From Washington to Berlin Consensus (Brussels, March 8, 2014)

DEU Europa Verfassungsgericht ReformvertragI ‘ll try to answer the subject of the panel (“Who profits from debt and the debt crisis?”) using the dramatic experience of Greece of the last years.

  • The first who benefits from debt crisis and the restructuring of debt is the financial system which caused this crisis, both Greek and financial banks. I stress three different facts:

    • According to data from the Bank of International Settlements, investements of European banks (especially German and French) on greek bonds on 31 of December 2009, were 122,6 bn. euros. Two years after, and two months before the haircut, those banks were holding 65 bn. In other words, they used the first two years of rescue to get rid of the greek bonds, knowing that at the end of the day haircut was unavoidable or a matter of time. Meanwhile, the greek bonds were bought by the ECB, helping in this way: first, speculation and second, the transfer of the burden to the official side, the side of EU tax-payers, which a bit later refused the haircut for these titles.

    • Greek banks have been compensated for 100% of their investments on Greek bonds, while greek public pension schemes, universities and even hospitals lost up to 95% of their mandatory deposits in Bank of Greece. Social security schemes alone lost 14 bn. Euros. Consequently, the bailouts to the countries are really back door bailouts to the big banks. The bailouts werenot about sustainability of sovereign debt but of banks.

    • The biggest achievement of financial sector was the nationalization of sovereign debt. In 2009, a much smaller debt of 299 bn euros (or 129% of GDP) was owned by private sector by a percentage of 75%. Now after the restructuring of 2012, which was the biggest one in recent history (bigger than that of Argentina), public debt has not only increased, reaching 321 bn euros (or 175% of GDP) but, the most serious is that a share of 76% is on the hands of official sector (EU governments, IMF, ECB, national central banks, EFSF, ESM).

  • The second factor who has been benefited from debt restructuring is the ruling – not financial – capitalist class who keeps producing, selling, etc. A strict term of the second memorandum (which accompanied the second “rescue” loan of 2012) was the horizontal reduction of wages by 22%. According to official statistics, these four years of crisis, available income has been shrinked by 34%. By another term of Memorandum, the collective bargaining system between trade unions and employers unions has been dismantled. Now, government decides and announces the height of salaries. It’s obvious that these violent changes have been proved the last nail in the coffin of trade unions.

  • The second way the capitalist class has been benefited by debt crisis and restructuring is privatizations. The sell-off of public property (from real estate and airports to water and energy companies) was included in every Memorandum as an aim to reduce public debt because the revenues are going directly, by law, to the servicing of debt. Profitable opportunities are created for European corporations to take over vital infrastructures and Greek businessmen to join as minor partners.

  • Among those who have been benefited from debt crisis are also the hegemonic states of European Union, or core countries of eurozone and most of all, Germany. They have earned in two ways. First, economically because, among others, since 2009 they are borrowing in much better terms. According to an answer of Finance minister Wolfgang Schauble these earnings (of “fly to the quality” as they called) were 41 bn. Euros. Also, EU governmnets profit from bailouts because they lend money with an interest rate that is two – three times higher than what they borrow at. The second way is political. The typical equality among the member states belongs definitively to the past, while Germany shows again its imperialistic, hegemonic face, transforming the crisis-hit periphery to rogue states. Economic governance and banking union provisions are very telling on this respect.

All these reasons, in my opinion, justify the demand of imminent and unilateral cessation of payments of public debt. An audit of the public debt can help to legalize its abolition. In this struggle we have nothing to wait from ECB, or EU, which have been proved much more aggressive than IMF, servicing creditors’ interests.

Greek debt audit believes that cancellation of debt must begin from Troika’s debts, which are a percentage of 66% of total debt. Loans of mechanism are a very clear case of “odious debt”, as Eric Toussaint has shown. Following Alexander Shakh’s definition, first, the two greek governments of Papandreou and Papademos that signed the two loan agreements (5.2010 and 3.2010) had no legitimacy to do it. Second, those loans don’t serve Greek people’s interests. According to a recent report of Attac 77% of Troika’s money has gone to creditors for the servicing of debt and financial institutions, only 23% went to state budget. Third, creditors knew about all those. Consequently, “rescue mechanism’s” loans can be characterised as odious, as a means to cancel them. It’s a matter of political willing.

From another point of view the above-mentioned are confirmed, answering another question: “Who has lost the last years from debt crisis and restructuring?”. Well, who have lost:

  • Greek taxpayers who have seen every kind of tax burden to be increased. Only real estate taxes have been increased by more than 700%. At the same time Troika and Greek political elite agree to tax reductions on capital.

  • Greek working class who is payed with wages of 480 euros a month, while 1 in 3 is unemployed, and among those who are lucky keep working 1 in 3 isn’t paid.

  • Cypriots normal citizens-depositors who lost even 47% of their bank accounts. The same will happen in Greece too, while EU in meantime decided officialy the bail-in on April of 2013.

  • Greek and Cypriot youth which immigrates massively to North Europe, USA and Middle East. As a result in the periphery of eurozone we observe the brain drain we saw on 80’s and 90’s in Latin America, with the only diference that in the seat of USA now sits Germany, The Netherlands, etc.

  • National sovereignty of periphery countries that is into question, like never before in the post war period.

  • Most permanently, on the camp of losers from debt crisis are the peoples of Europe who suffer from Stability Pact, Euro Plus Pact, two and six pack that form the cornerstones of Berlin Consensus. The most modern and dangerous version of Washington Consensus, that rised from the ashes of current debt crisis. 

(Speech at the conference, Alternative solutions to the debt crisis, organised by Rosa Luxemburg Stiftung and European Network on Debt and Development, 6-8 March 2014, Brussels)

In Piraeus, Chinese investment brings Chinese labour standards. Ex-employee reveals harrowing conditions at Cosco container terminal in Greece (Prin newspaper)

Mpatsoulis CoscoChinese labour standards in Europe. A daily reality for hundreds of employees, hired by subcontractors/slave traders, forced to work at abysmal security conditions and fired at a moment’s notice, in case they complain about medieval work relations. Dimitris Batsoulis, kicked out for requesting implementation of workplace safety regulations, has now gone to court against his former employer. This is his story

Interview  by Leonidas Vatikiotis 

-What are labour conditions like at Cosco?

When Cosco came to Greece it did things differently than normal employers. It did not hire full-time workers, it signed no collective agreement, it did not train its personnel, it just started doing business. It works as haphazardly as possible. Now, out of 600-700 employees, around 200-250 are working full time, with contracts privately imposed, not collectively negotiated. Their employer is a Cosco subsidiary called SEP in Greeks or PCT (Piraeus Container Terminal). The rest are hired by a complex web of subcontractors, again with privately “negotiated” contracts, very low paid. The money those people receive each month is fixed in advance (it corresponds to 10, 12, sometimes 16 workdays) irrespective of when they are called to work – nightshift, Sundays, anything goes. The main subcontractor, Diakinisi, has hired 4-5 other smaller subcontractors providing personnel, so that between each employee and the company there are 2 or 3 intermediaries. Out of one man’s wages, 2-3 layers of contractors get their cut. If this is not modern day slavery then I don’t know what it is.

Of course unions and collective bargaining are strictly forbidden. Employees receive no training whatsoever, despite the fact that the law granting Cosco rights to invest at the container terminal obliges the company to train employees.

-Theoretically, trade unions are not banned yet.

–       There are no “unionising forbidden” signs but people who speak up are fired and there is an atmosphere of sheer terror. Workers at the port are afraid, they try to salvage their wages at every cost- and the cost is truly high. If a journalist could get in there as employee for a month, or even a week, you’d understand what I mean. Nightclub style bouncers check workers, chatting amongst employees is not allowed, there are no work regulations.

-The law of the jungle?

Exactly. These are 19th century conditions. In Hong Kong, Hutchinson runs a terminal along the same lines and workers there went on strike for 45 days, and gained solidarity from other port workers around the world. Their conditions were slightly improved, but they still work with this subcontractor web that makes it impossible to find out who actually runs the port and who is responsible for these labour conditions. This is kind of what we see in Piraeus.

–       Were you working at the port before Cosco?

–       No, not at all. For 11 years I was running my own earthmoving business, I was doing digging, demolitions and so on. When the economy plummeted, I had to park the machinery and shut down my business. I was unemployed so I started looking for work as a qualified machinery operator -I ‘ve had these qualifications for 17 years now. I found out about a vacancy at Cosco by word of mouth. Then I had an interview with the main Greek subcontractor, Diakinisi.

–       And you immediately tried to form a union?

–       I did not set out with this in mind at all. I just needed work, because unemployment was 25% at the time (now it is higher). So I was forced to sign any work contract put in front of me. In this contract, 3 out of 10 terms were in blatant violation of workers’ rights.

We were made to sign two contracts, one normal full time contract and one saying we will work 16 days a month. They did this so that, if they had to fire us, they’d pay lower severance payment, according to the second contract. I was working very hard, the job was very dangerous and security measures had to be strictly enforced. But every day, we were putting our own lives and our colleagues’ lives in danger. My machine had problems, which I detailed in writing at the end of each shift. The breaks were faulty, the lubrication system was faulty, hydraulics had problems, tires had problems, lights at night had problems. The next day, we’d go back to work and find out nothing had been done about it. Heating and air conditioning at the cabin were broken. When you are doing something this dangerous, you need optimal temperature conditions, so as to work with a clear mind. Before getting to work, we used to talk about these problems, but it was impossible for all 800 of us to go to the management office and discuss these issues. We had to form a committee. Some of us indeed formed a five-member workers committee. As soon as the company found out, we were fired.

–       All five of you were fired?

–       Yes, although I do not know exact numbers. Two of us then went to court against the sub-subcontractor, claiming we were fired because we tried to form a union. We could not directly sue Cosco or the main subcontractor, Diakinisi. Let me also point out that there was no work schedule, working hours were incredible.

–       How did you know when you had to go to work?

–       We didn’t. We were getting SMS messages saying we need to be at work in three hours. Nobody knew next day’s schedule. For nine months, I was never given a work schedule. There was simply none. We didn’t even dare to go visit our parents. We tried to tell our colleagues that this must change, so that we can organize our lives. There were colleagues whose kids were in hospital and could do nothing about it, out of fear that they would be blacklisted.

–       What did labour inspectors say about this?

–       In the nine months I was working there, I didn’t see an inspector once. They were receiving tips – anonymous tips, because if someone spoke to them openly, they’d be immediately put “on ice”. Some people who alerted work inspectors were not called to work for a week. When we were fired, we went to the local labour inspection office in Keratsini and they could not show us our work schedule, although they were supposed to receive a copy every six months.

–       Did you get breaks?

–       No. If someone needed to go to the toilet, they were told to do so in the machine cabin. There were bouncer types walking around without any specific job to do and we wondered what they were doing. There was constant terror. We were constantly reminded that if we complain, we’d be the next to go. Unemployment is very high, so nobody said a word.

-Why did you nevertheless decide to speak up?

–       A machinery operator must be able to move in the cabin and see the container behind him. The machine, together with the container weigh 100 tons. This is a very responsible job. The operator should not be made to wear 10 layers of clothing to keep warm. I had to wear three jackets, because there was no heating. In January 31st 2012, I was working without heating at a temperature of -1 degree Celsius. It was snowing in Piraeus. Back in the summer we had already submitted reports saying heating does not work. After working three hours in these conditions, I could not go on. My hands were numb, my feet were numb, my brain did not work properly and I was constantly putting myself and my colleagues in danger. A 100tonne machine moving in the port at 15km per hour is a great danger. The crane can fall on a ship. I said stop, I need to get down, get warm and get back up again. They told me to go home and I heard nothing from them for a week. No SMS no nothing. Psychological warfare. After a week, they called me back, they had me work for 2-3 days and then I was summarily fired, together with others. That s how I was fired. People still working there live this every day. Workers must not think, this is the new model.

–       When Prime Minister Samaras visited Beijing, he triumphantly announced that the Chinese will buy the rest of the port as well. Is this good for the port, for the workers and for the economy?

–       The Chinese captain, captain Fu says Cosco is very beneficial for the local economy. I have not seen conditions in Perama (a very poor area near the port) improve because of Cosco. As for Samaras’ announcements, I think the blame for what s happening in the port does not lay with Cosco or with foreign investments, it lays with oversight mechanisms that are totally broken. Investors want to come in and make as much money as possible, as soon as possible. Labour inspectors (SEPE) must make daily, or at least weekly controls, they must have a constant presence in the port. Instead of this, they never come, or they come by appointment, while COSCO installs a 3 meter high fence and cameras everywhere. I tried to talk with the Secretary General of SEPE but he couldn’t see me, because he was busy running his campaign as a candidate of the socialist party.

–       How about the port as a big employment opportunity?

(Giorgos Gogos, Secretary General of the port workers union answers this question)

–       Beforehand, the Piraeus container terminal employed 400-500 people. Now it’s 700. No more than 250-300 new jobs- flexible, badly paid and dangerous. And we are not talking about stable employment. If the three of us split a monthly salary amongst us this is not three jobs, it is one job. This must be clear. Health care and insurance funds also lose out because of Cosco. The company does not pay premiums for unhealthy and dangerous employment, as it would be forced to do. Smaller wages means smaller contributions to health care and pension funds.

No taxpayer should be paid under the table. Everything must be taxed and contributions to social security must be paid. When there is no collective representation, employers give out crumbs. They divide and rule, they create an army of spies. That’s why there must be a collective agreement.

At OLP (the part of the port still run by the Piraeus Port Authority) there is a collective agreement and there is a workplace health service that works because we put pressure for it to work. When it is very hot in the summer, labour regulations are enforced. OLP is forcing us to work under difficult conditions too, the port is a very special place. A ship comes in and it needs to offload in three shifts, the client will always try to make it shorter. But when its 38 or 40 degrees outside, then inside the metal hull of the ship temperatures rise to 45 degrees. So our health service comes in with a thermometer and orders everyone to stop for a few hours. Our employer informs the client that there will be a two-three hour delay. But if there is no collective representation, then the difference is obvious. It’s people versus profits, once again.

Translation Eurydice Bersi, @ebersi

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