Money's Troika goes to the Banks and not to Greece!!!

Its membership in the euro currency union hanging in the balance, Greece continues to receive billions of euros in emergency assistance from a so-called troika of lenders overseeing its bailout.

But almost none of the money is going to the Greek government to pay for vital public services. Instead, it is flowing directly back into the troika’s pockets.

The European bailout of 130 billion euros ($163.4 billion) that was supposed to buy time for Greece is mainly servicing only the interest on the country’s debt — while the Greek economy continues to struggle.

More in the NYT.

How a Radical Greek Rescue Plan Fell Short

By MARCUS WALKER
10 May 2010
WSJ

ATHENS—Two years after Europe bailed Greece out to protect the euro, the rescue has become a debacle that threatens to unravel the common currency.

After Greece's May 6 elections left pro-bailout parties too weakened to govern the country, more elections are likely in June, with no guarantee a stable government will emerge. By next month, Athens must identify €11.5 billion, or $15 billion, in fresh spending cuts or face suspension of the international loans it needs to pay pensions and run schools. If it doesn't get the money, it would eventually have to print its own.

Greece's growing turmoil is the culmination of a radical austerity experiment and botched economic overhaul that have pushed the nation to the brink of social and political breakdown. The story of the ill-fated bailout suggests that forcing deep austerity on individual member states won't save the euro and may worsen its crisis.

Above all, Greece's example illustrates the...

Those Revolting Europeans

By PAUL KRUGMAN

The French are revolting. The Greeks, too. And it’s about time.

Both countries held elections Sunday that were in effect referendums on the current European economic strategy, and in both countries voters turned two thumbs down. It’s far from clear how soon the votes will lead to changes in actual policy, but time is clearly running out for the strategy of recovery through austerity — and that’s a good thing.

Needless to say, that’s not what you heard from the usual suspects in the run-up to the elections. It was actually kind of funny to see the apostles of orthodoxy trying to portray the cautious, mild-mannered François Hollande as a figure of menace. He is “rather dangerous,” declared The Economist, which observed that...

I am Hellene

Bravo Katerina

Resistance to austerity stirs in southern Europe

(Reuters) - Most of the people of southern Europe have stayed surprisingly stoical up to now in the face of some of the most painful budget cuts in living memory, but signs are stirring that patience may soon run out.

An unexpectedly broad general strike in Spain on Thursday and mounting opposition to Prime Minister Mario Monti in Italy are among indicators that resistance is growing in a region at the center of concerns about a resurgence of the euro zone debt crisis.

Portugal remains very subdued for the moment and even Greece, scene of repeated violent street protests, has quietened recently. But there are signals that political leaders will soon be directly in the firing line across Europe, especially if more cuts are required to reduce sovereign debt.

The atmosphere seems a combination of two opposite tendencies - acceptance of the message that deep cuts are the only way to save their countries from economic catastrophe, and a mounting feeling that greater pain cannot be borne by populations suffering deprivation and misery.

The problem for politicians like...

Annual Greek Parade in Boston!

Save the Greeks from their Saviors!

February 22, 2012
by Alain Badiou, Jean-Christophe Bailly, Étienne Balibar, Claire Denis, Jean-Luc Nancy, Jacques Ranciere, Avital Ronell

At a time when one Greek youth out of two is unemployed. Where 25,000 homeless wander the streets of Athens. Where 30% of the population has fallen under the poverty line and where millions of families are forced to place their children in the care of someone else in order for them not to die of hunger or cold, where refugees and the new poor compete for trashcans at the public dump, the “saviors” of Greece, under the pretext that “Greece is not trying hard enough”, impose a new aid plan that doubles the lethal administered dose. A plan that abolishes the right to work and reduces the poor to the most extreme misery, at the same time as it makes the middle class disappear.

The goal is not about “saving” Greece. All economists worthy of this name agree on this point. It’s about gaining time in order to save the creditors at the same time it leads the country into deferred collapse. Above all it’s about making a...
 

Social and Human Costs from the Troika program

One of the biggest and worst social costs of the current program is the enormous loss of jobs. As noted above, unemployment hit a record 20.9 percent in November.[At the present the record is 21%] By 2016 it is still projected to be at 17 percent, far above the 7.7 percent pre-crisis level, and a level that is generally seen as a national tragedy.[10]

Another way to see these losses is to look at employment. Figure 3 [see the picture on the left]  shows employment as a percentage of the working age population. By 2011 it had fallen to below its level of 1994, almost six percentage points below its 2008 peak.

The government has committed to cut 150,000 jobs from public employment for 2010-2015, about 22 percent of public employment. The IMF notes that:

You can blame the Greeks – but they have been betrayed by their leaders

by Jason Manolopoulos

Shocking examples of kleptocracy by the political elite explain the ferocity of the reaction. And it is this which has repercussions for the rest of Europe.

Thieves! Thieves!" cry the protesters outside the Greek parliament in Syntagma Square, although thief is not the most colourful allegation being levelled at the Greek ruling class.

The scenes are now familiar to TV viewers across the world: the angry banners, the scuffles or sometimes more serious violence, the petrol bombs and tear gas, the world's media, including battle-tested war reporters, descending.

The latest wave of Hellenic protesters call itself Aganaktismenoi, in the spirit of the Spanish indignados, a broad-based and non-party-political movement. The silent majority is, at last, finding a voice. Around me, in Athens, the fear, outrage, despair are palpable. But there is also a profound sense of bewilderment at a situation from which there appears no escape, and to which the only response is a call for more economic pain made by some of the same people who created the fiasco.

How did it come to this? How fair is this charge of "Thieves"? Did Greek politicians simply loot their own country, and EU taxpayers, for personal gain? There is truth in this tale, but...

Liberal Democracy dying in Greece and in EU

Today, Greek society is suffering both from the crisis and the responses to it, which have reached a dead-end. Major social and political institutions that were created with enormous struggles and sacrifices in post-War Greece – social security, the public health care system, public education, public transport, the natural and urban environment, the right to live a safe existence, and various elemental goods and services that underwrite the very existence of an already curtailed and devalued Greek state – are all being utterly dismantled so that Greek society is now dying of asphyxiation.

Troika(IMF, ECB and German EU leadership "Frau Nein" Angela Merkel  and "Baron Austerity" Wolfgang Schäuble), are the main architects of Europe’s disastrous mismanagement of the euro-zone debt crisis, can keep pretending that harsher doses of fiscal austerity will restore Greece and Europe’s other troubled debtors to economic health. These dead-end responses rest on the blackmailing dilemma: austerity or hard default? Yet, this is hardly a dilemma – it is rather a negative aggregate: both austerity and hard default. The tri-monthly threat to expel Greece from the Eurozone constitutes an ethical alienation and an economic catastrophe, precisely because it strengthens the profound recession, turning the whole of Europe into an agent of uncertainty, financial instability, and...

What Europe loses if Greece is forced out

By Nikos Chrysoloras
Guardian UK/Kathimerini GR

Germany should look to its past and ensure that Greece does not face a humiliating exit from the eurozone.

Many in Europe – particularly in Germany – wonder why they should continue providing financial support to a country that has failed to honour its commitments to its partners; a state which is an international laggard in all major indicators, including competitiveness, innovation and transparency. Such objections are understandable but mistaken. Europe stands to lose as much as Greece itself from an exit of the latter from the eurozone.

It is not just the spreading of the virus of uncertainty to the other countries of Europe's southern periphery, the repercussions on the northern European economies and the impact on...

German Twin: "Frau Nein" and "Baron Austerity"

Pr. Krugman, 3 years ago wrote that the German chancellor Angela Merkel is the “Frau Nein” because her and hers economic officials were the biggest obstacles to a much-needed European rescue plan.[1] Nothing has changed since that year regarding the German financial policy. The only that have change since then, is Mrs. Merkel’s finance minister. In 2008 was Peer Steinbrück and at the present is Mr. Wolfgang Schäuble, the “Baron  Austerity”.

"Frau Nein" and "Baron  Austerity", are the main architect of Europe’s disastrous mismanagement of the euro-zone debt crisis, can keep pretending that harsher doses of fiscal austerity will restore Greece and Europe’s other troubled debtors to economic health. They can recognize that only a combination of greater fiscal breathing room and pro-growth reforms — like opening up closed labor markets, breaking up state monopolies and streamlining bureaucracies — can achieve the desired result. But slashing wages, jobs and public spending across the board, as Europe demands, will only deepen recession.


The irony is that the leading architect of the austerity programme in Greece, the IMF senior employee Poul Thomsen has admitted that...

CAUTERISE AND PRINT: GERMANY’S NEWEST PLAN A

by Pr. Yanis Varoufakis
yanisvaroufakis.eu

While Greece burnt, and the Parliament of the Hellenic Republic was insincerely accepting impossible conditions for implementing yet another unworkable fiscal adjustment plan, the buzz in Frankfurt’s financial district was an exciting, fresh German Plan A.[1] For the first time in two years, since the euro Crisis began, Germany’s captains of finance could be seen to have re-discovered a spring in their step. The new optimism stems from a new Plan which is predicated upon a long delayed recognition and two strategic choices: Germany’s belated epiphany is that, without a major redesign of the euro architecture, a number (>1) of eurozone member states are irretrievably insolvent. As for the two strategic choices, the first is Berlin’s conclusion that German politics have no stomach for, or interest in, a structural redesign of the euro system.[2] The second choice involves a massive bet in attempting to save the eurozone by shrinking it forcefully while, at the same time, authorising the ECB to print trillions of euros to cauterise the stumps left when the states earmarked for the chop are severed.

The detail not...

20 popular fallacies concerning the Greek debt crisis

It’s that time again! Greece needs more loans and the governments in Europe are arguing about whether it’s really necessary and who should foot the bill.
There is widespread opinion in Germany that Greece itself is to blame for the problems it now finds itself in.
It first of all cheated its way into the Eurozone, then the government spent too much and the governed worked too little, many believe.
Latently nationalistic patters of interpretation of this kind have been nourished by German politicians and the media, who have no end of proposals for how to «solve» the crisis.
For example, the Greeks should save more, work more and sell their public property – and if all of these measures do not help, then Greece will just have to leave the Eurozone or declare itself bankrupt.
The stupid thing is, neither are the causes of the crisis that have been named actually correct, nor will the proposed ways out of the...

DEBTOCRACY

For the first time in Greece a documentary produced by the audience. "Debtocracy" seeks the causes of the debt crisis and proposes solutions, hidden by the government and the dominant media.

It's Time To End the Greek Rescue Farce

By Stefan Kaiser

Whether it be an escrow account or a budget commissioner, the latest demands by Germany show just how absurd negotiations over Greece's future have become. It is high time to bring an end to this tragicomedy.

For the past two years, Greece has wrangled with the euro-zone states and the International Monetary Fund (IMF) over its so-called "rescue." Austerity measures have been agreed to, aid has been paid and private creditors have been forced to accept "voluntary" debt haircuts. Despite all this, Greece is in even worse shape today than it was then. Its economy is shrinking, the debt ratio is rising and the country and its banks have been cut off from capital markets. There isn't even the slightest sign that the situation might improve. Something has gone very wrong with this rescue.
But none of the protagonists seem to have grasped this. They continue to negotiate as if things are business as usual, they let one "final ultimatum" after the other pass and they persistently fail to realize that their discussions have started to verge on the absurd. It would be a lot better to end this farce.
For weeks now, the Greek government has been...

The Greek Vise

by Paul Krugman


The current plan calls for Greece to move into large primary surplus — that is, surplus not counting interest payments on the debt:

So, what is the real truth about the Greek catastrophe?

In late 2009, Europe and the world discovered that Greece was a “fraud” and a “deceiver” that had never stopped forging its economic performance in order to enjoy the benefits of membership of a privileged club, at the expense of its partners and the euro.

But how accurate is this really? Due to the advancing international economic crisis at the time, the majority of European governments were inaccurate in their deficit estimations. For example, in their Stability Programmes, at the beginning of 2009, Britain had predicted a deficit of 8.2% that finally reached 11.4%, the Netherlands predicted a surplus of 1.2% that turned out to be a deficit of 5.4% and Portugal predicted a deficit of 3.9% that rose to 9.3%.

Why was Greece alone in the dock?
Also, in the years 2008-2009, the deficit in...

Depression and Democracy

By PAUL KRUGMAN

It’s time to start calling the current situation what it is: a depression. True, it’s not a full replay of the Great Depression, but that’s cold comfort. Unemployment in both America and Europe remains disastrously high. Leaders and institutions are increasingly discredited. And democratic values are under siege.

On that last point, I am not being alarmist. On the political as on the economic front it’s important not to fall into the “not as bad as” trap. High unemployment isn’t O.K. just because it hasn’t hit 1933 levels; ominous political trends shouldn’t be dismissed just because there’s no Hitler in sight.

Let’s talk, in particular, about what’s happening in Europe — not because all is well with America, but because the gravity of European political developments isn’t widely understood.

First of all, the crisis of the euro is killing the European dream. The shared currency, which was supposed to bind nations together, has instead created an atmosphere of bitter acrimony.

Specifically, demands for ever-harsher austerity, with no offsetting effort to foster growth, have done double damage. They have failed as economic policy, worsening...

Greece’s PSI is Dead on Arrival: An error in search of a rationale but also a failure that may prove a harbinger for the Modest Proposal

by Pr. Yannis Varoufakis
http://yanisvaroufakis.eu

A brief history of Greece’s PSI


In the beginning there was Wholesale Denial. Then the Denial began to subside under the weight of circumstances. It did so slowly, agonizingly so, with the result that, in the process, Greece lost any capacity it might have had to rebound. It also caused the Crisis to spread like a bushfire throughout the eurozone, turning liquidity problems into unyielding insolvencies first in Ireland, then in Portugal. Still, to this day, Denial is in the air. But it cannot remain intact, without the whole eurosystem crashing and burning. The Greek PSI may be the harbinger of denial’s end. If not, it is hard to see what will stop the juggernaut of the Crisis from destroying the few chances the euro has of survival.

Taking things from the top, the Wholesale Denial began life two years ago when imploding Greece was issued a triple ‘Nein’:...