Approximately $50 billion of Greek assets are to be sold out to obtain fiat liquidity in return. This is on top of the massive increase in tax rates and further reduction on its pension fund.
Even if all preconditions are to be followed this bailout agreement will never free Greece from its debt for the next 100 years because it is not designed to be so. This is a blatant raid on a sovereign economy.
Aside from the major bankers, Wolfgang Schäuble’s company will benefit from the just approved EU bailout package.
A Resounding ‘Nai’: Greek Parliament Votes to Accept EU Bailout Plan
With of a 168 in favor, 49 against, and 5 neglecting to vote, the Greek parliament has approved the bailout proposal.
Former finance minister Yanis Varoufakis voted to reject the deal. Given that Varoufakis had earlier compared the package to the Treaty of Versaille, his decision was not surprising, but could potentially lead to his ouster as a Syriza MP. House Speaker Zoe Konstantopoulou also rejeted the proposal, after earlier warning that it could lead to social genocide.
While Greek Prime Minister Alexis Tspiras called the bailout package “irrational,” he had nevertheless actively lobbied parliament to approve the proposal to prevent Greece’s exit from the eurozone.
As a part of the 86 billion euro bailout, the Greek government will have to enact strict austerity measures. These include a top VAT rate of 23% to take in processed foods, 13% rate to cover fresh food, energy bills, and water, and 6% rate for medicines and books. It will also raise the corporate tax rate from 26% to 29% and install a luxury tax on cars, boats, and swimming pools. Early retirement for Greek citizens will also be affected.
Expressing their opposition to the austerity measures, demonstrators gathered throughout Athens earlier on Wednesday, leading to clashes between protesters and riot police. Law enforcement deployed tear gas and pepper spray, while protesters threw Molotov cocktails and rocks.
Sputnik
Alexis Tsipras: Latest so-called ‘Leftist’ to sell-out to the bankers
Greece’s Prime Minister Alexis Tsipras (Reuters/Francois Lenoir)
For the so-called ‘radical leftist’ from Greece is only the latest in a long line of ‘radicals’ and ‘leftists’ to betray the people who had voted for them and cave into the demands of imperialist international finance capital.
The only surprising thing about Alexis Tsipras’ capitulation to the troika is that anyone should be surprised by it.
In Britain, we had our own version of the Greek ‘crisis’ in 1931. And like today, it was a politician nominally of the ‘left,’ the Labour Party leader Ramsay Macdonald, who eventually sided with the bankers against ordinary working people. A ‘banker-led coup’ occurred that replaced the democratically elected Labour government with a new capital-approved National Government, which moved to introduce steep cuts in public spending and slashed unemployment pay. The new government was dominated by the Conservatives, but had the turncoat ‘socialist’ MacDonald at the helm and another Labour traitor Philip Snowden as Lord Privy Seal.
The London bankers told MacDonald: “The cause of the trouble was not financial, but political, and lay in the complete want of confidence in His Majesty’s Government existing among foreigners,” records the historian A.J.P. Taylor, citing Keith Feiling’s biography of Neville Chamberlain. In the general election campaign in October 1931, Philip Snowden (soon to become ‘Viscount Snowden’), viciously turned on his former comrades in the Labour Party, saying that their anti-austerity program was “Bolshevism run mad.”
Like Alexis Tsipras today, Macdonald and Snowden told their people there was no alternative to the program they had agreed to do. But as is the case today there was an alternative (there always is), only the bankers did not approve of it.
Another shameful betrayal of the people by a ‘left-wing’ party happened in Hungary in 1994. Hungarians, fed up with four years of falling living standards since the end of ‘goulash communism,’ voted into power the Hungarian Socialist Party whose leading figures were ex-communists. The Socialists, it was believed, would temper ‘market’ reforms, and preserve the best parts of the old system. Their election victory set off alarm bells in elite western circles: “The Commies are back in Hungary, something must be done!”
Prime Minister Gyula Horn, who had attacked the idea of energy privatization, came under enormous pressure from international finance capital and their political emissaries to change course. Early in 1995, he did just that and made a spectacular U-turn. He sacked genuinely socialist ministers and appointed a fanatically neoliberal university professor, Lajos Bokros, to introduce a package of deep spending cuts. The Socialists and their ‘Free Democrats’ coalition partners launched major privatizations – including in the energy sector – which passed into the hands of Western corporations. The working class people who had voted for the Socialists in large numbers in 1994 had been well and truly betrayed, but the international money men rubbed their hands with glee at the profits they could now make from Hungary. Horn, portrayed as a dangerous leftist by pro-capitalist media in 1994, was now hailed as a great ‘reformer’ – the man who put Hungary firmly on the path towards EU and NATO membership.
The French and Spanish Socialist Parties also followed a similar trajectory in the 1980s. In 1981, there was enormous optimism after the election of Francois Mitterrand as the first Socialist President of the Fifth Republic. The Socialists started off really well, launching a major program of nationalization and increases in benefits and old-age pensions. But in 1983 there was a U-turn and the French Socialists ditched their socialism and embraced austerity and ‘modernization.’
It was the same let-down in Spain, after the election of Felipe Gonzales in 1982, and in Germany, after the election of the SPD in 1998. There, the genuinely socialist Finance Minister ‘Red Oskar’ Lafontaine was sacked after less than five months in his job to appease powerful financial interests.
In Britain, we know only too well what happened after the election of Tony Blair and ‘New Labour’ in 1997 after 18 years of Conservative government. New Labour’s ‘progressives’ took the country into an illegal war against Iraq alongside hardcore US neocons (as well as an illegal war against socialist Yugoslavia in 1999), while at home they failed to re-nationalize the railways (a pledge made by Tony Blair while in opposition) and pursued neoliberal economic policies which the money men in the City, Wall Street and Berlin, and the billionaire media mogul Rupert Murdoch, heartily approved of.
In fact, we can say that the story of ’leftist’ or ’progressive’ governments in power in Europe in the last thirty years or so has been one betrayal after another. The latest setback, in Greece, is further proof that we should be extremely careful when it comes to labels. Ironically, it’s sometimes been conservative politicians who don’t claim to be leftists, who have defended national sovereignty – and the interests of workers – better than those who say that they’re on the ‘progressive’ side.
Charles de Gaulle, President of France from 1959-69, is a case in point. Always distrustful of the power of money and market fundamentalism, he introduced a mixed economy, a welfare state, and presided over the biggest rise in living standards for ordinary people in French history. “He was a man who did not care for those who owned wealth; he despised the bourgeois and hated capitalism” was the verdict of de Gaulle’s biographer Jean Lacouture.
De Gaulle not only did not care for those who owned wealth, he didn’t care much for wealth itself. Despite occupying the highest office in state for ten years, he died in penury—instead of accepting the pension he was entitled to as a retired president and general he only took the pension of a colonel. The contrast between de Gaulle and the money-obsessed career politicians of today could not be greater.
Remember de Gaulle – the man ‘who despised the bourgeois and hated capitalism’ was labeled a ‘conservative,’ not a ‘radical leftist’. In fact, the so-called ‘radical left’ protested against him in 1968 with leading figures of that ‘rebellion’ becoming enthusiastic pro-NATO ‘liberal interventionists’ in the 1990s and 2000s.
It’s also interesting to contrast the assertive stance that Hungary’s much maligned ‘conservative’ government has maintained against the international money men – including the IMF and EU – with the way that Greece’s ’radical-left’ prime minister has capitulated. The government of Viktor Orban was attacked by Brussels for taking on the foreign-owned energy companies, but government mandated cuts have led to big reductions in fuel bills.
The ‘conservative’ Orban has undoubtedly done more to alleviate the suffering of the Hungarian people than the ‘radical leftist’ Tsipras has with the Greeks. With his Gaullist, dirigiste approach, he’s actually proved to be more of a ‘socialist’ than his socialist opponents – who simply governed the country for the benefit of Washington and Brussels and foreign banks when they were in power.
One socialist leader who most definitely did not betray his people was Bruno Kreisky, Chancellor of Austria from 1970-83. Kreisky made it clear that he wasn’t interested in going into coalitions with other parties who would water down his socialist policies- and was rewarded with a clear majority in three elections. Kreisky always put the interests of working people first. During the 1979 election campaign he said that he would rather the government run up a deficit, than people lose their jobs. “Hundreds of thousands unemployed matter more than a few billion schillings of debt,” the great socialist declared.
Another leftist who put his people first was the late Hugo Chavez. Unlike most leading European ‘progressives’- who start off as radicals but who move inexorably towards embracing neocon/neoliberal positions, the late president of Venezuela became more socialist as the years went on. In 2009, he said “Every factory must be a school to educate, like Che Guevara said, to produce not only briquettes, steel, and aluminum but also above all the new man and woman, the new society, the socialist society.”
The price for defying the international money men and not doing the dirty on the workers can be high.
Salvador Allende, the democratically elected Marxist President of Chile, paid with his life. He was toppled in a coup which bought to power General Pinochet, who proceeded to restructure the Chilean economy to the benefit of Western capital- with the help of neoliberal economists from Chicago University.
The leftists who did not sell out were all men of principle, with a deep commitment to socialism. Bruno Kreisky, for instance, spent time in jail in Austria in the 1930s on account of his beliefs. Compare his unwavering commitment to the socialist cause with the opportunistic positions of France’s Francois Mitterrand. Mitterrand, according to his biographer Philip Short, turned to socialism “less from conviction than from a process of elimination.” This was a man after all who had worked for both Vichy France, as well as the Resistance, and who had described the communists as “a pain”. It was easy for Mitterrand to ditch socialism in 1983, because he had no strong ideological attachment to it.
The events of the last few days have demonstrated the same about Alexis Tsipras’ commitment to ending austerity.
Defenders of the Greek Prime Minister are trying to maintain that he had no option but to surrender, but that is clearly untrue. He could- and should- have made it clear that unless there were substantial concessions from the Troika on Greece‘s debt, he would lead his country out of the euro.
The threat to leave the euro was a trump card which Tsipras refused to play, because he put “being a good European” above ending austerity- and his people’s suffering. The Greek prime minister could also have played on the Western elite’s fears of Greece moving closer to Russia and China by threatening withdrawal from the EU and NATO. He could have nationalized the banks. But he did none of these things. Instead he grinned and joked with his country’s enemies as he agreed to make Greece a de facto colony of the EU and international capital.
The scale of Tsipras’ betrayal of the Greek people is truly staggering. Only 10 days ago, the Greeks voted by a sizeable majority to say ‘Oxi’ to the Troika’s demands. Now, Tsipras has agreed to even more cuts than were rejected, as well as putting €50 billion of his country’s national assets into a privatization ‘trust’ fund – all under EU supervision. And this from a man whose party had pledged to halt privatization in January’s election campaign. The deal that Tsipras has agreed to is so harsh that even the IMF has criticized it.
The Greek people were ready to resist, but Tsipras clearly wasn’t.
The Daily Telegraph newspaper quoted a 23-year-old student Marios Rozis. “Everybody was happy on Sunday; it was a mature decision against austerity. Today I feel the referendum happened for no reason.”
The Greek Communist Party (KKE) to its credit predicted exactly what would happen. They had argued that an end to austerity could only come with a ‘true rupture’ with the EU, NATO, IMF and the forces of capital and the adoption of an alternative economic system. But of course, they were laughed at – and dismissed as dinosaurs by the ‘trendy’ pro EU ‘left’ who thought Tsipras and Syriza had all the answers.
Now, Tsipras, the ’radical leftist’ is asking the Greek Parliament to approve measures more extreme than anything ‘conservative’ governments in Greece would have dared to propose. In the same way that only a right-wing Republican like Richard Nixon could ‘go to China’ only a ‘progressive’ could have a chance of getting these extremely regressive proposals through the Greek Parliament.
Those who believe that the Troika was trying to get rid of Tsipras are missing an important point: It’s better for Greece’s creditors that a ’radical leftist’ such as Tsipras pushes to get these measures through, than a ‘right-wing’ figure. In fact, international finance capital likes it best when nominally ’left-wing’ parties do their dirty work for them-for the leaders of these parties will try and spin the ‘reforms’ as somehow ‘good for ordinary people’.
In the final analysis, the only ‘radical’ thing about Alexis Tsipras was that he didn’t wear a tie.
“It was a façade” says the veteran award-winning journalist John Pilger of Tsipras and his ‘comrades.’ They were not radical in any sense of that clichéd label; neither were they “anti-austerity”.
The lessons we need to learn from Tsipras’ truly epic betrayal is never to judge politicians by their appearance – and never go by labels which the media gives to parties. Instead, the questions we need to be asking are- how genuine are the politicians commitment to the cause- and how contradictory are the positions they take?
Greece proves to us that you can be pro-Euro and you can be anti-austerity, but you can’t be both.
Alexis Tsipras put his commitment to a colonial currency above everything else, and in doing so will be remembered as yet another pseudo-leftist who sided with the bankers against his own people.
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.
IMF Says Greece Needs Even Deeper Debt Relief From Europe
Andrew Mayeda
Greece needs debt relief “far beyond” what European creditors have been willing to consider, including possibly deep “haircuts” on the value of Greek debt, the IMF said in a new analysis.
Bank closures and capital controls have exacted a “heavy toll” on Greece’s financial system and the economy, leading to a dramatic deterioration in the ability of the country to pay its debts, the International Monetary Fund said in a preliminary debt-sustainability analysis released Tuesday.
“Greece’s debt can now only be made sustainable through debt relief measures that go far beyond what Europe has been willing to consider so far,” the IMF said in the analysis, which follows a similar study released July 2, before Greece held a referendum that rejected creditors’ proposal.
The IMF now estimates Greece’s debt to peak at close to 200 percent of gross domestic product in the next two years. In its analysis released July 2, the Washington-based fund said nominal gross public debt was on track to reach about 170 percent of GDP by 2017.
The IMF said the projections are subject to “considerable downside risk, suggesting that there could be a need for additional further exceptional financing from euro-member states.”
The fund said there are several options for bringing Greece’s finances under control. Providing debt relief by extending maturities would require a “very dramatic extension” on the order of 30 years on the entire stock of European debt, including new assistance, according to the IMF.
“Other options include explicit annual transfers to the Greek budget or deep upfront haircuts,” the IMF said in its analysis. “The choice between the various options is for Greece and its European partners to decide.”
Bloomberg
