No One Here Is Elected

Below is a quote from an article from Huffington Post. It is reported in it that the Eurozone is not just demanding that Greece capitulate to its desires, they must do it before negotiations can even start. There is not even the semblance of respect for a nation state or its people.

Picture yourself in negotiations. You’ve gotten behind in your mortgage and you want more time. The bank says that before they will even talk to you, negotiate with you in any way, you must sign over your income and submit to the banks’s recommendations of how and what kind of work you should do. That’s what the Greeks are being asked to do. Take all your bargaining chips off the table. Only when you are powerless and helpless, will we deign to speak to you. Give in now and we may show mercy.

There is really not much historical precedent for this. The only thing I can think of are the Austro-Hungarian demands on Serbia to yield up its sovereignty in the wake of the assassination of Archduke Ferdinand.

There are five things about these bailout talks that really bother me. First, the unfairness of it. To start with, the bulk of the bailout money has gone to foreign lenders and little has been used to bolster the economy. Second, we’re not dealing here with sovereign states or even groups of sovereign nations. We’re dealing with finance ministers and technocrats, essentially international bankers. They’re not elected. They can’t be voted out. Essentially, they can do pretty much what they want and the only people they are beholding to are other bankers. Democracy is irrelevant. Third, the Greek people are suffering terrible pain. The unemployment rate is more than 25% and the youth unemployment rate is more than 50%. And I can on and on about the other damaging effects of austerity. Fourth, the Greeks are being told with great specificity what they must do. The Eurozone is making a mockery of the power of national governments to conduct their own affairs. The Greeks want to impose a tax on businesses. The Eurozone says no. But the Eurozone doesn’t stop there. They tell the Greeks how they want the money raised and expect them to do it. They want a value added tax (VAT) and cuts in pensions. There’s more but you get the idea. The Greeks want to do a variety of things to raise revenue and the Eurozone and the IMF are staying on script: privatization, lower income taxes, cuts in social services and reduced regulation. And the last thing that bothers me and most important, it can happen to us. Whole nations, states, counties and communities can get into financial trouble and if we do, who we will turn to for help? Banks, the IMF, or state imposed administrators, technocrats from business, banking and corporate law will be our only choices and what will they demand? You can see it right here, right now. This will be the prototype in the future for dealing with creditor governments, whatever their size. If we have a great a power differential like they have in Greece there will be no negotiations. You will accept what is offered to you and you will do it without question. And above all else, forget that democracy things.

What is being implied her is that it is not the people that are sovereign, it is the international financial system of interlocking banks, finance ministers and multinational corporations.

I am sure that there are people reading this that believe that I am over reacting. Many hold the belief that if the Greeks overspent they should pay the money back. That does not sound unreasonable. But it is the highest level of hypocrisy imaginable to impose conditions that will make paying the debt impossible.

If you were one of my students, I would expect one of you to ask, “How do you know that the Greeks can’t pay under those conditions?” And I, of course, delighted by student intelligence and initiative will reply that the IMF has a paper out saying that they can’t pay under current conditions. Read below from The Guardian.

Greece would face an unsustainable level of debt by 2030 even if it signs up to the full package of tax and spending reforms demanded of it, according to unpublished documents compiled by its three main creditors.

The documents, drawn up by the so-called troika of lenders, support Greece’s argument that it needs substantial debt relief for a lasting economic recovery. They show that, even after 15 years of sustained strong growth, the country would face a level of debt that the International Monetary Fund deems unsustainable.

The documents show that the IMF’s baseline estimate – the most likely outcome – is that Greece’s debt would still be 118% of GDP in 2030, even if it signs up to the package of tax and spending reforms demanded. That is well above the 110% the IMF regards as sustainable given Greece’s debt profile, a level set in 2012. The country’s debt level is currently 175% and likely to go higher because of its recent slide back into recession.

So, the Eurozone already has evidence that they are essentially putting Greece into a state of permanent depression. Why would they want to that?

They aren’t saying. But I have a theory. All over Europe, there are people who are worried about what’s happening. Like me they wonder why nation states should bow before financial interests. They wonder why whether people should go without education, pensions and healthcare while the rich have a reduced tax burden and they pay higher taxes for less and less. They wonder much the same way we do in the United States, why their votes matter so little. Greece is an example of the power that can be brought on any show of defiance. Questioning the economic order has consequences, severe consequences. Don’t vote, comply. Economic value is the sole determinate in policy and practice. Humanity, compassion, honor, patriotism, and Christianity are all irrelevant concerns. The money must be paid, not to the people, not to the governments but to the banks. It is the money that votes.

James Pilant

Eurozone Leaders Meet, As Greece’s Debt Crisis Talks Continue

Euro zone leaders told near-bankrupt Greece at an emergency summit on Sunday it must enact key reforms this week to restore trust before they will open talks on a financial rescue to keep it in the European currency area.

Leftist Prime Minister Alexis Tsipras will be required to push legislation through parliament to convince his 18 partners in the euro zone to release immediate funds to avert a state bankruptcy and start negotiations on a third bailout program estimated at up to 86 billion euros ($95.5 billion).

Six sweeping measures including tax and pension reforms must be enacted by Wednesday night and the entire package endorsed by parliament before talks can start, a draft decision by Eurogroup finance ministers sent to the leaders showed.

via Eurozone Leaders Meet, As Greece’s Debt Crisis Talks Continue.