Why the European Central Bank’s Trillion Euro Plan will Only Help Keep the Banks Afloat
SHARMINI PERIES: In an effort to relieve some pressure on the struggling European economies, Mario Draghi, president of the European Central Bank, announced a 1 trillion euro quantitative easing package on Monday. Quantitative easing is an unconventional form of monetary policy where a central bank creates new money electronically to buy financial assets like government bonds. And this process aims to directly increase private-sector spending in the economy and return inflation to target.
Well, what does that mean and what might be wrong with it is our next topic with Michael Hudson. Michael Hudson is a distinguished research professor of economics at the University of Missouri-Kansas City. His two newest books are The Bubble and Beyond and Finance Capitalism and Its Discontents. His upcoming book is titled Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy.
Michael, the Fed and some economists will argue that this is what got the U.S. out of its 2008 financial crisis. In fact, they put several QE measures into place. So what’s wrong with quantitative easing?
MICHAEL HUDSON: Well, the cover story is that it’s supposed to help employment. The pretense is an old model that used to be taught in textbooks a hundred years ago: that banks lend money to companies to invest and build equipment and hire people.
But that’s not what banks do. Banks lend money mainly to transfer ownership of real estate. They also lend money to corporate raiders. They lend money to buy assets. But they don’t lend money for companies to invest in equipment and hire more workers. Just the opposite. When they lend money to corporate raiders to take over companies, the new buyers outsource labor, downsize the work force, and try to squeeze out more work. They also try to grab the pensions.
The Fed was pretty open in what quantitative easing is supposed to do since 2008. It’s supposed to lower the interest rates, which raises bond prices and inflates the stock market. Since 2008 they’ve had the largest monetary inflation history – $4 trillion of quantitative easing by the Fed. But it’s gone via the banks into the stock and bond market.
What has this done for the economy as a whole? For starters, it’s obviously helped stock and bond holders get richer. And who are they? They’re the 1 percent and the 10 percent.
People are wringing their hands and saying, why isn’t the economy getting richer? Why is it that since 2008, economic inequality and the distribution of wealth have worsened instead of gotten closer together? Well, it’s largely because of quantitative easing. It’s because quantitative easing has increased the value of the stocks and the bonds that are held mainly by the 1 percent or the 10 percent hold. This hasn’t helped the economy because the Fed is really concerned with its constituency, which are the banks.
Quantitative easing hasn’t helped one class of investors in particular: pension funds. It’s done just the opposite. Pension funds made the assumption a few years ago that in order to break even with the rate of contributions that corporations, states and municipalities are paying, they have to make eight percent or eight and a half percent a year as a rate of return. But quantitative easing lowers the interest rate.
Today’s lower interest rates have made pension funds desperate. The risk-free rate of return is less than 1 percent on short-term Treasury bills. If you buy longer-term treasuries you can make 2 percent, but then if the interest rates ever go up, you’re going to take a loss as the bond price declines. So pension funds have said, “We’re desperate; what are we going to do?”
They’ve turned their money over to Wall Street money managers and hedge funds. The hedge funds take a huge rake off of fees to begin with. But even worse, when hedge funds and the big banks – Goldman Sachs, Citibank – see a pension fund manager coming through the door, they think, “How can I take what’s in his pocket and put it in mine?” So they rip them off. That is why there are so many big lawsuits against Wall Street for mismanaging pension fund money.
To summarize, the effect of the quantitative easing has been to make pension funds desperate, and to support real estate prices, as if higher costs to obtain housing will help recovery. It doesn’t help recovery, because to the extent that quantitative easing supports a re-inflation of housing prices, new homeowners have to pay even more of their income to the banks as mortgage interest. That means they have less money to pay for goods and services, so markets for goods and services continue to shrink.
What the quantitative easing has not been used for is what was promised in 2008. Before President Obama won the election and took office, Congress said that the TARP bailout and TALF were supposed to go for debt reduction. Some was to write down mortgages, so that people could afford to stay in their homes rather than the millions of home owners that have been foreclosed on and thrown out. But even before Obama came into office, Hank Paulson, the Secretary of the Treasury, told Democrats in Congress, yes, we’re willing to write down debts. But as Barney Frank explained in exasperation, Obama said no, he’s not going to do that. Obama ended up supporting the banks. So almost none of the TARP bailout money has been used for debt write-downs.
The same phenomenon is happening in Europe.
PERIES: So, Michael, what’s wrong with what the ECB has announced in terms of a trillion euros worth of quantitative easing for Europe?
HUDSON: They head of the European Central Bank, Mario Draghi, has said that he’ll do whatever it takes to keep banks afloat. He doesn’t say that he’ll do whatever it takes to help economic recovery, or to help labor more. The ECB’s job is to help banks make more money.
Draghi was vice chairman of Goldman Sachs during 2002 to 2005. His view is that of Wall Street. It’s not a vantage point helping labor or helping economies grow. So it’s not surprising that the trillion euros of new money that the eurozone’s central bank is creating hasn’t gone to help Greece, for instance, survive. It hasn’t gone to help Greece, Spain, Italy, or Portugal get out of depression by fueling government spending. It’s simply been given away to the banks to buy bonds and stocks, including buying American stocks and bonds.
Behind this policy is the trickle-down theory that if you can make the financial sector richer, if you can make the one percent and the 10 percent richer, it’s all going to trickle down. This is the view of Paul Krugman, and it’s the view of the advisers that Obama has had. But instead of trickling down, the stock and bond price gains by the 1% and 10% drive a wedge in the economy, by increasing the value of stocks and bonds and real estate and wealth against labor. So quantitative easing is largely behind the fact that the distribution of wealth has become worse rather than better since 2008.
PERIES: One of the things that has happened in Europe that you wrote to me actually in an email was the disappearing central banks’ role in stimulating economies. Why is this an issue?
HUDSON: Central banks originally were designed to monetize government deficits. Governments are supposed to spend money into the economy, because that helps economies grow. But in Europe the Lisbon agreements say governments can’t run a deficit more than 3 percent of national income.
Furthermore, the role of the European Central Bank is not to give a penny to governments. They say that if you give a penny to government, you’ll have hyperinflation like you had in Weimar. So the central bank can only give money to banks – to invest in stocks and bonds. But the ECB won’t buy fresh bonds to finance new government spending. The result of this policy of not funding government deficits is that if the economy is to grow, it has to be entirely dependent on commercial banks for credit.
We had this situation in the United States in the last few years of the Clinton administration when the United States actually ran a budget surplus instead of a deficit. Now, how do you think the United States could grow when there’s a budget surplus sucking money out of the economy?
The answer is that commercial banks and bondholders have to supply the money. But the banks only supplied money in the form of junk mortgages and other forms of an economic bubble, such as takeover loans and a stock market bubble.
The interest of banks is not to help economies grow; it’s to extract interest from the economy. The financial sector uses part of its rising wealth to lobby for privatization sell-offs. The problem with this is that when you privatize a public utility, you give away a monopoly – and if you deregulate the economy, you let the monopoly set up tollbooths over the economy, for toll roads, communications or whatever is being privatized.
The ECB is telling Greece to privatize to raise the money to pay its bondholders, the ECB and IMF. So you have quantitative easing going hand-in-hand with the insistence on privatization. The result is debt deflation as the economy is forced to depend more and more on banks for the money to grow, instead of on government spending into the economy. You’re having the governments not being able to spend on infrastructure, letting it fall apart, as is happening with bridges and tunnels in the United States.
The next step is for the government to say, “I’m sorry, the central bank doesn’t have enough money to help us build new infrastructure. So we’ve got to sell it off to private investors who do have the money.” The next thing you know, you have the economy ending up looking like Chicago. That city sold off its sidewalks and its parking meters to Goldman Sachs and to other Wall Street firms. All of a sudden the prices of parking, driving, and living in Chicago went way, way up instead of lowering the costs as privatization promised.
You have the same phenomenon here that England suffered under Margaret Thatcher: costs for hitherto public services go up. Transportation costs go way up. Road costs go up. Communications, internet costs, telephone costs, everything that is privatized goes way up. Financialization leads to a rent-extractive, almost neo-feudal economy.
In that sense, quantitative easing and the refusal of central banks to fund governments (except to pay bondholders and bail out commercial banks) is a new kind of class war. It’s not the old kind of class war, which was between employers and their workforce over what wages will be. It’s by the financial sector trying to take over the economy, and especially to take over the public sector, to take over the public domain, to take over public utilities and whatever assets a government has. If governments cannot borrow from central banks, they have to begin selling off property.
PERIES: Michael, this is exactly what’s happening in Greece right now. The SYRIZA government is somewhat forced to continue privatization as a part of the agreement of the loans that they have been given by European banks. What could they do in this situation?
HUDSON: This is really a scandal, because most privatizations are corrupt insider dealings. The SYRIZA Party came in and said, wait a minute, the privatizations that have been done are by governmental officials to their own cronies at a giveaway price. How can we balance the budget if we’re giving away the public utilities instead of getting a fair price for them?
The European Central Bank said, no, you have to give away privatization to cronies at pennies on the dollar just like Russia did under Yeltsin, just like the United States did with the railroad giveaways of the 19th century.
Remember, the American privatization to the railroad barons and their financial backers created essentially the ruling class of the 20th century. It created the American stock market. The same thing is happening in Greece. It’s being told to continue the former politicians’ drive to endow a new oligarchy, a new kind of a feudal monopoly lord, by these privatization giveaways. The ECB says that if you don’t do that, we’re going to bankrupt the banking system.
Yanis Varoufakis went back to the party congress in Parliament and asked whether they would approve this. The left wing in Greece has said, no, we won’t approve the giveaways.
The pretense is that privatization is to make money, but the European Central Bank is saying, no, you can’t make money; you have to give it away to our cronies. It’s all one happy financial family. This is escalating financial warfare.
I can assure you that neither Varoufakis nor SYRIZA has any interest in this kind of privatization giveaway. It’s trying to figure out some way of perhaps prosecuting the cronies for bribery, for internal connections, or figuring out some way of legally stopping the rotten policies that they’re told to follow by the European Central Bank – which isn’t giving a single euro to help Greece get over the economic depression that debt deflation has brought on. The euros are only given to the financial sector, basically to help declare war on the Greek government, the Spanish government, the Italian government.
This financial warfare is trying to achieve the same thing that military warfare did in the past. It’s aim is to grab the land, to grab control of the public infrastructure, to grab control of governments themselves. But it’s doing it financially rather than militarily.
PERIES: Right. The SYRIZA Party last week did agree to the conditions of privatization, that they would not roll back on the existing agreements that had been made by previous government. They agreed to not roll back on ones that are underway, and that they’re actually not even averse to privatization as a statement by Yanis Varoufakis. What does all this mean for Greece?
HUDSON: The financial gun was put to their head. If they wouldn’t have said that, there would have been a total breakdown, and the European Central Bank would have tried to bankrupt the Greek banks. So he didn’t have much of a choice. Everything that Varoufakis has written, and all that the political leader of SYRIZA has said, has been exactly the opposite. But they had to give lip service to what they were told to do, and any agreement that’s made has to be ratified by Parliament. So, what they’ve said is, okay, we’re going to play good cop, bad cop. We’ll be the good cops with you, and let Parliament and our left wing be the bad cops and say that we’re not going to stand for this.
Russian President Vladimir Putin will “launch a campaign of undercover attacks to destabilise the Baltic states on Nato’s eastern flank”, the Telegraph reports today – along with all other mainstream news media.
How do we know this? Because the UK’s Defence Secretary Michael Fallon has said so. Lithuania, Estonia and Latvia watch out – the Russian peril is fast coming your way.
“There are lots of worries”, Fallon told the newspaper. “I’m worried about Putin. There’s no effective control of the border, I’m worried about his pressure on the Baltics, the way he is testing NATO, the submarines and aircraft … They are modernising their conventional forces, they are modernising their nuclear forces and they are testing NATO, so we need to respond.”
Covert attack by Russia on the Baltic states is “a very real and present danger”, Fallon insisted. Now where did we hear that before? Ah yes. On 16th December 1998 President Bill Clinton said that that Iraqi President Saddam Hussein presented “a clear and present danger” to the stability of the Persian Gulf and the safety of people everywhere.
We all know where that led: the Iraq war followed a few years later. We also know that the claim was a monstrous untruth: Saddam had no chemical, biological or nuclear weapons. So why should we believe Fallon now? Where is his evidence? He has none. When you already know the truth, who needs evidence?
Fallon – and NATO – should keep their eyes on the ball
But while Fallon’s attention is focused on the imaginary threat to the Baltic states, there is another country that really could be ‘at risk’ – and not because of cyber-attack, invasion by ‘green men’ or a campaign of destabilisation emanating from the Kremlin.
No, the EU, the European Central Bank, the IMF and European finance ministers have already been doing all the destabilisation that’s needed – forcing Greece into a deep programme of austerity that has seen the economy shrink by 25% over five years, the closure of vital public services, mass unemployment and the forced sell-off of public assets.
And now the Greeks – and their newly elected Syriza government – have had enough. This week the Greek prime minister Alexis Tsipras flatly refused to renew the €240 billion ‘bailout’ package, which comes with all the austerity strings, and he today advanced proposals for a ‘six-month assistance package’ free of harsh conditions to give Greece time to renegotiate its debt.
The standoff continues, and will be decided tomorrow by EU finance ministers. It’s not looking good: Germany has already stated that the Greek proposal “does not meet the conditions”. But if the finance minsters don’t agree, then what?
You guessed it: Tsipras will turn to Russia. Earlier this month Tsipras and Putin agreed on a range of bilateral ties, including the construction of a pipeline that would carry Russian natural gas from the Turkish border across Greece to the other countries of southern Europe.
This follows the re-routing of the ‘South Stream’ pipeline, which had been due to cross Bulgaria but was effectively blocked by the EU’s retrospective application of energy market rules, under heavy pressure from the USA. Last November and December Putin negotiated the pipeline’s realignment across Turkey with Turkish President Erdogan – right up to the Greek border.
Following the agreement between Putin and Tsipras, which came complete with an invitation to Moscow on Victory over the Nazis day, 9th May, the pipeline link to the major countries of southern Europe is now complete, at least on paper. And once it’s built, Greece will effectively control – and profit from – that gas supply, and take a strategic position in Europe’s energy landscape.
But Greece is a NATO member!
Greece’s increasingly warm relationship with Russia is already causing concern among other EU and NATO countries. German Defense Minister Ursula von Der Leyen has said that Greece was “putting at risk its position in the NATO alliance with its approach to Russia.”
This provoked a fierce retort from Greek Defense Minister Panos Kammenos who branded the attack as “unacceptable and extortionate” – noting that “Greece was always on the side of the Allies when they pushed back German occupation troops.”
“Statements that replace the EU and NATO’s institutional bodies are unacceptable as blackmailing”, he added. “They undermine the European institutions except if Germany’s aim is to dissolve the European Union and the NATO.”
So if Tsipras’s refinancing proposal is refused tomorrow will Greece quit NATO and the EU, to join the Eurasian Union? Not if Mr Putin gets his way: Greece is worth much more to Russia as an ally within the EU and NATO than outside – where it can veto more trade sanctions against Russia, block the TTIP and CETA trade deals with the USA and Canada, and oppose NATO’s increasing belligerence from within.
But we could see Greece simply renouncing its manifestly unpayable and unjust €320 billion national debt, and quitting the Eurozone straitjacket – while receiving an emergency liquidity package from Russia to support the launch of the New Drachma.
In fact, we could see a re-run of important elements of the Ukraine play of December 2013, when Russia offered a support package under which it would buy $15 billion in bonds from Ukraine, supporting its collapsing currency, and supply it with deeply discounted gas – £268 per cubic metre rather than the maarket price of $400.
A $15 billion purchase of New Drachma denominated Greek bonds would be a superb launch for Greece’s new currency, and would firmly cement Greece’s long term alliance with Russia, providing it with a valuable long term bridgehead into both the EU and NATO.
This move would also give inspiration and confidence to progressive political movements across Europe that take inspiration from Syriza’s fight for economic justice – in Spain, Portugal, Ireland, Italy, the UK and beyond – and bear the powerful message: there is an alternative.
And while NATO, the EU, the USA and their loyal servants, among them the UK’s Michael Fallon, deliberately whip up a fictitious threat in the Baltic, ignoring the real danger they face to the south, the masterly Mr Putin would once again make fools of them all.
At an anti-TTIP demonstration in Berlin last month. (Photo: Uwe Hiksch/flickr/cc)
The newly-elected government in Athens has always been suspicious of the Transatlantic Trade and Investment Partnership (TTIP) and will use its Parliament majority to sink the EU-US trade pact, claims a former Syriza MEP now turned minister.
After making its voice heard in the debate over sanctions on Russia, the new government in Athens is now making its opposition known to the EU-US trade deal, TTIP.
Georgios Katrougkalos, a former influential Syriza MEP who quit his European Parliament seat to become deputy minister for administrative reform in the leftist Greek government, said the new leadership in Athens will use its veto to kill the proposed trade pact – at least in its current form.
Just before the January elections, he told EurActiv Greece that a Syriza-dominated Greek parliament would never ratify the EU-USA trade deal.
Asked by EurActiv Greece whether the promise still holds now Syriza is in power, Katrougkalos replied:
“I can ensure you that a Parliament where Syriza holds the majority will never ratify the deal. And this will be a big gift not only to the Greek people but to all the European people”.
Double veto power
The leftist Syriza party may not have an absolute majority in Parliament but its junior coalition partner seems to share the same views on the EU-US trade pact.
Syriza, which won a stunning victory at snap elections a week ago (25 January) formed a coalition with the right-wing anti-austerity Independent Greeks party, which is intent on opposing laws seen as too favourable to big business.
The coalition agreement gives the new Greek leadership an effective veto power over TTIP and other deals submitted to Parliament ratification.
Indeed, once the pact is negotiated – a process which may still take over a year –, it will be submitted for a unanimous vote in the European Council, where each of the 28 EU national governments are represented.
This means that one country can use its veto power to influence the negotiations or block the trade deal as a whole, an opportunity Syriza will no doubt use.
And even if the pact makes it past this first stage, it will then be submitted to ratification by all parliaments of the 28 EU Member States, offering opponents a second opportunity to wield a veto.
Welfare state under threat
Like many other leftists and social democrats in Europe, Katrougkalos raised serious concerns about the Investor State Dispute Settlement mechanism, or ISDS, contained in the pact.
The mechanism is designed to protect companies’ foreign investments against harmful or illegal rulings in the countries where they operate. It gives them the chance to take legal action against a state whose legislation negatively impacts their economic activity.
Katrougkalos underlined the uncertainty surrounding the ISDS negotiations, saying the European Commission’s precise mandate was unclear.
“An undemocratic practice of lack of transparency has prevailed from the very beginning of the negotiations,” he claimed.
The newly-appointed minister understands that TTIP’s objective was not to reduce tariffs, which are already “very low” but to make an adjustment to the rules governing other sectors. “It contributes to the elimination of some bureaucratic procedures on exports, helping this way the economic efficiency,” he said.
But he made clear that the danger lies in the fact that in most economic fields the regulatory rules are different in the EU and the US. For him, multinational companies stand to benefit the most from lower regulatory barriers, citing banks and brokerage firms, which are subject to weaker supervision in America than in Europe.
“For example we [the EU] don’t permit GMOs, data protection is significantly more important as well as the protection of national health systems,” he said, adding that any consolidation in these rules “will undermine the way the welfare state is organised in the EU.”
Independent Greeks take the same line
Meanwhile, Syriza’s coalition partner, the right-wing anti-austerity Independent Greeks party, takes a similar stance against TTIP.
In a statement issued on 4 November 2014, the then-opposition party said the deal will not live up to its promise of relaunching economic activity.
“It is supposed to be an agreement that will boost the real economy, but its main supporters are international bankers and lobbies,” emphasised Marina Chrysoveloni, a spokesperson for Independent Greeks.
“In simple words, the speculative capital will have even more freedom to move […] in a huge single market with eight hundred million people,” she concluded.
On Syriza’s side, Katrougkalos admitted there was uncertainty about how the talks will conclude but said he was confident that the trade pact “will be approved by the European Parliament”.
“The social democrats have objections on ISDS [investor-state dispute settlement] mechanism but it seems they accept the trade deal’s logic,” Katrougkalos said. In his view, the centre-right European People’s Party and the Liberal ALDE “have a safe majority in Parliament”.
Anti-Russian sanctions are imposed as a hard neo-conservative lobby in America puts pressure on some European countries to go along with these sanctions, and to persuade other countries to do the same, journalist Neil Clark, told RT.
RT: The EU has extended individual sanctions but refrained from new economic restrictions. Why haven’t they gone further do you think?
Neil Clark: Well, it’s interesting, isn’t it? I think this reveals to us the split that there is within the EU. Because what we’ve got really, we’ve got the hard-line countries led unfortunately by Britain, countries like Poland, Lithuania and some others who really want an extension of sanctions. And then we’ve got the more realistic members, the countries that actually want to see these sanctions lifted. Of course, we remember just three weeks ago Francois Hollande, the French President, said that the EU hoped that sanctions would soon be lifted. And of course that would have caused a lot of horror among the anti-Russian camp. So I think what we saw [on Thursday] is the evidence of a real split. We haven’t had these measures that some people wanted, for example some of the more anti-Russian elements have been calling for Russia to be banned from the SWIFT banking system. And what we’ve seen is an extension of the existing sanctions so I think that this reflects the split within the EU at the moment.
RT: Russia’s been under American and European sanctions since last March. How much has it helped resolve the Ukrainian crisis?
NC: Well I think it’s very important to realize…Ukraine is really a pretext for these sanctions. What we’ve got is an anti-Russian lobby, a neo-conservative lobby in America which has for years wanted to sanction Russia. You go back to 2003 and you got neocons calling for Russia to be sanctioned. …This campaign for Russia to be sanctioned stepped up after the events in Syria in 2013 when Russia blocked a war against Syria…And then the Ukrainian situation kicked off as it were.
So I think it’s very important to realize it really that it has really nothing to do with the situation in Ukraine. These sanctions are being imposed, I’m afraid, because of a hard anti-Russian lobby in America and pressure’s been put on certain European countries that are very close to America to go along with these sanctions and to persuade other countries to go along with these sanctions.
It’s interesting, isn’t it, that when we talk about Ukraine the offenses launched by the Ukrainian government forces coincided with visits of high-ranking US officials. And I think that there would have been quite a lot of concern among this anti-Russian lobby in Washington when Francois Hollande did say three weeks ago that he would like to see sanctions lifted.And then what happens? American officials go to Ukraine and we get another offensive against the people in the East. Then the fighting there is used as a pretext for continuing on with the sanctions.
RT: There have been calls for the West to arm the Ukrainian army. Is that on the cards?
NC: It all really depends on what happens in Europe. It is actually crucial at the moment. We saw last night that vote at the Council of Europe – just how divided it was: 35 to 34. So I think there are certain countries in Europe… Poland has been called the 51st state of America, Poland is following the American line, and Britain unfortunately is. But there are other countries, Austria for example, who don’t really want to go down this road, who want to have a return to proper working relations with Russia, because Europe needs Russia. Europe needs a good working economic relationship with Russia. So it’s all a battle going on within the European Union now as to which fraction will actually prevail… So I think the hawks would love to see hard weaponry going to Ukraine, would love to see this conflict continue. But the more sensible countries in Europe want to see an end to it and get back to normal relations with Russia which is in Europe’s interest.
RT: On Wednesday two Russian bombers were detected flying over the Channel which provoked an outcry in the British media as they supposedly ‘disrupted UK aviation’, though these bombers didn’t violate other countries’ borders. What do you think about this situation?
NC: Well I think it’s very interesting, isn’t it, that this big news story happened when the EU was discussing the issue of sanctions with Russia. And I think it happened before, when we had…this debate about whether to extent or deepen sanctions, increase sanctions on Russia…And headlines that come up, you know “Russian bombers over the Channel”, but then we found out that it wasn’t exactly as it was first reported. So I think that in this anti-Russian climate we‘ve got to be careful when we look at the news headlines. There is an agenda going on, there is anti-Russian lobby in the West unfortunately which wants to keep this going and to keep more excuses and pretexts for the sanctions on Russia. So I think we have got to keep cool heads and you know look at bigger context of the stories and it seems quite interesting that every time we are getting these discussions about sanctions on Russia, that this sort of incidents seem to occur.
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The new Greek government has spoken out against the EU partners over the statement that lays the blame for Saturday’s fatal attack on the Ukrainian city of Mariupol on Russia. Hungary, Slovakia, and Austria voiced similar objections earlier.
The government, headed by Prime Minister Alexis Tripras, said in a press release on Tuesday that “the aforementioned statement was released without the prescribed procedure to obtain consent by the member states, and particularly without ensuring the consent of Greece.”
“In this context, it is underlined that Greece does not consent to this statement,” Tsipras added.
He voiced his “discontent” in a phone call to EU foreign relations chief Federica Mogherini.
The EU statement was published on Tuesday morning, saying that all 28 EU leaders had agreed that Russia bears “responsibility” for a rocket attack on the city of Mariupol that left 30 people dead on Saturday.
Brussels objected that the Greek government had been informed about the statement on Russia and Ukraine, but no one had contradicted it until Tuesday.
European Council President Donald Tusk initiated the EU statement, and claimed he had called Tsipras and the “sherpas” – top officials taking care of EU issues in each leader’s office.
One EU diplomat reportedly said that Greece had attempted to remove the line blaming Russia for the Mariupol killing. Also, Austria, Hungary, and Slovakia tried, and failed, to “water down” the communiqué, the EU Observer website stated.
It’s the first time that such a situation – a retroactive abjuration of an EU line – has happened, EU Council official stressed.
Foreign affairs analyst Serja Trifkovich told RT that other countries might follow suit and oppose Brussels’ policies on the Ukrainian crisis.
“It’s very difficult in the EU to break the ranks. Now that Greece has made a move, I confidently expect that the Hungarians in particular, but perhaps also Slovakia and Cyprus, will [find] the courage to say no to the dictate from Brussels.”
The EU statement on Russia and Ukraine also urged for more sanctions, for considering “any appropriate action” against Moscow.
One of the measures being mulled is to block Russia from the global interbank SWIFT payment system.
Economist Max Fraad Wolff told RT that this would be a drastic measure.
“Let’s be fair and honest here: if you’re cut off from SWIFT, your ability to have any kind of normal business flow with the global commerce community is hampered.”
However, what he envisages is that “cooler heads will prevail” and that “we won’t see Russia cut off from the SWIFT system,” as it is “in very few parties’ long-term interests.”
The bailout program, which the outgoing Greek government signed with the EU, is dead and will be renegotiated, Yiannis Milios, chief economy policy maker at the leftist anti-austerity party Syriza said after it won the country’s parliamentary election.
European Union Finance Ministers are scheduled to meet in Davos on Monday, but Milios said that Greece’s current finance minister, Gikas Hardouvelis, will attend the gathering only to “close pending cases of technical matters.”
“This program, which was agreed by Mr. Hardouvelis as representative of Mr. Samaras, is now dead,” he explained.
Syriza won over 36 percent of the vote on Sunday, forcing New Democracy – the party of Greek prime minister – Antonis Samaras, to settle for second with 28 percent.
Celebrating the victory, the party’s leader Alexis Tsipras announced to the cheering crowd that the era of ‘Troika’ debt inspectors is “over” for Greece.
“This is a historic victory of the Greek people. A new page has turned. It is a historic moment for the entire Europe. We turn a new page in our country. The Greek people take their future into their own hands,” Milios was also cited by ANA-MPA news agency.
The majority of Greek voters entered the election angry at the Samaras’s government for agreeing to the terms of 240 billion euro EU bailout, which included the severe cuts and tax hikes.
Syriza blamed austerity for deepening Greek recession, which pushed one third of the country’s population into poverty.
Before the vote, the leftist party’s leader, Alexis Tsipras, said that the terms of the bailout program must be renegotiated to give Greek economy more breathing space.
According to Milios, Syriza will form “the government of national salvation, is the government that will promote, defend and consolidate the interests of social majority but, at the same time, it is not just a message.”
Syriza has become the first anti-austerity party to form a government in Europe, with a Syriza economist saying that “it is the beginning of a major change for the entire” continent.
“Europe cannot continue with the deflation, recession, the rising unemployment and excessive debt. Greece leads the way, our country, our people are the pioneers of a huge change. We are all very emotional and happy,” he added.
Leader of Greece’s left-wing Syriza party, Alexis Tsipras, casts his ballot at a polling station in Athens, January 25, 2015
Exit polls show anti-austerity party, Syriza, has won Greece’s general election, which can affect the course of austerity policies in the European country.
The exit polls announced on Sunday suggest that the radical leftist party, Syriza, has won some 35.5 percent of the votes in the Greek parliamentary election.
The sweeping victory would enable the party to rule on its own, obviating the necessity of forming a collation with other smaller parties.
This is while Prime Minister Antonis Samaras’ conservative party, New Democracy, has secured around 25 percent.
Syriza is a fierce opponent of Greece’s bailout deal with the International Monetary Fund and eurozone countries, and has vowed to reconsider the austerity measures that have caused mounting dissatisfaction in the country.
The polls showed that the leftist party’s popularity has increased by 25 percent in the last seven years of the spiraling financial collapse.
Samaras had earlier warned that it would be crazy to elect Syriza as it “will turn all of Europe against Greece…. They don’t understand Europe, they don’t believe in Europe.”
Greece nearly went bankrupt in 2010. It survived, however, on international rescue packages. Athens has received 240 billion euros (USD 330 billion) in international loans in return for the enforcement of austerity measures.
The anti-EU movement spreads all over Europe… apart from Ukraine*
The events in Ukraine have been instructive, even though the mass media of the Transnational Elite (TE) have created the false impression that there has been a popular “revolution” there by cretins fighting for their right to become the TE’s slaves within the EU, so that they may starve like the Greek people! But I will not dwell here on the orange “revolution” that has just been staged in this country by the pro-western bourgeoisie and petty bourgeoisie of Kiev, with the decisive assistance of the provocateurs of the TE’s intelligence services who organized it, but rather on the two main lessons to be learned from it, which are especially important for all European peoples and, in particular, for the Greek people.
Firstly, social struggle in the era of neoliberal globalization can no longer be just a struggle for social liberation, as obsolete Marxists still believe today and some Trotskyites have always believed even during the Nazi occupation when they called upon German workers in the Nazi army to fraternize with occupied workers, while some “Marxists” and “anarchists” today still call for similar fraternization between the Zionist occupiers in Israel and the occupied Palestinians! The struggle for social liberation today must, first and foremost, be a struggle for national liberation. This becomes obvious when one considers the fact that, when a country (not belonging to the TE, i.e. mainly the “G7″) is incorporated into neoliberal globalization, it loses every trace of economic and, consequently, national sovereignty. This is why the struggle for social liberation today is inconceivable unless it has already gone through national liberation. The occupying troops that are now destroying and plundering Greece (or Portugal, Spain and Italy) and its weakest social strata (with the full cooperation of a small, local privileged elite which controls the media, the political parties, the “Left” intelligentsia etc.) are not a regular army in uniform and with lethal weapons of physical violence at their disposal, but an economic army in suits, possessing equally lethal instruments of economic violence, as well as the means to justify it.
Secondly, the target of social struggle today can only be neoliberal globalization, which is managed by a TE ensuring that only its own bogus revolutions succeed (the orange “revolutions” in Eastern Europe in the past and today, or the pseudo-uprisings in Libya, Syria, etc.) while even the attempted uprisings of the TE’s victims in Greece and elsewhere are suppressed in the most brutal way as soon as they occur – and yet Baroness Ashton finds nothing wrong with this, nor does she detect any violation of human rights occurring. Similarly, the peoples who resist being integrated into neoliberal globalization are condemned to remorseless slaughter, as the Libyan and Syrian people have been. Nevertheless, the impudent Barroso did not hesitate to declare that human rights had been violated in Ukraine when the police dared to beat “protesters” who attacked government buildings with bulldozers, “forgetting” that such conduct in any other “democratic” EU country would have sent many to the morgue!
In other words, contrary to the misleading propaganda of the degenerate “Left”, globalization is not a chimera, or just a continuation of the internationalization of the market economy taking place at the beginning of the last century, but, rather, a systemic phenomenon which can only be neoliberal within the capitalist system, as can easily be shown. Similarly, neoliberalism is neither a doctrine (of “shock” and similar fairy tales) nor the bad policy making of certain “bad” neoliberal politicians and economists. It is simply the ideology of globalization. Neoliberal globalization is, in other words, the necessary institutional framework that ensures the opening and liberalization of the markets (capital, goods and labor), which is required for the effective operation of the transnational corporations that currently control the globalized economy.
On the basis of this analytical framework it is not surprising that an unprecedented mass movement “from below” is currently spreading throughout Europe, challenging the EU directly but also neoliberal globalization indirectly. This movement is essentially comprised of the victims of globalization who are driven to mass unemployment and poverty, as well as to homelessness, starvation or even suicide. These popular strata sooner or later become aware of the fraud of the degenerate “Left”, which consciously misleads them by claiming that the current disaster could be overcome even within the EU, despite the loss of economic and national sovereignty. Then, these strata inevitably turn to nationalist movements of all kinds, since these are the only ones that raise the anti-EU flag: from patriotic to neo-Nazi movements – depending on the local conditions. But this nationalism, which both the Transnational and Zionist elites condemn with such disgust (at the very moment when the strongest nationalist state today is the Zionist one!), has little to do with the prewar aggressive nationalism that led to two World Wars. It is a new kind of nationalism which is fundamentally defensive and does not aim to conquer new “vital space” etc. like the pre-WWII nationalism. Above all, it aims to “protect” national sovereignty (national culture, domestic labor, etc.) that is under threat from the opening and liberalization of the markets imposed by globalization.
The main reason that these popular strata have been turning to nationalist movements is, therefore, not that they have suddenly become fascist (as the TE claims in an attempt to defame them); it is the bankruptcy of the degenerate “Left” which, rather than raising the anti-EU flag in place of the nationalists to promote a struggle for social and national liberation, is engaged in “antifascist” struggles together with privileged “leftists”. It is not surprising, then, that this “Left” implicitly consents to the passing of “anti-fascist” legislation, as required by the Transnational and Zionist elites, so that it may effectively ban such movements that threaten its hegemony. In Greece, for instance, a so-called “anti-racist” bill is now being passed through Parliament, which effectively bans freedom of thought (not action!). This bill means, for example, that if somebody supported the national liberation struggle of the Syrian Baathist leadership against the TE and the criminals, pretending to be rebels, who have destroyed this country, s/he might end up in jail for supporting war crimes against humanity. This is based on a very recent utterly biased report by the well known instrument of the TE, the UN Human Rights Commission, which asserted that as Navi Pillay, the UN’s human rights chief, said there is “massive evidence … [of] very serious crimes, war crimes, crimes against humanity” and that “the evidence indicates responsibility at the highest level of government, including the head of state”. Of course, neither this committee nor Navi Pillay who once said that “the Commissioner is the voice of the victim everywhere,” nor its blood brothers among the NGOs for human rights (Amnesty International, Human Right Watch, etc.) have ever dreamed of declaring the arch-criminals Bush, Blair et al. to be guilty of war crimes, even though they are responsible for the deaths of millions of people. Presumably, the millions of people killed or maimed by war criminals like them are not victims, according to Mrs Pillay’s definition of a victim!
However, the Greek “Left”, i.e. the SYRIZA party, instead of mobilizing the people against this unashamedly fascist law, has quietly consented to it by merely abstaining from voting (only the Greek Communist Party and the ultra-nationalist Golden Dawn party voted against it). It should be noted that SYRIZA, together with its leader, Alexis Tsipras – who has been heavily promoted by the media of the TE – is destined by the same elites to succeed the present parliamentary junta in implementing the same policies but under a “Left” cover. Yet the sordid professional politicians who voted in favor of this openly fascist law dare to speak of democracy and the fight against fascism. This blatant bankruptcy of the “Left” is yet another major reason why a mass popular Front is needed in Greece and in all other countries which have fallen victim to the TE that administers neoliberal globalization, as I stressed in my last article.
* This is an expanded edited version of an article by Takis Fotopoulos under the same title published in the Athens daily Eleftherotypia (8/12/213).
 See e.g. Stephen Lendman, “Ukraine: Orange Revolution 2.0?,” Global Research (6/12/2013).
 Takis Fotopoulos, “The Ukrainian Crisis and the Transnational Elite,” The International Journal of INCLUSIVE DEMOCRACY, vol.1, no.4 (July 2005).
 See e.g. Naomi Klein, The Shock Doctrine (Penguin, 2007).
 Ian Black, “Assad implicated in Syrian war crimes, says UN,” The Guardian (3/12/2013).
 Jonah Fisher, “Profile: New UN human rights chief,” BBC News (28/7/2008).
 Takis Fotopoulos, “Globalization and the End of the Left-Right Divide” (Part I), The International Journal of INCLUSIVE DEMOCRACY, Vol. 8, Nos. 3/4 (Fall 2012-Winter 2013).
Athens – Three political groups, faced with the coming European elections, presented in this capital a coordination communique today, in which they expressed their rejection of the European Union (EU) and the euro.
The French People’s Republican Union, the Finnish Independence Party and the Greek People’s Unitary Front announced their support for participation in the European call to elections in May.
In their proposal, they are demanding emancipation of the continent’s countries from the EU, an anti-democratic organization at the service of the financial and economic oligarchy, the interests of which are clearly against the interests of the citizens of the continent.
These parties are trying “to warn electors about what is at stake in the current European structure,” spreading the message that “to reestablish democracy in our respective countries, it is unavoidably necessary to oust the EU and the euro.”
The world’s largest military alliance seems annoyed about Russia’s “lack of transparency” over military drills at a very “delicate time.” NATO, however, has its own long history of war games all over the globe.
Western politicians have leveled criticism at Russia for planned drills on its own territory, seemingly glossing over the many joint military exercises Western powers, namely the US and NATO forces, have conducted on foreign soil over the years.
This week, US and South Korean forces began their annual joint military drills, which will last until mid-April. The Foal Eagle exercise is conducted near Iksan and Damyan, South Korea.
The drills prompted a stern reaction from North Korea, which slammed the exercises as “a serious provocation” that could plunge the region into “a deadlock and unimaginable holocaust.”
The US joined Greece, Italy, and Israeli forces at Ovda air base in southern Israel for the ‘Blue Flag’ air-training drills in November 2013. The drills were called the “largest international aerial exercise in history,” by Israeli news outlet Haaretz.
According to Israel National News reports the exercises are geared towards “simulating realistic engagements in a variety of scenarios, based on Israel’s experience with air forces of Arab armies in previous engagements.”
Poland and Latvia
NATO’s ‘Steadfast Jazz’ training exercise was held in November 2013, in Latvia and Poland. The drills included air, land, naval, and special forces.
Over 6,000 military personnel from around 20 NATO countries and allies took part in the largest NATO-led drills of their kind since 2006.
In October, NATO also held anti-aircraft drills in Bulgaria, along with the Greek and Norwegian air forces. The exercises were held to test responses in conditions of radio interference, according to the Bulgarian Ministry of Defense.
In May 2013, the US joined 40 other countries in the Persian Gulf for maritime war games. The US Navy said the mass exercises are aimed at “enhancing capability to preserve freedom of navigation in international waterways.”
The drills provoked a sharp response from the Iranian government who voiced concerns at how the maneuvers came in the run-up to the Iranian elections.
In August 2012, US Marines joined Japanese troops for military drills in the western Pacific. The drills were held in part in Guam, a US holding, just as an old territory dispute reemerged between Japan and China over islands in the East China Sea.
“China will not ignore hostile gestures from other nations and give up on its core interests or change its course of development,” the Chinese Communist Party stated in response to the drills, warning the US and Japan not to “underestimate China’s resolve to defend its sovereignty.”
The US joined 16 other nations in May 2012 for military exercises in Jordan near the Syria border. The ‘Eager Lion’ drills included 12,000 soldiers from the participating countries, Turkey, France, and Saudi Arabia among them.
Denying accusations that the violence in Syria had nothing to do with the drills, the US claimed it was “designed to strengthen military-to-military relationships through a joint, entire-government, multinational approach, integrating all instruments of national power to meet current and future complex national security challenges.
In August 2010, the US Navy joined Vietnamese forces for drills in the South China Sea, to the dismay of China. Sovereignty claims in the South China Sea have long been a subject of debate and animosity among Taiwan, the Philippines, Brunei, Vietnam, and Malaysia, though China’s territorial declarations have been the most aggressive.
Ukraine welcomed a fleet of NATO warships for a two-week period of military drills in July 2010. Operation ‘Sea Breeze-2010′ focused on joint anti-terror exercises, despite Kiev’s decision not to enter the NATO alliance. Some 3,000 international military personnel were said to be a part of the drills.
Ukraine began hosting the Sea Breeze exercises in 1997, as part of its commitment to join the alliance. In 2009, the Ukrainian parliament voted against the drills, curtailing then-President Viktor Yuschenko’s efforts to seek NATO membership.
In May 2009, 15 NATO countries held a series of controversial military exercises in Georgia less than a year after it launched an offense against its breakaway region of South Ossetia. Russia called the maneuvers “dubious provocation” saying it may encourage the country’s regime to carry out new attacks.
A new political phenomenon, which characterizes the New World Order (NWO) of neoliberal globalization and the parliamentary junta, is the effective abolition of the old political divide – established formally during the French Revolution – between Right and Left. On the Right, were all those political forces that supported the continuation and reproduction of the “establishment”, once represented by the monarchy and later by bourgeois parliamentary “democracy” and the capitalist market economy, while on the Left were those who advocated the overthrow of the establishment in the above sense, ranging from anti-monarchists to Marxists, anarchists, antisystemic ecologists (unlike today’s washed-out Greens) etc. By definition, then, the Right supported “law and order” and whatever that implied in terms of inequality, hierarchy and the privileges of the advantaged social strata, while the Left essentially fought for the overthrow of the “status quo” and ― to varying degrees ― for the equal distribution of political, economic and social power.
The main arena in which the struggle between Left and Right was taking place was the nation-state, even if the Left – particularly the Marxist (but also the libertarian) Left – was traditionally internationalist, until it adopted in practice the strategy of “socialism in one country” because of the objective conditions it faced, although in theory it remained internationalist. However, it is precisely this arena that is being eliminated by the current NWO, which is literally “pulling the rug” from under the traditional Left-Right divide. The consequences are the seismic changes that we see today across the whole political spectrum.
As regards the Left, an undeniable symptom of this phenomenon is the political bankruptcy of the traditional Left, both in the narrow sense of its electoral percentages, and, most importantly, in the broader sense of its traditional conception as the subversive mass movement that mainly attracted the popular strata, and not the privileged “Leftists” of the bourgeoisie who seek minor reforms through the degenerate “Left”, as is the case now. In other words, even though this “Left” continues to survive politically, this does not change the fact that it has been fully integrated into the NWO, as its demands are anything but subversive. On the other hand, the part of it which belongs to the communist Left theoretically makes subversive demands, which however remain theoretical, since they are not accompanied by a transitional programme and subversive political action. And this is true of any party or organization today that defines itself as Left, communist, anarchist, “Green”, etc, if it does not challenge – both in theory and in practice – the NWO itself, i.e. globalization (which can only be neoliberal within the system of a capitalist market economy) and the main international institutions implementing the neoliberal policies, such as the EU, preferring instead to wait for revolution before demanding withdrawal from such institutions and imposing economic self-reliance. That is why this entire “Left” can no longer attract the popular strata – who are the main victims of globalization – on a mass scale.
But seismic changes can also be seen on the Right, as evidenced by the fact that the traditional conservative parties of today have only survived thanks to the social strata which have clearly benefited from globalization and which therefore sustain them, while they have been losing support from the popular strata who were embourgeoised during the period of social democracy but are now getting poorer because of the mass unemployment and poverty that globalization brings! Thus, these increasingly conservative popular strata that are being crushed by globalization are now leaving the established Right but are not crossing over to the degenerate “Left” which has been fully integrated into the NWO either. Crucially, these popular strata are not joining the communist, or the pseudo-libertarian Left forces, who are supposedly fighting for self-management but who “fail” to see the strangulation of the popular strata through globalization, the EU etc going on right under their noses!
It is these popular strata which are currently shifting en masse towards nationalist parties such as the UK Independence Party (UKIP), to the point that even the most authoritative newspaper of the economic elite, the Financial Times, has emphasized that a wind of Euroscepticism, going as far as to raise the demand for withdrawal from the EU, is sweeping across Europe (15.10.2013). Contrary to the malicious propaganda of the transnational elite, which enjoys the support of the entire degenerate Left, this does not mean that the millions of Europeans who are turning against the EU and, indirectly, against globalization itself, have suddenly become Nazis, as though we were living in the 1930s. National socialism and social democracy itself are impossible today, as both flourished during the era of the nation-state which, under globalization is dead and buried. Nor does it mean that the fact that as much as 30 per cent of the new parliament, following next year’s Euro-elections, will comprise eurosceptics, have suddenly become racists. As the FT report stresses, the exptected massive influx of Eurosceptics in the next European Parliament, which even ardent European federalists now concede, will simply mean that the nationalist parties ‘are capitalising on the economic misery and high levels of unemployment that are plaguing the continent’. It is indeed characteristic that the more these parties get rid of racist or extremist right-wing elements in their politics, the more their percentages rise, as the meteoric rise of Le Pen in France showed lately.
At this crucial historical juncture that will determine whether we shall all become subservient to neoliberal globalization and the transnational elite, it is imperative that we create a Popular Front in each country which will include all the victims of globalization among the popular strata, regardless of their current political affiliations. In Greece, in particular, where the popular strata are facing economic disaster, what is needed urgently is not an “antifascist” Front, as proposed by the parties of the parliamentary junta, supported also by the degenerate “Left” (such as SYRIZA, whose leader A. Tsipras is a candidate for the post of the president of the European Commission!) which would unite aggressors and victims. An ‘antifascist’ front would simply disorient the masses and make them incapable of facing the real fascism being imposed on them by the political and economic elites, which constitute the transnational and local elites. Their criminal policies have already led to almost a third of the active population and over 60 percent of the young being unemployed, to Greek disposable income being almost halved and to a huge rise in poverty with thousands of people having committed suicide since the “crisis” began three years ago. Instead, what is needed is a Popular Front that could attract the vast majority of the people who would fight for immediate unilateral withdrawal from the EU – which is managed by the European part of the transnational elite – as well as for economic self-reliance, thus breaking with globalization.
This would allow also a genuine, new form of internationalism to be built from below, while creating the preconditions necessary for the people to decide, democratically, what kind of socio-economic system they would like in order to achieve an authentic form of popular power.
 Joshua Chaffin, “Europe: United by hostility”, Financial Times, 15/10/2013
This is an edited version of an article that was first published (in Greek) in the Athens daily Sunday’s Eleftherotypia, on 20/10/2013
By Takis Fotopoulos | The International Journal of INCLUSIVE DEMOCRACY, Vol. 9, Nos. 1/2 (2013)
1. The integration of Greece into the EU is the real cause of its catastrophic crisis
The almost complete destruction of the lower classes in Greece is not due to the causes usually attributed to it by the “Left”.In fact, contrary to the misleading “explanations” provided by this Left and the Right alike, the actual cause is the full integration of the Greek economy into neoliberal globalization, through its accession into the EU. This has meant the complete transformation of Greece into an economic and political protectorate of the Transnational Elite. The catalyst for this crisis was Greece’s unofficial default, which, however, was merely the consequence of the destruction of its production structure, as a result of the opening, and liberalization of markets imposed by the EU, following Greece’s entry in 1981. It is therefore no wonder that both the Left (apart from the Communist Left) and the Right––in fact, the entire Greek establishment––are fully united in not challenging the main cause of the present economic destruction: Greece’s membership in the EU.
In other words, contrary to the deceptive pre-election promises of SYRIZA, (which is an organic part of the Euro-left that has just chosen its leader, A. Tsipras, as its candidate for president of the EU Commission), there is no way that an EU/EMU Member State could refuse to apply the policies imposed by neoliberal globalization, as borne out by History with Mitterrand, Lafontaine, Hollande, et. al. It is equally disorienting to state, as SYRIZA does, that, if elected to power, it would revert the catastrophic legislation imposed by the well known ‘Troika’ (representing the IMF, the EU and the ECB) in the past three years or so.
The above deceptive promises are based on the myth that neoliberalism is some kind of a mistaken ideology or a doctrineupheld by “bad” politicians such as Thatcher, Merkel, Blair, etc. However, neoliberal globalization is, in fact, a systemic phenomenon implying, also, that the EU members’ economic growth does not rely anymore mainly on the domestic market but on the international market (within the EU and without) and that it is the Trans-National Corporations (TNCs) that control world production and trade, and–– through the Transnational Elite ––the international political, military and cultural institutions. So, only if the EU governments were taken over by the Euro-Left and they then forced the TNCs based in EU to operate solely within the EU area––imposing in the process strict social controls on the movement of capital and commodities from the other economic blocks (i.e. those of the Far East and America)––only then could the European economy be indifferent to its own level of competitiveness and live in the Euro-Left’s nirvana, happily ever after. In fact, however, EU is moving in exactly the opposite direction of further integration within the New World Order (NWO) defined by neoliberal globalization! This is clearly shown by the current negotiations between EU and US for a Transatlantic Free Trade Area.
2. Capitalist globalization can only be neoliberal
The Euro-elites simply cannot afford to lose more of their competitiveness. In fact, the real reason for the creation of EU and later of the Eurozone had nothing to do with the ideals of freedom, democracy, human values and the rest of its ideology, as EU’s history has clearly shown. It was the growing gap in competitiveness (in terms of EU’s share of world exports) during the 1980s, which led the Euro-elites to speed up the integration procedures, which were mostly dormant up to then. The EU economic failure was clearly due to the fact that the competitiveness of its commodities was increasing at much slower rates than those of is competitors, particularly in the low cost countries of the Far East.As supporters of the EU and its integration were claiming at the time, only a market of continental dimensions could provide the security and the economies of scale that were necessary for the survival of the European capital in the hyper-competitive global market that was just emerging at the time.
However, despite the high degree of integration achieved by the ‘Single European Act’ in the 1990s, and even despite the creation of the Eurozone, its decline in competiveness continued. Thus, whereas the share of Euro-exports to world exports was 35.8% in 1990, ten years later, it has fallen to 29.7% and by 2010 it has fallen further to 26.3%!In other words, within two decades, the Eurozone countries have lost more than a quarter of their competitiveness, measured in terms of their share in world exports. Although the Euro-elites are well aware of the fact that a significant part of their ‘loss’ of exports is, in fact, due to their de-industrialization––because of the move of industrial capital by the TNCs (most of them based in the metropolitan countries including the Eurozone ones) towards the low-cost paradises of China, India and the rest–– this is obviously no consolation to their own workers (and electorates), which benefit very little (if at all!) by globalization!
The present EU policies therefore, are not the result of a conspiracy or a satanic plot of the elites to exploit further the European workers but simply of the fact that the opening and liberalization of markets required by globalization, so that TNCs could expand their activities further, inevitably led to the present neoliberal policies implemented by every country fully integrated into the New World Order. To put it simply, globalization in a capitalist world can only be neoliberal and the rest is mythology adopted by today’s bankrupt world “Left”––apart from the genuine (but diminishing) anti-systemic Left.
3. Competitiveness is the rule
If, therefore, we accept the premise that the Euro-elites have no other option but to improve their competitiveness within the globalized economy, the next question is how competitiveness can be improved. There are two main ways in which a country’s competitiveness could improve: either by changing relative prices; i.e. squeezing the prices of locally produced commodities with respect to those produced abroad by squeezing wages and salaries, or by improving productivity of locally produced commodities, which may lead to lower cost of production without reducing real wages and salaries or to better quality products, etc. Changing relative prices in the former way is the easy solution, as it could be implemented, almost at a stroke, in case a country controls its own currency and Greece itself has repeatedly resorted to devaluation policies in the post-war period to improve, temporarily, its competitiveness. In case, however, a country does not control its currency, as is the case of Greece in the Eurozone, the only other option, given its historically low level of labor productivity because of the lack of investment in research and development, is the presently implemented policy of squeezing wages and salaries in the hope that the cost of production will fall accordingly. In fact, the level of Greek productivity of labor, for instance, has always been historically much lower than that of the Eurozone (in 2006 it was just 77% of the average Eurozone one, something which is not that much peculiar if we take into account the fact that the proportion of productive investments to the GNP is much higher in the European ‘North’ than in the ‘South’ in general and Greece in particular.
So, if we start with the premise that the uneven levels of competitiveness and productivity are unavoidable in an economic union like the EU, which consists of countries at highly different levels of development (as they have been historically formed within a very uneven development process like the capitalist one), then we may easily understand the causes of the crisis in countries like Greece. The fact, therefore, that a Eurozone country like Greece, facing a problem of low competitiveness, cannot devalue its currency (i.e. change its relative prices without the need for suppressing domestic wages and incomes) is not the cause of the crisis. This may be the cause of a similar competitiveness crisis of an advanced capitalist country like Germany but not of a country like Greece where low competitiveness is a development problem. Particularly so, when the Greek entry to the EU and later to the Eurozone had, itself, significantly exacerbated the development problem by effectively dismantling the productive structure of the country, as its infant industry and agriculture were not capable to compete with the imported commodities, following the opening and liberalization of markets imposed by the Single Market. Under these conditions, even a Greek exit from the Euro and a devaluation of the drachma that will be re-introduced in its aftermath, could only have temporary effects on Greek competitiveness, unless mass investment in its productive structure takes place at the same time, which is far from guaranteed in an internationalized market economy.
4. The EU as a mechanism to transfer surplus from its “South” to its “North
In other words, competitiveness at the core Euro countries, which are characterized by higher levels of labor productivity than in the South, mainly depends on keeping wages and prices under control, so that German commodities continue to be competitive (because of their higher quality and so on) compared to similar commodities produced in East Asia and beyond. On the other hand, competiveness in the European periphery, which consist of countries with lower levels of labor productivity, like Greece, mainly depends on improving productivity through new investment on R&D. Therefore, the competitiveness problem in the South is mainly a development problem and refers to the need of creating a strong productive base, which will not be formed within the process of uneven capitalist development (as today), but within a process of social control of the economy to create a self-reliant economy.
Yet, despite the fundamental difference concerning the causes of low competitiveness between the “North” and the “South” of the EU, in the framework of the post-Maastricht Europe, a common policy was adopted for all member countries––a policy that was determined by the needs and the interests of the North. Thus, the Single Market did not mean the unification of peoples, as the EU propaganda presented it, not even the unification of states, but simply the unification of free markets. ‘Free markets’, however mean not only open markets (i.e. the unhibited movement of commodities, capital and labour), but also flexible markets (i.e. the elimination of any obstacle in the free formation of prices and wages, as well the restriction of state role in the control of economic activity, which implies the drastic restriction of the element of ‘national economy’. This was the essence of the neoliberal globalization characterizing the new institutional framework of the EU; i.e., that the state control of the domestic market of each member state (which was drastically restricted within the Single Market of 1992) was not replaced by a corresponding EU control of it, apart from some (mostly nuissance) regulations on uniformity, etc. In other words, the new institutions aimed at the maximization of the freedom of organized capital, whose concentration was facilitated in any way possible, and the minimization of the freedom of organized labor, whose co-ordination was restricted in any way possible and mainly through the unemployment threat.
If Germany is indeed the country which was on the receiving end of the greatest benefits from joining EU and the Eurozone, whereas the countries of the European South received the least benefits out of it, this was far from accidental or due to the bad designing of the Eurozone as post-Keynesians and other reformists (including the Euro-Left!) argue. When the Eurozone was institutionalized at the beginning of the new millennium Germany already enjoyed relatively high levels of labor productivity and competitiveness and the new currency essentially has ‘frozen’ the relative deviations between the advanced North of the Eurozone and the much less advanced South (parts of which were, in fact, underdeveloped). Then, the Single Market itself, under conditions of a common currency, brought about a relative equalization of commodity prices and a certain increase in wages in the South, as workers were struggling to maintain the real value of wages and at the same time to narrow the gap in wages with Northern workers. On the other hand, German employers were in a much better position to suppress wage rises because of the difference in labor productivity they enjoyed due to advanced technology and investment in R&D, but also due to better relative prices. As Wolfgang Münchau put it, “Germany entered the Eurozone at an uncompetitive exchange rate and embarked on a long period of wage moderation. Macroeconomists would say Germany benefited from a real devaluation against other members”.If we add to this, that the countries in the South no longer had the power to devalue their currencies, whereas Germany did not have any need to devalue its currency as long as it could keep wage rises in pace with labor productivity increases, then we can understand why (and how) the Eurozone essentially functions as an economic mechanism to transfer economic surplus from the countries of the European South to those in the North and particularly Germany.
5. The disorienting role of the “Left”
The obvious conclusion is that it is impossible to take any radical measures to exit from the current economic (and not only!) disaster, without a unilateral exit from the EU along with a cancelation of the debt (for which the people were never asked anyway), as well as the discarding of all legislation imposed by the Troika and the adoption at the same time of the necessary geostrategic changes. Only this way, Greece could retrieve the minimum required economic and national sovereignty for a strategy for economic self-reliance, which is necessary for the permanent exit from the crisis, through building a new productive structure to meet its needs.
This means that the views that we could implement another policy even within the Eurozone, as SYRIZA suggests, or that it would suffice to exit from the Euro (without the parallel direct and unilateral exit from the EU) to implement a radically different economic strategy (as other Left organizations suggest), are completely misleading. This is because, as I tried to show above, the cause of the present economic catastrophe in Greece is neither the austerity policies of the Troika, as the supporters of the former view claim, nor the poor design (and implementation) of the Euro that led us to deficits and massive debt, as argued by the supporters of the latter view.
Thus, supporters of the former view (Laskos and Tsakalotos), in fact, reproduce the myths of an obsolete internationalism according to which the struggle of the European proletariat within the EU will reverse the austerity policies, despite the fact that, after almost five years of economic crushing of the popular strata, there has not been even a single (“official” or unofficial) European strike against these policies! On the other hand, the supporters of the latter view (Flassbeck and Lapavitsas), acting as the “Plan B” of the Euro-elite––in case it is forced to expel (temporarily or permanently) Greece from the Eurozone––argue for a Greek exit from the Euro, but not from the EU. However, in both cases, the failure of the proposed policies can be taken for granted, although the consequences will not be identical.
Thus, in the first scenario of a SYRIZA-based government (which looks likely following the Euro elections that could well function as a catalyst for general elections) it is a matter of time for its failure to become evident, if it insists on its pro-EU and pro-Euro policy. Despite its present rhetoric, it would simply have to follow the same economic policies as the present government, perhaps with a minor relaxation of austerity policies (assuming that the Euro-elites will find a way to cancel part of the Debt to make the rest of it payable). As markets will remain open and liberalized under a Syriza government (the party never challenged this fundamental tenet of neoliberal globalization), labor markets will also continue to be flexible. However, open and liberalized markets mean:
- wages and salaries will be kept at around their present minimum levels, or, at least, these levels will be the basis for any future increases strictly linked to productivity rises;
- Public Health and Education will never recover from their present dismantling, as the government will have to continue implementing the present Eurozone strict fiscal policies to keep budget deficits under strict controls;
- the selling out of the social wealth of Greece, following privatizations of essential services like electricity, water, transport, ports and airports, communications (and now even Greek islands!) will not be reversed, making the implementation of any effective social policy to protect the victims of globalization impossible;
- Unemployment may marginally fall from the present almost 30% of the working population (and 60% of young people) only to the extent that foreign investors will be attracted by the present extremely low wages/salaries and the ‘political stability’ that SYRIZA might secure. However, given the strong competition on this front by other low-wage countries in the Balkans and beyond (East Asia), unemployment is bound to be stabilized at very high levels for any foreseeable future, with young Greeks having either to work in Greece’s “heavy industry” (as the establishment calls tourism) or emigrate.
Clearly, this Latin-Americanization (or Balkanization) of the Greek economy will become permanent under SYRIZA’s pro-EU policy, and in the elections to follow a (likely brief) period of SYRIZA in power, the party will probably have the fate of the social democratic party PASOK, which has effectively been demolished. In fact, this would simply be the belated end of the Euro-Left in Greece, following the similar end of this kind of “Left” in the rest of Europe, in the era of globalization. Yet, the International “Left” is unable to see all this and would be ready to celebrate the possible victory of SYRIZA in the next elections,whereas Leo Panitch, (writing for the well known international “Left” newspaper which fully supported all the criminal wars of the Transnational Elite in the last two decades) is so enthusiastic about the new kind of ‘progressive’ reform SYRIZA represents that he became almost lyrical when reading that Tsipras “spoke in terms of the ‘historic opportunity’ that now exists for a left alternative to the current capitalist ‘European model’. This, at the very moment when the same Tsipras is also indirectly praised by the New York Times, the leading organ of the Transnational Elite, presumably as a ‘serious’ Left politician worthy of its trust, compared to the ‘loony left’ they so despise:
“Mr. Tsipras…has backed away from past rhetoric about abandoning the euro and said he does not want Greece to drop out of the 18-country zone that uses the currency. But he does want a fundamental reworking of the terms of Greece’s bailout funds, worth 240 billion euros, or about $328 billion.“Our intention is to change the framework, not smash the euro”, he said.
On the other hand, in the case of the second scenario; i.e., of a Left government that decides a Greek exit from the Euro (but stays in the EU), the image would be much more blurred, as the reintroduction and significant devaluation of the reintroduced drachma would initially bring in some positive results. But, these would be completely temporary, unless they were accompanied by a parallel radical restructuring of the productive structure, based on social decisions and not left to the market forces, as both scenarios implicitly or explicitly assume. And this brings us back to the need for a strategy of self-reliance that presupposes a Greek exit from both the Euro and the EU.
The main reason why both approaches are not only wrong, but also completely misleading, is that they are not based on the fact that the current devastating crisis is due to structural reasons having everything to do with the uneven capitalist development process, which is further exacerbated in the era of neoliberal globalization and the consequent policies implemented by the EU, and very little to do with the broader financial crisis, austerity policies, or the debt itself and the ways to deal with it.
Thus, as far as austerity policies are concerned, it is obvious that they are a consequence and not the cause of the devastating crisis. The solution, therefore, to the “problem” is not just the redistribution of income at the expense of profits and in favor of wages, as (supposedly is the conclusion drawn by a “Marxist” kind of analysis), as this inequality is nothing new but an inherent characteristic of the capitalist system. Unsurprisingly, despite growing world inequality during the era of neoliberal globalization, the system has enjoyed a sustained period of expansion throughout this period, with world GDP rising at an average 2.9% in the 1990s and 3.2% in the period up to the beginning of the latest financial crisis (2000-08).Furthermore, the only case that a systematic redistribution of income against the rich took place in a capitalist system was when the tax burden was shifted to the rich during the social democratic period (approx. 1945-1975). However, this kind of redistribution is simply not feasible anymore in the NWO of Neoliberal Globalization, since Trans-national Corporations can easily move to tax havens like Ireland, India, etc. leaving massive unemployment and poverty behind them.
Yet, neither the deficits and the consequent debts were created by reckless fiscal policies nor, as more sophisticated variations on the same theme maintain, because of the fact that the German elite were suppressing wage rises at a time when the other elites in the Eurozone, and particularly the elites in the Euro periphery, were doing the exact opposite. This policy, according to the same argument, had created an artificial competitive advantage and consequent Balance of Payments (BP) surpluses in Germany and, vice versa in the European South; i.e., low competitiveness and BP deficits. This, in turn, had led to excessive borrowing by the peripheral countries, (made easy by the fact that it was backed up by a strong currency, the Euro) up to the moment that the fiscal “bubble” burst, when the consequent shortage of liquidity made lending to these countries much tighter, leading to the well known debt crises in countries like Greece. Not surprisingly, the Euro-elite, has just decided to adopt an even tighter economic control of the Euro-members, through the Banking Union.
6. Concluding remarks
The crucial, therefore, issue arising is the following one: can a small Euro-peripheral country like Greece afford not to implement the policies of neoliberal globalization today? Or, should, (as the present “Left” suggests), the millions of unemployed and poor wait for a radical change in the balance of forces in the EU and the Eurozone, so that a new pan-European Left government proceeds with the ‘progressive’ reforms suggested by its supporters? Alternatively, should they better wait for a new socialist revolution in order to proceed with genuine socialist policies, as suggested by the dwindling anti-capitalist Left? My sympathies would, of course, be (as have always been) for an anti-systemic Left, as it is the only one which struggles against its full integration into the system and the NWO. Yet, it is obvious to me that, today, this Left is no less millenarian than the integrated into the system “Left”, and as such is equally useless to the victims of globalization, who every day lose even more of their hope for any better future, many of them increasingly resorting to suicide.
Under these conditions, it is clear to me that only if a country broke away from the internationalized market economy and pursued a policy of self-reliance, it could retrieve the necessary degree of economic and therefore national sovereignty, so that it is the people who will be determining the economic process; i.e., which economic and social needs are met and how, instead of leaving this life-and-death issue to ‘market forces’ and the Social Darwinism they inevitably imply. This, for a country like Greece would imply the need for the creation ‘from below’ of a Popular Front for Social and National Liberation(instead of relying on the professional politicians of the “Left” or of the Right), which will formulate a program for the radical changes needed to achieve the short term aim of restoring full social control on all markets, unilaterally cancelling the Debt and all related legislation imposed by the Troika, as well as a unilateral exit from the EU. Although socialization of the banking system and of the de-nationalized industries, particularly those covering basic needs (energy, water, transport, communication, etc.) will be necessary even at this early stage, yet, the medium-term aim will have to be economic self-reliance, so that the basic needs of all citizens are met through the rebuilding of the economic structure according to social needs rather than according to market demand. On the other hand, the issue of the systemic change; i.e., whether Greece would be in the future a state-socialist society, an Inclusive Democracy, or a radical kind of social democracy, will be determined by the people themselves at a later stage once the present crucial problems concerning their survival have been sorted out.
In fact, Greece will not be alone in such a struggle against the NWO and neoliberal globalization. Not only the peoples in other countries in the European periphery and beyond would follow its example when they realize that there is a way out of the present catastrophe, HERE and NOW, but also the peoples who already fight against neoliberal globalization would also join the common struggle against the New World Order of neoliberal globalization. In fact, this struggle is already intensifying from Latin America (Venezuela, Bolivia, Cuba, et. al.) up to the Eurasian peoples of the ex-USSR, and the peoples in the Arab countries (I do not, of course, mean the pseudo-revolutions in Tunisia and Egypt or the engineered insurrections in Libya and Syria),who shed their blood every day in the struggle for their national and social liberation.
 See e.g. the recent book by two members of the SYRIZA leadership, ( one of them a member of Parliament representing the party), Christos Laskos and Euclid Tsakalotos, Crucible of Resistance: Greece, the Eurozone and the World Economic Crisis, (Pluto Press, Sept. 2013).
 Takis Fotopoulos, “Greece: The implosion of the systemic crisis”, The International Journal of INCLUSIVE DEMOCRACY, Vol. 6, No. 1 (Winter 2010); see, also, Greece as a protectorate of the transnational elite, (Athens: Gordios, November 2010).
 see for the meaning and significance of the Transnational Elite in administering the NWO, Takis Fotopoulos, Subjugating the Middle East: Integration into the New World Order – Vol. 1: Pseudo-Democratization, (Progressive Press, 2014), Part I.
 Thus, whereas the EU share of world exports was stagnant between 1979 and 1989 , the US share increased by 3.5% and the Far Eastern share increased by a massive 48% ,(World Bank, World Deνelopment Report 1991, Table 14).
 World Bank, World Development Indicators 2002, (Table 4.5) & World Development Indicators 2012, (Table 4.4).
 World Bank, World Development Indicators 2008, Table 2.4.
 Heiner Flassbeck and Costas Lapavitsas, Left-Wing Strategies to Solve the Euro Crisis, (Rosa Luxemburg Foundation:: Berlin, May 2013, and full version in “The systemic crisis of the euro – true causes and effective therapies”.
 See e.g. Andreas Bieler, “Crucible of Resistance: Class Struggle Over Ways Out of the Crisis”, Socialist Project • E-Bulletin No. 926 January 10, 2014; Reproduced also in Global Research.
The New York Times, 12/1/2014.
 Takis Fotopoulos, “The myths about the economic crisis, the reformist Left and economic democracy”, The International Journal of INCLUSIVE DEMOCRACY, Vol. 4, No. 4, (October 2008).
 ‘Big step’ reached in rescue plan for eurozone banks, BBC News, 12/12/2013; See, also, Maria Snytkova, “European countries lose bank sovereignty”, English Pravda, 2012/2013
 see Takis Fotopoulos, “Neoliberal Globalization and the need for popular fronts for national and social liberation”, The International Journal of Inclusive Democracy, Vol. 9, No. 1/2 (2013), (under publication).
 Takis Fotopoulos, Subjugating the Middle East: Integration into the New World Order – Vol. 2, Engineered Insurrections, (Progressive Press, 2014).