing] money to cover public spending”, well printing money to bail out the banks is just fine, of course. That’s called Quantitative Easing which, combined with historically low interest rates (recently turned negative in some places), is all that’s keeping the ever more precarious Ponzi scheme afloat. So don’t be mistaken: what worries Lilico is not the unfettered overproduction of money ‘out of thin air’, but an awful dread that some significant part of this new money might be misdirected “to cover public spending”. Money for public expenditure instead of funnelled into the pockets the bankers (like almost all of the money from the previous ‘Greek bailouts’); to Lilico, this is unthinkable. As for “overthrow[ing] property rights”, well I’m really not sure what Lilico means, but I think the problem might lie in his inherent inability to see beyond a certain characterisation of Syriza. His own hard-right lunacy obscuring the fact that Syriza’s actual demands are both democratic and reasonable.

In the end it is the people who matter, and in Greece, the people are suddenly taking to the streets in droves. Not to shout down government injustices, but to add their own chorus of support. Yes, pro-government rallies without a can of tear gas in sight. Can you imagine? Lilico can’t.

However, the main trouble still facing the majority of us (the 99 percent) is that evangelists of loopy free-market, neo-liberal economics such as Andrew Lilico have been ruling the roost for decades. Intent only to smooth the way for business as normal, they are already the technocrats and they have a great deal to lose if the system were ever to be radically reformed. Unfortunately, these people are now embedded, and not only within ‘think tanks’ and ‘policy forums’, but also throughout academia, which in itself ensures any dissenting voice – anyone who does not fully subscribe to the current economic orthodoxy – is conveniently sidelined as a heretic.

Yanis Varoufakis is a perfect example of just such a heretic. A Professor of Economic Theory at the University of Athens, yet Lilico entirely brushes aside his alternative vision on the grounds that it is “amateurish”. For having cornered the market in supplying economic “expertise”, the likes of Lilico are very handsomely rewarded in their role as ‘consultants’: in reality, one of an increasing number of unelected and unaccountable architects of policy, who pocket a small fortune irrespective of results. Small wonder Lilico fears Syriza’s success.

Those wishing to see real political change should get behind Syriza. I suggest that we give those like Lilico good cause to keep on squealing.

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The following statement and call for action is taken from the Greece Solidarity Campaign website:

The European Central Bank is trying to force the new anti-austerity Greek government to its knees. Its actions provoked mass demonstrations in Athens last week in support of the government anti-austerity stance.  On Wednesday 11 February the Eurozone Finance Ministers have called an Emergency Meeting with Greece where Prime Minister Alexis Tsipras and Finance Minister Yanis Varoufakis will present their plans.

The Greece Solidarity Campaign, Syriza London and other organisations are calling for a Mass Rally in support of the people of Greece on Sunday 15th February at 13.00 in Trafalgar Square. This is part of an international wave of rallies and protests in support of Greece taking place across Europe. Come along with friends and colleagues to show your support for the first anti-austerity government in Europe.

1 From an article entitled “Eurozone leaders believe Syriza must fail and be seen to fail”, written by Andrew Lilico, published in The Telegraph on February 11, 2015. http://www.telegraph.co.uk/finance/11406154/Eurozone-leaders-believe-Syriza-must-fail-and-be-seen-to-fail.html

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King Juan Carlos has abdicated — long live the real transition!

After the abdication of the king, time to checkmate the regime
Esther Vivas

The regime is collapsing, it is dying and in its last-ditch struggle to survive, the king has abdicated. Never has the regime resulting from the Transition [The Transition is the name given to the political process following the death of Franco, which culminated in the Constitution of 1978] been as widely challenged as it is today. The pillars on which it rests, the monarchy, the judiciary, bipartisanship, have been greatly delegitimized for some time now. We no longer believe in their lies, those lies with which they are trying to hold together a system that is falling apart. What seemed not so long ago impossible appears today as a reality. Let us push with all our might to widen even further this breach that the economic, social and political crisis has made possible.

Since the elephant hunt of his “majesty” in Botswana, through the indictment of his son- in-law Iñaki Urdangarín in the “Noos affair” and the involvement of the Infanta Cristina in this case, and including the many operations on the monarch’s hip, costing millions and paid out of public funds, the Royal House has become a caricature of itself. One of the main justifications of “democracy” is mortally wounded, but it is not dead yet.

The announcement of the royal abdication is a final, desperate attempt to save the regime; an attempt at a “facelift” with the aim of restoring legitimacy not only to the monarchy but also to its suite of judges, politicians and opinion formers. For years, far too many years, they have lived under the shelter of this false Transition, trying to efface or hide our collective history. Our forgetfulness has been the substrate of their victory, not only moral but also political and economic.

The economic crisis, transformed into a profound social and also political crisis, has put the king and the regime of 1978 on the ropes. People have said “basta”. We saw it three years ago with the emergence of the 15-M Movement; with the spread of civil disobedience; with the occupation of empty homes that were in the hands of banks, and all of that with broad popular support despite the criminalization of protest. More poverty means more pain, but thanks to these mobilizations it also means greater awareness of who are the winners in this situation – the bankers, the politicians – and who are the losers.

The rising demand for sovereignty in Catalonia has also thrown the regime on the ropes, highlighting the deeply anti- democratic nature of a Constitution that does not allow the right to self-determination. Today, the European elections have given the “coup de grace” to a decaying regime, with the loss of more than five million votes for the PP and the PSOE and the emergence, with the election of five members of parliament, of “Podemos” . The regime is becoming nervous, very nervous.

The royal abdication is the latest rescue manoeuvre. But we must nevertheless remember that the system still has room for manoeuvre. The abdication of the king illustrates the weakness of the pillars of the regime and the strength of the people. But we do not want Juan Carlos Felipe [Juan Carlos Felipe is the Crown Prince] either. It’s time to go out into the streets to demand the opening of constituent processes throughout the Spanish State, in order to decide what kind of future we want. We must go on the offensive in order to checkmate the regime.

*This article was published in “Público.es ” June 2, 2014. Translated by International View Point.

I would like to thank Esther Vivas for allowing me to reproduce this article.

+info: http://esthervivas.wordpress.com/english

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Spain: popular resistance delivers results

Victory against Madrid’s hospital privatisation – and other recent struggles in Spain – shows popular resistance delivers results.

“Resisting is pointless,” we hear endlessly repeated. “So many years of protest but the crisis continues, why bother?” insist others, inoculating us with apathy and resignation. “Protests could lead to something that’s even worse,” whispers the machinery of fear. They want us submissive, heads bowed. Dreams of change are forbidden. However, history rebels, it is indomitable. And it shows us, despite the naysayers, that struggle is worth it. The victories against the privatisation of the Madrid’s public health system, of the Gamonal neighbourhood standing up to speculators and the corrupt, of the cleaners in their battle for jobs in the capital and the struggle against evictions and the banks, are good examples.

It is not easy to achieve concrete victories when the political class betray our rights and sell out to capital. It’s hard to win when the state apparatus defends the haves, and rolls back our democratic rights and freedoms. The task of change is arduous, when the media are hijacked by private interests. Still, there are victories, big and small, showing us the way.

The Madrid government’s u-turn on its plans to privatise six public hospitals is one of them. The [Popular Party-run] adminstration in the capital has been forced to revoke the “outsourcing” plan after fifteen months of protest and the announcement of the High Court of Justice of Madrid to provisionally suspend the privatization process on the grounds it could pose “serious and irreparable damage.” There have been months of demonstrations, strikes, a referendum with nearly one million votes against such measures, hospital occupations, lawsuits. The triumph swept away its leading promoter, regional health commissioner Javier Fernández-Lasquetty, who has been forced to resign. It’s worth the fight.

Gamonal, another great victory. After little more than a week of intense protests, from 10 to 17 January in Burgos, against the construction of a boulevard in the neighbourhood of Gamonal, mayor Javier Lacalle had no choice but to halt construction indefinitely. The conflict, however, came from afar. A multi-million euro project, with huge profits for firms and politicians of the day, in a working class neighbourhood lacking investment and amenities. The “urban” conflict in Gamonal became the spearhead of the fight against corruption, land speculation and crisis. Demonstrations were held across Spain in solidarity with the community. And the attempts to criminalise and spread misinformation failed. It’s worth the fight.

13 days of strike and tons of debris around Madrid were necessary to avoid 1,134 layoffs of street cleaners and gardeners of the City of Madrid. It took an indefinite strike to paint into a corner private contractors that not only wanted to have hundreds of workers, but to carry out pay cuts of up to 43%. The victory was partial because the staff had to each accept 45 days temporary furloughs (unpaid lay offs) annually over the next four years, and a wage freeze until 2017. Still, this does not detract from an indefinite strike , unprecedented sadly in this day and age, succeeding in protecting every single job. It’s worth the fight.

The fight against evictions has been, without a doubt, the ultimate expression of a collective rebellion against this con-trick of a crisis. In response to the unlimited usury of the banks, people organized at the grassroots. Over a period of more than four years, the Platform of People Affected by Mortgages (PAH) has managed to stop 936 evictions, rehouse 712 persons in empty properties owned by financial institutions and today occupied under the Obra Social campaign of the PAH. And it has forced many banks to negotiate hundreds of repossessions and social rent. Some will say that is very small progress compared to the overall offensive. That’s true. However, I would put that to all those who thanks to the PAH have a roof over their heads. It’s worth the fight.

Since the emergence of the indignados, or 15M movement, we have gone from “They do not represent us” to “Yes we can”. We have regained confidence in ourselves. The offensive by capital continues, but our indignation and disobedience increases. Victories today are catalysts of the victories of tomorrow. Struggle is imperative to change things. We must take note. And if we do, we can win.

* Article published in Público.es, 30/01/2014. Translation by Revolting Europe.

* Esther Vivas is a member of the Centre for Studies on Social Movements (CEMS) at Universitat Pompeu Fabra. She is author of the book in Spanish “Stand Up against external debt” and co-coordinator of the books also in Spanish “Supermarkets, No Thanks” and “Where is Fair Trade headed?”. She is also a member of the editorial board of Viento Sur.

I would like to thank Esther Vivas for allowing me to reproduce this article.

+info: http://esthervivas.com/english/

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Filed under austerity measures, campaigns & events, Esther Vivas, neo-liberalism, Spain

how can there be any talk of recovery in this “age of austerity”?

Toffed up to the nines and luxuriating in five-star privilege, David Cameron recently told a gathering of fellow ministers and lords during the annual Lord Mayor’s Banquet at the Guildhall in London that the devastating “austerity” will be “permanent”:

The age of austerity is not just a passing phase and Britain should get used to having a ‘permanently’ smaller state, David Cameron said last night.

The Prime Minister used one of his most significant speeches of the year to say that low public spending and a ‘leaner, more efficient state’ would have to be maintained permanently in order for the UK to succeed.

He said the country would have to rediscover its traditional ‘buccaneering’ spirit for private enterprise in order to generate wealth instead of relying on the state.

His remarks are a significant shift for a leader who said in 2010 that he ‘didn’t come into politics to make cuts’, insisting: ‘We’re tackling the deficit because we have to – not out of some ideological zeal.’1

Tory cuts, ideological? Come, come…

If you can stomach any more of it, the full Daily Mail article is here.

Curiously, chief political correspondent at the Guardian, Nicholas Watt, lets Cameron and his Coalition government off the hook too, accepting his pleading that the cuts are “not out of some ideological zeal”:

In a change of tack from saying in 2010 that he was imposing cuts out of necessity, rather than from “some ideological zeal”, the prime minister told the Lord Mayor’s banquet that the government has shown in the last three years that better services can be delivered with lower spending.

Watt adding that:

The remarks by the PM contrasted with his claim after the 2010 election. In his New Year’s message for 2011, issued on 31 December 2010, he said: “I didn’t come into politics to make cuts. Neither did Nick Clegg. But in the end politics is about national interest, not personal political agendas.” […]

A few months earlier that year, in his first Tory conference speech as PM, Cameron said he would have preferred to tackle the deficit in ways other than public spending cuts.2

Click here to read the full article.

Yet this declared “change of tack” is absolute nonsense and easily refutable nonsense at that. Here, for instance, is what Cameron promised back in April 2009 at the party’s spring conference when he was a mere leader of the opposition:

A Conservative government would usher in a new “age of austerity”

So begins a rather different Guardian article, this time from politics editor, Deborah Summers, reporting on what she (and others) then described as Cameron’s ‘age of austerity’ speech. Her article continuing:

The Tory leader insisted greater transparency would help to get Britain’s finances back on track as he used his keynote speech to the Conservative party forum in Cheltenham to pave the way for sweeping cuts in public spending.

“Over the next few years, we will have to take some incredibly tough decisions on taxation, spending and borrowing – things that really affect people’s lives,” Cameron warned.3

So for the record then, Cameron has never changed tack at all. Neither for that matter have their Coalition ‘partners’, the spineless Lib-Dems, or even the supposedly left of centre Labour government. None of our main parties ever seriously discussing real alternative economic strategies, with policies differing purely in terms of how savage the cuts would “need to be”. The Tories, once in office and free to wield the axe thanks to the quiet complicity of their Lib-Dem lackeys, cutting deeper and faster because, in truth, they love nothing better than hounding the lower classes and impoverishing the poor.

Yet after more than three years of “taking our medicine”, a collective punishment very eagerly dished out by the Coalition government, there has basically been no recovery at all in any meaningful sense. Yes, GDP growth has been positive for three quarters, but even this is only at levels comparable to the end of 2009 and beginning 2010 – in other words, growth equivalent to that achieved during the last few months of the admittedly wretched and incompetent Labour government.4 So no improvement, whatsoever, and this is after three years of stagnation. On top of which, all these figures are “real” and thus “adjusted for inflation”. But then, of course, the inflation rate itself is already rather carefully finessed. Henry Blodget of businessinsider provides a helpful explanation of the effect of this adjustment, although here writing about US GDP growth back in May 2011:

The way the government calculates real GDP is to start with nominal GDP – the actual change in the output of the economy as measured by adding up all the actual sales prices (“nominal”) – and then “deflating” this number by subtracting an estimated inflation rate. Thus, the government backs into the real GDP growth number, starting with nominal prices and then adjusting for inflation.

Well, the “GDP deflater” the government is using right now – the estimated rate of inflation – is only 1.9%. As anyone who has been to a supermarket or gas station recently can attest, this assumption is preposterously low. But the effect on “GDP growth” of using a very low inflation estimate is helpful, in that it makes real GDP growth look bigger.5

Click here to read the full article.

GDP is regularly and rather casually accepted as an indicator of “standard of living”, although actually it measures something entirely different and far more abstract: the monetary value of all goods and services produced within national borders. “Standard of living” is therefore better assessed on the basis of a variety of alternative indicators including the quality of healthcare, standards in education, income growth inequality and so forth. That a string of successive governments have failed us in all these regards is widely acknowledged.

I know many who work in the NHS and can’t recall anyone ever telling me that services were getting better or their jobs any less stressful. More personally, I have worked in education for more than fifteen years and standards have unquestionably declined, whilst grade inflation is absolutely real. But then, we can all see how our public services, and the NHS especially, have become infested with managers; whilst our teachers, healthcare professionals (doctors excepted) and many other public sector workers have been put under increasing pressure, and further demoralised thanks to deteriorating pay and contractual conditions alongside flexploitation. Meantime our entire society is being steadily ripped apart by the ever-widening gulf in wealth and incomes. Much of this, of course, is Thatcher’s legacy.

Now I accept that there is indeed a great deal of waste in public spending, and pruning out levels of superfluous management as well as trimming salaries at the top could be beneficial as well as cost effective. But these are not cuts of the type being made on the ground. If the government were seriously intent on cutting back only on real waste, then it would apply its measures with something like surgical precision, but instead it brings the axe. Waste being just a smokescreen. And as with any axe, it hacks away at the bottom of the trunk. Making the most vicious cuts to welfare, which means deliberately snatching a little public money from those who can least afford to lose any, whilst simultaneously targeting the soft underbelly of our few remaining public services, which is also as deliberate as it is ideologically driven. Lastly, when it’s not cutting services, it’s selling them off instead – lowest prices, because everything must go…

Our government is now so openly committed to establishing its permanent “age of austerity” that for millions of people no hope survives that their standard of living will ever improve again – with the proposed £20bn cuts to the budget of our already broken and terribly overstretched NHS being nothing short of a final swing of the wrecking ball through Britain’s most treasured national institution.6 Indeed, a friend who is a dedicated political activist in London recently sent me a distressing email that put into better perspective (since it was founded on her own personal experience) how this talked-up “recovery” is absolutely nothing of the sort. She wrote:

Life is already unbearable/intolerable for many people in the UK on sick benefits having their benefits cut off or cut in half to £49 a week to live on, left with no money to pay bills or the water rates part of their rent, means eviction and out on the streets, living with no heat, no light, no gas, no electricity; or mental breakdown and in a mental hospital; or taking their own lives as they have nowhere to turn and an uncaring society that goes on about benefit scroungers. These people are too sick to work. This is pure fascism and no one is making a fuss in the UK – why? Where is the anger, where are the activists? Why aren’t they doing something? People who are too sick to work are being killed by this government.

Yes, as Cameron entertains an equally pampered audience from behind his gilded lectern, talking without a hint of irony about all the “hard choices” and “tough decisions” he has to make in this new age of perpetual “austerity” — does one use the fish knife for spreading one’s caviar? — people less than a mile away are already struggling to find a few coins for the electricity meter or food for the next meal. All of which elegantly sums up the age we are already living in: an age not of shared “austerity”, where “we’re all in this together” (even if we know it was the bankers who caused the crisis), but of “let them eat cake” disparity. Times, for instance, when super rich Premier League footballers (super rich by ordinary standards that is) wear shirts emblazoned with the name of payday loan sharks Wonga and no one seems to notice, no one feels ashamed, and so one begins to wonder, as my friend wrote: “Where is the anger, where are the activists? Why aren’t they doing something?”

*

Yesterday, I received a new article from journalist and political activist Esther Vivas, which is appended below. In it she details the growing despair of the people of Spain as they suffer even more severe “austerity” bringing with it the inevitable mass unemployment, frozen salaries and escalating costs of living. Broadly, what she says about Spain sadly applies to nearly every corner of the western world and beyond.

Spain in 2014: Not a Prosperous New Year
Esther Vivas

We have entered 2014 a little poorer. For those of us with a job, our salaries have been frozen, or even cut; only a few can expect a rise in the New Year. Furthermore, the price of electricity, public transport and water are increasing.

2013 ended with the controversy over a threatened increase in electricity bills by 11%, leaving Spaniards paying well above the European average and Spain ranking the third most expensive electricity in Europe. So, Mariano Rajoy’s Popular Party (PP) government intervened and stopped this rise by decree. As you can see, if the PP wants to, it can intervene. But overall, there is little willingness to confront the interests of multinationals. For now, the government has limited the rise to 2.3%, and we are expected to be thankful.

The rising price of public transport is another traditional New Year scam. Train tickets, are up nearly 2%, and in Barcelona, not to be outdone, the fare raises on the subway are an abusive 5% with the most popular travelcard, the T-10. However, if you usually take the high speed train (AVE) , which is only used by a minority of citizens, do not worry, because the price has been frozen . Lucky too, are the drivers who use the highways from Castelldefels to Sitges and Montgat to Mataro, where the tolls have been reduced by 30% and 10% respectively, provided they use teletac card, the automatic payment system. Lower the cost of private transport and increase the cost of public transport – that’s the approach of Catalonia’s [right-wing nationalist] CiU government.

And in Barcelona, we face further rises, for water too, even if money appears to be in plentiful supply, especially for the city council, as we saw with the celebrations on New Year’s Eve at the Montjuïc fountain. The tourists are happy at least. But for the rest of us, water bills will be going up by 8.5 % on average in the metropolitan area of Barcelona, thanks to the votes of CiU and [Catalan Socialists] PSC, and the abstention of the [left nationalists] ERC. In the end, those who criticise the cuts are the first to sharpen the scissors. We will not forget.

Meanwhile, the minimum wage remains frozen, as was the case last year, leaving it at a meagre 645 euros per month, while public sector workers remain on the wages they received in 2010. Pensions of those ten million retirees who worked all their lives, will see their incomes hit by a change in indexation that means rises are tied to below inflation (CPI ); this year they will rise by just 0.25% , the minimum set by the Government. An increase that will barely buy a cup of coffee.

We enter this 2014, a little poorer. Our purchasing power slowly falls. Every year that passes we have less. They want to make poverty normal. Do you remember those stories, not so long ago, of those struggling on 1000 euros a month? The new precariat. Today an employer offering a job paying a thousand euros monthly would be swamped by curriculums. And yet some, like the Prime Minister, dare to say that 2014 brings “the beginning of the recovery.” What a bunch of thieves and liars.

*Article published in the Spanish digital newspaper Público.es, 02/01/2014. Translated by Revolting-Europe.com.

+info: http://esthervivas.com/english/

I would like to thank Esther Vivas for allowing me to reproduce this article.

Not all of the views expressed are necessarily views shared by ‘wall of controversy’.

*

Update:

On January 6th, Chancellor, George Osborne, delivered a New Year economy speech at the West Midlands headquarters of Sertec in which he continued from where Cameron had left off, announcing that:

If 2014 is a year of hard truths for our country, then it starts with this one: Britain should never return to the levels of spending of the last government.

We’d either have to return borrowing to the dangerous levels that threatened our stability, or we’d have to raise taxes so much we’d put our country out of business. Government is going to have to be permanently smaller – and so too is the welfare system. […]

We’ve got to make more cuts. £17 billion this coming year. £20 billion next year. And over £25 billion further across the two years after. That’s more than £60 billion in total.

Click here to read a full transcript of George Osborne’s speech at gov.uk

From a report in the Guardian published the same day (co-authored by Nicholas Watt and Rowena Mason), we also learn that:

In an interview on Radio 4’s Today programme, Osborne said he would seek to achieve some of the £12bn savings by targeting housing benefit for under-25s and by means-testing people on incomes of £60,000 to £70,000 who live in social housing. But one Whitehall source said that targeting those two areas would produce “laughable” savings. Department of Communities and Local Government figures show that the 11,000 to 21,000 council tenants, who earn more than £60,000 a year, each cost the taxpayer £3,600 a year. Targeting this group would produce savings of £40m-£76m a year.

No doubt desperately intent to put some clear blue water between his own party and the truer blue Tories in the run up to the 2015 general election, the same article reports on Nick Clegg’s entirely belated fightback against what are in any case his own government’s “austerity measures”:

Clegg chose to describe Osborne’s plans to target cuts on the working-age poor – while ruling out tax increases – as “lopsided and unbalanced”. In a sign of how coalition relations will remain fractious until the election in May 2015, the deputy prime minister said: “You’ve got a Conservative party now who are driven, it seems to me, by two very clear ideological impulses. One is to remorselessly pare back the state – for ideological reasons just cut back the state.

“Secondly – and I think they are making a monumental mistake in doing so – they say the only people in society, the only section in society, which will bear the burden of further fiscal consolidation are the working-age poor.”

Signalling how he will waste no time in publicly criticising Tory plans over the next 16 months, Clegg later added: “I literally don’t know of a serious economist who believes that you only do it from that lopsided, unbalanced approach. Almost all serious economists say you have some kind of mix.”

Meanwhile, professional clown and London Mayor, Boris Johnson, managed to upstage both Osborne and Clegg on LBC radio by comparing Nick Clegg to a condom, describing him as “David Cameron’s lapdog-cum-prophylactic protection device”.

This is taken from The Mirror, published January 7th:

The London Mayor likened the Deputy Prime Minister to a “prophylactic protection device” as relations between the Tories and Lib Dems sank to a new low. The tirade came during a radio phone-in after Mr Clegg claimed George Osborne’s “extreme” plan to cut £12billion from welfare was a “monumental mistake”.

Furious Tory MPs called on the Lib Dem chief to apologise. Leading the backlash on LBC radio slot Ask Boris, jabbering Johnson said: “Clegg is there to perform a very important ceremonial function as David Cameron’s lapdog-cum-prophylactic protection device for all the difficult things that David Cameron has to do.

“He is a lapdog who’s been skinned and turned into a shield.”

You can listen to Boris Johnson’s latest rant against Coalition teammate Nick Clegg embedded below:

 

*

Additional:

On November 27th, Alexis Tsipras, leader of Syriza in Greece, wrote an op-ed for the Guardian entitled “Austerity is wreaking havoc, but the left can unite to build a better Europe”. Here are a few pertinent extracts:

Those European leaders who claim that the current medicine is a “success” are hypocrites. For millions of people, the European dream has turned into a nightmare. Eurobarometer surveys show the growing crisis of confidence in the EU and the catastrophic rise in the popularity of far-right parties. What should give us hope is the emergence of new solidarity groups and community-based movements. They can and will lead to greater democratic participation and control. […]

Europe needs an anti-austerity and anti-recession front, a solidarity movement for its working people, north and south. This could deliver a pact for democracy, development and social justice. We must rebuild solidarity among the young, the workers, the pensioners and the unemployed to break down the new dividing line between Europe’s rich and poor, the “mur d’argent” to use a historical phrase that has become topical.

Click here to read Alexis Tsipras’ full article.

*

1 From an article entitled “Cameron: Austerity should last for ever and Britain must get used to being a ‘leaner, more efficient state’” written by James Chapman, published in the Daily Mail on November 11, 2013. http://www.dailymail.co.uk/news/article-2501697/Cameron-Austerity-Britain-used-leaner-efficient-state.html

2 From an article entitled “David Cameron makes leaner state a permanent goal” written by Nicholas Watt, published in the Guardian on November 12, 2013. http://www.theguardian.com/politics/2013/nov/11/david-cameron-policy-shift-leaner-efficient-state

3 From an article entitled “David Cameron warns of ‘new age of austerity’” written by Deborah Summers, published by the Guardian on April 26, 2009. http://www.theguardian.com/politics/2009/apr/26/david-cameron-conservative-economic-policy1

4 A comparison can be easily made from studying a graph published by the BBC in late October. Figures from the ONS for UK GDP growth are as follows: 2009 Q4, 0.4%; 2010 Q1, 0.5%; 2010 Q2, 1.0% compared against 2013 Q1, 0.4%; 2013 Q2, 0.7%; 2013 Q3, 0.8%. Indeed, the accompanying article begins: “The figures mean that the economy grew at its fastest pace for three years.” After three years of Coalition government, in fact! http://www.bbc.co.uk/news/10613201

5 From an article entitled “Check Out What GDP Growth Would Look Like If The Government Were Using The Right Inflation Numbers” written by Henry Blodget, published by businessinsider on May 30, 2011. http://www.businessinsider.com/gdp-adjusted-for-inflation-2011-5

6 In October 2011, Denis Campbell and James Meikle investigated and reported in an article published by the Guardian entitled “£20bn NHS cuts are hitting patients, Guardian investigation reveals”.

They write: “This Guardian investigation details the latest evidence of increased cuts – the cuts that, according to the government, should not be happening – being implemented across a wide range of the NHS’s many care services. With £20bn due to be saved by 2015, and the NHS receiving only a 0.1% budget increase each year until then, experts predict that tough decisions – about the availability of services and treatments, staffing levels and which clinics and hospitals provide care – will become increasingly common.”

http://www.theguardian.com/society/2011/oct/17/nhs-cuts-impact-on-patients-revealed

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Filed under austerity measures, Britain, Esther Vivas, Spain

independence for Catalonia?

An introductory note:

The following is the translation of an article written by journalist and political activist Esther Vivas after the recent September 11th demonstrations for Catalan independence.

The Catalan independence issue is a complex one, and so I also sent the original article to a Catalan friend who has helpfully explained some of the more technical terms. I have since re-edited the original version and added my friend’s remarks in the form of footnotes (with links) to provide a little guidance for those of us less familiar with politics of the region.

What is perhaps especially interesting to outsiders is the birth of a new political movement. The movement, which is known as Procés Constituent – approximately translates to mean “constitutional process” – was started by a nun by the name of Sister Teresa Forcades and a fellow activist called Arcadi Oliveres.

*

Catalonia: independence from Spain, independence from capitalism

Esther Vivas

Hundreds of thousands turned out last September 11 to demand independence for Catalonia. Some decided to surround the Caixa, form a human chain around the largest bank in Catalonia and third largest in Spain, to demand not only independence from Spain, but from capitalism.

Some in that crowd will say that independence comes first, and then we’ll see. That independence itself will end unemployment, poverty, and hunger. As if independence were a divine manna. This, however, is falsehood. Just ask people in Greece, Portugal, Ireland, Cyprus and all of us now living in Spain. Instead, gaining real independence must mean that we escape from, well, the grip of the Troika*, since it is the European financial powers which now stand in the way of real freedom for the people. After all, there can be no real independence under the burden of debt, the blackmail of the risk premium and the “markets” .

Others in the crowd will claim “Madrid robs us ”, and so if we say “Farewell to Spain”, then our problems are solved. But nothing is further from reality… Where are we going with a country in the hands of just 400 families1 forever? Moving towards real independence, involves asking: independence for what and for whom.

The open debate in Catalonia today is an opportunity to rethink the foundations for a new model of society. It may be independent, yes, but it must be open to a ‘constitutional process’2 that allows us to decide together what kind of country we want… Always remembering that it has been the banks which are most responsible for this crisis, with La Caixa being the largest bank in Catalonia. And that to save these financial institutions we have been sunk into absolute misery. So we will never be free nor independent, if we are still subject to policies that only serve to prop up the banks.

It is also common knowledge that La Caixa does not want a referendum on independence. “Social peace” [or “let’s not rock the boat”]3 being the final guarantor of its sustained profits, and with the Spanish State always its biggest source of business…. Its true loyalties evident from the scandal involving the royal family… La Caixa ensuring a golden retirement for the Infanta Cristina in Switzerland4, as head of the International Department of the La Caixa Fundación, her salary increasing to 320,000 euros per year…

So which country will we have after independence if our largest bank still evicts families and rips us off through ‘preferred shares’5? What will our independence amount to if we are still in the hands of thieves…?

* This is an extract from an article published by Esther Vivas in Spanish in Publico.es, 12/11/2013.

Originally translated by http://revolting-europe.com.

+info: http://esthervivas.com/

*

Footnotes:

* The following is a previous article published by Esther Vivas at Publico.es, June 1, 2013:

United against the Troika
Esther Vivas

Who is the Troika? A year ago few knew the answer to this question. We knew it by reference, to its stay in Greece, and it wasn’t good. The Troika was synonymous with austerity, adjustment and cuts, hardship, hunger and unemployment.

But it was not until the arrival in Spain of the much denied rescue, in June 2012, that the “men in black” and “Troika” became a household name. Today, a year later, people, sick and tired, are coming out into the streets to say loud and clear: “Troika, go home”.

History repeats itself. And just as many countries of the South in the 1990s and 2000s saw mass demonstrations against the International Monetary Fund and the World Bank, whom the people accused of reducing them to misery, now people here speak out against the Troika: the International Monetary Fund, the European Commission and the European Central Bank. The bank is different. But the logic is more of the same.

Centre-periphery relations at a global level are now repeated in the European Union. And the countries of the periphery of the Continent, we have become the new colonies, markets or sources of financial capital. Where once, in the South, structural adjustment plans were applied, in order, it was said, to make debt more sustainable, as if the misery and poverty to which they could be subjected was sustainable. Now they speak to us of “aid” and “bailouts “… and they reduce us all to misery.

Debt remains the yoke imposed on the poor. A mechanism of control and subjugation of peoples. An infallible instrument to transfer resources, or to be more precise, of plunder, from South to North, either global or at a European scale. And an argument for reducing the rights of the majority and generate more profits to capital, cutting and privatizing public services covertly. The debt imposed on us, which, incidentally, is not ours, is the perfect excuse to implement what is a long plan. Thus, the scam is called the crisis, the theft is the debt.

We have quickly learned the meaning of the Troika, but also that of other concepts such as anger, rebellion and disobedience. And today we rise in more than 100 cities across Europe as the “peoples united against Troika”. Because we can.

* Article published at Publico.es, June 1st, 2013.
** Translated by http://revolting-europe.com.

1400 families”: I don’t know exactly when this phrase was coined, but it has been current in the media in recent years to refer to the Catalan ruling elite, whose members are often descended from the industrial bourgeoisie of the past. The phrase became popular in 2009 when Fèlix Millet, a well-connected businessman from this particular class, confessed to embezzling large amounts of money from the Palau de la Música foundation. He has also been accused of conniving in the illegal funding of Convergència Democràtica de Catalunya, the political party in power in the autonomous government, many of whose leaders happen to belong to the “400 families”. But despite his confession and the public outrage that followed, the court case keeps being delayed and Millet has only spent a few days in prison so far.

According to La Vanguardia, in an interview he referred to himself as belonging to a group of 400 influential Catalans, some related to each other and others not, “who meet everywhere and are always the same” (sorry, I haven’t found a link in English:

http://www.lavanguardia.com/politica/noticias/20090924/53791233174/uno-de-los-nuestros-felix-millet-orfeo-catala-omnium-cultural-montserrat-estado-liceu-joan-anton-mar.html).

2constitutional process”: this refers to the writing of a socially progressive Catalan constitution in the future, which is advocated by a group called “Procés Constituent” started by Teresa Forcades (the nun who became famous on Youtube exposing the pharmaceutical industry in connection with the swine flu vaccine) and a fellow Christian activist called Arcadi Oliveres.

This group is not a political party and both founders have said from the start that they are not going to stand in elections. Their aim is allegedly to set up a movement that will eventually lead to a “constituent assembly” for the new Catalan state. The group organized the alternative human chain around la Caixa that is mentioned in the article, to signal their differences with the independentist “Via Catalana” chain.

They are pro-independence but believe that a Catalan republic will be pointless unless it’s built on radically different principles, so for example in their manifesto they advocate, among other things, nationalising banks, refusing to pay “odious debt” and extending the welfare state (which is the reason Vivas supports them; I also signed my support when they first published their manifesto, which felt pretty odd given my feelings about Catholics –Forcades and Oliveres seem well-meaning, though). So when Vivas refers to the “constituent process”, I think she’s referring to the idea that social rights should be written into the future Catalan constitution.

To read more about Sister Teresa Forcades and her movement, “Procés Constituent”, I recommend a BBC news article entitled “ Sister Teresa Forcades: Europe’s most radical nun”, written by Matt Wells, published on September 14, 2013. The article outlines her 10-point programme, drawn up with economist Arcadi Oliveres, as follows:

• A government takeover of all banks and measures to curb financial speculation

• An end to job cuts, fairer wages and pensions, shorter working hours and payments to parents who stay at home

• Genuine “participatory democracy” and steps to curb political corruption

• Decent housing for all, and an end to all foreclosures

• A reversal of public spending cuts, and renationalisation of all public services• An individual’s right to control their own body, including a woman’s right to decide over abortion

• “Green” economic policies and the nationalisation of energy companies

• An end to xenophobia and repeal of immigration laws

• Placing public media under democratic control, including the internet

• International “solidarity”, leaving Nato, and the abolition of armed forces in a future free Catalonia

http://www.bbc.co.uk/news/magazine-24079227

3Social peace”: this is a direct translation of a euphemism that is often used here by politicians, bankers and businessmen alike, so when there’s a demonstration or a strike or any kind of protest by the people, those in power will say that this is undesirable because it disrupts “social peace”, by which they mean that the protests threaten to disrupt the status quo.

4ensuring a golden retirement for the Infanta…”: this refers to a financial scandal involving the Infanta, her husband, the king and various Partido Popular politicians and regional governments. It’s a long soap opera so I’ll spare you the details. The latest thing is that after being let off the hook by the corrupt justice system, the Infanta has been given a cosy and highly lucrative job in Switzerland by La Caixa, the bank mentioned in the article.

5preferred shares”: this is a complex, high-risk ‘financial product’ that a few years ago was fraudulently sold by Spanish banks to thousands of unwitting citizens, mostly elderly and uneducated, who didn’t have a clue what they were buying. When the crisis set in, the buyers lost everything (in fact I know someone whose elderly mother lost her savings this way). The victims are still fighting to get their money back. If you want to read more about this, you can have a look here: http://www.arabtimesonline.com/NewsDetails/tabid/96/smid/414/ArticleID/194380/reftab/96/Default.aspx

I would like to thank Esther Vivas for allowing me to reproduce these articles.

Not all of the views expressed are necessarily views shared by ‘wall of controversy’.

*

Update:

The following is a subsequent article on progress of the ‘Constituent Process’ published on October 27th 2013:

Catalonia: a Constituent Process to decide everything
Esther Vivas

Nobody said that it would be easy, but it is necessary to try. And this is precisely what is being done through the Constituent Process in Catalonia, led by the Benedictine nun Teresa Forcades and the economist Arcadi Oliveres, along with many other people. To create social consciousness, to mobilize, to promote civil disobedience and to raise a political alternative that defies those who monopolize power.

Its objective is to construct a new politico-social instrument, based on popular self-organization, loyal to those of at the bottom and able to contribute, in diversity, to the social and political left as a whole. On the horizon, if things work out, it expresses the will to compete in the next elections to the Catalan Parliament, with a broad candidacy, the result of the necessary confluence of many people, some currently inside and others outside the Process, that aspires to transform social discontent into a political majority and to establish the bases to promote a constituent process, that allows us to collectively equip ourselves with a new political framework in the service of the majority.

Some will say that this is utopian, but it is more utopian, from my point of view, to think that those who have led to us to the present situation of crisis, from which, by the way, they obtain substantial benefits, will get us out of it. Breaking with scepticism, apathy and fear is the challenge that we have ahead. Knowledge that “we can” is the first step to obtaining concrete victories.

Ever since the Constituent Process went public last April, the support received has been wide The Process has connected with broad sectors of society who perceive, in the present context of crisis, the urgent necessity of changing things. Many people without too much political or organizational experience have identified with a discourse that appeals to something as essential as can be: justice.

Other social activists have seen in the Process an instrument to go beyond social mobilization per se and to consider a political-organizational perspective of change. Two years after the emergency of 15M, many perceive that no matter how much we occupy banks, empty houses, supermarkets, hospitals… those in power continue applying a series of measures that sink us into absolute misery. Resting on the essential struggle on the street, without which there is no possible change, the Constituent Process raises, at the same time, a challenge to the political-economic regime, as well as in the institutions. And to change the system by “occupying” these instances and giving them back to the social majority via a constituent process.

For sure there are no magical formulas but experiences like the constituent processes in Latin America (Ecuador, Bolivia, or Venezuela) or, closer to home, Iceland, in spite of their debatable evolutions, are experiences to consider deeply, not to imitate but to learn from their successes and errors. In Catalonia, the debate on the national question and independence opens an opportunity, as we could never have imagined, to be able to decide… and to decide on everything.

High participation

The high participation in public presentations of the Constituent Process, some led by Teresa Forcades and others by Arcadi Oliveres, with an average of between 400 to 700 people in municipalities like Vic, Sabadell, Santa Coloma de Gramenet, Lleida, Girona, Vilanova i la Geltrú, Balaguer, Figueres, Blanes, Granollers, Terrassa, or even small municipalities like Santa Fe del Penedès or Fals, shows the capacity of attraction of this initiative, which has, in a few months, made more than one hundred presentations across the Catalan territory.

And more importantly, the interest of those who approach the Process does not reside only in listening to its two main promoters but in participating actively in the construction of this politico-social instrument. In this way, more than 80 local assemblies have already been set up across Catalonia. Also specific assemblies around such issues as education, health, feminism and immigration have started up. All of them are coordinated in a general assembly known as the Promotional Group, which meets monthly.

The forms of action of the Constituent Process also reflect this “other politics”. At most public events makeshift money boxes are passed around to collect what it costs to rent the PA apparatus, photocopies and so on. The presentations serve also to attract those present to attending local meetings and assemblies. The groups in the territory are organized according to their own priorities and are coordinated nationally. The Constituent Process still has some way to go, but it shows the potential of a political initiative able to connect with major social unrest. Although obviously there is still much to be done, perhaps the most difficult part: to consolidate the process and improve the coordination of the assemblies. This is a work in progress.

From bottom to top

The confidence generated by its principal promoters, Teresa Forcades and Arcadi Oliveres, is key to its success. But we know that this is an initiative that will only succeed if it is built from the bottom up. I was told the day both presented the proposal: “We two alone cannot do much”. Correct. Today, the Constituent Process has more than 44,000 people attached and multiple local and sector meetings. Teresa Forcades and Arcadi Oliveres, as has been said many times, do not want to be leaders of anything, but agree to put their credibility at the service of a just cause.

Criticisms of the Christian profile of both have been made, despite the secular nature of the Process. Which in part is not surprising. The social mobilization of the left, both in Catalonia and in the Spanish state, would not be understood, in part, without the contribution of ordinary Christians. Without going any further, one of the founders of the Field Workers Union was none other than the priest of the poor, Diamantino Garcia. Denying this reality means ignoring this part of our collective history. And both Teresa Forcades and Arcadi Oliveres have spoken repeatedly and at length before the Constituent Process, against the ecclesiastical hierarchy, for the separation of church and state and in defence of the right of women to decide on their bodies. Which, incidentally, has earned them widespread criticism by reactionary sectors of the church and its hierarchy.

Last October 13, the main event of the Constituent Process was being held in Barcelona, just six months after its introduction. I still remember how before the proposal someone commented: “Why go ahead with such a project. This is going to fail”. A colleague said: “Failure would be not to try.” How right she was.

*Translated by International View Point.

+info: http://esthervivas.com/english

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Esther Vivas speaks out against Spain’s reactionary government

Spanish State: They want us poor, silenced and straight

Esther Vivas

The governing Popular Party (PP) is on a crusade – not only against fundamental rights such as health, education, housing, work, but also against sexual and reproductive freedoms. The PP wants to impose a model of society, not only at the service of capital, but sexist and homophobic to boot. It wants us poor, silenced and straight.

Last week the Government proposed to the Spanish regional governments that they veto, within the public health system, assisted reproductive treatment (artificial insemination and in vitro fertilization) to lesbians and single women. A measure that threatens equal access to public services and discriminates against those who do not conform to the strict hetero ‘standard’ . If you are female, poor, lesbian, or you are single, you are forbidden to get pregnant. For the PP, without men there must be no children. In this way, the Right imposes its family archetype: a straight couple.

We are facing a government that is shocked that two women can be mothers, that two men can be fathers, that a lone woman may have daughters and sons, but it does not feel the slightest shame in pursuing policies that lead to hunger, unemployment and evictions. It is the double standard of those who do not have any principles. Who are only obedient to the doctrine of capitalism and patriarchy.

Yesterday in a feminist protest outside the Ministry of Health in Madrid, called precisely to condemn this measure, the response was repression. This is a government that pursues and criminalises those who refuse to be silent. The ‘politics of the truncheon is the other side of coin of their ‘politics of cuts’.

Here’s another example. The Ministry of Health, Social Services and Equality plans to leave out of official statistics the abuse of women who, despite being attacked, do not visit the hospital or whose hospital stay is less than 24 hours. Which means the majority of cases will remain hidden. Could it be that the figures are getting out of control?

In the first quarter of 2013, 1,100 women per month signalled injuries when reporting attacks by men, according to the Observatory for Gender Violence of the General Council of the Judiciary. This, however, represents a minority of cases. In 2012, according to the same organisation, in only 11% of the 128,000 complaints for abuse did women notify that they had been injured. For some, it seems, it is better to hide or disguise the reality, rather than fight it.

And to all of this must be added the offensive by Minister Alberto Ruiz-Gallardón to change the already limited abortion law, turning the clock back to the era of ‘the caves’. A change that, in the words of the minister, will take place in the next three months. The future law, everything seems to indicate, will be more restrictive than that of 1985, only allowing pregnancy to be terminated in certain, very limited circumstances.

Among the cases that are being earmarked for removal from the current law, is the malformation of the fetus. According Gallardón, the reform aims to ‘increase the protection of the quintessential right of a women: that of motherhood.’ And I wonder: Motherhood in whose hands? Women or the State?

In short, this is an attempt by the PP to take control over, and legislate about our body. These measures ultimately add up to a political solution to the crisis that sees women returning to the home. When cutting public services such as health, welfare, social services, there will be a whole area of care work, invisible, undervalued, but essential, that will end up being done, again, by women. It is us who, above all, will bear the burden of the cuts to the welfare state.

We face a right-wing government that is sexist and homophobic. The response to this can only be at once left-wing (not talk, but action on the streets) and feminist, in defence of sexual freedoms.

*Esther Vivas is a Spanish journalist and activist.

**Translation by Revolting Europe.

+info: http://esthervivas.com/

I would like to thank Esther Vivas for allowing me to reproduce this article.

Not all of the views expressed are necessarily views shared by ‘wall of controversy’.

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“Into The Fire” — ‘austerity’ and its part in the return of fascism

Angela Merkel tried to contain her irritation when asked at a podium discussion in Berlin this week whether southern European countries could take much more German-ordered austerity.

But the frustration in her voice was clear enough after a week in which several European allies broke ranks, and in a public challenge to Germany, effectively declared the era of deficit reduction in Europe to be over.

“I call it balancing the budget,” the German chancellor told her audience at a book presentation. “Everyone else is using this term austerity. That makes it sound like something truly evil.”

So begins an article published yesterday by Greek Independent Press. The article continues:

There are signs the criticism is beginning to grate. German officials turn testy when the word “austerity” is mentioned these days. In recent months, they have deliberately adjusted their language, adopting the term “growth-friendly consolidation” to describe their policy approach.

Yes, whatever you do just make sure you don’t mention… “the austerity”!

Listening to Angela Merkel here, one might mistakenly imagine that “austerity” was some kind of nasty term made up by opponents of the agenda, whereas, in actual fact, it was coined as the euphemism of choice by those who advocated and most avidly sought the implementation of such an economic “shock therapy”. “Shock therapy” being, of course, a term conveniently applied by the earlier proponents of such measures, and good enough when the victims mostly lived in Latin America or Africa. But then, when “shock therapy” came back to Europe and America it needed another name, and, as euphemisms go, “austerity” obviously had its advantages: it was short and memorable, and unconsciously appealed to a certain kind of stoical, almost religious outlook, and as such was able to cover its ill intentions beneath the guise of such virtues as frugality and self-restraint.

Of course, the term “austerity” is actually just a polite cover needed to hide away the truly diabolical consequences of destroying a nation’s wealth and welfare provision. “Growth-friendly consolidation”, on the other hand, and aside from being unmitigated nonsense*, is far too much of a mouthful. After all, does anyone still remember the dear old “Community Charge”? – most people don’t. When it came to naming, more cuddly sounding “Community Charge” simply didn’t stand a chance against its punchier rival “The Poll Tax”. So Merkel and the others should be warned: they are no doubt already stuck with the term “austerity”, whether they like it or not.

And “austerity” is only getting a bad name because it is indeed “something truly evil” (as Merkel put it); an evil that, as time passes, will doubtless become more and more obvious to everyone. For “austerity” is as socially divisive as it is economically destructive: opening up the way for the very worst forms of political extremism to rise and prosper. Savage economics and hard right policies complimenting one another perfectly; the iron fist slipped (but only barely concealed) inside an already iron glove. We should call it what it is: extreme “austerity” is creeping fascism.

I actually visited Greece in the Summer of 2006, just about a year before this crisis kicked off, and back then it was a fully functioning western democratic society. It felt like a home from home. Yet, in little more than six years the country has been trashed. Broken on the wheel of “austerity”, and with no end at all in sight.

To see how terribly Greece has been ruined, and to also understand how, on the back of such wanton destruction, a neo-Nazi group like Golden Dawn has grown and incrementally seized more power, I strongly recommend a new documentary entitled “Into The Fire: The Hidden Victims of Austerity in Greece”, which was released just a few days ago and is embedded below:

Into the Fire is being crowd-released today [April 20th]: All over the internet people are embedding Into the Fire on their website or blog. With everyone who participates the audience and distribution network will grow. Are you participating? http://intothefire.org

A hard hitting documentary which shows the plight of refugees and migrants in recession hit Athens, Into The Fire is a film with a difference.

Shot and edited with sensitivity and compassion, it doesn’t pull its punches and makes for harrowing viewing in parts. It is the product of crowd funding, dedication, self-sacrifice and a burning sense of justice.

In times of severe austerity things look bleak for Greek people, but they’re far worse for those who have recently arrived. Without housing, legal papers or support, migrants in Greece are faced with increasing and often violent racism at the hands of the growing Nazi party Golden Dawn and the police in Athens. Many are trapped by EU laws and legislation of other EU countries meaning they’d be returned to Greece if they managed to get to another member state, they are desperate to leave the country.

This film gives incredible insights into the reality faced by people who simply want to lead peaceful, normal lives.

*

* Here are some interesting graphs taken from an wikipedia article entitled “European sovereign-debt crisis”, which show the rise in the levels of Greek, Spanish and Portuguese debt since 1999 as compared to the average of the Eurozone:

All three graphs (and others including those for Ireland and Cyprus) show a marked turning point around 2007-8, providing further evidence not only that “austerity” hasn’t worked (even within its own terms of debt reduction), but that the western world is actually faced with a systemic banking crisis that flared up at that time. (Please note that the flattening off throughout the final three years of these graphs represents only projected estimates.)

The following is taken from an article written by Tyler Durden and posted on zerohedge from February 18, 2013:

“Beleaguered Prime Minister Mariano Rajoy just broke another record. As if a plague of corruption scandals was not enough, Spain’s debt-to-GDP has now reached levels not seen in over 100 years. As El Pais reports, Spanish debt levels rose at an alarming EUR 400 million per day in 2012 making for the largest annual increase in debt in the nation’s history – all the while proclaiming austerity.”

And here’s another helpful graph that goes along with the article, showing once more that rather than reducing Spanish debt, the imposition of “austerity measures” is very closely correlated to the spike in that debt:

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Esther Vivas calls for action against Spain’s boom in corruption

Spain is in the hands of thieves

Esther Vivas

No doubt. We are in the hands of thieves. The Barcenas, Pallerols, Crespo, Nóos and Mercurio cases, added to the Gürtel case, Millet, Champion, Pretoria and many others, show that those who have been giving us lessons of austerity have been benefitting: not only the bankers and businessmen but also, when the cameras have not focused on them, the politicians, who have filled their pockets in order to live in opulence and extravagance. And all at our expense.

Mayors, former ministers, regional leaders, senators, councillors, MPs… a total of more than 300 politicians  are under investigation for corruption. And sleaze is present at all levels of public administration. Corruption looms too in the General Council of the Judiciary, including the governors of the Bank of  Spain and the Royal Family. Here no one is exempt. And we are only seeing the tip of the iceberg.

The Valencia region and the Balearic Islands have the dubious honour of topping the ranking of corruption and cronyism, although territories such as as Catalonia, Galicia, Madrid and Andalusia follow closely behind. In Valencia, nine members of the Popular Party are formally charged and former senior officials of the government of Francisco Camps, who, even The New York Times has compared with Silvio Berlusconi. In the Balearics, there are almost a hundred defendants, between middling and top posts, for the most part from the last Popular Party administration of Jaume Matas, who, incidentally, has accumulated a total of a dozen cases of irregular funding, among others.

In Catalunya, corruption is widespread in both Convergència and Unió [the two parties of the coalition CiU backing recently re-elected Catalonia regional President Artur Mas]. Convergència, whose headquarters have been seized to cover the bailout of 3.2 million euros for the diversion of funds from the Palau de la Música and [the alleged public bid rigging] for the ITV [vehicle inspection stations] by Convergència’s general secretary, Oriol Pujol [son of former Catalan regional premier Jordi Pujol]. Furthermore, there’s the case of the Catalan Health Institute, which forced its president Josep Prat to resign, and now the case of Xavier  Crespo, Convergència deputy in parliament, presumed to be linked to a plot of laundering funds from the Russian mafia. The “very honourable” Jordi Pujol seems to be ignorant of this, and is promoting from his think tank a “code of ethics for professionals in politics,” based on honesty and transparency. Another bad joke.

And so to Unió Democràtica de Catalunya, or Unió, which was convicted of misuse of 388,000 euros of European Union funds meant for jobless training programs between 1994 and 1999. That’s case known as Pallerols. And that culminated — check this out! — with an agreement between prosecutors and defence to avoid prosecution, and a statement from, among others, the training chief Duran y Lleida, and a reduction in prison sentences to less than two years (initially the Court of Barcelona demanded 11 years!), thus avoiding jail. Justice?

Nor should we forget the ‘fake redundancies’ plot in Andalusia, led by the Socialists, with about 70 defendants, including former senior regional government officials. Many, it seems, were the beneficiaries, for over at least ten years, of money from the Andalusian ERE redundancy scheme. It was a scandal that followed in the wake of a long history of corruption in socialist ranks since the days of Juan Guerra and Luís Roldán.

Having said this, most corruption cases occur locally. Today some 80 mayors and former mayors plus several dozen more councillors are under investigation for cases related to the awarding of contracts and urban development. Many of them are charged with crimes of embezzlement, breach of trust, influence peddling and/or fraud. The Pretoria [urban development] case in Santa Coloma de Gramenet, and the more recent case of ‘operation Mercurio’ in Sabadell, are examples.

The major political parties in particular appear to have done what they wished with public funds, using them as illegal financing instruments and treating public matters as if they were private. No wonder, then, that in the last Barometer Sociological Research Center (CIS), in December 2012, politicians and parties were considered the third most important problem that exists in the Spanish state, after corruption and fraud. In fact, Transparency International’s Corruption Perceptions Index 2012 report,  the Spanish State was ranked 30th in the standings, tied, coincidentally, or maybe not, with Botswana.

Intimidating the media

And, what happens to those who dare to denounce corruption? Today the most emblematic case is that of  CafèambLlet (a local magazine with very little means) that reported in early 2102, by means of a home video (an upload that was seen by more than a hundred thousand Youtube visitors within just a few days) how Catalan public health money was being stolen by businessmen and politicians of CiU and Catalan Socialist Party (PSC).

Months later, CafèambLlet faced legal action by Josep Maria Via — someone quoted in the video — for allegedly attempting to bring him into disrepute. Following an unusually fast trial, in which representatives of CafèambLlet were not even allowed to speak, the editor was convicted and sentenced to pay a fine of ten thousand euros. But take note, another major  scandal that was uncovered by CafèambLlet in its Crespo Report, regarding [the CiU’s deputy] Xavier Crespo, who in turn threatened to sue the magazine, and is at present facing investigation for graft and bribery called for by the anti-corruption prosecutor. Will anyone compensate CafèambLlet for the threats received by this character?

Nature of today’s corruption

Corruption is not perceived today as it was in the past. Now it is regarded as an intrinsic part of the crisis. And in so far as it increases unemployment, poverty and insecurity, illicit enrichment of the elites at the expense of the majority is becoming an unbearable burden. So the impunity enjoyed by the politically corrupt appears to be ending. And as the pillars that built the system during the Democratic Transition continue to crumble, and as the loss of legitimacy of institutions and political representatives grows because of their subservience to financial power, it is likely that the impact of this corruption on public opinion and voting behavior will be dramatic.  The crisis is no longer seen as resulting from the ‘waste’ of the ordinary people but as ‘theft’ and ‘fraud’ of the ruling elite.

Now is therefore the time to act. To say stop and to take action. To demand mechanisms of control over public officials, the revocation of mandates, the de-professionalisation of politics, the end to the accumulation of public posts, a limit on salaries, and transparency in public accounts. Yesterday thousands of people gathered outside Popular Party headquarters in Madrid, Barcelona, Valencia, Zaragoza and La Coruña.  A first step in a new surge in the streets? The Barcenas case may turn out to be the straw that breaks the camel’s back. Certainly, it is high time that they return all that they have stolen from us.

 I would like to thank Esther Vivas for allowing me to reproduce this article.

* Translated by Revolting Europe.

+info: http://esthervivas.com/english/

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