In a bid to forge an anti-austerity alliance, Greek Prime Minister Alexis Tsipras has invited the leaders of six southern European Union countries to a conference in Athens on September 9. The event will include France, Italy, Spain, Portugal, Cyprus and Malta. The forum is to focus on the «common» challenges the EU is facing on an economic, political and institutional level and particularly on austerity, fiscal discipline and migration. It should be noted that the meeting is arranged before a scheduled European Union leaders’ summit on September 16.

The idea of a united front of Southern European countries was first mooted by leftist SYRIZA before the general elections of January 2015 that brought it to power. The current situation is potentially more beneficial for Athens as the protracted imposition of austerity on Greece and elsewhere has increased the pressure on countries in Southern Europe.

Tsipras and his Italian counterpart Matteo Renzi discussed the possibility of setting up an «Alliance of Europe’s South» to push for a pro-growth agenda on the sidelines of the last EU summit (28-29 June). They agreed on the need for southern states to create their own growth-focused agenda, compared to the austerity prescribed by Northern European countries.

France, Italy, Greece, Spain, and Portugal face similar challenges: migration, security, proximity of an unstable neighborhood – the issues that justify enhanced cooperation between them.

French President François Hollande and Prime Minister of Portugal Antonio Costa seem to support the idea, especially in the aftermath of the Brexit. The participation of France is particularly intriguing as this nation has traditionally struggled to find a balance between its desire to build a sphere of influence along the Mediterranean and its strategic interests in the north. If the entire European Union agreed that the Schengen area must be abolished, then France and others could decide that it is best to regain control of their borders while Germany might decide to sign new border agreements with the northern countries.

The Greek and Portuguese heads of state signed a joint declaration in April, claiming that EU austerity-driven policies are «wrong».

Greece and Italy are also disappointed with the stance of their partners in North Europe on the migration crisis, while the French Socialist government is seeking ways to counter the rise of far-right Marine Le Pen, who now finds fertile ground for disseminating her anti-European rhetoric. The Italian government feels the pressure of the right-wing Five Star Movement, especially after its great victory in local elections.

These countries are not the only ones on the way to form alliances within the European Union. Some EU members are starting to think about a post-Schengen, if not post-EU, Europe. The Dutch Cabinet has already floated the idea of «mini-Schengen» with EU partners that would include only the Netherlands, Belgium, Luxembourg, Germany and Austria.

It has debated a plan to introduce passport checks at the borders of several Western European countries in a bid to control an influx of migrants and refugees. The idea of carving out a «mini-Schengen» within the Schengen area would seem to violate the treaty guaranteeing free travel within 26 European countries. The «mini-Schengen area» would involve setting up transit camps for migrants outside those borders.

An alliance of these countries is plausible and it’s not the problem of migrants only. These nations tend to have similar views when it comes to financial and economic matters. This is not a random list of countries, but a collection of states that share deep cultural and historic links. They also oppose the idea of the EU as a transfer union in which wealthy countries in the north subsidize those in the south. Should the eurozone collapse, it would make sense for these economies to create a currency union of their own.

Brexit and the problem of immigration have given new life to the Visegrad Group, made up of Poland, Hungary, the Czech Republic and Slovakia (the V4). They work together in many fields of common interest within the all-European integration framework with perceptions of priorities on the national and the EU levels overlapping a lot. The 2015 refugee crisis ushered in a new era in the Visegrad Group’s relationship with the European Union. With the ethnic composition of the four member nations being significantly more homogenous than those of West European nations, the V4 openly opposed efforts to formulate an EU-wide resolution to the migration crisis. The group is gaining influence against the background of the economic and political chaos that is consuming Europe. It possesses enough significant growth and influence to move beyond the Continent. In particular, the combined GDP of the V4 makes it the world’s 15^th largest economy, and the number of its representatives in the European Parliament is twice as large as the number of representatives of France, Italy and the United Kingdom. The V4 countries continue to use the Visegrad Fund to exercise so-called «soft power» policies in regard to their neighbors.

In late July, leaders of the group agreed upon joint proposals on reforms. The list of possible amendments will be presented at an informal summit of the European Union in September.

The appearance of alliances within the EU is on the way. The divergences on financial and immigration policies are getting deeper against the background of widening discord over the anti-Russia sanctions.

There is no coherent policy to unite the member states thinking of alternatives, should the current political, economic and security order in Europe change. More broadly, this might just be the first steps on the way to break up.

The economic cost of this decision will be even higher for the Greeks. Greece will receive its initial 13 billion-euro payout from its third aid package, which totals 86 billion euros, but is now once again being managed from abroad: a trio of creditors – the ECB, IMF, and European Commission – will continue their routine oversight of the Greek budget.

In addition, Greece has pledged to uphold its tax reforms, make it easier to lay off employees, put an end to early retirement, and liberalize the markets for natural gas and pharmaceuticals, as well as housing and utilities. Several measures that could be dangerous for the Greek economy, such as an increase in VAT taxes on tourism in the islands, were approved by Parliament back in July. All this will exacerbate unemployment and raise the cost of living.

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One would think that having suppressed this «rebellion on the Greek trireme», Angela Merkel could now relax. She got what she wanted: Greece has toed the line and German dominance of the eurozone and EU is stronger than ever. One look at the Greek example will warn anyone to think long and hard before defying the will of «the mistress of Europe», who has already decided to run for her fourth term as chancellor of Germany.

But it’s actually more complicated than that. Of course Washington’s reaction to the election victory of Greece’s SYRIZA party was remarkably warm – Barack Obama telephoned Alexis Tsipras, offered his congratulations, and advised him to get some rest after his arduous campaign. But the most interesting part of Obama’s congratulatory phone call was his comment that the US supports Athen’s desire to push back against Europe’s austere budget policies and to adopt «a strong agenda for growth». 

At a time when Berlin is clearly losing control over Greece, the new Greek prime minister could become a convenient tool for the Americans to use to further diminish German influence within the EU and to tether the EU to the US. One way to do this would be to rush to establish the Transatlantic Trade and Investment Partnership (TTIP).

That would seem to explain Christine Lagarde’s behavior in recent days. The US-controlled International Monetary Fund is approving the allocation of financial aid to Greece, but insists that that debt be restructured. This was part of astatement by the IMF’s managing director. US Treasury Secretary Jacob Lew shares that view. 

It is touching to see how these two leading spokesmen for neoliberalism have joined efforts to alleviate the Greeks’ plight, but it does raise some questions. It makes one wonder, for example, about British Prime Minister David Cameron’s idea to hold a referendum on Great Britain’s future in the EU. Most likely it is not Cameron who is blackmailing the EU with the threat of its collapse after a British pullout, but Washington that is using London to blackmail Berlin, should the EU refuse to join the TTIP. If the EU signs off on that transatlantic partnership, it will ultimately result in Europe’s complete prostration before the Anglo-Saxons, the beginning of the end for the EU, and Berlin’s loss of hegemony.

Perhaps that is why Angela Merkel is in such a hurry to create a «Fourth Reich», claiming to be an «economic» Bismarck. On July 19 the German chancellor made the televised statement that it was not possible to write off debts within the currency union. No options will be made available to Greece except for extensions on the maturities of its loans and lowered interest rates, and even those will not happen immediately, but only when the Greeks fulfill «all the conditions». In other words, this means when Greece’s most valuable physical assets are «expropriated». By those same Germans, for example.

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Paris is deeply concerned about such a scenario, given that the French national debt has exceeded two trillion euros and is almost equal to 100% of GDP, while the French economy stagnates.

According to the French sociologist Emmanuel Todd, «Under Germany’s direction, Europe has become hierarchical, authoritarian, and ‘austeritarian.’» That scholar claims that the inherent tragedy of this situation is that Europe as a continent has already committed suicide twice in the twentieth century with Germany at the helm. Now Todd claims in an interview quoted on herodote.net that a third self-immolation in underway in Europe, and the Germans are once again behind it. 

France could disrupt this sequence of events, but Todd wonders whether France will even be able to rouse itself to action, given that its political system continues to produce a series of ridiculous presidents, in which hysterical leaders are replaced by weak ones. For Hollande, this is a moment of truth. The French sociologist believes that if he deserts the Greeks, the French president will go down in history alongside those socialists who gave Marshal Pétain their vote of confidence.

However, it is difficult to wait for Hollande to «make a move». He is frightened enough of his own shadow, let alone Merkel. But at the same time, his biggest rivals in the upcoming 2017 presidential election – Nicolas Sarkozy and Marine Le Pen – are adopting a far more critical stance toward Berlin and Brussels. For example, at the founding congress of the French party now known as The Republicans (the successor to the Union for a Popular Movement), Sarkozy stated that that party was tasked with «rethinking the whole concept of the European Union». Le Pen says that if she wins she will hold a referendum about a French withdrawal from the EU.

The European Union in its current form was not created for the sake of a united Europe, but in order to hold Germany in check after the reunification. At least, that was the thinking in Paris at the time. And Greece’s victimization at German hands is pushing France to take countermeasures. France is not alone here and can fully rely on the support of the countries of southern Europe, starting with the largest of them – Italy, which is experiencing problems that are comparable to Greece’s (Italy’s public debt broke yet another record in May of this year, reaching a historical high of 2.218 trillion euros, or 132.1% of GDP).

Objectively speaking, it is now high time for France to take a leading role in rallying southern Europe to thwart Germany’s ambitions. The only question is whether the countries of the Mediterranean Union (in existence since 2008) will find the courage to operate independently or whether that party will be led with one eye on Washington. François Hollande would be good at that second option. However, such a policy would be of little benefit.

Europe’s future does not lie in a new administration of Gauleiters or in their duumvirate, such as we have now, but in the formation of a «European concert» of national interests. If supranational structures get in the way, they will become expendable. Europe is waiting for politicians who can cut through this Gordian knot that is so dangerous for the entire continent, as the example of tiny Greece so clearly shows.

Far from being all quiet on the «southern front», the Greek government is now facing a revolt within its own ranks as the country’s parliament absorbs Berlin’s shock attack on its economy and sovereignty. France, Italy and other highly indebted southern eurozone countries are also reeling from German financial tyranny. The reverberations are shaking the entire edifice of the EU and its supposed values of European equality and solidarity».

Washington is far less concerned by the damage to European values than by the opening up of deep political rifts between EU capitals, which could then undermine the architecture of its hegemony in Europe and toward Russia.

When the financial bailout «agreement» was reached after tortuous negotiations last weekend, European Union leaders tried their best to make the outcome sound like a kiss-and-makeup»compromise». European Council President Donald Tusk hailed it as «a typical agreement between European partners». French President Francois Hollande declared: «Europe has won!» While European Commission chief Jean-Claude Juncker gave the game away by claiming that «Greece was not humiliated».

But the sweeping austerity measures that Athens is being forced to implement in order to avail of a third bailout put at €86 billion ($95 billion) is far from a compromise. It is a capitulation by Greek Prime Minister Alexis Tsipras and his»anti-austerity» Syriza government. Some €50 billion worth of Greek public assets are to be locked up under EU creditor»trust» to be sold off at some time in the future if Athens does not implement the draconian austerity demands. By «EU creditors»what is meant is German banks, which are the paymaster of Athens and much of the rest of the EU.

The Washington Post did not equivocate on the brutal terms, although it disguised Berlin’s sinister role with the catch-all euphemism of «European leaders». It reported: «Greece acquiesced early Monday to a punishing ultimatum from European leaders, agreeing to a lighting-fast passage of reforms and a pledge to strap itself into a fiscal straight-jacket to save its banks and stay in the euro». The report added that «a financial gun had been held to Greece’s head».

Reuters pointedly reported that Greece had «surrendered». «Eurozone leaders made Greece surrender much of its sovereignty to outside supervision on Monday in return for agreeing to talks on an 86 billion euros bailout to keep the near-bankrupt country in the single currency».

In a second Washington Post article, the headline betrays American misgivings about Berlin’s terms. «Germany doesn’t want to save Greece. It seems to want to humiliate Greece».

As the dust settles over Germany’s de facto take over of Greece’s sovereignty, Washington is now fighting a rearguard action to try to mitigate the terms of the surrender. The Washington-dominated International Monetary Fund (IMF) has renewed its calls for debt restructuring for Athens. «The IMF is calling for much greater debt relief for Greece than what EU countries are willing to give so far,» reported France 24, while the BBC headlined: «IMF attacks EU over [Greece] bailout terms». Again, the euphemism of «EU leaders» is being invoked, when the unspoken specific target for Washington’s admonition is Berlin.

What has the United States alarmed is the geopolitical fallout from the Greek crisis. Explicitly, the US is worried that the debacle driven by Germany’s hardline financial dictate could result in Greece crashing out of the EU. That in turn could lead to a wider melt down of the 28-member bloc and the unravelling of Washington’s anti-Russia project. That project is dependent on a cohesive EU implementing US-led trade and diplomatic sanctions against Moscow, as well as serving as a platform for American-led aggression toward Russia under the guise of the NATO military alliance.

As noted in an earlier column, in the days before the latest bailout «agreement», Washington made a strenuous intervention to urge Germany to soften its demands on Greece. US Treasury Secretary Jack Lew and IMF chief Christine Lagarde both called on Berlin to afford debt restructuring for Greece, that is, a substantial write-off of Greece’s $350 billion debt – most of which is held by Berlin.

Notably, too, the British government, which serves as a mouthpiece for Washington in Europe, was also appealing to Berlin to soften its policy on Greek finances – this at the same time that Britain’s Chancellor George Osborne was unveiling swingeing public spending cuts on his own population. Hardly concern from London then for Greek poverty, and more likely a dutiful geopolitical message on behalf of Washington.

Washington’s appeals to Berlin fell on deaf ears, which as noted, pushed on for a financial scorched-earth surrender by Athens. German Chancellor Angela Merkel and her powerful Finance Minister Wolfgang Schäuble have shown no mercy to the Athens government. Both have ruled out any debt restructuring. Merkel said of the bailout terms that Greece «faces a long tough road ahead».

But it’s not just Washington that is unnerved by Germany’s newfound truculence with regard to EU finances. Even within Germany, media reports have voiced concerns that the Berlin Chancellery’s financial dictates toward Greece are straining the foundations of the bloc. German newspaper Der Spiegel said Berlin was displaying a dangerous «hypocrisy» over its insistence on debt repayment considering the historic relief that Germany itself received over Second World War reparations.

Another German media outlet, DWN, warned that Berlin’s financial imperiousness was threatening to collapse the EU. From a translation, the newspaper said: «Angela Merkel and Wolfgang Schäuble have overnight transformed the EU into an entity that is no longer held together by trust, but only by naked fear. With the signing of the agreement with Greece the nightmare for the EU has begun. Life in Europe is no longer determined by contracts, but by the law of the jungle».

The Washington Post reported on the brewing tensions within the EU over the Greek debt negotiations in Brussels. «European leaders had seriously clashed over the deal to rescue [sic] Greece, with Germany and Finland taking a hardline and the leaders of France and Italy expressing a distinct lack of ease over the German position – worried that it was undermining the European ideal».

French Finance Minister Michel Sapin was duelling with Germany’s Wolfgang Schauble by insisting on a degree of debt forgiveness for Greece. In the end, Schauble over-ruled his French counterpart, wrenching from Athens a humiliating surrender.

But in the aftermath of Berlin’s financial conquest, the French government is now giving full-throated endorsement to Washington’s renewed call for debt relief, as articulated again this week by the IMF. We can be sure that Berlin is in no mood to make concessions over its financial dictate, which can only lead to more confrontation between it and Washington, together with Paris and Rome.

Latest Eurostat figures on country public indebtedness from show that there is a clear north-south divide in the EU on the issue of national finances. Apart from Greece, whose total public debt is running at a peak of 180 per cent of gross domestic product (GDP), France, Italy, Spain and Portugal are also seriously overloaded with respective figures of 95, 130, 97 and 130 per cent of GDP.

In contrast, the northern European countries have much lower debt levels. Poland is on 50 per cent of GDP, while Latvia, Lithuanian and Estonia have less than 40 per cent. Luxembourg, Netherlands, Finland, Denmark average a debt-to-GDP ratio of around 50 per cent, according to the Eurostat figures. Germany itself has a national debt level of 77 per cent of GDP.

This division of debt correlates with the differing policy in these capitals towards Greece. Germany’s hardline stance is matched by the relatively low-debt countries. There are structural reasons for the varying indebtedness that stem from the competitive advantages that the euro currency has bestowed on Germany’s more developed industrial and export-orientated economy.

No doubt the unease felt by France and other highly indebted EU members is that the Berlin paymaster will sooner or later come banging on their doors for repayment – and on the same draconian terms that are now being applied to Greece. That would explain why France and Italy in particular are rattled by Berlin’s financial dictate and have been calling for some slack to be shown to Athens. They feel that they could be next for Berlin’s Panzer banks and shock-troops in pinstripe suits.

On the other hand, Washington’s disquiet arises from the geopolitical backlash from a Europe that is riven with rivalries and acrimony. From Washington’s point of view, Berlin’s financial «efficiency» towards weaker EU members is a spanner in its geopolitical designs of confronting Russia. The US wants to keep Europe united, whereas Berlin’s quest is for financial aggrandisement and economic dominance in the EU, even if that means some weaker states being ejected.

Historical resonance abounds. As in Nazi Germany’s ascent in times past, Washington and its British ally will have to move decisively to derail the Berlin machine for their own selfish strategic interests with regard to Europe and Russia. In that case, we may anticipate a mounting political campaign from Washington and its London lackey aimed at taking down German might – before Paris also gets marched on by the Panzer banks.

The Greek people, at one of the most critical and dramatic crossroads of a history going back several thousands of years, for which they feel proud and justifiably so, shall be called, this coming Sunday, to decide once again whether man is the measure of all things or money is the measure of all things, the latter being the central “motto” and “belief” of the global financial oligarchy, the European “elites” and their domestic offshoots, attacking Greece. And in the face of the Greeks, they are attacking the social and democratic conquests of all Europeans after their victory in 1945 against fascism, if not after the French Revolution.

A moment comes for man, societies and nations alike, when they have to decide «where they stand». This moment has now come for the Greek people. They will have to decide once for all that their Alexandria [1] of a few decades of a relatively stable and democratic prosperity that followed the fall of the junta in 1974 and accession to the EC in 1981 is definitively lost. The real question facing this people, though, is whether they will abandon this Alexandria with dignity, as urges their great Poet, whether they will take the thorny and dangerous road towards a new future, a new perspective for their country, or whether they will fall apart in a state of enslavement.

1940, 2004, 2015

The answer the Greeks are going to give to the creditors’ ultimatum is of no less importance than the importance of the answer they gave to Benito Mussolini’s ultimatum on October 28, 1940. An answer that led to the first victory of the Allies in World War II and to a delaying of the German attack against the USSR which was probably decisive for the outcome of the war. Their answer made Winston Churchill, celebrated for his wit and not a friend of the Greeks, say: “Hence we will not say that Greeks fight like heroes, but that heroes fight like Greeks!.”

The Greeks didn’t give this answer to Mussolini’s ultimatum out of sympathy for their own regime, nor because they were in a better position than they are today. They didn’t put up the strongest resistance, proportionally to the country’s size, in the Nazi-occupied Europe, because the conditions were favorable to them or because they didn’t have anything to lose. They acted the way they did because, deep down, they felt that they could not survive without their dignity. As a people, we may be full of faults. But, I find it hard to believe that some decades of consumerism were sufficient to undermine our sense of self-pride (“filotimo”) that has always been with us during the critical times of our history.

The significance of a NO in 2015 is no lesser than that of the NO uttered by the citizens of the Republic of Cyprus in the 2004 referendum, who refused to give in to the strongest international pressures in order to accept a plan which would abolish their independent and democratic state. It is no lesser either than that of the NO uttered by the French and the Dutch (2005 referendum), the Irish (2008 referendum) and the Icelanders (2010) against Euroliberalism, despite the fact that these NOs, with the exception of the one in Iceland, were later belied by their leaderships.

What these NO had in common, despite the different circumstances, was people’s opposition to the dissolution of their national  and popular sovereignty, of their independence and democracy, in the only context where it still exists in today’s world, that of the nation-state. This is what the Annan plan attempted to do in Cyprus or the European constitutional treaty in Europe.

Dignity

The question History is now asking us, by means of the «take it or leave it» question of the creditors, is whether we continue or not to consider our national and individual dignity as the fundamental value which allowed our people and civilization to survive in the midst of defeats, incredible threats and disasters for several thousands of years. We have known many  defeats in the course of our history. But we never signed off our enslavement – this is the reason that the Greek state exists today, be it a miserable, poor one; but the only one we have got. We shall suffer of course if we resist the will of the mighty. But, where shall we be without our own state, in the ocean of a barbarous, “prehistoric” globalisation which causes whole nations to perish?

This coming Sunday we are not merely called to decide whether we accept the creditors’ ultimatum. We are called to determine whether we consider the existence of a state of even a rudimentary independence and democracy, as the most fundamental prerequisite for our national survival.

Peoples have been called times and again in their history to choose between destruction and enslavement. The creditors do not even place us before such a dilemma. They want both. Our destruction and our enslavement! The only thing they are offering us is the continuation of a program which has caused, beyond the shadow of a doubt, as the greatest economists of Europe, America and Russia admit, the biggest financial, social and political disaster in Western (capitalist) Europe after 1945. Instead of apologizing for the destruction they have caused, they are now impeding the Greek government from taking even elemental measures to enable hundreds of thousands of people to have some food, the medication they need, electricity, and heating, a roof over their heads; they are killing the hopes of a whole people. These are the hands we have permitted to take the control of Europe!

The disillusionment

Many, including the SYRIZA leadership, had been under huge illusions and, unfortunately, they are still suffering under them. They believed that the Greek disaster was nothing but a misunderstanding, a mistake of the prevailing European elites. After Monday, June 22, however, all these illusions ought to have been dispelled. The Greek government presented to the institutions a proposal which was in line, unfortunately, with the program’s spirit, and a far cry from SΥRΙΖΑ’S pre-electoral announcements on the basis of which it won the elections. Had the proposal been accepted, it would not have solved any problems. For many, this was an unacceptable proposal of capitulation.

What was the creditors’ reaction to this proposal? Initially, they expressed their satisfaction because the spoiled leader of a «spoiled» country was finally beginning to «see reason». After that they began asking him for more concessions! They as good as told him “we are not interested in taking prisoners of war, we are demanding your full surrender and suicide.”

Faced with the political suicide option he was given for himself and the option of a national-social suicide for his country, Alexis Tsipras and his closest associates, who never wanted or prepared for a rupture (on the contrary, they turned against all those of us who kept telling them to prepare for the worse option), proclaimed – and rightly so – a referendum, an idea which had been «brewing» since 2012 in the highest echelons of SYRIZA.

It is now the time for the Greek people to answer whether they accept or not the ultimatum. We hope that they will reject it with a sweeping majority, although the indecisive stance of the SYRIZA leadership, its weakness in defending its own choice, risks to bring about disastrous results, aggravating the population’s doubts and fears.

The leaders of SYRIZA need to understand that they have already crossed the Rubicon. They did so when they asked for the vote of the Greek people in order to stop the disastrous course of the memorandum. They crossed it yet again when they decided to hold a referendum. By so doing they cut off bridges. They will drown and will drown us if they attempt to reverse their course.

If they now turn around and look where they were, even a week ago, they will turn into pillars of salt like Lot’s wife did. If they capitulate, if they do not assume the consequences of their choices, they will be adding ridicule to defeat.

Let not Alexis Tsipras entertain any illusions. If he cops out now, he will not even be allowed to have George Papandreou’s relatively quiet retirement. George is a man who always belonged to the “family”, to the club of the “international establishment”, he is their man. Alexis Tsipras shall be humiliated and thrown to the dogs, as an example for all European peoples and politicians to see what is the fate of those who dare challenge the masters.

There is only one way for the SYRIZA leaders. Rid themselves of their remaining illusions and finish off what they started, taking all necessary measures to organize the Greek people’s struggle for the rescue of their country, and explaining to them what to do and why. We shall never tire of repeating that it is not possible to organise the Missolonghi exodus [2] by inviting people to a drink of ouzo on the beach of Aitolikon. Α la guerre, comme à la guerre, Napoleon used to say. And Greece has been at war since 2010, only, till now, it has chosen not to retaliate!

We hope that the Greek citizens, when asked by their children if they personally accepted the TROIKA ultimatum in 2015, will be in a position to answer them without lowering their heads. We also hope that the leaders of the country will find the will and the mind to meet the historical challenge it is facing.

Dimitris Konstantakopoulos, Athens (Translated from Greek)

A two-page letter was sent to the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) late on June 30 and obtained by a number of media outlets including the FT and Bloomberg on July 1. The talks on debt will be suspended until the results of the referendum to be held on July 5 are made public.

New Democracy, the main centre-right political party and historic rival, the Panhellenic Socialist Movement (PASOK) had ruled the country since 1974 till the recent election that took place just a few months ago. They had become fully discredited to make SYRISA, a left-wing political party originally founded in 2004 as a coalition of left-wing and radical left parties, come to power. This is the first time left-wing forces came to power in Greece since the days of «Mountain Government». The Political Committee of National Liberation, commonly known as the «Mountain Government», was a Communist Party – dominated government established in Greece in 1944 in opposition to both the collaborationist German-controlled government at Athens and to the royal government-in-exile in Cairo. 

SYRISA is popular today. The three major money lenders are adamant in their desire to continue the same policy unchanged. Threats, blackmail and ultimatums – these are the instruments used to make Greek Prime Minister Alexis Tsipras implement further austerity measures like his predecessors had done. The country is going through a period of economic woes with a quarter of GDP lost and unemployment rate rising to 27 % (over 50 % of people younger than 25 years old are unemployed). Tsipras got enough votes at the January 2015 parliamentary election to put an end to austerity measures, but the European Union insists that Greece should be «punished». 

The situation makes one remember the Chile of early 1970s when President Nixon endorsed the neutralization of Salvador Allende’s government so that nobody would dare implement independent policy in the US backyard. Nixon wanted the economy of Chile go down the wall and it did. As a result, General Pinochet led a military coup. The organizers of quite coup use more sophisticated weapons than tanks on the streets. They prefer rating agencies, banks and media…The Tsipras government has only two scenarios to follow: either it continues the implementation of its program to face a financial deadlock, or capitulates by submitting a resignation to lose the voters’ trust. 

The three money lenders are afraid of SYRISA’s influence spreading beyond the national boundaries. Before the Greek parliamentary election Mario Draghi, President of European Central Bank, announced that ECB would buy €60bn of private and public sector debt from March 2015 to September 2016 worth over €1 trillion. This policy could be applied to Greece only on certain terms – the needy would get the aid only if they complied with the instructions from Brussels. The people of Greece failed to get the message and voted for SYRISA. Eurogroup Chief Jeroen Dijsselbloem said then that the people of Greece were to realize that the election did not mean the end of economic problems. Christine Lagarde, Managing Director of International Monetary Fund, said there would be no exclusion from the rules. Everyone has to pay.

Jeroen Dijsselbloem

Some time passed and Mario Draghi did his best make Greece face hard times. Without explanation he stopped providing funds for Greek banks, except the Emergency Liquidity Assistance, ELA. This is a very cumbersome program which must be prolonged weekly. The Greek government has to function under the Sword of Damocles. Even that funding lifeline can be taken away from Greece. On May 14 the head of Germany's Bundesbank ripped into the European Central Bank, saying emergency funding for Greek banks broke the taboo of financing governments and it was not up to central banks to decide who was or wasn't in the euro zone. Jens Weidmann also said it was questionable whether money printing by the ECB to boost the euro zone economy and halt deflation was necessary. 

Greek banks have been drawing emergency liquidity assistance from the country's central bank, a funding lifeline provided in exchange for collateral. They have used some of this emergency funding to buy Greek government debt, indirectly helping to keep the county afloat. Those days Moody’s predicted that the victory of SYRISA at election would negatively influence the economic growth. The main thing in focus for Tsipras are the terms the credits are granted on as stated in the ill-fated memorandums of 2010 that made Athens implement austerity measures and make people pay sky high taxes. Over 90% of sums paid to serve the debts return to money lenders, sometimes on the very next day.

Nothing can be done under the circumstances to improve economy. A failure to come up with money for debt payments means bankruptcy. Money lenders got a useful instrument for blackmail. The steps offered by Athens were met by threats to stop providing funds, even though ELA.

As far back as February, Eurogroup put forward an ultimatum, saying its either you do what your predecessors had done or look for funds elsewhere. Tsipras presented a reform plan to end a grueling four-month standoff and unlock the final 7.2-billion-euro ($8.0-billion) tranche of Greece's international rescue package. The Greek government was seeking the return to the Greek state of 1.2 billion euros from the European Financial Stability Facility (EFSF). The money, originally in the Hellenic Financial Stability Fund (HFSF), was used for the recapitalization of Greek banks instead of EFSF bonds destined for this purpose. It was recently transferred to the EFSF in the form of bonds not used for bank recapitalization. Greece wanted the European Central Bank provide it with €1.9 billion received from the profits the Bank made as the Greek bonds holder, but in mid-March the ECB refused, no matter Tsipras made concessions by suggesting that Greece’s privatization program may go ahead and the reinstatement of the minimum wage may be postponed.

Then creditors wanted Tsipras to deregulate the labor market and legalize mass public sector layoffs. The European Commission insists on further privatization. Germans are especially interested in the process as they expect equity prices to go down.

Greece asked for an international conference to discuss its debt problem. It wanted to use Germany's 1953 debt restructuring as a precedent for its debtrelief demand. The relief made possible the German economic miracle. The proposal was put under the rug with threats and ultimatums to follow.

Two months ago Euclid Tsakalotos, the deputy Foreign Minister, took over as Greece's new chief negotiator, instead of Finance Minister Yanis Varoufakis. He says the government faces a new kind of coup, one that is not carried out with tanks, as in 1967, but through banks.

The week after the leftwing Syriza candidate Alexis Tsipras was sworn in as prime minister, the ECB announced that it would no longer accept Greek government bonds and government-guaranteed debts as collateral for central bank loans to Greek banks. The banks were reduced to getting their central bank liquidity through “Emergency Liquidity Assistance” (ELA), which is at high interest rates and can also be terminated by the ECB at will.

In an interview reported in the German magazine Der Spiegel on March 6th, Alexis Tsipras said that the ECB was “holding a noose around Greece’s neck.” If the ECB continued its hardball tactics, he warned, “it will be back to the thriller we saw before February” (referring to the market turmoil accompanying negotiations before a four-month bailout extension was finally agreed to).

The noose around Greece’s neck is this: the ECB will not accept Greek bonds as collateral for the central bank liquidity all banks need, until the new Syriza government accepts the very stringent austerity program imposed by the troika (the EU Commission, ECB and IMF). That means selling off public assets (including ports, airports, electric and petroleum companies), slashing salaries and pensions, drastically increasing taxes and dismantling social services, while creating special funds to save the banking system.

These are the mafia-like extortion tactics by which entire economies are yoked into paying off debts to foreign banks – debts that must be paid with the labor, assets and patrimony of people who had nothing to do with incurring them.

Playing Chicken with the People’s Money

Greece is not the first to feel the noose tightening on its neck. As The Economist notes, in 2013 the ECB announced that it would cut off Emergency Lending Assistance to Cypriot banks within days, unless the government agreed to its bailout terms. Similar threats were used to get agreement from the Irish government in 2010.

Likewise, says The Economist, the “Greek banks’ growing dependence on ELA leaves the government at the ECB’s mercy as it tries to renegotiate the bailout.”

Mark Weisbrot commented in the Huffington Post:

We should be clear about what this means. The ECB’s move was completely unnecessary . . . . It looks very much like a deliberate attempt to undermine the new government.

…The ECB could . . . stabilize Greek bond yields at low levels, but instead it chose . . . to go to the opposite extreme — and I mean extreme — to promote a run on bank deposits, tank the Greek stock market, and drive up Greek borrowing costs.

Weisbrot observed that the troika had plunged the Eurozone into at least two additional years of unnecessary recession beginning in 2011, because “they were playing a similar game of chicken… [T]he ECB deliberately allowed these market actors to create an existential crisis for the euro, in order to force concessions from the governments of Spain, Italy, Greece, Portugal, and Ireland.”

The Tourniquet of Central Bank Liquidity

Not just Greek banks but all banks are reliant on central bank liquidity, because they are all technically insolvent. They all lend money they don’t have. They rely on being able to borrow from other banks, the money market, or the central bank as needed to balance their books. The central bank (which has the power to print money) is the ultimate backstop in this sleight of hand. If that source of liquidity dries up, the banks go down.

In the Eurozone, the national central banks of member countries have relinquished this critical credit power to the European Central Bank. And the ECB, like the US Federal Reserve, marches to the drums of large international banks rather than to the democratic will of the people.

Lest there be any doubt, let’s review Goldman’s December memo to the Greek Parliament, reprinted on Zerohedge. Titled “From GRecovery to GRelapse,” it warned:

[H]erein lies the main risk for Greece. The economy needs the only lender of last resort to the banking system to maintain ample provision of liquidity. And this is not just because banks may require resources to help reduce future refinancing risks for the sovereign. But also because banks are already reliant on government issued or government guaranteed securities to maintain the current levels of liquidity constant.

In the event of a severe Greek government clash with international lenders, interruption of liquidity provision to Greek banks by the ECB could potentially even lead to a Cyprus-style prolonged “bank holiday”. And market fears for potential Euro-exit risks could rise at that point. [Emphasis added.]

Why would the ECB have to “interrupt liquidity provision” just because of a “clash with international lenders”? As Mark Weisbrot observed, the move was completely unnecessary. The central bank can flick the credit switch on or off at its whim. Any country that resists going along with the troika’s austerity program may find that its banks have been cut off from this critical liquidity, because the government and the banks are no longer considered “good credit risks.” And that damning judgment becomes a self-fulfilling prophecy, as is happening in Greece.

“The Icing on the Cake”

Adding insult to injury, the ballooning Greek debt was incurred to save the very international banks to which it is now largely owed. Worse, those banks bought the debt with cheap loans from the ECB! Pepe Escobar writes:

The troika sold Greece an economic racket… Essentially, Greece’s public debt went from private to public hands when the ECB and the IMF ‘rescued’ private (German, French, Spanish) banks. The debt, of course, ballooned. The troika intervened, not to save Greece, but to save private banking.

The ECB bought public debt from private banks for a fortune, because the ECB could not buy public debt directly from the Greek state. The icing on this layer cake is that private banks had found the cash to buy Greece’s public debt exactly from…the ECB, profiting from ultra-friendly interest rates. This is outright theft. And it’s the thieves that have been setting the rules of the game all along.

That brings us back to the role of Goldman Sachs (dubbed by Matt Taibbi the “Vampire Squid”), which “helped” Greece get into the Eurozone through a highly questionable derivative scheme involving a currency swap that used artificially high exchange rates to conceal Greek debt.

Goldman then turned around and hedged its bets by shorting Greek debt.

Predictably, these derivative bets went very wrong for the less sophisticated of the two players. A €2.8 billion loan to Greece in 2001 became a €5.1 billion debt by 2005.

Despite this debt burden, in 2006 Greece remained within the ECB’s 3% budget deficit guidelines. It got into serious trouble only after the 2008 banking crisis. In late 2009, Goldman joined in bearish bets on Greek debt launched by heavyweight hedge funds to put selling pressure on the euro, forcing Greece into the bailout and austerity measures that have since destroyed its economy.

Ambrose Evans-Pritchard wrote in the UK Telegraph on March 2nd:

Syriza has long argued that [its post-2009] debt is illegitimate, alleging that the ECB bought Greek bonds in 2010 in order to save the European banking system and prevent contagion at a time when the eurozone did not have a financial firewall, not to help Greece.

Mr. Varoufakis [the newly-appointed Greek finance minister] said the result was to head off a Greek default to private creditors that would have led to a large haircut for foreign banks if events had been allowed to run their normal course, reducing Greece’s debt burden to manageable levels. Instead, the EU authorities took a series of steps to avert this cathartic moment, ultimately foisting €245bn of loan packages onto the Greek taxpayer and pushing public debt to 182pc of GDP.

The Toxic Central Banking System

Pepe Escobar concludes:

Beware of Masters of the Universe dispensing smiles. Draghi and the . . . ECB goons may dispense all the smiles in the world, but what they are graphically demonstrating once again is how toxic central banking is now enshrined as a mortal enemy of democracy.

National central banks are no longer tools of governments for the benefit of the people. Governments have become tools of a global central banking system serving the interests of giant international financial institutions. These “too big to fail” behemoths must be saved at the expense of local banks, their depositors, and local economies generally.

How to escape the tentacles of this toxic squid-like banking hierarchy?

For countries with a bit more room to maneuver than Greece has, one option is to withdraw public and private deposits and put them in publicly-owned banks. The megabanks are deemed too big to fail only because the people’s money is tied up in them. They could be allowed to fail if public funds were not at risk.

The German SBFIC (Savings Banks Foundation for International Cooperation) has proposed a pilot project on the Sparkassen model for Greece. Other provocative options have also been proposed, to be the subject of another article.

Ellen Brown, ellenbrown.com

Syriza’s victory

The truly historic victory of SYRIZA in Greece has catapulted its leader, the charismatic Alexis Tsipras, under the limelight. It befits to be reminded that his party is in reality an alliance regrouping former leftists, former communists, ecologists and former socialists. What is cementing this improbable alliance and explains its success, with over 36% of votes expressed, is in reality much deeper, but also much more complex than the « social question. » Not that the latter is not important, and even tragic. One can understand the refusal of a murderous austerity which has been savaging the population ever since 2010. But there is also the question of national sovereignty. The refusal to submit to the injunctions of Brussels and of the European commission, which was expressed on the very first day following the elections, is a very important dimension in SYRIZA’s victory. The social question, upon which the French commentators are focusing, however important it may be, does not explain everything. In reality, SYRIZA has engaged in a fight for the sovereignty of the Greek people, against the bureaucrats of Brussels and Frankfurt, seat of the European Central Bank. The victory of SYRIZA may be a harbinger of the one of PODEMOS in Spain in early autumn. And, just as in SYRIZA, the soverenist component is far from negligible in PODEMOS, or for that matter in the Irish party who will also try a run for victory in early 2016, the SIN FEINN.

Beyond the symbols, there are actions. And the first actions of Tsipras have been very strong signals sent to the authorities in Brussels. First of all, he has constituted his government by making an alliance with the party of “Independent Greeks,” or AN.EL. Many consider that this is an alliance against nature between the far-left and the right. But such a judgement reflects precisely their misunderstanding of SYRIZA’s fight, and its reduction to the sole social question. What justifies the alliance between SYRIZA and the « Independent Greeks, » is precisely the fight for the independence of Greece. Tsipras, right in his first speech, spoke about the newly found independence of his country from a European Union overtly described as an oppressor. The second strong action of the new government, which has had no echo in the French press but which is fundamental, has been to dissociate itself from the EU declaration about Ukraine. Once again, as could be expected, the European Union was condemning Russia. Tsipras has said loud and clear that Greece did not approve this declaration, neither in substance nor in form. However, this point is going to become more and more important. The policies of the European Union concerning international affairs are of anintergovernmental nature. This implies that decisions be taken unanimously [1]. The new Greek government is therefore reproaching the EU for this decision to have been taken without respecting the procedures internal to the EU [2]. It is clear forthwith that the EU will no longer be able to behave as before concerning Russia as well as Ukraine. The third action was the decision of the government, announced by the new minister of finances M. Varoufakis, to immediately suspend the privatization of the harbour of Piraeus. This decision signals the end of the auctioning off of Greece for the profit of foreign countries. Here again, we find the necessity to affirm Greek sovereignty. But this decision is also a severe blow dealt to the various companies who had sat themselves down at table before this juicy market.

The German dilemma

We must then try to understand the position of Germany. The declaration of the Minister of the Economy, M Sigmar Gabriel, is luminous in this regard. He declared: “a principle of justice must be respected, as far as our population is concerned [3].” He stressed that this notorious « principle of justice » needed to be applied in favour of « the people in Germany and in Europe (…) who showed their solidarity” (with the Greeks). In reality, the aid in question went mainly to European banks which had bought a large share of the Greek debt. There has been no “solidarity,” only a well understood principle of the socialisation of losses. Nevertheless, we must ask ourselves about the “why?” of his declaration.

Germany does not want the Eurozone to become a “transfer union.” This has been a constant ever since the beginning of negotiations on the Eurozone. We can well understand this, for if the principles of a real “federalism” were applied (the way they are inside a country like France) Germany, as a rich “region” in the Eurozone, would have to contribute as much as 8-9% of its GDP per year, over a period of ten years at least. One can consider that this would end up breaking the back of the German economy. But Germany wants – on the other hand – the advantages of the single currency and an unchanging exchange rate with its “customer” countries. That’s where the shoe hurts. Indeed, either Germany accepts a new – and very thorough restructuration of the Greek debt (or a moratorium on it), and it will immediately be seized upon by similar demands from countries like Portugal, Ireland, Spain and Italy. Or Germany adopts a “hard” position, wrapped in obscene whinings like those of Sigmar Gabriel (and forgetting all the restructurings of German debt which occurred  during the XX. Century) and provoke a showdown with Greece. But then, the risk is big to see Greece leaving the Euro, and a process of contagion taking place.

As a matter of fact, and whatever Germany will do, it will be confronted with this process of contagion, either inside the Euro (and with ever mounting pressure to see its contributions increasing) or outside, with a probable dislocation of the Eurozone. Germany still has a choice, but it is a choice between evils. And one might conjecture that, in this case, it will end up choosing, for itself, and more precisely for its leaders, that which will appear as the lesser one: the break-up of the Eurozone. But Germany cannot, for historical reasons, bear the responsibility for the destruction of this zone. It will have to saddle it on the Greeks, at all costs, even if it means deploying the most massive bad faith.

In any case, the future looks bleak for Germany who is understanding at present that it is stuck in a trap, the very trap in which it had thought to shut in the other countries. Whatever way out it will be choosing, Europe, which is at present a form of German property, will come out of it weakened. But this weakening really has its origins in the fact that Germany has knowingly practiced a “lone ranger” policy while pretending to adhere to federal mechanisms. Double talk always comes at a cost, and in this case the cost will be especially high.

Anticipation by the ECB?

We must then go back to the conference of Mario Draghi on Thursday, January 22. We have already pointed out the importance of the limitation at 20% of the ECB’s guarantee on the new purchases of securities. [4] But one may well ask if, in reality, Mario Draghi was not anticipating the situation to come, and the probable disintegration of the Eurozone. One may read his policies, and his declarations, as the following choice: no mutualization of debts if there is no economic mutualization (budgetary, in particular). This is a very reasonable position. The mutualization of debts would make sense only if one ended up rapidly with a system of economic and budgetary mutualization. However, Mario Draghi is not ignorant of the fact that Germany is strongly opposed to such a mutualization. Which is why he is organizing the monetary fractioning of the debt market, and in so doing the re-nationalization of the latter. This could very well be the last stage before a dissolution of the Eurozone.

But, in order for there to be an « organized » dissolution, Germany would have to recognize the dilemma into which it has been thrown by its very own policies. There is very little probability that the German leaders, be they from the CDU-CSU or the SPD – who all have colluded with this policies, will accept it. Let’s say it upfront, the probability is low indeed. The path we should be expecting things to be taking is the one of a rising confrontation with Greece driving the latter to default on its debt and to be « expulsed » from the Eurozone, not formally (for nothing allows to do this) but in fact. The ECB will stop furnishing the Greek Central Bank and will decide that the « euros » emitted in Greece can no longer circulate in the rest of the Eurozone. We note that mechanisms of this type have already been implemented before, granted over a very short period, against Cyprus.

It is clear also that the Greek government is preparing for a scenario of this type. It is going to realize a budget in strict equilibrium, in exchange of course for affecting to other expenses the spendings earmarked for interest payment on the debt. But if this policy makes sense for Greece, it doesn’t by any means do so for the Eurozone, which will then be confronted with a massive crisis of distrust, and a rapid contagion to other countries. This will be the scenario of the “dislocation” of the Eurozone.

It would be matter a lot if our French political personnel began to prepare for this. But one may fear that, living as it does in a bubble and practicing a peculiar form of political autism, it will have seen nothing coming and be confronted with reality in a very brutal way.

One of the issues to hit the news in early 2015 is the possibility of Greece leaving the eurozone, or, even, the European Union. German weekly Spiegel reported that Chancellor Angela Merkel now believed that the eurozone could cope with Athens leaving the common currency in case the Coalition of the Radical Left (SYRIZA) wins the January 25 parliamentary election. Rejections followed (allegedly Chancellor Merkel said something else) but there is no smoke without fire. The Greece eurozone exit has been in the wind since a long time. On the one hand, it can remedy the eurozone economic situation. On the other hand, the very fact of such a possibility being discussed could be perceived as a harbinger of EU disintegration process about to kick off. There will be mixed consequences for Greek economy in case the conjecture becomes a reality. The core problem to affect the relationship between Greece and the European Union is the Greece’s government debt (see the graphic below): 

Greece and eurozone: Sovereign (general government gross) debt at the end of year

The relative amount of Greek sovereign debt by far exceeds other eurozone countries and members of the European Union. As of 2013, Italy, the second largest debtor in eurozone, had the debt equal to 132, 6% of GDP, Portugal was the third with the debt equal to 129, 0% of GDP. According to the estimates of Greek government, the country’s debt was to be 318 billion euro at the end of 2014 but media reported in early 2015 that it went up to 322 billion euro. It’s worth to note that external (or foreign) debt of the eurozone and other EU member-states (the debt includes private and national debt) is hardly ever mentioned. By the way, Greece is far from being the largest external debt holder. By the end of 2012 the Greek external debt was $568, 7 billion or 234% of GDP ($52 thousand per capita). At the very same time the external debt of Great Britain was $10 trillion or 400% of GDP. But, as they say, Quod licet Iovi, non licet bovi or what is permissible for Jove is not permissible for an ox. Greece is not even an ox, it’s rather a scapegoat. In the 2000s it got mired in public and government debts. The global lenders wanted to make this South European country a milking cow. They went too far. The cow could not give milk anymore. Now it’s good only for the role of scapegoat. 

How the Troika – the IMF, the ECB and the European Commission – «rescued» Greece

During a few years world financial circles have been tried to make the Greek «cow» bounce back. In the spring of 2010 the European Union in concert with the International Monetary Fund introduced unprecedented measures, including the loan of €110 billion granted to Greece. It did not work. Then they launched a new bigger aid package equal to €130 billion. Actually a large part of sovereign debt was written off then. The International Monetary Fund and the European Union had to reason it out and find arrangements with the major Greek bonds holders who agreed to «forgive» a part of the debt. It was a fait accompli for minor bonds holders. By the end of 2013 the IMF and Brussels started talks with Athens on the third aid package but the economic situation in Greece did not improve. The government did not fully comply with the conditions put forward by creditors to make the money flows slow down. Greece cannot receive the next €7 billion tranche. The creditors (the big three including the International Monetary Fund, the European Central Bank and the European Commission) tend to believe that the «cow» is not good for milking anymore. 

Disillusionment became overwhelming in Greece too. The country keeps on plunging into the money pit. Neither austerity measures, nor privatization of remaining state property, nor the attempts to attract investors by bringing down taxes – nothing works. Even according to official data, unemployment exceeds 20%. The figure is 40% for the young people. In 2014 around €6 billion (11%) out of €56 budget expenditure was spent to service the public debt. Partly the debt was paid off at the expense of profits received from privatization. But Greece managed to scrape together only €2, 5 billion from this source. Many politicians and people understood that the «debt restructuring» was nothing but a trick. Proportionally the debt was not reduced: over €100 billion were written off while the debt in 2011-2013 decreased only by €52 billion. A half of the written off debt was immediately replaced by new debts to pay off. So called privileged creditors and lenders took no part in the restructuring and writing off. They continue to receive all the money Greece owes to them. For instance, the International Monetary Fund. 

Grexit – a symbol of «pure relationship» between Athens and Brussels

As far back as 2010, Greeks lost hope to find a way out of the dead end as the crisis set in. Those days the first calls for eurozone (and even the European Union) exit were voiced. A new term appeared – Grexit (Greece and exit). They threatened Brussels with the prospect of holding a referendum on leaving the eurozone. The European Union did its best to quell such sentiments. It realized there would be serious implications for the European Union. But today the situation is different in Greece and elsewhere. 

The eurozone exit idea has gained great support inside Greece. Yes, it’ll be hard at first, but he return to drachma (Greek national currency before the euro) would allow adopting independent fiscal and economic policy. Greeks are fed up with control exercised over their country by Washington (the International Monetary Fund), Brussels (the European Commission), Frankfurt (the European Central Bank) and Berlin (the German government calling the shots in the eurozone). 

At the same time the «big three» and Germany are tired of shouldering the problems of Greece – a cow to feed with no prospects for milking in the foreseeable future. According to the opinion of Angela Merkel and Brussels officials, the eurozone has become stronger in the recent two years. Of course, the withdrawal of Greece from the eurozone will have negative consequences, but it won’t be the end. 

Syriza and its economic program

The main provisions of the Syriza economic program envision the withdrawal from the eurozone and return to the national currency – drachma that existed in the days of ancient Hellade to be back in circulation after the country got rid of Turkish yoke in 1832. This measure will allow adopting national fiscal policy, something Greece sacrificed in order to enter the eurozone on January 1, 2001. Then the nationalization of all strategically important enterprises and banks will follow. 

The Syriza leaders understand well that even the restoration of Central Bank’s national status is an imperative, but it’s not enough for implementation of independent national fiscal policy. They propose to introduce capital controls to prevent financial speculators from entering the country. Instead of lowering the taxes as recommended by the IMF and Brussels, they want to raise them and restore the social programs cancelled by the International Monetary Fund. 

As the debt problem exacerbated in recent years Syriza started to study the ways to tackle the issue. It has rejected the traditional recommendations of the International Monetary Fund like privatization of state property. Instead it offered …reparations to be used as an alternative. Syriza raised the issue of the reparations underpaid by Germany to compensate Greece for the WWII losses. True, Greece has received some reparations from Germany. The first tranche was received in late 1940s – early 1950s. Mainly the reparations included industrial products (equipment, machines) for the total sum of 105 deutsche marks (the sum equals around $25 million or €25 billion at current prices). The second tranche of reparations arrived in the 1960s. In 1960, Greece and the Federal Republic of Germany signed an agreement whereby 115 million marks were given to Greek victims of Nazism. The payments were tied to the Greeks’ abandoning any additional claims for individual compensation. In 2013, the National Council for German War Reparations headed in Greece by war veteran Manolis Glezos put the amount of damages at half a trillion euros. In March 2014, Greek President Karolos Papoulias once again demanded that Germany pay reparations for damage inflicted on the country during the war. Greece is claiming €108 billion euro as compensation for damages and €54 billion for loans issued to Nazi Germany by the Bank of Greece and never repaid. The total amount of reparation claims by Greece stands at €162 billion. At current price levels, this equals 5,000-6,000 tons of gold. The sum is enough to repay a half of current debt. 

Syriza vs. world money lenders

The most radical measure offered by Syriza is writing the debt off. At least 50% of it. Once in power the coalition plans to hold talks with the main creditors and bond holders. At first glance, it resembles the restructuring of 2012 but there is a big difference. Back then the process was guided from «top», now it is to be initiated from «bottom» by Greece itself. In June 2012 the center-right New Democracy has won the election. It gave its consent to implement the policy of economic strangulation imposed by Washington and Brussels. Back then Syriza raised the issue of writing the debt off or at least imposing a moratorium on payments. Vangelis Apostolou, an MP and a Syriza activist, said before the 2012 parliamentary election that the party stood for debt restructuring. Syriza believes that a large part of the sum is the result of illegal international operations. The party calls for establishing a special international commission to assess the state of Greek economy. If Greece agrees to repay what is left, then a moratorium on interest payments will take effect for the period of three-four years. Apostolou said it was the only way to carry out the obligations before people and the only acceptable solution to make Greece remain in the eurozone. Then the amount of payments would be pegged to the economic growth indicators. The priority would be social needs, not interest payments. Greece would pay if it can and not pay if it can’t. 

According to other statements coming from Syriza members, the moratorium and restructuring are not the only viable options on the table. A sovereign debt default is not excluded. According to Greek politicians, it’s not the first time – the country saw defaults on government debts in 1898 and 1932. Actually there is only a relative difference between a moratorium, a debt restructuring and a default. It all boils down to warning about the upcoming default. Restructuring may imply a temporary suspension (grace period) of interest or principal repayments. 

The most resolute Syriza representatives say if Greece fails to reach an agreement with creditors and money lenders on restructuring then a new government would take a unilateral decision on moratorium and partial writing off the debt. 

In early January Alexis Tsipras, the Syriza party leader, said, «What we demand is a European conference, to tackle this European problem together, and there cannot be a solution without writing off a large part of the debt, a moratorium on repayments and a growth clause.» He said coordinated technical measures could be used to avoid a solution at the expense of Europeans. Syriza vows to write down most of the nominal value of Greece’s debt once elected. «That’s what was done for Germany in 1953, it should be done for Greece in 2015,» Tsipras said in a speech delivered this January. He added that an agreement will include an amendment to make debt payments tied to the indicators of economic growth, not state budget surplus. The party will ask for a grace period or a moratorium to accumulate money for economic development and restructuring. 

* * *

Today the legendary Manolis Glezos is the informal leader of Syriza. On May 30, 1941, he and his friend climbed on the Acropolis and tore down the swastika, which had been there since April 27, 1941, when the Nazi forces had entered Athens. Before the 2012 election said that «all the agreements concluded with loan sharks, not partners or creditors, but loan sharks – as that’s what they are – will be nullified…We’ll say from the very start we don’t owe you anything». Today he repeats the same thing. Greece owes them nothing. Manolis Glezos hopes to see his party win the election and tear up the shackling agreements imposed on Greece by the European Union and the International Monetary Fund. 

There is some similarity between the events in Greece and Russia. Before the New Year Member of Russian State Duma Committee on Budget and Taxes Yevgeny Feodorov had prepared amendments to the Civil Code providing for the freezing of Russian debt servicing in force majeure circumstances. The list of conditions to justify the measure includes the economic sanctions that impede the functioning of Russian companies and organizations making impossible to service foreign debts. 

Many experts believe the introduction of such measures would be timely. It will allow to introduce a moratorium on foreign debts repayments. No doubt, it would be expedient for Russia to take a page out of the Greek book and see what it’s like to declare a moratorium on sovereign debt payments. It’ll be possible if the Syriza coalition wins in Greece on January 25.

Source: sputnikipogrom.com

The powerful Euro-skeptic movement is divided into two main camps. They might be called «New Right» and «New Left». The first one gains ground as it squeezes out the traditional center and right parties. It calls for the return to traditional cultural and family values, taking protectionist measures in economy, gaining independence from supranational entities (especially the European Union), restoring Europe of national homelands and putting a stop to immigration from Asia and Africa. The «New Left» forces take strides on the way of making Social Democrats and old-pattern Communist parties retreat Europe-wide. The Party of the European Left, commonly abbreviated PEL, is a European political structure which operates as an association of around 30 Democratic Socialist, Socialist and Communist (reformed) political parties in the European Union and other European countries. It was formed in January 2004 for the purposes of running in the 2004 European Parliament elections. Unlike the majority of PEL members, the «New Left» are convinced Euro-skeptics. Sooner or later they will have to establish an organization of their own. They stand for dissolution of NATO, the development of international relationship based on justice and equality and putting an end to the militarization of the European Union. They oppose the military and political cooperation between the United States and the EU and speak out against the creation of Transatlantic Free Trade Area (TAFTA). 

* * *

The influence of the European «New Right» and «New Left» has increased since the elections. In autumn they upset the stability of Sweden’s political life. After the parliamentary elections in September 2014 the Sweden Democrats (a typical «New Right» political force) received 13% of votes (in comparison with around 10% at the European Parliament election) to become the third largest party in the country. They got their «golden share» in the Riksdag (the Swedish parliament). On December 3, the Sweden Democrats voted against the budget bill put forward by the coalition of Social Democrats and Greens to topple the government. Now the country faces its first snap election in 60 years scheduled on March 22, 2015. Sociologists believe that this time the «New Right» will get at least 18% of votes to become the main political arbitrator joining the government. In this case Stockholm may revise its policy towards Brussels. Unlike the traditional Right, the Sweden Democrats support traditionally strong welfare state policies. In particular, they speak out in favor of supporting families with children, they want to improve the plight of pensioners, increase the funds allocated for medical needs and boost subsidies to cover travel expenses of those who reside in distant parts of the country. The Sweden Democrats oppose mass immigration. Some time ago the party voted against the Ukraine–European Union Association Agreement.

* * *

Sweden is not the only European country to enter the election campaign. Spain, Great Britain and, possibly, Greece will also face elections in 2015. These states may be in for big surprises. 

The deep economic crisis in Spain and corruption scandals inside the ruling party led to the growth of popular support for Podemos («We Can»), a left wing political party. Podemos' economic manifesto includes the restructuring of national budget and EU debt. In opinion polls support for Podemos has surged as high as 28% ahead of both the centre-right governing People’s Party and the opposition Socialist Party. The new political force presents an imminent challenge to the two-party system established after Franco. 

The popularity growth of UK Independence Party threatens the two-party system in Great Britain. It got 28% at the European Parliament election, more than any other British political party. Its platform calls for the UK leaving the European Union, the introduction of tougher immigration laws and the support of small and medium business. 

There are many Euro-skeptics inside the Conservative Party led by David Cameron. Experts say there is a possibility of split. Euro-skeptics may leave the Tories to join the United Kingdom Independence Party with EU supporters filling the ranks of British Labor. In any case, the level of support enjoyed by the UK Independence Party makes it impossible for the country to be ruled as before with the Conservatives and Labor Party succeeding each other at the helm. If the UKIP takes part in forming the government, the relations between Great Britain and the European Union will significantly cool down. 

In Greece the economic crisis gave rise to the popularity of SYRIZA (the Coalition of the Radical Left), a left-wing political party opposing the austerity agenda of the European Union (EU). It received 27% at the European Parliament election, more than any other political party in Greece. After the elections Alexis Tsipras, the leader of the Coalition of the Radical Left, called for snap elections to reflect the change in voter sentiment, but the old political elite refused to follow suit being afraid of defeat. The Greek parliament is to elect a new president next year. The ruling pro-EU coalition comprising the New Democracy, the Greece's main centre-right party, and the Panhellenic Socialist Movement, a social-democratic political party known mostly by its acronym PASOK, lacks minimum 180 votes needed to elect their candidate. According to the constitution, a snap election is to take place in case the parliament fails to elect a president. According to polls, SYRIZA is predicted to hold an election winning 5% lead. The party wants the external debt restructured to shake the Eurozone again. SYRIZA opposes the «reckless and irrational» policy of Greece on Ukraine and opposes the anti-Russia sanctions imposed by the West. 

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The forces opposing the «European choice» gain ground in other European Union member – states: Italy, France, Denmark, Austria, Hungary, the Netherlands, Finland and Slovakia. No matter how prosperous Germany may appear, the popularity of the Euro-skeptical Alternative for Germany (AfD) is on the rise. This party was founded in 2013. It describes itself as neither left nor right wing and insists that it cannot be classified using the traditional left-right political spectrum. The party won 7 of Germany's 96 seats for the European Parliament in the 2014 European Election. It exceeded forecasts in gaining its first representation in state parliament elections in Saxony (9, 7% of votes), Brandenburg (12, 2%) and Thuringia (10, 6%) during 2014.

Greece's Kathimerini credited the elections with creating a basis for a stable ruling coalition in the country, and Eleftheros Typos wrote that the outcome of the race to the parliament instilled fresh hopes. The score of the leftist Syriza whose program was built around the pledge to subject to a complete revision the relations between Athens and Brussels was 27%, and, being the highest on record, it still would not enable the radical group to form the cabinet. Hong Kong's Hang Seng, Japan's Nikkei 225, China's Shanghai Composite, and South East Asia's composite MSCI Asia Pacific convincingly rebounded in the wake of the triumph of the moderates in Greece.

“The two pro-austerity groups getting a majority together in the parliament is a very good outcome. It’s the best-case scenario for the election, prompting traders to cover short positions in the euro,” explained Daisuke Karakama, a market economist in Tokyo at Mizuho Corporate Bank Ltd., a unit of Japan’s third-largest banking group by market value, in the habitual terms of his profession. "The result in the Greek election is certainly better than the alternative," synchronously opined Ric Spooner, a chief market analyst at CMC Markets in Sydney. 

Council of Europe chairman Hermann Van Rompuy and European Commission president José Manuel Durão Barroso stressed in a joint statement that they would "stand by" Greece's membership in the Euro and the EU. Emboldened New Democracy leader Antonis Samaras contributed to the optimistic chorus by saying that “The country does not have a minute to lose.”

Just days before the ballot, the withdrawal of Greece from the Eurozone looked like a foregone decision and the country seemed to be headed for a messy default. Reuters reported amidst the situation that a mock job add on a building wall in Pláka, a historical neighborhood in Athens, read "Wanted. Dead or Alive. Greek prime minister. No qualifications or brains required". Indeed, the programs Greek political parties attempted to sell on the eve of the election offered little in the way of in-depth analysis or innovation. The divisive issue was how Athens should handle the deal with the EU which made it possible for Greece to nab a Euro 130b bailout and to count on more, but at the cost of implementing a package of crippling austerity measures. In fact, even at the moment neither pro-EU New Democracy nor the left radicals from Syriza are under the illusion that the credit deal, known as the Memorandum in Greece, has serious chances to be put into practice in its current form. The differences between the positions held by the right and the left amounted to details, but the details were Brussels' major headache. Charismatic leader Alexis Tsipras was open about his view that the agreement with the EU was “a matter of the past”, pledged that his government, if formed, would turn the page on the Memorandum, and charged in an interview to Antenna that lack of concessions on the part of the EU would be indicative of Brussels' intention to destroy Greece and to exterminate the Greeks.  

Tsipras's rival in the competition over the post of the Greek premier, Samaras, ridiculed the Syriza program as “a comics book” but also made it clear that he would try to negotiate softer terms for Greece from the EU lenders and the IMF. Anyhow, Samaras asserts that during the recent rerun the Greeks voted for staying in the Eurozone.

As of today, international lenders have full freedom to decide how to rearrange the Greek economy and under what conditions to keep Greece in the Eurozone. Several weeks ahead of the elections, the IMF chose to distance itself from whatever was happening in the country – the fund's deputy director of external affairs David Hawley simply said: “We look forward to being in contact with the new government when it has been formed”. As for the EU, one gets an impression that a rift over the problem of Greece is widening within the alliance. The key issue is the cost: European Central Bank president Mario Draghi expressed his personal support for the membership of Greece in the Eurozone, but not regardless of the price tag. Berlin and Paris promptly sent similar signals. German finance minister Wolfgang Schäuble told Stern that whatever government pops up in Greece it would not change the situation in the country which endures a painful crisis generated by decades of economic mismanagement. French president François Hollande urged Greece to abide by its obligations but gently added that though some EU countries would be happy to put an end to the presence of Greece in the Eurozone, he would like it to stay.

It transpired during the last elections that the Greek constituency had largely outlived the emotional reaction due to which the traditional favorites – New Democracy and PASOK – performed miserably in the May 6 poll, meaning that a moderate coalition finally became a realistic plan. Greece, however, faces a permanent destabilization threat, and the EU must choose between shouldering the costs of debt cancellation for the country or letting it drop out, with the living standards of its population plummeting and a myriad of other problems arising. It depends on the ability of the Greek political class to reach compromise as well as on the atmosphere across the EU what the future holds. Importantly in the context, elections are due in 2013 in Germany, the European economic powerhouse, and a considerable faction among its politicians are skeptical about endlessly draining the German budget to help Greece.

Given the current disposition within the country, Athens has a period of time to resolve its disputes with Brussels. The upcoming EU summit is scheduled for June 28-29, and no significant decisions concerning Greece can be expected ahead of the date. When the summit convenes, the crisis in Greece will be seen as an episode in the unraveling of a wider domino effect into which Spain and Italy are drawn to almost the same extent. By then, Athens should be able to assemble a viable governing coalition which the EU can tolerate (the Democratic Left are ready to blend in along with New Democracy and PASOK), new financial infusions will follow, and the credit terms will likely become available with fewer strings attached. German diplomacy chief Guido Westerwelle dropped a hint that Greece can expect the above when he said on the elections day that new talks on the timetable for the country's compliance with its obligations in the framework of the credit deal were not beyond imagination. The political games, though, are no cure for the socioeconomic ills of Greece which recorded recession for five consecutive years and where unemployment measures 20% (50% among the young), and will not in the long run stabilize the economic and political machinery of the EU. 

Tsipras says Syriza will play an active role in Greek politics as the main opposition party and presses the message that the drastic austerity policies and the privatization campaign must not roll on, since the nation denies legitimacy to the approach. He interprets the election scores as a reflection of the nation's will to tear up the agreement with the lenders. Consequently, the increasingly influential Syriza will continue to be a huge problem for the Brussels bureaucracy and the architects of the new world order. Economist and Nobel Prize winner Nouriel Roubini projects that the new government in Greece will remain afloat for a year or less and that upon its collapse the country will fall out of the Eurozone. If that is right, the domino effect affecting the European geopolitics is going to spill to an ever growing number of countries.