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Memorandum–steamroller for the Greek people

By Leonidas Vatikiotis

The prerequisites passed by a tiny majority 153 MPs (in an overall number of 300) of the Greek government on May 18th, equivalents to a new super-memorandum, as the new measures which further deepen the poverty extend up to 2021, three years after the end of the current 3rd programme, on August of 2018.

The new Memorandum (3rd in a row voted by the MPs of SYRIZA and ANEL, after the agreement of August 2015 and the May 2016 pre-requisites) is sacrificing on the altar of the budget surpluses any potential of GDP growth that may existed. The GDP shrinking by 0.5% in the first quarter of 2017 already cancels the optimistic projections for the reduction of unemployment, which had been incorporated in the budget this year. It is not at all coincidence that the projected GDP growth of 2017 included in the Medium Term is limited to 1.8%, much lower than the 2.7% provided by the state budget

The measures included in the 4th Memorandum, which have been quantified in the Medium-Term Budgetary Objective of the 2018-2021 Program, tantamount to whirlwind and can be divided into four general categories.

Recovery measures

Direct impact on disposable income of citizens, namely deepening poverty, will be brought by seven measures:

  1. Reduction in pensions

The so-called personal difference between primary and supplementary pensions came into the government’s target, with the reduction reaching even 18% of the paid pension. In absolute numbers the reduction will reach an average of 185 euros per month and in some cases up to 300 euros, while it is expected to affect about 1.35 million pensioners.

In the first line of fire will be thrown the pensioners from the former TEVE (Self-employed Insurance Agency), retired doctors, lawyers, engineers and pharmacists, double-pensioners, etc. The measure will be applied from January 1, 2019. Losses will also suffer the young pensioners who will retire by 31/12/2018.

  1. Reduction of the tax-free income

This measure, which according to Minister of Economy, Eykl. Tsakalotos, would be the reason of his resignation, if passed, will be applied on 1 January 2020 and is expected to burden each family with an average of 600 euros per year. The new tax-free income threshold, which will exclusively hit the poor, develops as follows:

1,250 euros (from 1.900 euros) for taxpayers with no children

1,300 euros (from 1.950 euros) for taxpayers with 1 protected child

1,350 euros (from 2.000 euro) for taxpayers with 2 protected children

1,450 euros (from 2,100) for taxpayers with 3 or more protected children

The savings to the State budget or else the cost that the pensioners will pay from the pension cuts in 2019 amount to 2.26 billion EUR and the cost that the taxpayers will pay from the drastic reduction in the tax-free income starting in 2020, is EUR 1.92 billion..

  1. Increase in insurance contributions

In article 58 provides that as from 1/1/2018 insurance contributions of freelancers and the self-employed will be calculated on the monthly income, including contributions.

Article 58 stipulates that as of January 1st 2018 the freelances and the self-employed insurance contributions will be calculated on the monthly income, including insurance contributions. This is an unprecedented robbery – a confession of the failure of EFKA (Single Social Security Institution), as contributions will be calculated on non-existent income! According to calculations made by professional parties, the consequent increase, in relation to the current year, may reach up to 37%!

  1. Reductions in special wage regimes

Officers of the army, the police, the Fire Brigade and the Coast Guard fiercely reacted, forcing the Government in the last minute to propose allowances in order to close the rift triggered by the reductions caused by the shrinkage of wage levels. On the grounds of rationalisation, the government attempted to remove allowances that led to more sustainable wage levels.

Moreover, according to a statement by POSDEP (Panhellenic Federation Of Faculty Associations & Research Staff), wage cuts were also made in Universities, dismissing the proclamations of the Minister of Education, Mr. Gavroglou ,at the Rectors’ Meeting on May 13th, for increases in the salaries of professors of all levels ranging from 2.5% to 7.5%. These increases, even if they had been applied, they would have been absorbed by the tax increases…

  1. Reductionof grants to municipalities and Regions

Based on Article 8OA, from January 1st 2018 the total amount to be transferred annually from the regular budget to Municipalities and Regions must not exceed € 3.4 billion. The decision is justified as follows: since the municipalities managed to draw up and implement balanced budgets, they do not need the Central Independent Resources! Therefore, it is obvious where this famous ” financial independence ” of the municipalities leads: to the gradual withdrawal of the State from funding and the transferring the cost on the citizens’ backs.

  1. Taxation of short-term tenancy of real-estate in the context of sharing economy

This particular request, which is contained in Articles 83 and 84, increases significantly the cost of Airbnb and was a requirement of the hoteliers in order to reduce the gap in prices between hotels and short-term leases from electronic platforms that made hotels unprofitable.

  1. Further use of generic medicines.

Article 88 encourages pharmacies to prescribe more and more often cheap generic medicines with the incentive of a compulsory deduction from the pharmaceutical companies if the generics exceed 25% of the medicines included in the prescriptions. This percentage may be adjusted annually, by decision of the Minister of Health. Moreover, goals incorporated into the e-prescription system may be set for every doctor, as well as penalties! As a result, pharmaceutical expenditure, will be reduced, on the benefit of the State Budget, with unknown however effect on the health of the insured.

The Scientific Committee of the Parliament has already expressed reservations about the constitutionality of the cuts in pension rights and special wages. In a lengthy report, the Committee questioned whether or not a fair balance between the requirements of the general interest, as invoked by the government, and the protection of the fundamental rights of the individual is guaranteed. Of course, SYRIZA, like all the other governments that signed a Memorandum, didn’t give a hoot …

Measures of Real Existing Liberalism

Chapter E, which is entitled “Provisions of competence of the Ministry of Justice”, describes all the details of the amendment of the Code of Civil Procedure in order to permit the beginning of electronic auctions. Government and bankers under the fear of popular reactions that culminated in the previous period, set up the institutional framework that will allow the bloodless persecution of thousands of borrowers from their houses, without publicity. The amended Article 959.1 of the Code of Civil Procedure suggestively states that “electronic auction is carried out by the certified electronic auctioneer notary, through the electronic auction systems. Electronic auctions are held on Wednesdays or Thursdays or Fridays from 10.00 to 14.00 or from 14.00 to 18.00.”

According to the provisions of the Financial Agreement there will be a tightening of the budgeting procedures. An amendment to Law 4270/2014 provides that the submission of the preliminary draft of the annual State Budget is subject to the Financial Council’s observation that it is complied with the provisions of the Financial Agreement (Article 66).

Release of the sale of Non-Prescription Drugs! Confident enough, that the sale of medicines in supermarkets will result in the increase of their prices, the Government is rushing to impose maximum prices for their purchase by the health system, so as not to burden the budget. As for the burden of the citizens, it is left to the mood of the pharmaceutical industry …

As ordered by the Domestic Troika, that is to say, of specific business interests that speak directly with the government, Article 49, provides the operation of stores on Sundays from May to October, with the exception of the second Sunday of August. In fact, paragraph 2 removes all prior restrictions on the landsize, the legal relationship with chain of stores, and so on. This measure is order of the department stores to the executives of SYRIZA and will soon lead to a redistribution of sales shares at the expense of traditional markets such as Ermou street, and to the benefit of commercial hubs such as the one nearby airport. Indeed, in the explanatory memorandum, in an impeccable neo-liberal dialect that has evolved into the native language of SYRIZA, it is directly stated that the challenge is to enhance competition… And may the stronger survive!

Another “gift” to certain private interests is also the extension of the purpose of the Claims Management Companies, which is contained in Article 48. The 4th Memorandum gives them the extra opportunity to manage real estate that has been burdened with notices of change or mortgages. This amendment passes houses and commercial roofs that were guarantee in “red loans” to the claws of the predators.

In addition, as facility to the private school owners they offer the opportunity to students participate in classes of foreign languages in private schools.

The imposition of the most primitive liberalism from SYRIZA is further accompanied by the introduction of ‘open access’ of tax authorities in taxpayers data in order to achieve the classification of risk avoidance characteristics (risk profiling) from one hand (ie “big brother state”), and on the other hand the absolute immunity of those who will achieve restructuring or write-offs in order to avoid the risk of persecution (ie “reshuffling of the cards” by people who are above the Law)! Immunity is also given to the members of the Board of Directors of EOPYY (National Agency of Health Services) and other committees, creating in fact a body of state officials – mandarins that operate beyond and above the law.

Article 39 of the new memorandum enables intervention and control by the state on the finances of the political parties. In particular, it states that “the issue of vouchers, the purchase of which is a means of financing, is permitted only if … there is a mandatory mention of the name and VAT or ID number of the buyer, if the amount of funding is more than fifty euros”.

Anti-labour measures

SYRIZA’s promise to restore collective bargaining had the same fate of the … torn Memoranda: “From 21.8.2018, the institutional framework of collective bargaining returns to the status laid down in 1876/1990 (A’27),” as mentioned in the explanatory report.

The measures to mitigate the effects of collective redundancies as advertised by SYRIZA (“amounts for coverage of self-insurance, amounts available through corporate social responsibility for training and consultancy”) are indeed contained in Article 17, with the title “Control of collective redundancies”. But these are measures that “the employer may bring into the attention of the employees”. He may, he may not! As they could do in the past, without SYRIZA’s fourth memorandum.

The opinions of the Supreme Labour Council, are not binding. The Explanatory report of the 4th Memorandum states that “the negative reasoned decision of the SLC due to the non-fulfillment of the relevant conditions is a presumption of nullity of the redundancies before the civil courts,” and nothing more. Meaning it does not have a binding character!

The bad news for collective redundancies are apparent from the very first lines of the explanatory report, which states that the proposed provision takes into consideration “the recent judgment of the EU Court, (Heracles General Cement Company -AGET Heracles- against Ministry of Labor, Social Security And Social Solidarity) C-201/15 of December 21st 2016, which amends the legislative framework for the control of collective redundancies for the purpose of harmonizing national law with EU law”. The decision was interpreted as opening a “window” in order to facilitate the dismissal of 236 workers from the factory of Chalkis, as requested by the French multinational (Lafarge, owner of AGET Heracles), introducing a more flexible interpretation of the Greek law which was clearly much more pro-labour than the European. That is why Lafarge had appealed to the European Court, challenging Greek law.

As far as the lock-out is concerned, what matters is the complaint filed by the Spokesman of the Union of Judges and Prosecutors in the Parliament on May 16th which argues that Article 20 which is contained in Part B (“Work Regulations”) of the Memorandum, brings through the back door the lock-out… which SYRIZA supposedly did not allow to be introduced! Nor the government, or the creditors and their mouthpieces did not breathe a word about this revelation. The retrograde is also confirmed by the amendment of paragraphs 1 and 2 in Article 5 of Law 1264/82, which explicitly and categorically stated that: it is prohibited to recruit strike-breakers and lock-outs are forbidden! These articles were amended. In other words, they ceased to be binding for the employers as it was until May 18th, at least at a typical level.

As regards to the trade union leaves (article 19) they set up a single framework that that uniformly regulates the paid and unpaid leaves.

Ιt is more than obvious that a government that imposes such anti-labour measures cannot be called a leftish government, but the leftovers of a failed capitalism.


In the 4th Memorandum it is provided the disposal “from the date of registration of the statute of the the Public Holding Company to the General Commercial Registry Service, ipso jure and without any compensation, from the State Asset Development Fund (TAIPED), to the Public Holding Company the ownership rights, rights of management and exploitation, acquired financial interests, intangible rights as well as rights of operation, maintenance and exploitation of infrastructure that had been transferred to TAIPED”. Consequently, everything is passed to the Super-fund of sell-out!

In addition, the following twelve legal entities pass immediate to the above mentioned Superfund: OASA (Athens Public Transport Organisation) and its affiliates (OSY SA and STASY SA), OSE SA (Railway Organization), OAKA (Olympic Athletic Center of Athens), ELTA (Hellenic Posts), International Airport, Greek Saltworks, ETVA INDUSTRY CORPORATE COURT, Corinth Canal SA, Central Market And Fisheries Organization, Thessaloniki Central Market, TIF – HELEXPO and Duty Free Shops.

By December 31st, 2017, 66% of DEPA’s (Public Gas Corporation) shares of DESFA’s (Management of National System of Natural Gas) share capital must be sold, through international tender carried out by TAIPED.

SYRIZA’s temperament in the sell-out of public property is accurately reflected on the table included in the Medium-Term, derived from TAIPED, which shows that in 2017 and 2018 record-breaking collections will occur! Apparently, SYRIZA does not only know to how to “sell-out” the people of the Left, but they also know how to sell-out the public wealth …

The 4th Memorandum also foresees the contraction of DEI (Greek Electricity Board) so that in 2017 its share in the retail market of the interconnected system to be limited at 75.24%, while in 2018 at 62.24% and in 2019 at 49.24%. Moreover, another crushing blow to DEI, will also be brought by the increase of the annual electricity auctioned rates in 2017 at 16%, in 2018 at 19% and in 2019 at 22%. The imposition of the contraction of DEI through administrative way, meaning using the state’s power, shows not only how hollow the liberal anti-state beliefs are, but also that the Government along with the Troika legislate in the name of private interests. Nobody doubts, that behind Article 101 there are certain individuals who are active in the energy market. It is for their sake, that the MPs of SYRIZA and ANEL betray once more the trust of the hard-pressed Greek people!

Countermeasures: sugaring the pill of surpluses

The Government attempted to sweeten the pill of the new memorandum and the bleeding of workers and pensioners by promising a package of measures -the famous countermeasures, which would be applied if and so long as they achieved a surplus of 3.5% of GDP. The countermeasures included reduction in ENFIA (Real Estate Flat Tax) for tax amounts of up to € 700, not exceeding € 70, reduction in the rate of income tax from 22% to 20%, reduction in the special solidarity levy and in corporate tax rate from 29% down to 26%.

The countermeasures also include housing allowance for up to 600,000 households, free health care for a very small proportion of the population with income less than € 1,200, childcare program, school meals, child benefit, work-related measures targeting the registered unemployed of OAED (reek Manpower Employment Organisation), reduction of pharmaceutical expenditures for taxpayers with income up to € 1,200, etc.

The problem is not on that the countermeasures will be implemented after two years. The problem is how a sine qua non for their implementation is the achievement of outrageous fiscal surpluses through the application of the above mentioned measures, as well as any others that may be necessary until the program is completed, in August 2018.

So, the countermeasures, which are tantamount to breadcrumbs and will only be implemented if and insofar the IMF agrees, work like the carrot that legitimizes the whip of reduced pensions and the lower tax-free income level.

Last but not least, one thing that is being repeated since 2010 with irritating accuracy is the inclusion in the Memorandum of a number of correct and necessary provisions. For instance, in the current Memorandum, among the many others (such as the abolition of the MPs tax-free regime with Article 71, the reduction of VAT on agricultural supplies from 24% to 13% with Article 70, the prohibition of the financing of political parties by legal entities, etc.) is the creation of an electronic register of production factors for public and private projects, studies, technical and other related scientific services. Also, the creation of an electronic healthcare procurement platform and the introduction of annual procurement programming, which if not eliminates, significantly curtails the potential of corruption posed by the decentralization of procurement on the basis of the “hospital and procurement” principle.

In my opinion, the inclusions of such measures of urban modernization by all the Memorandum Governments PASOK, ND, and SYRIZA and their Health Ministers (Loverdos, Adonis, Polakis) is an attempt to embellish the Memorandums themselves and deconstruct those who blame them as a cause of social regression. In fact, all together (PASOK, ND, SYRIZA) prove their inability to manage the commons without having Troika over their head, dictating them even how the medicines supplies will take place.

For this (extra) reason they are dangerous and the quicker they get off the power the better…


Greece: Back to the Future of Austerity and Debtocracy!


The SYRIZA-ANEL made a deal with the creditors, signed in May 2, that was met with a great deal of enthusiasm from the markets. It is an agreement that will increase poverty and over-indebtedness in Greece, and will deal a blow to the country’s sovereign rights.

by Leonidas Vatikiotis & Aris Chatzistefanou

The staff level agreement which will be Eurogroup’s green light for the disbursement of the 7 billion tranche “necessary to meet debt repayments which include 2 bn. euros to private creditors due on July 17, and 3,9 bn. euros to the ECB three days later” (Financial Times, May 12), includes:

  1. Reduction of the tax-free limit from 8.636 euros to 5.681. A measure that will affect the poorest employees and pensioners, since even those who are paid 474 euros per month will be taxed.
  2. Average pension cuts of 9%, which may reach 18%, for pensions over 1000 euros. From these two measures, pensioners will lose 2 out of 12 pensions each year.
  3. Reduction of unemployment benefits (which today are received by merely 12% of the unemployed), poverty, child and natural disaster benefits. Those affected will be the poorest habitants of the country.
  4. Retail shops opening for 32 Sundays. A measure which Finance Minister P. Papadimitriou described as “modernizing” effectively equating modernization with neo-liberal deregulation of the working relations and making clear that SYRIZA has transformed completely. Against the implementation of this measure, the Trade Union and the Confederation of Small and Medium Size Businesses have already announced a strike.
  5. Collective dismissals are made easier by abolishing the requirement of ministerial decisions and vetoes for dismissing more than 5% of the total staff. A system of early warning by the employers will be enough.
  6. A reduction in the numbers of contract workers of the public sector from 49.448 on December 2016 to 49.104 at December 2017 and 48.420 at December 2019. This will result in the further dissolution of the public services.
  7. Privatization of 40% of the lignite units belonging to the Public Power Company and 17% of its shares. The sellout of energy will be the final blow to the public wealth by SYRIZA that broke its pre-electional promises after the sale of 14 airports to the German Fraport, of trains to the Italian Ferrovie and Piraeus port to the Chinese firm Cosco.


The 7 measures above are only a small part of the total 140 measures that the Greek Parliament members have to vote by fast track procedures like it regularly happens since 2010, when the country first entered the memorandum regime. As a result the ministers don’t even have enough time to go read through the memorandum laws that are always voted during the last moment. All in the name of the state of emergency that has already been around for 7 years, as long as the Coup of the Colonels lasted from 1967 to 1974.

However there is a fundamental difference. The measures that will be voted by the Greek Parliament will be applied at 2019-2020. By then another government will be in power, since the service of the current government, which was elected in 2015, ends at 2019. Also, the 3rd economic adjustment program of 86 billion dollars that was signed in August 2015 (by a government ordered to cancel the austerity and tear up the memorandum) ends at September 2018.

Therefore, neither the creditors (EU, IMF) had the jurisdiction to demand such measures, nor the government alliance of SYRIZA and the far right ANEL had the legitimation to impose them. It is unacceptable for a government to tie the next government with its decisions.

The government attempts to prettify the situation using two arguments: The first is the acceleration of the relief of sovereign debt. The government however has already signed the exclusion of a debt write-off, limiting the possible solutions to a new grace period, debt repayment lengthening and lower interest rates. As a result, debt-wise, the IMF appears to be more radical than the Left and the Far Right government.

Greek public debt reached 176% of the GDP after the 2012 restructuring, from 115% in 2009, before the arrival of Troika.

The government’s second argument is about relief measures that will be implemented in case the surplus surpasses 3,7% of the GDP. There will be spending for school meals (just so the kids won’t faint at schools), tax reliefs and so on, from the money gathered beyond the 3,7% of the GDP as a reward.

Until then however extreme poverty that affects 13,3% of the population will reach record levels. Recession will continue to shut out any possibility of unemployment reduction from 23% which is the highest in Europe. Under these conditions, the demand for immediate cessation of payments and unilateral debt write off, returns urgently. The government which has recently been congratulated by Pierre Moscovici for imposing 200 reforms against its people, surpassing any previous government, must use the report of the Debt Truth Committee, which described the public debt as odious and illegal to denounce the loan agreements and proceed to a rupture with the creditors: ECB, EU, IMF.

In this fight the people of Europe stand on our side because they know that more than 90% of the rescue loans return to the creditors. We loan to save Deutsche Bank, BNP, Paribas, ABN AMRO and the Greek zombie banks until they were bought by the vulture fund of Paulson.

Any other compromise policy will perpetuate poverty and the abolition of sovereign rights, as it keeps on happening since 2010.

Poder popular para derrocar la austeridad, salir del euro y la UE!

chileUn año después del victorioso referendum del pueblo griego contra las políticas de austeridad (el 5 de Julio del 2015) y la humillante traición del partido izquierdista SYRIZA (En Agosto del 2015) una pregunta crucial surge por toda Europa:

¿Cuál es la precondición para la derrota del neoliberalismo?

En otras palabras, ¿Por qué SYRIZA y los otros partidos políticos de la periferia europea no lograron crear una alternativa real? ¿Cuál es la meta que facilitará e contraataque del pueblo trabajador y la juventud, acabando con la larga crisis económica y política?

Leonidas Vatikiotis

Antes de que SYRIZA ganara las primeras elecciones en Enero del 2015, había un intenso debate dentro de la Izquierda griega. Intelectuales, organizaciones políticas de movimientos de ex-parlamentarios izquierdistas y radicales probaban el rol catalizador de la UE en la implementación de esta política. Esta opinión nunca fue mayoritaria. SYRIZA marginalizó este concepto. Por el contrario, insistió que una mayoría parlamentaria clara era suficiente para persuadir a los europeos de que la austeridad era una muy mala idea, lo cual no funcionó. Todos saben la continuación…

La austeridad está trabajando perfectamente incluso bajo un supuesto gobierno de izquierda (como parece la continua merma en los salarios y pensiones a favor de los pagos de la deuda). Las manifestaciones durante el año pasado, dada la decepción política, han sido borradas de las calles y ya nadie desafía públicamente a las políticas de la Troika (FMI, BCE y la Comisión Europea). No es accidental que las escenas de batalla entre la policía griega y los manifestantes que gritaban contra la Troika en el nuevo filme de aventura de Jason Brown no hayan sido filmadas en Atenas sino en Tenerife, España…

En el mundo real, las ilusiones de SYRIZA fueron demolidas por la UE. El Banco Central Europeo detuvo la provisión de liquidez para los bancos griegos, impuso controles de capital y unas cuantas semanas después SYRIZA repetía que si queríamos evitar una bancarrota debemos aceptar un nuevo memorándum. Una vez más el pueblo griego tuvo que responder a la extorsión de “bancarrota o Memorándum”.

Bajo esta experiencia podemos argumentar que la derrota del movimiento popular contra la austeridad ha ocurrido cuando habíamos derrotado el objetivo de la lucha contra la UE y el Euro. La traición de Agosto del 2015 había sido presagiada dos años antes.

Los de SYRIZA fácilmente predijeron que la capitulación demostraría también que la dirección de la UE no es tema de resultados electorales. La Unión Europea no es una institución que cambie sus contenidos según las urnas electorales. A cada vez en las elecciones del Parlamento Europeo el porcentaje de participación es más bajo. Los números son chocantes:

1979 1984 1989


1999 2004 2009 2014
61,99% 58,98% 58,41% 56,67% 49,51% 45,47 42,97 42,61

Fuente: http://www.europarl.europa.eu/elections2014-results/el/turnout.html

El pueblo europeo da la espalda porque entienden que Bruselas tiene su propia agenda y no da importancia a las opiniones e intereses de la gente. Por ejemplo los temas más importantes son decididos en la Comisión, la cual no es elegida y no tiene obligación de rendir cuentas. El Parlamento Europeo tiene un rol decorativo. De hecho no son tan raros los casos donde el Parlamento decide a favor de relaciones laborales más flexibles o medidas de austeridad más estrictas (i.e. “pack de seis” y “pack de dos”), mostrando cuán falsa es la noción de que el PE puede hacerle contrapeso a la Comisión Europea.

Sin embargo, sabemos que hay una larga distancia al final de la historia. Las políticas de austeridad draconiana genera nuevas contradicciones y es un tema de cuándo, y no “si”, renacerá un nuevo movimiento masivo contra la pobreza de los memorándums, privatizaciones y recortes en gastos públicos.

Dos son las precondiciones sine qua non si queremos que este movimiento no reproduzca las enfermedades infantiles del pasado: La demanda de una doble salida del euro y la UE y la Asambea Constituyente como un medio de ruptura con el pasado del actual sistema político.

Es debido a los siguientes motivos que la salida doble de la actual moneda y de la Unión Europea es necesaria para derrotar al neoliberalismo:

  1. La recuperación de una soberanía monetaria es necesaria para recobrar la soberanía económica. Hasta ahora, el BCE decide las cantidades de dinero en circulación y las tasas de interés. Dada la asimetría de las economías europeas, estas decisiones son tomadas según los intereses de Alemania. Como resultado, estos últimos años Alemania, junto con otros países del centro de la Eurozona, como los Países Bajos, disfruta de unos excedentes crecientes en su capital y actual cuenta, que se encuentran opuestos a los déficits de la periferia de la Eurozona.
  2. La salida de la Unión Europea es condición previa a implementar una economía política expansiva, dando aumentos en salarios y pensiones (lo cual es la prueba más segura de la progresividad de una economía política) y expandiendo el espacio público. La salida, por supuesto, no es un golpe al neoliberalismo per se, como lo demuestra el Reino Unido, donde el Brexit fue incitado por la clase dominante como un medio de enfrentar el peligro de un cuarto Reich alemán. La lección del Reino Unido no es seguir a Berlín, como hace la Izquierda Europea, sino construir una verdadera alternativa, un lexit (left exit) por todo el continente Europeo.crjxf5aweaa9syz

La demanda de una Asamblea Constituyente, la cual es la segunda condición previa, significa el final del viejo orden político y el reinicio del sistema político. Tal vez, por este motivo, SYRIZA y el partido de ultraderecha Griegos Independientes, que participa en el gobierno, como confirmación de la naturaleza oportunista de este gobierno, nunca apoyaron y nunca adoptaron esta demanda antes de su victoria electoral. Su distancia puede ser fácilmente explicada viendo el año pasado. La pseudo-izquierda nunca quiso contabilidad, porque el pueblo griego ahora chequearía la consistencia de su actuar político contra las promesas pre-electorales y el gobierno debería respetar o renunciar a tales promesas.

En consecuencia, la Asamblea Constituyente, como se discute en el 8vo Congreso Internacional Poder Constituyente en Chile, donde fue probado por primera vez el más venenoso experimento económico del neoliberalismo, debería y puede desenredar este nudo gordiano entre la actual retirada democrática y la institucionalización-constitucionalización de las estrictas políticas de austeridad.

Poder al pueblo para derrocar los cortes en gastos públicos, reducción de salarios, elasticidad laboral, y el nuevo totalitarismo que está emergiendo para escudar estas odiadas políticas económicas. Ésta es la lección del país donde el ya mencionado venenoso experimento económico lleva siendo probado por los últimos seis años.

Felicidades a todos quienes trabajaron para este congreso y gracias por su atención.

VIII Congreso internacional poder constituyente, Una via para enfrentar la crisis mundial, Chile

Left and opinion polls

opA crucial question that emerges especially in periods of big dilemmas is whether the Left can support an idea that does not have peoples’ support. In other words: Can the legitimacy of the Left be based upon opinion polls?

This question is not only theoretical. For instance, does the Greek Left have the right to open the discussion and demand the exit from the Eurozone and EU?

My opinion is yes, the Greek Left has this right, but under a very strict condition: Its demands and broader analysis has to be originated from the working class and the interests of the majority, with the ultimate goal to reflect the interests of the whole European working class. Furthermore, its demand for exit from the EU and the Eurozone must be in conflict with the interests of the ruling class. It is not difficult to prove that as time goes by the EU is increasingly becoming the spearhead of the capital. Measures that the governments cannot impose alone are being voted in the parliaments by the form of EU mandates (Stability Pact, Report of 5 presidents, et. al.). Even, in the extreme case where people vote against austerity, the participation in the EZ and the EU does not allow the implementation of the popular will (this is what happened in Greece in 2015) and ultimately the principal dilemma “in favor or against the austerity” becomes “memoranda or Grexit”, catching the Left unprepared to give the appropriate response. This shows that in order to defend peoples’ interests you must question the role of the European institutions. But a position like this does not look so attractive…

Today, the most unpopular attitude is that of challenging capitalism and promoting socialist and revolutionary ideas. However, despite this reality, the leftwing parties worldwide continue to propagandize the transgression of capitalism, struggling to alter peoples’ opinion.

It is no doubt true, that the majority of people seem to reject the idea of exit from the Eurozone and the EU, due to the “terrorist” dilemmas posed by the mainstream media and political parties, which present the attack of the capital (from flexibility of labor relations to political freedom) as a European directive and social modernization, concealing its social content. In other words, they promote it as something that cannot be questioned. The Left has its own share of responsibility on this veil of silence because it failed to open the discussion, under its own terms, about the character of the EU and the common currency. Its inefficiency is much more striking if we compare it with the inveterate enmity of the Latin American Left against any kind of US-led economic integration in the American continent.

Furthermore, we can doubt or we can be very skeptical about this matter. The opinion polls, which present people being in favor of euro and EU, are the same opinion polls that have record epic failures during the elections of every European country. On the contrary, in many occasions when European people where asked about concrete issues of EU integration, they have rejected them. This happened in Ireland (2008), France (2005), Sweden (2003) and Denmark (1992, 2000).

In any case, the representation of class interests is not a beauty contest. The Left will be judged for its incapability to reveal the underlying social relations and political links as the means to analyze and change a complex situation. This task was never an easy job or a matter of public relations.

The artice was initially published on: http://stocktaking-scenarios.blog.rosalux.de/2016/01/09/leonidas-vatikiotis-the-left-and-opinion-polls/

Rupture with the EU: Α return to the “cave age” or a new “golden age”? (Prin newspaper, 30/5/2015)

flagWhen the mild arguments about the “people’s house” and the EU’s ability to transform fall apart, the neoliberal/Memoranda bloc resorts to the only argument left: breaking with the EU equals to returning to the “cave age”.

by Leonidas Vatikiotis

It is worthwhile to attempt an outline of the day after the rupture, in other words, the loan payment default, the unilateral sovereign debt write-off, and the exit from the Eurozone and the European Union. At this point, it is important to note the huge methodological issue arising from trying to solve a future’s equation using parameters of the present, knowing that they will dramatically change after such a rupture. But it is also important to note that the effect of such a change will be mainly positive. Thus, although the conflict with the capital will deprive society of valuable resources (e.g. the net inflow of €6 billion due to Greece’s dealings with the EU in 2015), it will put a halt to the inconceivable destruction of production forces that is currently underway and tends to become endemic (as shown, among others, by the fact that unemployment is stable at 26% and the idle production capacity has reached 34% in the industry).

There are seven sectors that will be affected already the next day after the rupture and are very significant for the people’s incomes but also for the economy: the currency, the funding of the imports and deficits of the state budget, the banks, the alimentation, the energy, and the medicines.

The exchange rate of the new currency in the first period after the rupture will be based on a fixed one-to-one exchange rate to the euro, despite the fact that the exchange rate corresponding to the structure of the Greek economy is lower even than the existing exchange rate of the euro, which is ideally “soft” enough -thanks to the presence of the south European countries in the Eurozone- to allow Germany to export but far too “hard” for the periphery.

The pegging to the euro will be a political decision aiming at preventing the launch of punitive speculative attacks on the new drachma and the repeated chocks to the daily trading practices. Similar practices of pegging to another currency are not followed only by “closed economies”, but also by highly internationalized ones such as Hong Kong. The effect of devaluation on people’s incomes can be counterbalanced by proportional salary increases. The effect on prices can be kept under control, as Greek economists have shown. In other words, there will not be uncontrollable inflation. Besides, such a danger can only be taken as a joke in an economy that suffers from deflation. To tackle deflation within the Eurozone, 60 billion euros are spent each month through the Quantitative Easing Program. Moreover, loans that have been taken in euro will be converted by law into the new currency.

Debt write-off and exit from the euro-EU

will improve and not lower the standard of living

In 2014, the trade deficit (excluding shipping and fuel) amounted to €8.13 billion (compared to €16,04bn in 2010). This deficit can be closed by the travel services balance surplus that in 2014 rose to €11.32 billion (€13,39bn of revenues minus €2,07bn of payments). The small presence of vertically integrated tourist activities controlled by multinationals -although their penetration in the tourist sector has been increasing in the last years- allows a government to provide appropriate motivation in order to collect this money. In addition, clearing (non-monetary forms of exchange trade) can make up for the need for foreign currency, while “smart” measures to promote imports like those successfully applied by Argentina (ensuring that every importer will export a specific percentage of the value of their imports) can reduce the need for foreign currency and boost exports.

For the lovers of the Memoranda who claim that they created surpluses, there are no budget deficits to be covered. But for those who believe that giving new life to the dilapidated social structures should be a priority, there is the possibility of printing new money, which should of course be limited. In addition, there is the option of domestic borrowing, which can be used as a means of income redistribution and reinforcing low incomes, showing that not all of forms of debt are reproachable. To some extent, this was also the case when the Greek state was covering its financing needs by publishing treasury bills addressed to savers, even during the ’90s. It is remarkable that in 1998, 80% of state borrowing was internal and 70% of this borrowing was short-term and thus low-risk. The Maastricht Treaty eliminated this possibility in favor of the banks (which, in this way, got rid of competition) and especially the financial giants that took over state lending. The safety net provided by domestic borrowing is made clear in the case of Japan, where although the sovereign debt is extremely high (246,1% of GDP in 2015), its creditworthiness has not been downgraded by the credit rating agencies exactly because borrowing is domestic and can thus be subjected to many silent restructurings. The threat that domestic borrowing poses to the international speculators was also made clear when PSI took place in February 2012, when nothing was done to protect bondholders. The IMF and credit rating agencies wanted to abolish this possibility once and for all. On the contrary, a government that would want to reinstate the market of domestic borrowing should fully compensate the bondholders who suffered losses in 2012 and perhaps also set a ceiling of, let’s say 100.000 euros, in order to hinder very high incomes.

Nationalizing banks will relieve society from the burden of their prolonged death. Despite the 211 billion they have received since 2008 in the form of subsidies and guarantees, banks today are in a much worse state, as reflected in the loans to deposits ratio: from an admirable balance in 2000  (€108,23bn of loans to €109,23bn of deposits or 99%) to an enormous asymmetry in 2009 (€300,32bn of loans to €237,53bn of deposits or 126%), which has become even worse in January 2015 (€214bn of loans to €147bn of deposits or 146%, with the non-performing loans to have climbed up to €78bn) and is further deteriorating due to the bank run caused by the policy of suffocation of the ECB.

As far as food products are concerned, according to a research by the Panhellenic Confederation of Unions of Agricultural Cooperatives (published in 2012) that examines 41 basic rural food products – both plant- and animal-based – for the year 2011, there is sufficiency (production in relation to consumption, with consumption being defined as the amount of production plus imports minus exports) at the hopeful level of 95%. Taking a better look at the figures, however, one can see that the highest sufficiency is observed in not-basic products (edible olives 996%, raisins 275%, sea products 221%, oranges 191% and kiwis 180%) whereas the lowest sufficiency is observed in almost basic products (sugar 14%, beef 29%, lentils 33%, soft grain 33% and pork 36%). It is important to note that the production of sugar is indicative of the damage caused in the rural production by the Common Agricultural Policy and the EU directives, which led to the closure of the factories of the Greek Sugar Industry in favour of German exporters. In this way, Greece moved from being a net exporter to a net importer of sugar. There are similar examples in livestock production as well. The ability of a country to fill this gap if a shift of policy is decided was proved in 2010 when Russia massively bought young milk cows from Western Europe, succeeding in gaining sufficiency within two years.

As far as solid fuels are concerned, the market is characterised by oversupply, with a total installed power of 17.500 MW and a highest demand of 7.000 MW. Same as the food production, if it was not for the EU directives within the framework of the so-called “liberalisation”, much cheaper electricity power could be generated, for example by putting the brakes on the scandalous funding of the private sector of the Renewable Energy Resources, by allowing the expansion of the Public Power Corporation S.A., etc. As far as liquid fuels are concerned, the strategic cooperation of Greece with Russia and the choice of Iran as supplier -instead of the American protectorates- can secure the provision of much cheaper liquid fuels.

Finally, although the country’s 27 pharmaceutical industries are exporting to 80 countries, they only cover 18% of the domestic medicine demand, with the rest of it being covered by multinationals. Domestic medicine producers have repeatedly denounced the scandalous advantage given to the multinationals in the years of austerity and have claimed that they are able to provide for the 70% of the primary health care and the 50% of the hospital care with quality and low cost medicines as long as prescriptions are written differently…

In conclusion, with regard to food products, energy and medicines, but also other sectors, a revolutionary rupture will release unimaginable progressive social forces, which are now being amputated simply because no bourgeois government can implement the aforementioned measures, and will allow society to enter a new ‘golden age’.

Την μετάφραση έκανε η ReINFORM (πολιτική ομάδα Ελλήνων που ζουν στην Ολλανδία), http://www.reinform.nl