Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Ok a lot of comments. Some answers below, and some questions to all and anyone who might venture some answers.

@Migeru: The measures inflicted on Greece and the collective austerity imposed on Europe (talk about ruining a good idea...) are meant AFAICS to dismantle the European Social Model through Shock Therapy. I'm not a conspiracy nut usually, but I thing this is pushed by some players as a strategy. I think I mentioned it before, but the thing us that up until late January / early February this year, interest on debt was at 20-year historical lows as a percentage of GDP and tax revenues. The debt could have been serviced and rolled over at these levels quite comfortably.

@A Swedish Kind of Death: as for strikes and democracy, we're already in a very dodgy situation democracy-wise. Apart from the fact that the minister of finance is now in the position to ratify loans, modifications etc regarding the IMF measures, without the parliament's approval (in what the opposition unanimously called a parliamentary coup d' etat), the unprecedented wiretapping measures (cell and landline) these past few days that envelop all of down-town Athens on a pretext of "terrorist activity are not a good sign. And neither is the fact that "respectable journalists" are suggesting an "emergency government" that will suspend a few articles of the constitution, just to be on the safe side with the unions.

@ Frank Schnittger: These are pretty important points you make. I agree with:

Thus what Greece really needs is a social revolution - a radical modernisation of the productive base of the economy, a widening of the ownership of those means of production, an innovative approach to economic and social organisation, and an elimination of corruption, tax evasion, mis-allocation of public resources etc.

But, having given a few fights over the years for some of the things on the list, these are easier said than done. First of all, the young and active educated professionals that could lead this wave are on their way to emigrate, if they haven't done so already. This will not help at all. Secondly the powers that be would not hesitate to use force if push comes to shove. So you need dedicated "troops" - although desperate would do if there is a political platform that they can see as including their concerns - and third: it isn't moving that way with these measures: the agenda of the Greek Industrialists Union (a nest of reactionaries and corrupt elites if there is one), fought tooth and nail by whatever was left if the unions for years, is currently being implemented, lock, stock and barrel, creating even worse prospects for any improvement (apart from people taking to the streets that is)...

The EU and the ECB could help positively, if they wanted by changing the Euro rules, and allowing, say, states to borrow at bank rates of, what is it now? 1%? This could be conditional on transparency and efficiency improvements, of which there are plenty to be made. That would be real help. In fact the conditions imposed on the EU loan (and it remains a rather expensive loan not a "bail out" except for Greece's debtors) are worse than those on the IMF money in terms of rates and conditions and a boon to these elites, shedding worker costs and rights at an delirious pace.

Having said all that, your original point is a central one: it has to do with alternative political strategies that would allow some sort of non-dystopic future for the country. I plan to translate it and pass it on as food for thought over at my greek blog if you don't mind!

@melo: Since Ottoman times as Upstate NY, points out! However the past two governments were elected on an explicit mandate to change things, to clean up government. They didn't even try, of course, but still that's what they campaigned on, which probably matters as far as the electorate's intentions are concerned.

[wild political-historical speculation]I would personally venture to suggest that a large part of the mess is due to the fact that the Greek bourgoisie proper, as a class with a vision and a national strategy, the shipping magnates, never stuck around, they took their ships and money and sought more profitable havens, and were too cosmopolitan to bother with building a proper capitalist state. Again it is a wholly personal (and impossible to defend here) perspective, but I think that the origins of a large part of the merchant class, comprador and retail, never original and always risk averse, in the black marketeers of WWII and the fact that they were on the side that triumphed in the civil war that followed, created a certain economic mentality that persists to this day, and legitimized corruption as a survival strategy among the masses. Arguably, earlier political expressions of the local bourgoisie (such as Trikoupis at the turn of the 19th century and Venizelos in the 20s and 30s) were much more modernizing in attitude and ambition than what followed for most of the cold war years and persisted afterwards. That's only a small part of the story of course but its a long story :-)[/wild political-historical speculation]

@Sven Triloqvist: Yep it is a fact! (I was going to mention this in part 2 but hell): There were undeclared swimming pools, in the posh northernmost Athenian suburbs. Pools are considered now as what the tax office translates as "presumptions" - which means that if you own one you can't declare an income of less than the fixed income that the swimming pool (or the villa, or the yacht etc) is considered to prove you are earning (these are additive and IMHO not harsh enough)

@all What would you prescribe as "progressive" policy in the case of Greece now? How does the current turn towards pan-european austerity affect things in Greece if at all? Would a significant depreciation of the Euro help Greece and the South create trade surpluses and export themselves out of big deficits?

The road of excess leads to the palace of wisdom - William Blake

by talos (mihalis at gmail dot com) on Fri May 14th, 2010 at 06:13:17 PM EST
Oooops: @marco I meant, not @melo!

The road of excess leads to the palace of wisdom - William Blake
by talos (mihalis at gmail dot com) on Fri May 14th, 2010 at 06:45:09 PM EST
[ Parent ]
What would you prescribe as "progressive" policy in the case of Greece now?

  • Impose confiscatory capital controls to prevent asset stripping.

  • Strategic default on particularly odious debts. This includes all debt assumed in the course of bank bailouts.

  • Kill a bank or two; if the capital markets turn on the sovereign, the sovereign kills them - that's a good principle and it needs to be reasserted with some vigour.

  • A credible threat to leave the € if the inflation target is not raised for the core members to permit the periphery to engage in "internal devaluation" without having to push their economy into a deflationary spiral.

  • Inform all remaining creditors that the first and final duty of the Greek sovereign is towards the Greek people - there will be no dismantling of the Greek social model, so if the creditors want their money back, they can damn well help figure out a way to make that model work.

  • Tell the IMF to fuck off, and send a delegation to Moscow. Influence in the Aegean region has been a Russian geopolitical objective for the last three hundred years, so you have chips to bargain with if you play them right.

That's the foreign policy bit. As for how to deal with the entrenched corruption and regulatory capture... well, our own track record is less than spotless, to put it mildly. But we promise to let you know if we figure it out.

How does the current turn towards pan-european austerity affect things in Greece if at all?

It means that you're screwed.

Would a significant depreciation of the Euro help Greece and the South create trade surpluses and export themselves out of big deficits?

No. Your trade imbalance is with the core €-zone members, not with economies outside the €-zone.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri May 14th, 2010 at 07:07:44 PM EST
[ Parent ]
On the shippers, obviously they can float away to another port, so they are untaxable. And yet, there is a tonnage tax, and those shipping companies report gains on the Athens stock market. That being said, the shipping tycoons typically strip away the cash position for themselves and so, these companies yo-yo in the market.

However, it's my understanding that the shippers are in arivalry, and they have built conglomerates inside Greece, with media and especially banking.

by Upstate NY on Sat May 15th, 2010 at 12:20:59 AM EST
[ Parent ]


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