Greece: Perpetual Austerity

Εισήγηση που παρουσιάστηκε στην συνάντηση που διοργανώθηκε από τη FIAN με θέμα τις Εξω-εδαφικές Υποχρεώσεις των Κρατών (ETOs), Χαϊδελβέργη 22-25 Απριλίου 2018.

The current political debate in Greece is about the next day of the end of adjustment programs on August 2018, when the third program that the government signed on August 2015 finishes. In brief, the debate is about the dilemma of a clean exit (without a preventive credit line from ESM) or the demand for a stand-by loan, accepting simultaneously the accompanying conditionalities.

The reality is much simpler. The government of SYRIZA voted on June 2017, as a precondition of the second review which liberated the third tranche of the loan, “to maintain a primary surplus of 3.5% of GDP until 2022 and therefore… a primary surplus of equal or above to 2% of GDP in the period from 2023 to 2060”[i]. As a result, a fortune of harsh austerity measures and the shape of the next day have already been agreed.

In close relation to the latter conditionality is the regulation No 472/2013 of the European Parliament and the Council of 21 May of 2013 – which is a voted law by the Greek parliament- defining that “a member state shall be under post-programme surveillance as long as a minimum of 75% of the financial assistance received from one or several other member states, the EFSF, the ESM, or the EFSF has not been repaid”. This period ends in Greece on 2050. After that, Greece will pay 77.8% of its debt to the official creditors. Now, the debt from the rescue mechanism reaches 243.861 bn. of a total outstanding debt of 324.192 bn.

Many scientific contributions have shown that such an achievement is, realistically, impossible. Among many others, Eichengreen and Panizza have shown that fiscal surpluses of this scale and persistent are rare[ii]. However, more important than the feasibility of this aim are its political and economic implications.

Both of these measures pre-define the economic policy of the following 4 decades. Under these restrictions, the results of the following 10 elections (if we suppose that we will have no snap elections – a probability which tends to be impossible) are meaningless! The strict austerity will be the elephant in the room of fiscal policy which violates the freedom of elections, even the scope of a modern democracy when a crucial pillar of the well-being has been excluded from the public controversy.

On an economic level, the obligation of primary budget surpluses until 2060 comes along with a perpetual poverty for hundreds of thousands of people who have not even voted or they have not even been born yet. A primary surplus of 3.5% and 2% of current GDP means 3.7 and 6.4 bn. respectively to be taken away each year from the “real economy” by means of taxes or spending cuts. The consequences if these measures can be more easily understood if we bear in mind that the yearly budget of the Ministry of Education is 5.2 bn. and the yearly public investments reach 3.5 bn. So, we could suppose that if Greece didn’t have these obligations, it could easily double its public investments and the expenses of the Ministry of Education.

There are already serious social struggles from trade unions asking the hiring of public servants and the increase of the public spending in primary and higher education, against these measures, which violate human rights of the future generations.

[i]http://www.consilium.europa.eu/en/press/press-releases/2017/06/15/eurogroup-statement-greece/

[ii]Eichengreen B. & Panizza U. (2014) A surplus of ambition: Can Europe rely on Large Primary Surpluses to Solve its Debt Problem?, NBER Working Paper, No 20316.

Memorándum: una apisonadora para el pueblo griego

Los pre-requisitos del Gobierno grego aprobados por una estrecha mayoría de 153 parlamentarios (de un total de 300) el 18 de mayo equivalen a un nuevo super-memorandum, mientras las medidas agudizadoras del empobrecimiento se extienden hasta 2021, tres años después del final del tercer programa en vigor, que acaba en agosto de 2018.

Leonidas Vatikiotis

El nuevo memorandum (el tercero votado por los parlamentarios de SYRIZA y ANEL, tras el acuerdo de agosto de 2015 y los ore-requisitos de mayo de 2016) sacrifica en el altar del superávit fiscal cualquier aumento del PIB que pudiera existir. La reducción del PIB en un 0,5% en el primer trimestre de 2017 acaba ya con las proyecciones optimistas de reducción del desempleo, que se habían incorporado en el presupuesto de este año. No es ninguna coincidencia que el crecimiento proyectado del PIB de 2017 en el medio plazo se limite a un 1,8%, muy por debajo del 2,7% previsto en el presupuesto estatal.

Las medidas incluidas en el 4º memorandum, que se han cualificado en el objetivo presupuestario a medio plazo del Programa 2018-2021, equivalen a un torbellino y se pueden dividir en 4 categorías generales:

Medidas de recuperación

Siete medidas tienen un Impacto directo en el ingreso disponible de los ciudadanos, es decir, profundizan la pobreza.

  1. Reducción de las pensiones

La llamada diferencia personal entre pensiones primarias y suplementarias ha sido objetivo del gobierno, con una reducción que alcanza hasta un 18% de la pensión pagada. En números absolutos la reducción alcanzará una media de 185 euros al mes y en algunos casos hasta 300 euros, y se espera que afecte a 1,35 millones de pensionistas.

En la primera línea de fuego estarán los pensionistas de la antigua TEVE (Agencia Aseguradora de los Autónomos), médicos, abogados, ingenieros y farmacéuticos retirados, dobles pensionistas, etc. La medida se aplicará desde el 1 de enero de 2019. También sufrirán pérdidas los jóvenes pensionistas que se retiren hasta el 31 de diciembre de 2018.

  1. Reducción del ingreso libre de impuestos

Esta medida, que según el Ministro de Economía Eykl. Tsakalotos, causaría su dimisión si se aprobara, será aplicada el 1 de enero de 2020 y se estima que suponga una carga para cada familia de unos 600 euros al año en promedio. El nuevo umbral de ingresos libres de impuestos, que afectará exclusivamente a los pobres, se desarrolla de la siguiente manera:

1,250 euros (antes 1.900 euros) para los contribuyentes sin hijos

1,300 euros (antes 1.950 euros) para los contribuyentes con un hijo a cargo

1,350 euros (antes 2.000 euro) para los contribuyentes con dos hijos a cargo

1,450 euros (antes 2,100) para los contribuyentes con 3 hijos a cargo o más.

Los ahorros para el Presupuesto del Estado o el coste que pagarán los pensionistas por los recortes de pensiones en 2019 ascienden a 2,26 millones de euros el coste que pagarán los contribuyentes por la reducción drástica de los ingresos libres de impuestos a partir de 2020 es de 1.920 millones de euros (1,92 millardos).

  1. Aumento de las contribuciones a los seguros

En el artículo 58 se establece que a partir del 1/1/2018 las cotizaciones de seguros de los autónomos se calcularán sobre la renta mensual, incluidas las contribuciones. Se trata de un robo sin precedentes – una confesión del fracaso de la EFKA (Institución de Seguridad Social), ya que ¡las cotizaciones se calcularán sobre un ingreso inexistente! Según los cálculos realizados por profesionales, ¡el consiguiente aumento, en relación con el año en curso, puede alcanzar el 37%!

  1. Reducción de los regímenes salariales especiales

Los oficiales del ejército, la policía, el cuerpo de bomberos y la Guardia Costera reaccionaron ferozmente, y forzaron al Gobierno en el último momento a proponer subsidios para cerrar la brecha provocada por la reducción de los niveles salariales. Sobre la base de la racionalización, el Gobierno intentó eliminar los subsidios que habían llevado a niveles salariales más sostenibles.

Además, según una declaración de POSDEP (Federación Panhelénica de Asociaciones de Profesores y Personal de Investigación), también se produjeron recortes salariales en las universidades, desmintiendo las proclamaciones del Ministro de Educación, Sr. Gavroglou, en la reunión de rectores del 13 de mayo, que habló de aumentos salariales de los profesores en todos los niveles, que iban del 2,5% al 7,5%. Incluso si hubieran sido aplicados, dichos aumentos habrían sido absorbidos por los aumentos de impuestos…

  1. Reducción de subvenciones a municipios y regiones

Sobre la base del artículo 8OA, a partir del 1 de enero de 2018, el importe total que se ha de transferir anualmente del presupuesto ordinario a los municipios y regiones no debe superar los 3.400 millones de euros (3,4 millardos). La decisión se justifica de la siguiente manera: como los municipios lograron elaborar y ejecutar presupuestos equilibrados, ¡no necesitan los Recursos Independientes Centrales! Por lo tanto, es evidente a dónde conduce la famosa «independencia financiera» de los municipal: a la retirada gradual por parte del Estado de la financiación y la transferencia del coste a las espaldas de los ciudadanos.

  1. Gravamen de arrendamiento inmobiliario a corto plazo en el contexto de la economía compartida

Esta solicitud particular, contenida en los artículos 83 y 84, incrementa significativamente el coste de Airbnb y era un requisito de los hoteleros para reducir la brecha de precios entre hotels y arrendamientos a corto plazo de plataformas elecrónicas que hacían que los hoteles no fueran rentables.

  1. Uso más extendido de medicamentos genéricos

El artículo 88 alienta a las farmacias a prescribir cada vez más medicamentos genéricos baratos con el incentivo de una deducción obligatoria de las compañías farmacéuticas si los genéricos superan el 25% de los medicamentos incluidos en las recetas. Este porcentaje puede ser ajustado anualmente, por decisión del Ministro de Salud. Por otra parte, se pueden establecer los objetivos incorporados en el sistema de prescripción electrónica para todos los médicos, así como las sanciones! Como resultado, el gasto farmacéutico se reducirá, en beneficio del Presupuesto Estatal, aunque con efecto desconocido en la salud de los asegurados.

El Comité Científico del Parlamento ya ha expresado reservas sobre la constitucionalidad de los recortes en los derechos de pensión y los salarios especiales. En un extenso informe, el Comité se pregunta si se garantiza o no un justo equilibrio entre las exigencias del interés general, tal como se invoca desde el Gobierno, y la protección de los derechos fundamentales del individuo. Por supuesto, SYRIZA, al igual que todos los demás gobiernos que firmaron un memorandum, no dijo ni pío…

Medidas del Liberalismo Realmente Existente

El Capítulo E, titulado «Disposiciones de Competencia del Ministerio de Justicia» describe todos los detalles de la modificación del Código de Procedimiento Civil para permitir el inicio de las subastas electrónicas. El gobierno y los banqueros, bajo el temor de las reacciones populares que culminaron en el período anterior, establecen el marco institucional que permitirá el desalojo incruento de miles de hipotecados de sus casas, sin publicidad. El artículo 959.1 enmendado del Código de Procedimiento Civil, indica sugestivamente que «la subasta electrónica es llevada a cabo por el notario electrónico certificado, a través de los sistemas de subastas electrónicas. Las subastas electrónicas se llevan a cabo los miércoles o jueves o viernes de 10.00 a 14.00 o de 14.00 a 18.00».

De acuerdo con las disposiciones del Acuerdo Financiero habrá un endurecimiento de los procedimientos presupuestarios, Una enmienda a la Ley 4270/2014 establece que la presentación del anteproyecto de presupuesto anual del Estado está sujeta a la observación del Consejo Financiero de que se cumplen las disposiciones del Acuerdo Financiero (artículo 66). ¡Liberalización de la venta de medicamentos sin receta! Confiado en que la venta de medicamentos en supermercados resultará en el aumento de sus precios, el Gobierno se apresura a imponer precios máximos para su compra por el sistema de salud, para no cargar el presupuesto. En cuanto a la carga sobre los ciudadanos, se deja al estado de ánimo de la industria farmacéutica….

Según lo dispuesto por la Troika doméstica, es decir, por intereses comerciales específicos que tienen interlocución directa con el Gobierno, el artículo 49 prevé la apertura de las tiendas los domingos de mayo a octubre, a excepción del segundo domingo de agosto. De hecho, el párrafo 2 elimina todas las restricciones previas sobre el tamaño del local, la relación jurídica con las cadenas de tiendas, y así sucesivamente. Esta medida es una orden de los grandes almacenes a los ejecutivos de SYRIZA y pronto dará lugar a una redistribución en las cuotas de ventas a expensas de los mercados tradicionales como el de la calle Ermou, en beneficio de los centros comerciales como el que hay cerca del aeropuerto. De hecho, en el memorando explicativo, en un impecable dialecto neoliberal que se ha convertido en la lengua nativa de SYRIZA, se afirma directamente que el desafío es mejorar la competencia… ¡y que el más fuerte sobreviva!

Otro «regalo» a ciertos intereses privados es también la ampliación del propósito de las Sociedades Administradoras de Reclamaciones, que se encuentra en el artículo 48. El 4º Memorandum les da la oportunidad adicional de administrar bienes raíces que han estado cargados con avisos de cambio o de ejecuciones hipotecarias. Este cambio entrega viviendas y locales comerciales que estaban garantizados en las «hipotecas rojas» a las garras de los depredadores.

Además, como concesión a los propietarios de escuelas privadas, ofrecen la oportunidad a los estudiantes de participar en clases de idiomas extranjeros en escuelas privadas.

La imposición del liberalismo más primitivo de SYRIZA se acompaña de la introducción del «acceso abierto» de las autoridades fiscales en los datos de los contribuyentes para lograr la clasificación de las características de riesgo de evasión (perfiles de riesgo), de una parte, (esto es, «Estado gran hermano»). Y por otra parte, se garantiza la inmunidad absoluta de quienes logren reestructuraciones o anulaciones para evitar el riesgo de ser perseguidos (es decir, se baraja y se vuelve a dar cartas, ¡por personas que están por encima de la Ley!). También se otorga inmunidad a los miembros de la Junta Directiva de EOPYY (Agencia Nacional de Servicios de Salud) y otros comités, creando de facto un cuerpo de funcionarios estatales -mandarines que operan más allá y por encima de la ley.El artículo 39 del nuevo memorándum permite la intervención y el control por parte del Estado sobre las finanzas de los partidos políticos. En concreto, se afirma que «la expedición de cupones, cuya compra es un medio de financiación, sólo se permite si […] existe mención del nombre, CIF o número de identidad del comprador, si el importe de la financiación es más de cincuenta euros.

Medidas contra los trabajadores

La promesa de SYRIZA de restablecer la negociación colectiva tuvo el mismo destino que los memorandos rotos: «A partir del 21.8.2018, el marco institucional de la negociación colectiva vuelve a la condición establecida en 1876/1990 (A’27)», como se menciona en el informe explicativo.

Las medidas para mitigar los efectos de los despidos colectivos anunciadas por SYRIZA («importes para cobertura del auto-seguro, cantidades disponibles a través de la responsabilidad social corporativa para la formación y la consultoría») figuran efectivamente en el artículo 17, titulado «Control de los despidos colectivos». Pero estas son medidas sobre las que «el empleador puede llamar la atención de los empleados». ¡Puede o puede que no! Como podían hacer en el pasado, sin el cuarto memorándum de SYRIZA.

Las opiniones del Consejo Laboral Supremo no son vinculantes. El informe explicativo del 4º Memorando señala que «la decisión negativa motivada del Consejo Laboral Supremo por el incumplimiento de las condiciones relevantes es una presunción de nulidad de los despidos ante los tribunales civiles» y nada más. ¡Lo que significa que no tiene un carácter vinculante!

Las malas noticias para los despidos colectivos son evidentes desde las primeras líneas del informe explicativo, en el que se afirma que la disposición propuesta toma en consideración «la reciente sentencia del Tribunal de Justicia de la UE» (Compañía General de Cemento Heracles -AGET Heracles- contra el Ministerio de Trabajo y Seguridad Social) C-201/15 del 21 de diciembre de 2016, que modifica el marco legislativo para el control de los despidos colectivos con el fin de armonizar el Derecho nacional con el Derecho de la UE». La decisión fue interpretada como una «ventana» para facilitar el despido de 236 trabajadores de la fábrica de Chalkis, a petición de la multinacional francesa (Lafarge, propietaria de AGET Heracles), introduciendo una interpretación más flexible de la ley griega que era claramente mucho más favorable a los trabajadores que la de la Unión Europea. Es por ello que Lafarge había recurrido ante el Tribunal Europeo, desafiando la ley griega. En lo que se refiera al cierre patronal, lo importante es la denuncia presentada por el Portavoz del Sindicato de Jueces y Fiscales en el Parlamento el 16 de mayo, que sostiene que el artículo 20 que figura en la Parte B («Regulaciones Laborales») del Memorando, introduce por la puerta trasera el cierre patronal… ¡que SYRIZA supuestamente no permitía que se introdujera! Ni el Gobierno, ni los acreedores ni sus portavoces dijeron ni una palabra ante esta revelación. La medida retrógrada también se ve confirmada por la modificación de los párrafos 1 y 2 del artículo 5 de la Ley 1264/82, en la que se declara explícita y categóricamente que: ¡está prohibido contratar a esquiroles y se prohíben los cierres patronales! Estos artículos fueron enmendados. En otras palabras, dejaron de ser vinculantes para los empleadores como lo fueron hasta el 18 de mayo.

Por lo que respecta a los permisos sindicales (artículo 19) establecen un marco único que regula uniformemente los permisos pagados y no pagados. Es más que obvio que un Gobierno que impone tales medidas contra los trabajadores no puede ser llamado un gobierno de izquierda. sino las sobras de un capitalismo fallido.

Privatizaciones

En el 4º Memorandum se regula la puesta a disposición «desde la fecha del registro del estatuto de la Sociedad Anónima al Servicio General del Registro Mercantil, ipso jure i¡y sin ninguna compensación, desde el Fondo Estatal de Desarrollo de Activos (TAIPED) a la Sociedad Anónima los derechos de propiedad, los derechos de gestión y explotación, los intereses financieros adquiridos, los derechos intangibles, así como los derechos de explotación, mantenimiento y explotación de las infraestructuras que habían sido transferidos al TAIPED. ¡En consecuencia, todo pasa al superfondo para su liquidación!

Además, las siguientes doce entidades jurídicas pasan inmediatamente al citado superfondo: OASA (Compañía de Transporte Publico de Atenas) y sus filiales (OSY SA y STASY SA), OSE SA (Compañía Ferroviaria), OAKA (Centro Olímpico Atlántico de Atenas), ELTA (Correos de Grecia), el Aeropuerto Internacional, las Salinas Griegas, Corte Corporativa Industrial de ETVA, Corinth Canal S.A, Compañía Central de Mercado y Pesca, Mercado Central de Tesalónica, TIF – HELEXPO y tiendas libres de impuestos.

Para el 31 de diciembre de 2017, el 66% de las acciones de DEPA (Sociedad Pública de Gas) del capital social de DESFA (Gestión del Sistema Nacional de Gas Natural) deben ser vendidas a través de licitación internacional realizada por el TAIPED.

El temperamento de SYRIZA en la venta de bienes públicos se refleja con exactitud en la tabla incluida en el medio plazo, derivada del TAIPED, que muestra que en 2017 y 2018 ¡se producirán recogidas récord! Al parecer, SYRIZA no solamente sabe cómo vender a saldo a la gente de la izquierda, sino que también saben liquidar la riqueza pública…

El 4º Memorándum prevé también la contracción del DEI (Junta de Electricidad Griega) de forma que en 2017 su cuota en el mercado minorista del sistema interconectado se limite al 75,24%, en 2018 al 62,24% y en 2019 al 49,24%. Otro golpe aplastante a la DEI vendrá del aumento de las tarifas anuales de la electricidad subastada de 16% en 2017, de 19% en 2018 y de 22% en 2019. La imposición de la contracción de la DEI a través de la vía administrativa, es decir, por medio del poder del Estado, muestra no sólo cuán huecas son las creencias anti estatales liberales, sino también que el Gobierno junto con la Troika legislan en nombre de los intereses privados. Nadie duda que detrás del artículo 101 hay ciertos individuos que operan en el mercado de la energía. ¡Es por ellos que los diputados de SYRIZA y ANEL traicionan una vez más la confianza del presionado pueblo griego!

Contramedidas: endulzando la píldora de los excedentes  

El Gobierno trató de endulzar la píldora del nuevo memorandum y la sangría de trabajadores y pensionistas prometiendo un paquete de medidas -las famosas contramedidas, que se aplicarían siempre y cuando se alcance un superávit del 3,5% del PIB. Las contramedidas incluían la reducción del ENFIA (Impuesto sobre Bienes Inmuebles) por importes impositivos de hasta 700€, no superiores a 70€, reducción del tipo impositivo del 22% al 20%, reducción de la tasa especial de solidaridad y del impuesto de sociedades del 29% al 26%   Las contramedidas también incluyen subsidios de vivienda para un máximo de 600.000 hogares, atención médica gratuita para una proporción muy pequeña de la población con ingresos inferiores a 1.200 euros, programa de guardería, comidas escolares, prestaciones por hijos, medidas laborales dirigidas a los desempleados de la OAED (Organización para el Empleo y la Fuerza de Trabajo de Grecia), la reducción de gastos farmacéuticos para los contribuyentes con ingresos hasta 1.200€, etc.

El problema no es que las contramedidas se vayan a implementar pasados dos años. El problema es cómo la condición sine qua non para su aplicación es el logro de superávits fiscales escandalosos a través de la aplicación de las medidas antes mencionadas, así como cualesquiera otras que puedan ser necesarias hasta que el programa se complete, en agosto de 2018.

Por lo tanto, las contramedidas, que son migajas y sólo se aplicarán en la medida en que el FMI esté de acuerdo, funcionan como la zanahoria que legitima el azote de la reducción de las pensiones y del nivel de ingresos exento de impuestos.

Por último, pero no menos importante, una cosa que se repite desde 2010 con irritante exactitud es la inclusión en el Memorándum de una serie de disposiciones correctas y necesarias. Por ejemplo, en el actual Memorandum, entre otros muchos elementos (como la abolición del régimen de exención de impuestos de los diputados con el artículo 71, la reducción del IVA sobre los suministros agrícolas del 24% al 13% con el artículo 70, la prohibición de la financiación de partidos políticos por entidades jurídicas, etc), cabe mencionar la creación de un registro electrónico de factores de producción para proyectos públicos y privados, estudios, servicios técnicos y otros servicios científicos relacionados. Asimismo, la creación de una plataforma electrónica de adquisición de servicios de salud y la introducción de una programación anual de adquisiciones que, si no elimina, restringe significativamente el potencial de corrupción que plantea la descentralización de las adquisiciones sobre la base del principio de «hospital y abastecimiento».

En mi opinión, la inclusión de tales medidas de modernización urbana por parte de todos los gobiernos del memorandum PASOK, ND y SYRIZA y sus ministros de Salud (Loverdos, Adonis, Polakis) es un intento de embellecer los propios memorandos y deconstruir a quienes los culpan como una causa de retroceso social. De hecho, todos juntos (PASOK, ND, SYRIZA) demuestran su incapacidad para manejar los bienes comunes sin tener a la Troika sobre sus cabezas, para que les dicte incluso cómo debe tener lugar el suministro de medicinas.

Por esta razón extra son peligrosos y cuanto más rápido salgan del poder, mejor….

Traducido para Rebelión por P.R.

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.

Privatizations

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…

 

Third memorandum, worse than the previous ones!

tsiprBy Leonidas Vatikiotis

It is not only the new austerity measures, which among others include VAT increase, reduction of pensions, reintroduction of the zero deficit clause, Sunday shop opening and implementation of the liberalization measures included in the OECD’s famous toolkit! The deeply unpopular agreement, signed by Tsipras government in the early hours of July 13th, after 17 hours negotiations between the eurozone Heads of State, (here is the full text) introduces for the first time commitments that guarantee the impoverishment of workers in perpetuity and even attempts to eliminate syndicalism, turning Greece into a second or third class capitalist country for the benefit of the German Fourth Reich! Four specific measures make the difference compared to the previous memoranda. More specifically:

First, the «introduction of quasi-automatic spending cuts in case of deviations from ambitious primary surplus » -which is one of the four measures that ought to be voted by Wednesday, July 15-, eliminates the possibility of divergence from the targets set. Practically, this means that by the time there is a deviation from the forecasts, a school, a clinic of the National Hospital of Nicaea will be shut down or a whole sector will be sacked in order to reduce the costs and achieve the surplus which will service the debt and satisfy the creditors.

Secondly, another safety valve is also included in the privatization program so that the overambitious target of 50 billion EUR revenue is reached and not just remain on paper. The prospect that the 50% or 25 bn. EUR will be returned to the ESM for the recapitalization of the banks and from the remaining 25 bn. euro half will be given away for reducing the debt and the rest for investments, connects the sellout of public property with real interests, paving the way to even convey to the banks public companies and real estate for privatization so that the selling off to achieve the best possible terms and on their own responsibility. But it needs to be done… and not cancelled in practice as happened in the past.

The tremendous implications of the 50 billion EUR privatization program, which also includes the selling off of the Independent Transmission Operator (ITSO) are revealed if we compare the target of 50 billion euros with the revenues from the so far privatizations. For instance, the 2015 government budget reports that in 2013 there were received only 86 million euros, in 2014 230 million, while for this year the (inflated as usual) budget estimate was 474 million euro. The loot that will follow, with the sellout of all traces of public property (Municipalities, Universities, public entities), will be sweeping, in order to manage to gather such a large amount, as the best «pieces» of public property (OTE Olympic Airways etc.) have already been sold.

Third, the «program under the auspices of the European Commission, for de-politicizing the public administration» will attempt to eliminate trade unionism in the public sector and – something far more important – reform the public administration, by abolishing current hierarchies and launching a new generation of managers in the state machine, fully subjugated to the limited sovereignty regime that the new, third, Memorandum de facto establishes, with predictions such as the «unilateral» amend of “roll-back” legislation adopted in 2015. In practice, this means annulment of any populist law: from the reinstatement of the cleaning ladies to the school guards … and it also remains to see if they will include the opening of ERT. Therefore, the strong resistance of the state machine -that was put forward since 2010- will not only surrender to the demands of Memoranda but also, Troika returns reinforced, with its own people in every key position, ready to encapsulate and implement even and the most reactionary measures, by violating laws and ethics. The arbitrariness of Georgiou in ELSTAT, which becomes further independent, is indicative of the morals they wish to impose on public administration and services.

Fourth, the political targeting of the left Memorandum signed by Tsipras is reflected on the commitment for «rigorous review and modernisation of collective bargaining, labor mobilisations and collective redundancies.» No longer do they target the collective-bargaining rights and strikes, but also the protests themselves. «First time left»… first time that the right to protest is put into question!

Furthermore, even the enactment of these measures by 15 and July 22, as explicitly described, does not prejudice the happy ending for the government’s negotiations. Clear statements such as «the opening of negotiations do not prejudice any potential final agreement» or «the Greek offer of reform measures needs to be seriously strengthened to take into account the strongly deteriorated economic and fiscal position of the country during the last year», guarantee that we are at the beginning of a long and painful process, involving continuous adoption of unpopular laws, that will ensure the approve of the new 82-86 bn. euro loan and the release of the instalments, as happened in the previous five years.While with other humiliating formalities like «the dangers of non-rapid conclusion of the negotiations fully borne Greece»gives the creditors the right to ask for … their mother and father, whenever they wish, from any government, obliging Greece to immediately comply and without objections.

Moreover, the fact that the banks will not open (as explicitly stated by the term «rapid decision on the new program is a condition to allow banks toreopen”)implies that the EU will keep sending ultimatums until its requirements are met in full, such as «decisive action for non-performing loans”, which means that thousands of houses, even first residences will soon go under the hammer… Even if this is about a blackmail that was explicitly rejected by the grand ‘No’ of the Greek people on the a referendum of July 5th.

The third memorandum, which signals the complete humiliation of SYRIZA, puts the last nail in the coffin of the request the public debt cancellation, as claimed by the people and was grounded by the recent findings of the Parliament’s Truth Committee on Public Debt. The clear reference on the penultimate page of the decision that «the Euro Summit stresses that nominal haircuts on the debt cannot be undertaken» in conjunction with the reference»the Greek authorities reiterate their unequivocal commitment to honour their financial obligations to all their creditors fully and in a timely manner”, import -fully and completely- the current government of Alexis Tsipras to the camp of the enemies of the people and society, who from 2010 until today use the debt in order to circumvent rights and conquests of decades!

Translation: Foula Farmakides

Nominal and Real Aims of Austerity Programs: the Greek (extreme) Case

Leonidas Vatikiotis & Petros C. Kosmas (International Conference: Neoliberalism and the Crises of Economic Science, Istanbul May 2011)

Abstract

One year after the adoption of the Memorandum between the Greek government and the IMF-EU, many official data allows us to check, whether the objectives were implemented for which imposed. The dominant opinion in Greek political circles supports strong cuts, which will in exchange save the Greek economy from relying on the high cost of borrowing on the financial markets. This report examines the detail of the adjustment programme ofGreeceand leads to the opposite conclusion. In particular we examine: Firstly, the reasons invoked to legitimize the society the use of IMF-EU. Secondly, the measures implemented this year. Thirdly, the real causes of the Greek financial crisis. Fourthly, these results were provided in terms of social measures and the conclusions were reached in relation to the real goals of austerity. On this basis we argue that the real challenge was to improve fiscal imbalance, but with a major shift in macroeconomic policy that will allow to increase the profits of capital. Finally, reports in direct workable proposals have been produced that can solve the debt crisis faced byGreeceand the mean improvement in the position of the social majority.

1. Nominal aims

In May 2010 the government ofGreeceagreed with the IMF-EU for a set of economic austerity measures, which is supposed to solve the financial problem inGreece.

The basic outline of the financial problem inGreeceis defined by a combination of high debt and fiscal deficit. Specifically, in 2009 and 2010, Greece’s government debt to GDP ratio was 127% and 143% when the average mean of the 17 countries of the Eurozone was 79% and 85% and the of EU 27 was 74% and 80% of GDP respectively. And the budget deficit in 2009 and 2010 was 15% and 11% of GDP when the corresponding mean for the EU-27 was 7% and 6% of Eurozone’s GDP for both years (Eurostat, 2011).

The action mechanism of EU-IMF inGreeceaccelerated by rising interest rates, which made it unusually expensive to be prohibitive to fund borrowing theGreekRepublicand this in turn by the continuing degradation of the Greek economy from the credit rating agencies.

The resort to IMF- EU and the measures that accompanied the four Memoranda to date have been applied to correct these distortions.

2. Measures that imposed by IMF–EU

  • Outlining the measurements that have been imposed until today in order to confront the crisis of the public debt we observe that they concern:
  • Reductions in wages in the public and private sector by removing working allowances and cropping the 13th and 14th salary.
  • Against insurance law with reduces pensions and promotes the contributory system.
  • Sharp reduction in social expenditure having as a direct consequence the closure of 1056 schools – something unprecedented in the history of the Greek public sector, the dismantling of public health, as shown by the “working on the limits” of historic public hospitals and clinics and the shrinkage of public transport.
  • Dismissal of tens thousands of contracted employees meeting fixed and permanent needs in the broad and narrow public sector by not renewing the contracts.
  • Abolition of collective bargaining agreements and transferring the weight of trading in an increasingly low level: from the collective – in general area, then to the operational, and finally to the individual, where reigns the employing and managing arbitrariness.
  • Abolition of the institution of arbitration.
  • Increase the working hours in the public sector.
  • Reduction of compensation in order to facilitate redundancies.
  • Increased indirect taxation and in particular of the VAT and excise duties at the same time reducing the tax rate from 24% to 20% for business.
  • Facilitating business activities of multinational corporations and limited liability companies through the liberation of closed professions.
  • Sell-off public assets by privatization programmes of 50 billion euros, which were announced by the Troika, when its existence was initially denied by the government ofGreecein a categorical manner.

3. Real causes of Greek sovereign Debt Crisis

The evaluation of the real goals of the austerity programs requires the examination of the actual causes of the Greek budget crisis which are seven in total.

3.1 Measures to tackle Depression

The collapse of Lehman Brothers in September 2008 increased the interbank interest rates, limited bank financing in the economy, reduced the consumer spending as well as the public and the public tax revenues in all EU countries. Furthermore, the government intervention aiming to mitigate the effects of the crisis increased public spending and widened the gap across the EU. This situation is much worse inGreece, where from 2008 until now the banks have absorbed a total of 108 billion (of which 85 billion. were guarantees and 23 billion. were cash or equivalent bonds). Likewise, the 20 most developed countries in the world were confronted with a comparable situation. Consequently, the only times in history that recorded a similar increase in debt to that of 2009 (13%) where in time of war and especially in 1944: 22% and 1919: 14 % (IMF, 2010).

Comprehensively, it is estimated that the current crisis in advanced countries led to output loses of 25% of GDP and a consequent increase in public debt of around 24% of GDP (Laeven andValencia, 2010).

3.2 Addiction of the Greek capital in Direct Subsidies

The rescue of problematic firms in the 80s and the Olympic Games in 2004 -with an initial cost of 9.5 billion and probably a final cost of 20 billion- are the tip of the iceberg of direct aid to enterprises in the form of cash. However, in recent decades the Greek companies, especially the elite, have been steadily supported by billions each year in the form of development incentive through the Public Investment Program. The scandals are fostered by accomplices of the two powerful political parties (PASOK and ND) as well as of the big companies. The latter were imposed by the Memorandum and appear to be concerned about deficits.

3.3 Privatizations

By invoking the rationalization and the reduction of the state, the government revenues lost revenue source. The most popular but not unique example is the case of OTE Telecommunications, which was sold to the German Deutsche Telecom from the government of New Democracy under completely non-transparent procedures and a price equal to the public revenue for a year.

3.4 Equipment for Defense

The amounts spent nationally on armaments gives the impression thatGreeceis a military superpower inEuropeandMediterranean.

For the purpose of illustration, when on average in the EU of the 27 spends 1.6% of GDP on armaments, Greece spends 3,3% (SIPRI, 2011), which is twice the EU average and three times more of what other neighboring countries such as the Mediterranean Europe, spend. Although this equipment is not necessary, it is however enforced by NATO and not by the national defense.

TABLE 1: Total Expenditure for Payment of Debt, in Euro (1991-2011)

 

YEAR

 

AMORTIZATION

 

INTERESTS

CONCURRENT COSTS

 

TOTAL

1991

2.703

4.203

46

6.952

1992

6.406

4.123

71

10.600

1993

4.707

6.228

135

11.070

1994

7.162

8.990

190

16.342

1995

7.907

9.098

307

17.312

1996

10.263

9.641

339

20.243

1997

10.145

8.809

308

19.262

1998

9.682

9.018

170

18.870

1999

9.251

9.290

101

18.642

2000

13.131

9.499

58

22.688

2001

11.618

9.289

39

20.946

2002

20.280

8.535

59

28.874

2003

20.763

9.208

70

30.041

2004

18.444

9.283

72

27.799

2005

20.379

9.616

71

       30.066

2006

16.589

9.441

56

26.086

2007

22.195

9.657

71

31.923

2008

26.246

11.134

72

37.452

2009

29.000

12.195

145

41.340

2010

19.510

12.950

0

32.460

2011

28.130

15.920

0

44.050

ΣΥΝΟΛΟ

314.511

196.127

2.380

513.018

Source: Ministry of Economics, Government Budgets

3.5 Low Taxes on Capital

Greecehas one of the lower reasons for tax revenue to GDP: 32.6% of GDP when the average in the EU of the 27 and the euro area is 37% and inDenmarkthat has the highest ratio of 48%. The low tax revenues are a consequence of the almost symbolic taxation of the capital.

This reflects from the great discrepancy that display the rates of capital taxation inGreececompared to the EU: the rate is 15% inGreecewhile the corresponding tax rates are 27% in the EU (Eurostat, 2010).

3.6 Participation in the Eurozone

The participation of Greece in the European Union in 1981 and in the Eurozone in 2002 initially accelerated the liquidation of capital at the expense of manufacturing, agriculture, livestock and total employment and, of course, of government revenues. Furthermore, the reason for the low rate of exports in total GDP (21%vs.40% for the euro area) should be sought in the adoption of a monetary policy that is not only inappropriate but diametrically opposite to the interests of the Greek economy. Suffice it to say that the Greek economy is required to survive in an environment of appreciation of the «national» currency by 64% within a decade (this how much the euro has appreciated against the dollar since the01/02/2002), while in the past every seven years was devaluated.

The causes of the current crisis in the Eurozone are related to the separation of the Eurozone in periphery and center respectively.  The intensification of conflicts within was a result of depressed wages policy that was followed byGermanyover the last decade (RMF, 2010).

3.7 Servicing Public Debt  

The costs of servicing the public debt between 1991 and 2011 amounted to 513 billion € (Table 1). The redemption of short-term securities or titles only in the last 9 years (2003 – 2011) amounted to 151 billion. Evidently, it is easy to conclude that over the last 20 years we have paid the debt twice. (A clear case of compound interest!)

The destructive role of the public debt on public finances is evident by the fact that tax revenues this year (52.9 billion) is more than enough for the necessary social expenditure, i.e., wages and public pensions, pension funds and financing, costs for Department of Health, Education and Defense (51.6 billion). The public debt will instead absorb interest and amortization of 62 billion. Three times more than the salaries and pensions, and ten times more than the expenses for education will be.

4. Implications to the Society and Real Aims of the Austerity Programmes 

Although it is still early there is considerable evidence of the worsening social problem inGreece, as a result of the austerity policy imposed by the IMF and the EU.

4.1 Explosion Unemployment

Based on recent evidence of the Greek Statistical Service, the official unemployment rate in February 2011 amounted to 15.9% (affecting 787.229 people). Compared with last year this was increased by 30.1% (then hit 605,277 people) [1].

4.2 Elastification in Labour Relations

According to statement by Minister L. Katseli, businesses inGreeceusing the new workplace, in 2010 necessitated the change of contract full-time flexible in a number greater by 55% compared with 2009.

4.3 Decreases in Salaries and Pensions

On the basis of a statement of the Governor of the Bank of Greece, George Provopoulos, 2010, in the first year implementation of the Memorandum wages inGreecefell by 14% and pensions by 11%. Also, the hourly labor costs inGreecein 2010 recorded a record drop of 6.5% when the EU-27 increased by 2% and the 17 euro zone increased by 1.4% (Eurostat, 42/2011).

4.4 Increases in Poverty

Based on data released last year by the Bank of Greece, the poverty rose by one quarter and now it reaches 25.07% of the population. Obviously, workers and the social majority did not benefit from the Memorandum, while the bourgeoisie was benefited by reversing gains of several decades.

Notable gains were recorded by foreign banks, in particular the Franco-German that had the highest exposure in Greek bonds. To corroborate recent evidence showing that while the beginning of the crisis involving the foreign banks in the Greek debt was around 150 billion, now stands at 50 billion. On the other hand European banks were from 115 to 40 million. More specifically, Germans and French had the greatest exposure to the Greek debt by 30 to 8 and 45 to 12 billion euros (BIS,21 April 2010) respectively. As a result of this economic policy, the main creditors ofGreecewill not risk more than a possible cessation of payments that was initiated by the debtors. In this way, the IMF confirmed its role as negotiator and organizer of creditor’s cartel, just as had happened inArgentina(Cibils, Weisbrot and Kar, 2002).

All these measures were not only ineffective but also class-biased as the crisis deepens. Witnesses: Firstly, the increase in public debt of 127% in 2009, when decisions are taken on appeal to 160% of GDP when it is supposed to complete the memorandum. Secondly, the deterioration of the reliability ofGreecewith the explosion of interest in the secondary market and the continuing deterioration of credit rating agencies.

Table 2 below shows the trend of interest rates in the time since the adoption of the Memorandum.

Table 2: Interest Rates in the Secondary Market for 2 years, 5 years, and 10 years – Greek Government Bonds

2y

5y

10y

5 May 2010

14,91%

12,48%

10,17%

5 May 2011

25,28%

16,71%

15,51%

Source: Bloomberg Generic

Thirdly, plans to restructure the debt and new loans will result in a failure ofGreeceto come to market in 2012. In conclusion, the simplicity and the Memorandum have not been applied to overcome the debt crisis, but to change the balance between the forces of labor and capital. In this occasion,Greecedeficits have been the testbed of the economic attack, which unleashed the hawk’s deficits (Polin, 2010). Also, the IMF, as in the case ofArgentinaandSoutheast Asia, proved unable to manage the crisis (Cibils and Vuolo, 2007).

5. An Alternative to the «Chemotherapy» of IMF-EU

In contrast to these measures a condition for overcoming the financial crisis and improve the position of the majority is to implement the following measures:

  • Stop paying the debt with responsibility of the debtor on the basis of emergency (RMF, 2010),
  • Exit from the Eurozone to halt the creation of deficits,
  • Devaluation of the new national currency[2],
  • Nationalisation of banks,
  • Barriers to entry and exit of capital,
  • Production restructuring of the economy.

This is a minimum set of measures on which the Greek society will leave from the position of Ulysses, who spent a decade to return from where it started, and will go in place of Prometheus, who pioneered the effect of helping all humanity.

6. Conclusions

The only thing in reality the packet of measures achieves is an important change in the ownership of the debt, where the national debt ofGreeceis transferred from European bank accounts to labour class. The claim that fiscal austerity during a recession is “economically correct”, in reality is “economically incorrect” and is designed to avoid public criticism. As far as to why, that many dominant circles support today this catastrophic policy, is simple: those circles are concern for the purpose of the capital, less for the interest of the workers and the poor, but rather they identify their interest with those of the Wall Street and the City, and the higher classes. The obvious beneficiary from the ‘rescue packet’ of the Eurozone governments will not be the Greek workers and pensioners who suffer from extreme cuts and resection, but the financial centres.

6. References

Cibils, A., Weisbrot M., and K., Debayani, (2002), ‘Argentinasince Default: The IMF and the Depression’, Center for Economic and Policy Research, Briefing Paper.

Cibils, Alan and R., L., Vuolo, (2007), ‘At Debt’s door: What can we learn from Argentina’s recent Debt Crisis and Restructuring’? Seattle Journal for Social Justice, Vol. 5, Issue 2.

EEAG (2011), Report on the European Economy, GoverningEurope.

Eurostat (2011), Euro Area and EU27 Government Deficit, 60/2011.

Eurostat (2010), Taxation trends in the European Union, Main Results.

Eurostat (2011), Fourth quarter 2010 compared with fourth quarter, 42/2011.

IMF (2010), ‘A Historical Public Debt Database’, S. Ali Abbas, Nazim Belhocine, Asmaa El Ganainy and Mark Horton, WP/10/245,

IMF, (2010), ‘Greece: Staff Report on Request for Stand – By Arrangement’, Country Report, No.10/110.

Laeven, L., and F., Valencia(2010), ‘Resolution of Banking Crisis: The Good, the Bad and the Ugly’, IMF Working Paper, No. 10/146.

Pollin R., (2010), ‘Austerity is not a solution, why the Deficit Hawks are Wrong’, Challenge, November / December 2010.

RMF (2010), ‘The Eurozone between Austerity and Default’, RMF Occasional Report, September 2010.

SIPRI (2011), ‘Stockholm International Peace Research Institute Yearbook, 2011.

 


[1]           The explosion of unemployment is the most typical failure among many other false predictions of the IMF related to inflation, the depth of the recession, etc. For unemployment in particular the IMF forecasts that this year will fall only to 14.6% (IMF, May 2010).

[2]           The option of leaving the euro and the depreciation in response to tackle the Greek tragedy is not displayed only by radical school of thoughts. It is referred for example from European Economic Advisory Group Report on the European Economy 2011: “The two options (exiting the euro and introducing a devalued drachma, the first and a radical internal depreciation, with Greek prices and wages falling sharply relative to those in the rest of the euro area, the second) impose very large costs and will not work quickly. Both will increase the burden of foreign debt expressed as a share of GDP and have dangerous effects on the balance sheets of many firms and financial institutions. An internal depreciation as large as required can certainly not be achieved without a painful and sustained contraction of the economy and higher unemployment. An external depreciation is likely to be preceded by rumours that can cause a bank run and lead to a currency crisis. There is therefore no alternative that is clearly more palatable than the other in every respect. The choice is between two evils” (EEAG Report, 2011).