Beleaguered Greece writes down its massive debt 2/3

Beleaguered Greece writes down its massive debt 2/3 ( Comment Whitehorse Star July 13, 2015 )

It is not a secret that the 2008 financial melt down and banking bail outs, their worsening destabilizing impacts and the suffering from it are far from over. 

There is no meaningful conversation about resolution for the Greek crisis without the question for the lessons of 2008. 

Among important figures, Angela Merkel unfortunately gives the sense she was not around, like a character that appears on stage from outside of the plot.

The big rotting corpse that was publicly unearthed since 2008 is the culprit of banking deregulation. 

We can tell by media and radio interviews, the Greek public at this point is much better informed on this one than many Canadians or Germans.

A lack of public banking control is the problem inside the problem and it had been understood and corrected during the Great Depression. 

At its centre is the crucial separation of commercial banking where people make deposits and carry out legitimate business transactions, protected from investment banking for speculator activities.

FDR broke ground for fiscal responsibility with the Glass-Steagall Act from 1932 which in variations of its responsible banking mandate was adopted around the world.

Before we look at who revoked it lets see how it works.

There may be those who feel that counterfeit money should be illegal also as electronic money. 

It turns out in a liberal society, it should be good enough if it's honestly labelled as such, just as GMO in food should be. 

Counterfeit money that is labelled, off course, is toy money that kids can play with. 

Carbon offset trade, inflated energy futures, electronic betting and gambling products and and other derivatives are not even stock. And all of it has no place in commercial banks to dilute regular, boring money that people and economy depend on.

The whole idea of going big with huge quantities of counterfeit money is, of course, to steal lots of valid money by mixing the two. 

And that is where our epic prototype of a neoliberal finance figure enters the scene -- Bill Clinton.

Other neoliberals like Reagan, Kohl and Thatcher had done their part and Mulroney’s financial services deregulation had already come in 1987.

Yes, 1999 Bill Clinton tabled and pushed through Congress the Gramm-Leach-Bliley Act which abolished the Glass-Steagall Act. 

He did it against the direct and dire warning of the brilliant banking expert Brooksley Born, then chair of the Commodities Futures Trading Commission.

Michael Greenberger, an official who had worked for her at the CFTC, recalled later what happened when Born finally realized that Clinton’s massive finance deregulation was going ahead in ‘damn the torpedoes’ fashion. 

"I walk into Brooksley's office one day; the blood has drained from her face, …”

On a little side note, I hope those who blame Jews for excesses in the field of banking take note that Bill Clinton is not Jewish. 

On second thought, we might not be able to rescue the hard antiSemites from the dustbin of history. 

However, it is not necessary for Angela Merkel to herd ordinary Frenchmen, Italians and others into fascist extremist camps by blaming the Greek people, when it is rentiers and banks out of control she fattens up.

The Greek finance disaster serves as a reminder that a big policy deficit eventually leads to real debt trouble, especially useful here in Canada. 

Here is another odious debt biggie from the Greek audit report which investigated the crime of “shifting private debt onto the public sector”. 

Some day we might read this line in a Canadian debt audit report.

CBC News/Business reported on April 30, 2012 with the headline 

“Support for banks 'more substantial than Canadians were led to believe': CCPA [Canadian Centre forPolicy Alternatives]report”

The 2009 CMHC securities bail out of hundreds of billions for Canadian banks is mentioned with lowball figures. Canadian bank bail out funds under the 2008 American TARP are not mentioned nor is the 2007 Asset Backed Paper scandal, with a $ 40 billion bail out for the big Canadian banks by our government.

Note, Asset Backed Papers are not asset backed in the real world but nevertheless were purchased by former premier Dennis Fentie's government to the tune of squandering and risking about $ 36 million of Yukon taxpayers' funds. The decision was reprimanded by the Auditor General as an illegal act.

Another finance gun powder keg Canadians and Americans share with Europeans is the stealth appearance of privately owned and controlled central banks. 

Interestingly to this day many in the public eye perceive central banks still as state-owned and government-directed national banks.

The Bank of Canada is a special case because it is at least partly owned by the public, but unfortunately has picked up the habit of acting mostly in accordance with the privately owned central banks' agendas. 

The European Central Bank, ECB, representing the individual EU member countries central banks in negotiations with the Greek government of course has a huge legitimacy issue.

There was a big change that had come in 1974, but it seems forgotten.

Starting with the so called Group of Ten countries in the Basel Committee on Banking Supervision process, national banks were flat-out privatized. 

Typically this change was reflected in specific and general language solutions involving the term, central bank. 

The incredible daily strain of presenting a public image while acting on a private mandate shows in the sagging face of poor ECB president Mario Draghi these days.

Had today's privately owned central bank world been around then, Canada and other countries would still service interest payments on WW2 debt. Ellen Brown explains it really well in "Web of Debt".

FDR and his economic advisor, Henry Wallace, had it right: Band-aids for serious trouble make only sense together with structural reform. 

I am not making all this up, there are much smarter people to learn from like public banking advocate and educator Ellen Brown.

And then there is the state owned Bank of North Dakota where people's money is very save because it is not mixed with counterfeit money.

Will cooler heads prevail, such as, perhaps, that of IMF chair Christine Lagarde? 

The IMF position on Greece has evolved and now substantially agrees with the Greek government. 

Honesty needs to return to the table also from the other two Troika members' side. One way or the other, debt is written down as we watch.

Will Merkel blow up the table with more make believe politics, and will Greece pick up its old Drachma currency? Nobody knows. 

We do know the world owes a debt of gratitude to the hardworking and courageous Greek people whose life on the brink had not started with the amazing democratic referendum. 

Greece is helping Canada with a reminder to timely put public banking and finance safeguards back in order. 

It is frustrating and disturbing to see how much the CBC and others have distorted the context of the referendum towards their neoliberal elitist biases.

Lets act as Canadians with international solidarity and perhaps remember the wits and gumption of a Lester B. Pearson. 

Greek farmers just started large-scale direct actions and are trucking potatoes straight to market squares where they are sold at about 25 cents/kg.  

Non partisan greecesolidarity.org was founded by the late, legendary British MP Tony Benn. It provides trustworthy information and takes online donations for Medical Aid for Greece (MAfG).

Beleaguered Greece writes down its massive debt 3/3

Beleaguered Greece writes down its massive debt 3/3 (Comment Whitehorse Star July 14, 2015)

Germany's agenda to strangle a trustworthy Greek government to extract pounds of flesh from Greece is not based on economics but on political domination. 

Alongside, the Greek people become collateral damage and their country is to be divided and divvied up into shreds. 

Alexis Tsipras and his colleagues fought with honour but lost this round. The involved EU countries’ people and their representatives have the next word on new ESM (European Stability Mechanism meaning bail out) conditions.

Not all is lost. A Grexit in unity may keep Greece in better shape than a Grexit in chaos or into serfdom. The resigned finance minister Yanis Varoufakis who so far had best anticipated this turn of events is still around as MP.

The core of the final dictate titled “Comments on the latest Greek proposals” was leaked already Saturday night, July 11, leaving as much negotiating space as an incoming cannon ball with a kidnapper’s ransom note tied to it. John Cassidy from the New Yorker traced the anonymous one page slip to the German finance ministry.

It already listed the two core points that appear certain as the shame summit conclusion is not yet published:

1. Expropriation and removal beyond Greek sovereignty of infrastructure assets worth 50 billion Euros. 

2. Politically, economically and inhumanely debilitating privatization so severe it would send disciplinary shockwaves throughout Europe.

The incredible speed of the Sunday night extortion operation is a deja vu of the 2008 trillion dollar handout to American, Canadian and British banks and the 480 billion euro bail out to German banks. 

This speed of another bank bail out crime is to shock people everywhere into obedience, and faster than a thought of fighting back. It is the opposite of any democratically paced process. A violation to be paid for of the EU foundation as a peace union.

It is hyper-aggressive towards the current Greek government, which is not even six months in power and very different to the previous EU Yes Man operations, of Samaras, Pikrammenos, Papademos, Papandreou and Karamanlis ruling during the trouble period since 2008. 

Contrary to Chancellor's Merkel’s and Vice-Chancellor Sigmar Gabriel’s claims Alexis Tsipras’ government never broke any trust and never negotiated a bail out.

Then, last Sunday afternoon European time, the Guardian and a few independent journalists obtained another anonymous leak.  A dog eared and hand annotated four page scribble surfaced, this time talking about in detail what the “eurogroup” wants. 

More than a deal it set down in stone a crime, ahead of Sunday Night’s summit outcome. 

The popular and well respected German weekly Der Spiegel online Sunday uses words to describe it like, "Humiliation for Greece" and "The Catalogue of Cruelties". 

On the paper slips drafted in the fashion of an unconditional surrender on the field of battle, one of the bullets on page 2 reads: 

“ • adopt more ambitious product market reforms with a clear timetable for implementation of all OECD toolkit 1 recommendations, …”

The OECD toolkit 1 is a neoliberal handbook with false free trade language that advises  for legislating powers to shift from parliaments to corporations and entrenches protectionism such as patent extensions in favour of Big Pharma. 

Under its point “9. Product Market” the Greek compromise proposal had already surrendered to the OECD toolkit 1 with the exception of retaining market based and vital pharmaceuticals affordability. 

Pharma profiteering is obviously one more German carpet bagger provision that harms the Greek people and economy, and is sure to drive up a poor country’s debt. Austerity is duplicity.

Next bullet on page 2 of the gangster deal:

“ • on energy markets, proceed with the privatisation of the electricity transmission network operator…” 

It is another direct stoppage or gutting out of the development oriented Greek proposal which had followed the very successful German industrial growth model of its 1999 Renewable Energy Source Law, also under point “9. Product Market”: 

”The [Greek] authorities will also continue the implementation of the roadmap to the EU target model, prepare a new framework for the support of renewable energies and for the implementation of energy efficiencies and review energy taxation; the authorities will strengthen the electricity regulator’s financial and operational independence.”

In fact, spearheaded by energy minister Panayotis Lafazanis feed in tariffs, community based wind and solar initiatives and other renewable energy cornerstones are or were on the move. 

Like the policy in Germany, the Tsipras government stays away from green washing carbon pricing systems because they incentivize emission increases.

Ironically, cynically the German proposal is quite intentional in opening Greece to the British government’s as well as oil corporations’ emphasis of corporatizing the climate crisis with carbon tax and trade finance derivatives. 

The now likely crushed renewable energy planning had been an area where last week’s Greek proposal had shown intelligent use of very small wiggle space.

Next bullet on page 2 of the draft attacks human rights U.S. Republican style:

“ • on labour markets, undertake rigorous reviews of collective bargaining.…”

It continues on page 2 with sloppy capitalization, overuse of parentheses and the rough typing and formatting speed of robbery:

“On top of that the Greek authorities shall take the following actions:

• to develop a significantly scaled up privatisation programme with improved governance….

OR

(Moreover, valuable Greek assets of (EUR 50 bn) shall be transferred to an existing external and independent fund like the Institution for Growth in Luxembourg to be privatized over time and decrease debt. …)”

German finance minister Wolfgang Schäuble stands to personally benefit as a paid board member of this outfit that in the past was heavily involved with derivative speculators like Lehman Brothers.

The end of the robber document on page 4 reads:

“(In case no agreement could be reached, Greece should be offered swift negotiations on a time-out from the euro area, with possible debt restructuring.)”

John Cassidy titles his New Yorker online piece from July 12:

“Grexit: An Indecent Proposal From Germany”

Gwynne Dyer had explained well the red line of the Greek people for Greek government compromises. This is how economist Mark Weisbrot understands the unfolding events in a July 10 interview with Democracy Now host Juan González: 

“Well, the proposal is similar to what they had rejected previously. And, you know, you have to take into account that this is kind of a hostage situation.” 

Weisbrot about closing the banks: “And that’s very important because a lot of people don’t know that. You know, they think the government closed down the banking system, but it really was the European Central Bank doing something that probably no central bank has ever done before, which is to create a financial crisis in a country that’s under their jurisdiction.”

Weisbrot peers down deeper into the neoliberal rabbit hole:

“You know, this is the ironic thing about it, is that the European authorities have made this mess. The reason they need all this debt relief is because the economy has shrunk by more than 25 percent and greatly reduced their ability to pay. And now, the IMF is already saying—or the IMF has already acknowledged that the debt is unsustainable.”

Weisbrot further indicates the US want generally a more neoliberal Europe with less social dignity but certainly no trouble in Greece. I would add the US has strategic motivations to protect the Southern flank of NATO. 

A brutal humiliation or Grexit transformation could bring on memories of a big mistake in cutting the lifeline to the Cuban people after Castro and Guevara overthrew the U.S. puppet dictator Batista in 1959. 

Cuba’s trade had been part of the Americas. Naturally for Castro the Russian connection had been second choice, but the Cubans needed food and oil imports. Russian pipeline projects through Greece are at least being proposed. 

US concerns are understandable as a remotely potential NATO Grexit down the road would diminish total control of the Bosporus which bottles up Russia’s ice-free, year round shipping and naval operations.

The real dark underside Greek and German press, Dyer, Weisbrot and Cassidy don’t talk about, or don’t know how to talk about, is the role the Social Democratic Party leadership plays in Germany’s governing coalition, or in Brussels, for that matter.

One might think they would have tried to loosen up the square-headed deadlock. To the contrary, Germany’s vice-chancellor, foreign minister and Social Democratic Party leader Sigmar Gabriel is talking tougher than Merkel to oust or colonize Greece.     

This makes no sense, and it doesn’t to a lot of Germans and to a lot of international folks, until we do dig a little deeper. The divisiveness he and his executive colleagues  are living and breathing they have not invented.

Historic structures one is not aware of or in denial of can be very dominating.

The division in the German social democracy of 2015 is the one of 1915, of imperialism against realism, and it is relevant to us now as then.

I think Sahra Wagenknecht and others in the Left Party leadership correctly and refreshingly trace the split of the German social democratic movement to the First World War era. Then, in 1913, August Bebel died; as leader of the SPD (Social Democratic Party of Germany), he had stood for the iron-clad commitment of the party base and a majority of Germans overall, to general political strike against war.

The Left Party (Die Linke) was originally formed by East Germans, after the wall came down, who basically were disillusioned by West German robber economics during re-unification in which also parts of the SPD played a negative role. The long lasting wounds it cut really are quite reminiscent of Greece’s treatment now.

Since, prominent West German SPD figures also joined; like Oskar Lafontaine, former leader of the SPD and super popular former Minister President (Premier) of the Saarland. Die Linke has been or is successful in provincial coalition governments.

In divisive betrayal, after Bebel's death 1913, the SPD executive had gotten openly behind military escalation and also enforcing party discipline and votes in favour of financing war measures. Rosa Luxemburg and Karl Liebknecht were forced to respond during the war by founding the USPD (Unabhängige, meaning independent, SPD).

Before Luxemburg and Liebknecht were murdered by early Nazi militias in 1919, of all politicians, Liebknecht had by far the strongest popular support throughout all sectors of German society, soldiers, workers, women, farmers.

An eerily identical situation exists today with a rift between SPD and the Left Party. The latter honourably with a strengthening voice supports the democratic Syriza and Podemos movements in Greece and Spain.

Beleaguered Greece writes down its massive debt 1/3

Beleaguered Greece writes down its massive debt ( Comment Whitehorse Star July 10, 2015 )

Ed. note: this is the first of a two-part commentary.

The status and eventual outcome of the financial crisis are not clear at this point, except for one thing.

Without any doubt, the odious debt is gone after the July 5 referendum.

What is odious debt?

It is the term economists, political and banking people use for debts or parts of a debt that are illegal.

It is no more enforceable than debt from a deal on street drugs or stolen goods could be legally collected.

Its not surprising the Star, as one of fewer than 10 independent and not corporate-controlled dailies in Canada, published some good syndicated coverage.

I am a Gwynne Dyer fan. He summarized well some of the complex stream of events, but a quote from an oil executive in the movie thriller Syriana comes to mind.

“You dig a six-foot hole and you’ll find three bodies. Dig 12 and maybe you’ll find 40.”

Let’s dig a little more and concentrate on the big ones.

Following the successful examples of Iceland and Ecuador from the 2008 financial meltdown, a Truth Committee on Public Debt is currently auditing the Greek debt.

The president of the Hellenic Parliament, Ms. Zoe Konstantopoulou, made the initial decision and set the work in motion April 4, 2015.

Why successful?

Under the participation of citizens and independent international finance experts on June 17, the parliamentary debt audit released its preliminary report with key findings and advice.

Cutting out, writing off the rotten parts of debt combined with democratic economic reforms, including towards public banking, have a good track record.

Not only in Ecuador and Iceland, but also Sweden, in 1992, rebuilt the economy, and restored credit worthiness and investor trust by clearing the air.

This is the exact opposite of the proven debt growing neoliberal restructuring and privatization that is well underway, expropriating Greek islands and gutting out heritage treasures, and to intensify new demands by an EU finance colonialism.

Further, the audit investigates criminal corruption and bribery through years, to the end of selling expensive German weaponry such as superfluous submarines and Leopard tanks to Greece.

Even now, forcing more German weapons deals on Greece, as a condition, is not off the negotiating table. Karlheinz Schreiber is everywhere.

A substantial debt write off within the euro currency poses the problem but also opportunity of novelty to set the right tone in an exercise for preventing events in the future.

The Troika, which is made up of the European Central Bank, the European Commission (essentially EU government), and the IMF, would be in a more credible negotiation position now, had they approached the situation in a more balanced way.

Instead, they had dug in on making an example of destruction of Greek people.

This was not very bright because a heavy-handed approach to make Greece obedient to rules makes no sense when these rules are shifting below people’s feet.

The Troika did one better than example setting, which was mostly left out in the Canadian mainstream media. It really interfered in Greece with a special interest political agenda.

They outright blocked proposals of the latest Greek plan to actually increase and restore tax revenue, which was brought forward before the referendum launch.

Tax evasion in Greece had increased sharply since 1999, a period that saw corporate income tax rate reductions from 40 to 25 per cent.

The drama of it can be understood a little better when adding to that four centuries of Ottoman rule which left behind a strong cultural sediment for social justice.

Poor people paying the taxes and debt the elites owe is much less acceptable in Islamic countries, which also means their banks came out clean in 2008.

Tax evasion is a problem in Greece and a business in Luxembourg, but it is caused and led by elite finance interests, not the ordinary people.

Before the referendum was launched, the EU negotiators had dug themselves into a bad hole when they insisted on their own neoliberal tax ideas even at the expense of some of the creditors they claimed to represent.

The preliminary audit report provides context to such conflicts of interest on page 13.

“The website LuxLeaks provides information on nine Greek firms which benefitted from ‘fiscal agreements’ with Luxemburg (shares with Holland EU tax hide outs as well as austerity speculation interests).

“These are Babcock & Brown, BAWAG, Bluehouse, Coca Cola HBC, Damma Holdings, Eurobank, Macquarie Group, Olayan Investments Company Establishment and Weather Investments.”

Especially the governments of Germany, Luxemburg and Holland, as the hardliners which are  lost most deeply in the austerity rabbit hole, overlook a simple human touch. The only example that counts now is one of integrity.

It’s not just Podemos in Spain and Syriza in Greece who are more than social democratic by name.

As official federal opposition and coalition partner in the government of several states (provinces), Die Linke (the left party) is gaining ground in Germany, and actually seems able to carry a conversation beyond worn-out platitudes, in Europe as well.

If there is an emerging social democratic shift in Greece, as in other European countries, we can understand it better when we look at what motivates and informs it and what doesn’t.

Certainly a comeback of McCarthyism does not intimidate it; other Cold War confusions or even echoes of Stalin’s charisma do not influence it.

The very last of those had already rung out during the Spanish civil war (1936-1939).

Part two, to be published Monday, will offer a glimpse into why public banking rules prevent debt runaway.