35 Comments

  • Yanis’s hope for a grand political settlement ignores political realities in the Eurozone. Also, legal barriers to Grexit cannot be enough to prevent it. See here for the legal framework in relation to the Grexit discussion http://wp.me/p5zzQG-3Z

  • As good as your presentation was, I was truly underwhelmed by Schauble’s which preceded yours in the same forum. Is there any hope of ever coming to terms with this guy? Does not seem like it. So, let’s frame it properly as to whose’s failure this is from the so called “European side”.

  • I reckon that Syriza is about the very first attempt at statesmanship in the EU, and particularly Southern Europe, since way too long ago. And I bow to that.

    But I think that the key question in the whole video was one made by a Greek woman who complained that Greeks are waiting for real action, for the implementation of at least a substantial part of the program that Syriza promised. You replied that this is because of the Euro-partners, who are sabotaging your efforts (not exactly your words but certainly the implied meaning) by extending once and again absurd outlandish demands that keep the Tsipras government frozen and unable to act.

    On the other hand the less helpful intervention was done by a former Turkish minister who argued that you basically have to do what you are told. Oddly enough you gave way too much credit to that claim, more so considering the lack of cooperation that your “partners” (plunderers) are displaying in an obvious effort to cause the collapse of the Greek government and the return to the Samaras-ist semi-colonial “normality” that they desire to implement as the rule for the EU and the Eurozone.

    To me this means that in the effort to save the European Union and the Eurozone, you guys are sacrificing way too much, for too long. I’m as europeanist as you may be, I wholly agree that the problem is pan-european and not at all just Greek or of any particular country/region… but there is a time when you have to take action and you guys (sadly) don’t have power in Germany, nor Spain, nor Slovakia. You have power and a mandate in Greece.

    Until this week it could be understood that Syriza was delaying the process of much needed urgent action because of liquidity issues. But I read yesterday in RT that Russia has agreed to grant Greece a 5 billion loan on future profits for the southern Black Sea pipeline, which will now go through Greece. That’s more than a lifeline: that’s what you need to do what you must, regardless of Brussels, Merkel, De Guindos and Lagarde.

    So why not slam the door for a change and revise, as you promised, the illegitimate debt, what in effect will be a partial default? Along with capital controls and in general a forcing of the so-called “markets” to serve the social needs of Greece, even if they still can make a reasonable (but never unreasonable and destructive) profit? You can now afford even “Grexit” if need be. Sure: it’s not ideal but what negotiations have shown is that the two promises you made: permanence in the Eurozone and radical reforms of social nature are incompatible, at least with the current European leadership of bankster lackeys.

    I reckon it’s not ideal but there is a choice to make: the Greek People or the EU. And the EU is by the moment a bit too big for Syriza to manage, no matter I’d like it to be the case as European citizen. Probably the EU must collapse at least partly before it can be rebuilt in social key anyhow. There’s absolutely no hope for EU as it is, much less with the loss of centrality of Europe after the end of the Cold War.

    Now you have, up to a point, the pan by the handle but that money won’t last if you dedicate it to pay for the illegitimate debt contracted under the Goldman Sachs regime, which still rules the EU as a whole. So it’s certainly the time to stop procrastinating and do what you must do, what you have promised the Greek People.

  • George Friedman’s framing of the issue in the opening paragraph of the attached is mostly wrong and as such quite misleading. Greece has lost access to market recycling of its debt, a process known in the financial world as “debt rollover”. Typically debt of say 10-yr maturity expires and needs to be replaced by equal debt, hopefully with better terms such as lower interest for example.

    The total absurdity with Berlin is that it refuses to advance such rollover funds to Greece, 95% of which go to European banks and institutions necessary to roll over such debt. Therefore the big winner in this process are the funding mechanisms and not Greece.

    To therefore take a position of either you reform or I won’t give you money which is vastly towards my own benefit is a totally ridiculous proposition. It’s what you call in negotiations a non-starter.

    https://www.stratfor.com/weekly/grexit-issue-and-problem-free-trade

  • Comparing your talk to the one Schäuble gave just before, it is clear that this is a colossal ‘clash of cultures’.

    On the one hand we have the germans and their disturbing notion that democracy can be replaced by an automated system of laws and contracts that have to be met regardless of the consequences – which is mirrored by the current state of the EU with its toothless parliament, its comission of lobbyists and its treaties and diverse ‘mechanisms’ like the ESM or the technocrat regime of the former Troika.
    On the other hand we have a greek government represented by its finance minister who, again, is making a detailed analysis of why the so called ‘reforms’ could not possibly make sense to any reasonable person willing to view it with an unbiased mind and claims its right to be heard by people who are essentially deaf.

    I fear that the technocratic ‘machine’ made in Germany has developed a life of its own. Mr Schäuble and his supporters can only grease its cogs and provide it with fuel. They obviously lack the mental capacity to see the flaws in its design and they certainly do not wish to change a system that, in their narrow understanding, is running perfectly well.

    Meanwhile, in a marvelous act of completely reversing reality, the german media – with a few noteworthy exceptions – has pulled the incredible stunt of portraying the Syriza government and especially Minister Varoufakis as an untrustworthy band of naive and narrow-minded radical ideologues, who refuse to accept the truth and wisdom of the utterly pragmatic german Chancelor and her even more fact-facing finance minister.

    Even if they could actually be brought to see the fault in their own thinking, I doubt that the German government would ever dare to try and go against their constituents who, ever since the the new greek government was elected, have been subjected to a propaganda campaign the likes of which has not been seen since the end of the cold war and whose attitude towards Greece can only be described as hostile. In their minds Greece is not a ‘proud nation’ – as you mentioned before – on par with their own, but already a failed state belonging to the ‘third world’ rather than the first. Thus the greek people and the leftist government they so irresponsibly dared to vote into office cannot be taken seriously anymore. They are rather treated like unruly children and they need to be taught a lesson and are told to ‘do their homework’ – as many german politicians and journalists never fail to point out.

    I admire your patience and countenance, being met with such blatant disrespect and I really wish that Greece can somehow free itself from this conundrum without completely imploding, but I have my doubts.
    I am sad to say that as a german I could not be more ashamed of what my government and the majority of my fellow countrymen who support it are doing to the greek nation and to european democracy itself – out of sheer ignorance.

    • Thank Hubert you are a true gentleman. This is why when negotiations fail due to Schauble’s ill advised tactics there is one thing left to say to him:

    • Thank you Hubert for your – as ever – kind and civilized remarks.

      After watching Yanis’ presentation it took me two days to force myself to watch the 3 Scheuble presentations – at the Brookings Institute, Council of Foreign Relations and Columbia University. What I saw surprised me.

      Scheuble gave 3 completely inadequate talks: inadequate that is, in explaining even the smallest part of the reasoning behind the Eurozone / IMF’s total rejection of Greece’s stance – despite having admitted earlier that the Greek program was a catastrophic failure. His three talks provide no clue whatsoever. Genuine seekers after truth are left in the dark.

      Second, though treated with great respect, it is clear that not a single participant or compere actually liked him, or agreed with him, and most openly and fulsomely disagreed with him. He refused to answer any of the question as asked but changed topics, and his speeches also jumped about, with little continuity and not much sense.

      Third, his ‘digs’ at his host country (USA) are second only to his digs at Greece.

      I was left with the overwhelming impression that he was invited as a monster to be exhibited and recorded for posterity.

    • @elenits

      Here in Germany, rumor has it that Mr Schäuble has absolutely no love for economists in general, especially for those who deal in macro-economics. It is said that he finds their elaborations tedious, speculative and unsubstantial and would rather deal in ‘facts’ than in theory. I don’t know if it is true but it would fit his apparent lack of understanding on the matter. And despite Mr Varoufakis trying to be more diplomatic by praising his german counterpart’s intellectual prowess, the latter clearly does not have a clue about what is going on outside his own rulebook. (Either that or he is even more cynical and cold-blooded that even I can imagine.)
      There is another rumor about the chancelor’s reaction to widespread criticism from the anglo-american world towards Germany’s insistence on austerity as the only cure for the euro-crisis and towards its unwillingness to acknowledge its own role in its escalation due to the permanent german trade surplus and beggar-thy-neighbour mercantilism. According to this story she is reported to have said something along the lines of: ‘I know they think we’re wrong but I don’t really care because I know I’m right.’
      Now, I don’t know if that is true either, but it perfectly fits my theory of the german political elite being trapped within their own system of perpetual self-sustaining circular logic. And the fact that even after Mr Obama himself openly, however mildly, criticized the austerity programme in the Eurozone, the chancelor – who in almost all other aspects of international politics is usually the first to take sides with the United States – refused to take him seriously, speaks for itself.
      One also has to understand that among german elites the predominant narrative on the financial crisis is that it was entirely the product of anglo-american financial market shenanigans and that honest german bankers and businessmen had nothing to do with it. (As proof of this astonishing claim serves the refusal of Deutsche Bank to take any money out of the 400 billion EUR rescue fund that the german government had to pull out of its hat after the initial financial market collapse in 2008-09. The fact that Deutsche Bank would propably have gone bankrupt if many of its own debtors hadn’t been saved by government intervention and that it was indeed generously compensated for its irresponsible involvement in the grand Ponzi-scheme on wall street by the US-Government is usually omitted within this discussion.)
      As a consequence, any criticism of german economic and fiscal policiy from across the atlantic is mostly dismissed as coming from unreliable sources, who were unable to prevent the crisis in the first place and therefore must be based on false theories and are not to be trusted.
      So, from the german perspective it all boils down to one simple statement: Germany has done everything right in the past and is not responsible in any way for the current crisis. Ironically, trying to push the blame for one’s own misdeeds onto somebody else’s shoulders is exactly what Germany is accusing Greece of.

    • “Either that or he is even more cynical and cold-blooded that even I can imagine”.

      The latter. And that’s why Merkel says: “I know they think we’re wrong but I don’t really care because I know I’m right.”

      For Germany the EU is not any union of equal partners but the equivalent to what Latin America or the OAS is for the USA: a colonial backyard. That’s why now and then Tsipras or Samaras compare Merkel’s Germany to Hitler’s, whose militaristic adventurerism was all focused on granting Germany a colonial empire in Poland, Ukraine and Russia and an area of subservient satellites in the rest of Europe, which act as semi-disposable markets for German exports and providers of cheap labor without rights. It’s not any gratuitous provocation: it’s an exact description what is going on, just that this time Germany uses an army of accountants and bureaucrats rather than panzers.

      Naturally Germany has no great interest in Greece as such but rather wants to use Greece as example to make sure that other larger pieces of the IV Reich such as Spain, France or Italy don’t slide out (as they will sooner or later anyhow – more and more people think the EU is crumbling as we speak). The conflicts with the Anglosaxons are about who’s the boss (Ukraine and Russia are a clear point of contention in which Germany had to bow to Washington… but is already sliding again towards Moscow, which is a much more profitable and less demanding partner than the USA – and not just for Germany, also for many other European states) and the more and more challenged hegemony of the dollar, right now growingly nominal and unsustainable, for which the export-oriented and hyper-strong euro attitude of Germany does not help (although it makes total sense for Germany, at least for its bourgeoisie).

      In brief: Germany sees itself as regional European main power willing to maneuver more freely than Washington would like to allow. It also sees itself as a significant power at global level, at least in the economic aspect. And definitely sees itself as a neat exporter or manufactures and even able to make its way towards a post-nuclear and post-oil energy paradigm possibly, being the only advanced country heavily investing in solar and other renewables, with at least some success (something that Washington of course doesn’t like either). But Germany also sees the EU as a mere tool for its national imperialist goals and not a goal in itself. If the EU crumbles, Germany will be able to raise on its feet, maybe even stronger than ever in the last many decades, they believe, thanks to their oversized high-end industrial capacity.

      The only interest they have in Greece within all that scheme is that the socialist government collapses and it returns to “normality”, i.e. the Samaras era. And that’s not mostly because of Greece itself but because of fear of contagion to other areas of Europe. They can work well with right-wing “pro-Russian” governments like Hungary or even a hypothetical Le Pen government in France (not likely in the short run anyhow) but not with leftists who attempt to implement social rights of any kind in their colonial backyard. It’s not so much the default what they fear but socialism in any effective form, be it seriously social-democratic or leaning towards communism.

      So right now Greece is to Germany like Venezuela to the USA: a democratic country who has “wrongly” chosen not to be a slave of the imperialist designs anymore. And therefore must be crushed no matter what.

    • Hubert what is the street view regarding the Transatlantic trade agreement currently in the works? And how this fits into the pattern of German intransigence re: Greece?

    • @Maju

      Although there is some truth to what you say, I still think you are wildly exaggerating Germany’s will and capacity to be that kind of imperialist hegemon.
      Let’s not forget that this would force german politicians to take responsibility for their actions and that is something they loathe even more than ‘bailing out’ the southern Eurozone. As much as I despise what the US have been doing in their own ‘backyard’, one has to give them credit for being quite open about their belief in their own superiority and their supposed right to do as they please as the last remaining superpower and supreme protector of ‘freedom and democracy’ all across the globe. The majority of government and party officials have no grasp on this kind of geo-strategic thinking (other than simply mimicking the americans), which has become more than obvious during the crisis in the Ukraine. Unfortunately their ignorance also extends to the realm of macro-economics and Germany’s role as the largest single part of the common market.
      I know it may seem otherwise from a foreign perspective, but if you listen closely to german politicians, economists and journalists talking about Europe, it is quite obvious that most of them simply do not know what they are doing. They are mostly just parroting what the neoliberal Ideologues have been preaching to them for the last two decades. Of course, this german ignorance has proven most fortunate for major corporations and financial institutions who do not really think in national terms anymore and so they are very interested in keeping it that way, regardless of the cost for the common folk in Greece, Spain, or Portugal. Unfortunately, they seem to be the only ones our political leadership is listening to.

    • I agree that German political leaders are not great statesmen, at least in the sense one would expect from a European perspective, in which Germany, as leader of the pack, would be expected to assume continental leadership and not just work on nationalist parameters as they do all the time. But they are much closer to statesmanship than any other European leader, except the new Greek government surely, and that is because they fiercely defend the interest of the national German capital, and do it with success that I would not have expected a decade ago. Compare Merkel to Rajoy or any other Spanish Premier of the last decades: Merkel is doing something, even if it something evil, selfish and harmful for the overall continent, the Spanish leaders have just acted as colonial scum, yielding in everything to what was dictated from Frankfurt, Brussels, London or Washington, without even blinking. Even comparing with French or British leaders, the German ones clearly stand out: they defend their national interests, something the others do not or very weakly so, they even dare to (weakly) challenge Washington with actions or inactions (Germany was not in Lybia, nor Syria, nor is particularly enthusiastic about the induced fascist chaos in Ukraine either, having deals with Russia, Iran and what-not). What they do is not particularly admirable or outstanding but they do have a semi-independent position that other European “leaders” (managers) simply lack. Are they weak? Possibly. Are they as weak and incompetent as the Spanish, French, British and Italian leaders? Not at all.

    • @Dean

      I think (but that is really just my personal opinion) that most people on the street do not really understand what the TTIP is really all about. There has been some campaigning against it from leftist NGOs though which has proven quite effective in turning public opinion against it. Unfortunately most people seem to think that it is just another attempt of US-corporations at dominating european markets and very few of them know that it was actually a german idea in the first place and that major german corporations (not SMUs!) would also benefit greatly from it. Which, I think, is why Mr Gabriel, our social democrat vice-chancellor, minister of the economy and staunch defender of the coming agreement, said at a conference in the United states that german people tend to be hysterical about such things and that their concerns should not be taken seriously.
      At the moment, this is not really connected to the discussion about the greek crisis in puplic opinion, although it has been mentiond in the past that Greece might not be as excited about the TTIP as the german leadership and may even vote against it eventually. People – or, I should rather say: major newspapers and TV-News stations – are much more concerned about Mr Tsipras having the audacity to meet with the evil Tsar in Moscow and even accept an advance payment on a future pipeline project, which, according to some conservative party officials almost amounts to an act of treason against the wholy spirit of freedom and democracy that is the fundation of the European Union.

    • You’re right that is not just US corporations but all large corporations which brutally benefit from it, including German ones. But what the TTPI is in practical terms is extending the de facto corporate government above (residual and ritual) democracy that already controls the EU and (to a large extent as well) the USA. The peoples, via their elected parliaments and governments will not have anymore any control, even if minimal, over corporations and what they are allowed or not to do, or how they are obliged to serve the public interests, if at all.

      Sometimes our late Capitalism is compared to the Feudalism that developed in late Rome and brought upon us the Dark Age and I’d dare say that the comparison is not at all far-fetched. However the dangers of such development are even much greater today because: (1) social losses are much more than mere “panem et circensis”, at the very least it is also democracy and human rights what are being challenged and (2) the ecological contradiction of Capitalism is so extreme that, if unchecked by democracy, by people’s power, it will unavoidably lead Humankind to extinction in few decades.

      So I wouldn’t dismiss as “less important” what is at play with all these developments of hyper-corporatization, of which TTIP is a historical culmination: a true new constitution of the Atlantic Empire in which the only remaining “citizens” with any say and any right will be big business. It’s something big, it’s something horrible and it’s something extremely dangerous.

    • @Maju

      I fully agree with your views on the rising influence of corporatism and I also see the TTIP as another sign of the downfall of democracy in the ‘western’ world. I just don’t think that the german leadership is much less incompetent as the people you mentioned. They were just lucky to be at the right place at the right time.
      Ms Merkel may benefit from this particular brand of german neoliberalism but judging by her various speeches on the subject it seems quite clear to me that she does not understand how this system actually works. Neither does she seem to realize how she is actually undermining democratic political authority, including her own(!) by trying to conform democracy to ‘the markets’.
      Her government’s current take on economic policy – i.e.: internal devaluation via massive cutting of wages and social benefits combined with massive labour market deregulations and a total denial of anything even faintly smelling of supply-side thinking – could only be ‘successful’ because:
      a) Germany has always been a strong exporter of industrial goods and therefore german corporations are the largest benefactors of reduced labour costs, because it made them more competitive than their counterparts in other European countries like France, Italy or Spain who didn’t undertake similar so-called reforms early on.
      And b) Since the EURO’s exchange rate has been kept reasonably low by the participation of less export-heavy countries within the Eurozone, they didn’t even have to fear appreciation of their own currency because of the permanent trade surplus.
      But most german politicians and even most german economists do not even acknowledge these facts. These things are not openly discussed. Instead, everybody is telling themselves that our economic power derives solely from our great amount of hard work and ingenuity and – lately – fiscal responsibility.
      I admit, this kind of hubris and the practice of elevating oneself by looking down on others who are less fortunate and declaring them unworthy of having a voice of their own, does have a whiff of the good old fascism to it. But I still think that our political class does not realize all these implications. So I dare say they could hardly be any more incompetent.

    • “[Merkel] does not understand how this system actually works. Neither does she seem to realize how she is actually undermining democratic political authority, including her own(!) by trying to conform democracy to ‘the markets’”.

      With due respect, I think it’s you who don’t understand how the conservatives (broadly speaking) have never worried at all about democracy. If we observe the rise of Hitler, we see that the various conservative parties backed him till the last minute, if we observe the forge of Franco’s dictatorship, we realize that his National Movement was mostly not made up of falangistas but of ex-cedistas (CEDA was the largest conservative party in pre-fascist Spain). Much of the same can be said of socialdemocrats although it’s a bit more ambiguous and I don’t want to overextend my comment. My point is anyhow that they do not care about democracy except as tool to keep the masses pacified in the carefully controlled ritualized belief that they can control politics (but beware if they ever do, as in Greece), what they care is about serving the powerful masters of Capital (banksters and others): if that can be done best via (controlled) democracy, fine, else then Pinochet, Hitler, etc. Another discussion would be to what extent the 2010s can be compared with the 1930s and what “success” can fascism have today… but that’d be too lengthy.

      “Germany has always been a strong exporter of industrial goods and therefore german corporations are the largest benefactors of reduced labour costs, because it made them more competitive than their counterparts in other European countries like France, Italy or Spain who didn’t undertake similar so-called reforms early on”.

      Not really. A key factor in labor costs is the cost of life, particularly homes. Germany has managed (by means of subsidies to public housing) to keep this cost relatively low, while other countries (and very particularly Spain) saw a tremendous speculative spike because of lack of state control of this key asset. The only way to export homes is being a tourist destination but even that has limits, so if you have to pay a 700 € rent, you can’t earn a salary of 700 € but at the very least 1000 or 1200 € (or have more than one salary per home, what is also problematic in many ways and often just not available with the massive unemployment and precariousness). While Germany has cared about its scientific and technological development, even daring to experiment very determinedly with renewables, other states do not invest much on it, and again Spain is paradigmatic and Rajoy’s aggression against solar energy development (which was following the German path in Zapatero’s time), with the pretext of “austerity” but with the real goal of benefiting its oil, nuclear and electric parasitic cronies (what also raises labor costs because salaries are first of all to pay for the basics). I could go on…

      “Since the EURO’s exchange rate has been kept reasonably low”…

      I must protest: this is something absolutely new! In 2007-2014 you got around 70 euro cents per US dollar, only now it’s approximating parity in a desperate attempt by the ECB to keep the Eurozone afloat. Not sure if too little but definitely way too late. Remember that the dollar were at near-parity originally, there was even a time when a dollar was worth 1.15 euros. And it should have stayed that way, more or less. By keeping the euro hyper-strong, particularly in the crisis, Europe in general has burdened itself with the bulk of the costs of the mega-crisis, maybe as hidden imperial tribute to the USA but also because it favored the German economy (but heavily damaging the peripheral Eurozone, which does not compete in the same tier).

      May it be a misunderstanding? Are you calling “low” exchange rates what I consider extremely high rates? My reading is that the euro has been most of this century (most of its existence) unacceptably high, what has dramatically damaged the Eurozone’s periphery (and even parts of the core), unable to compete inside or outside the bloc (remember that a lot of EU countries are not in the euro, for example Poland, Sweden, Britain, what gives them some major advantages and very few disadvantages, if any at all). In Spain or Greece people is paying almost German prices but have Polish-like salaries (and working conditions). In Britain they have German salaries but much lower prices. That’s the hard fact of low competitivity in the Eurozone’s periphery: a deadly strong and inflexible euro (and short-sighted or corrupt political leaders unable or unwilling to take action about this major problem).

      “But most german politicians and even most german economists do not even acknowledge these facts. These things are not openly discussed”.

      Why would they? It’s better for the German Capital to try to keep things as they are for as long as possible. If a thousand peripheral Europeans have to die to save a German savings account, so be it (paraphrasing Hitler). So they try to keep the real facts out of the discussion and the focus on very basic terms: you owe: you pay, inflation danger and other blah-blah, which are not the real issues but either derived secondary problems or mere scarecrows. And that’s why the Eurozone is a postmodern IV Reich (not sure how exactly I’m citing Yanis but he said something like that once or several times): because the German Capital is bleeding its “partners” (neo-colonies) largely by keeping them unaware of their real status in the European order.

      The recently deceased Uruguayan author Eduardo Galeano said it clearly at the beginning of his masterpiece ‘Open Veins of Latin America’: “The division of labor among nations is that some specialize in winning and others in losing”, and that is sadly what the Eurozone is about, sadly enough for us staunchly but often naive Europeanists.

    • @Maju

      Sorry. I made a mistake there in the 3rd paragraph of my last answer to you.
      Instead of :’… a total denial of anything even faintly smelling of supply-side thinking[…]’, I meant to say: ‘…a total denial of anything even faintly smelling of demand-side thinking.’ (or anything like a Keynesian approach).

    • Of course: they don’t have a global or general or long term project of sustainable capitalism (if such thing is possible at all, what I don’t think it’s the case), they just care about a short or mid-term period and how much they can loot in that time. Anyone minimally familiar with Lenin’s work on imperialism and war, for example, knows that. In essence Capitalism is about looting (looting the worker masses, looting the colonies or semi-colonies and looting the environment), sophisticated looting indeed but looting in any case. And pirates don’t worry much about tomorrow, as Keynes (who wanted to save Capitalism from itself) famously said when asked about the limits of his plan: “the future will care of its own problems”. The only problem is when the future becomes now, but as long as they can extend and pretend, they say like the proverbial guy who jumped from the skyscraper: “so far everything is fine”.

    • @Maju

      I think we have a misunderstanding here. I was not in any way trying to defend the german position. I was merely trying to explain the german perspectve as seen by the german elite (i.e.: german capital), which is of course fundamentally different from the point of view of the working class in Spain or Greece (or even in Germany to some extent).
      When I was talking about the ‘low’ exchange rate of the Euro, I was talking about the ‘german’ Euro. There is now doubt that – as you say – for the people living in the so called ‘periphery’, the rate has been much too high. Which is exactly the result of the major flaws in the design of the monetary union. However, if germany had kept its own currency, it would have appreciated a lot more because of the german trade surplus and prices for german industrial goods exported to the world outside the Eurozone (where the majority of german exports go to) would have risen a lot stronger than they have.
      The same can – more or less – be said about the ‘internal’ inflation rate of the Eurozone members. Costs of living have been lower in Germany than e.g. in Greece, exactly because unit labour costs have been pushed as low as possible by means of the infamous ‘reforms’ of the german labour market, starting in the late 90s and being brought to full fruition by a social-democrat / green coalition(!) back in 2005.
      As a consequence, the domestic markets in Germany have seen a significant drop in demand and prices had to be adjusted accordingly. Which, in turn, is why Germany’s glorious economic power is almost exclusively based on our export surplus which is the cause of any significant growth in german GDP. It is also the reason why the biggest chunk of the common market (Germany) does not create enough demand for imports from other eurozone countries, thus increasing trade deficits of those vis-a-vis Germany.
      The millions of working people in my country who helped produce the surplus have not benefited from it at all because the profits earned by german exporting corporations are passed on to the boards of directors and the shareholders they represent, instead of being used to raise wages of the workforce.
      So the Euro essentially strengthened the power of german capitalists significantly. And you are absolutely right that they are using that power to prevent any significant changes to this system. It is also clear to any critical observer that almost all of Ms Merkel’s economic advisors are nothing more than badly disguised lobbyists for german capital interests.
      However I do not think that the chancelor or the conservatives who follow her lead are intentionally trying to turn Germany into a fascist country and the rest of Europe into vassals of a IV Reich, as you claim. I actually believe that they believe they are defending democracy by trying to come to terms with what they call ‘the markets’. I also think that they are utterly wrong in their assumption that capitalism can coexist with real democracy (not the mock one we have right now) – which has been the point of my arguments here for years now. And through sheer ignorance they might actually help real Nazis to come into power (like the Golden Dawn in Greece, for example) but I do not think that they WANT to do that.

      As to our fascist ancestors: I must admit I don’t know very much about the rise of Franco but I know that when german conservatives backed Hitler, they also thought that they could control the beast and they mostly did it because, to them, the rising tide of communism in pre-war Germany seemed like a much bigger threat which they had to contain at all costs. Of course one could say that, first and foremost, they were defenders of capitalism and if democracy had to be sacrificed for that purpose, they were willing to let it happen, but I am not sure if all of them really knew what they were getting into. However, the driving force behind all this, back then as well as today, is capitalism. We can agree on that, don’t you think?

      P.S.: For a very educating inside into German ignorance towards the deeper reasons behind the whole euro crisis, I would like to refer you to an excellent series of interviews that german Journalist Harald Schumann did with various economists politicians and troika representatives for his film on the devastating effects of the Troika regime on greek society. One of them being our host whose blog we are abusing for this lengthy exchange after all, before he became a misunderstood politician.


      (At 45:00 Mr Varoufakis explains his theory about why Ms Merkel is unlikely to agree to anything like his modest proposal, which I find very interesting)


      (At 10:20 Mr Schumann and Paul Krugman discuss the phenomenon of germans completely rejecting international criticism and what may be the underlying reasons for that. They also talk a lot about the situation in Spain.)

    • “Costs of living have been lower in Germany than e.g. in Greece, exactly because unit labour costs have been pushed as low as possible by means of the infamous ‘reforms’ of the german labour market”…

      I can’t but disagree. I know about the infamous German labor reforms but there has been the same kind of organized collapse of worker rights in other states, for example in Spain (a case I know better than the Greek one) and this has not pushed prices down. The only thing that has eventually pushed prices down has been the dramatic shrinking of the demand as the crisis extended itself beyond the first years, so now in some sectors (food, housing) there is some deflationary tendency because of extreme competition for a collapsing market. But mostly that deflationary tendency is minimal anyhow (rather non-inflationary than truly deflationary).

      Social subsidies are in the end subsidies to salary cost, so the states with larger social subsidies, for example in housing, health care, etc. what actually do at a macroeconomic level is to allow for salary shrinking (in a less dramatic and more productive way than by throwing 25% of the workers to the unemployment dumpster) and therefore lowering of production costs. This is particularly true for the housing sector, but also energy costs and other can help. In states like Spain where the housing costs are absurdly high, where energy costs are artificially kept high by corruption, cronyism and monopolistic practices, where TAV is rising for every kind of purchase, salaries can’t fall, no matter how much they flog the workers with unemployment, marginalization and repression. Because workers have basic needs and salaries are supposed to pay for them. Why would you work if you can’t even pay the very basics with the salary you get? Wouldn’t you be better off begging? Or even in jail or dead?

      It’s basic maths: how much does a worker cost? The cost of living, at the very least. So if the cost of living is high, salaries cannot be low.

      “However I do not think that the chancelor or the conservatives who follow her lead are intentionally trying to turn Germany into a fascist country and the rest of Europe into vassals of a IV Reich, as you claim”.

      I don’t know in which exact terms they phrase their convictions when they think alone or talk in private. I know however that the Secretary General of the Spanish conservatives, María Dolores de Cospedal, has twice fallen in public the lapsus linguae of confusing “sanear” (sanitize, clean up) with “saquear” (loot, plunder), evidencing that the Spanish conservatives do know what they are doing: looting the country. Because lapsus linguae tell the truth, ask any psychologist.

      But what matters is what drove German national-imperialism historically. It’s not just Hitler, merely an incident in that historical drive (albeit a particularly ignominious one), already before WWI, Germany was prosecuting similar Euro-colonial targets via alliances with reactionary regimes such as Tsarist Russia or the Ottoman Empire. It was in fact more like today’s German Euro-imperialism because it was largely a house of cards and it eventually collapsed leading to WWI. Hitler and the other Nazis wanted to do something similar but more consolidated, by means of making Russia and other Slavic countries “the India of Germany”, i.e. the heart of their colonial empire as India was to Britain back in the day. We can focus on the genocidal racist strike of the Nazis not to understand this issue but that genocidal racism was something very common back in the day and the Nazi genocide can be perfectly compared to the US genocide of Native Americans, the English colonial genocide of Aboriginal Australians, the earlier German colonial genocide of the Herero, the brutal Belgian colonial policies in Congo, the Turkish genocide of Armenians and also Anatolian Greeks, etc. Or even today with the Zionist genocide of Palestinians particularly. Nor their racism was different to the apartheid that existed in the USA or South Africa, for example. This is what we often think when we think of the Nazis but what matters for this discussion is not that aspect, horrible and despicable as it may be, what matters is what was the general imperialist intent of their policies and that was no other than to establish a German Empire in Europe itself, an unequal colonialist empire not at all different to the US neo-colonial empire in Latin America, the French or British colonial empires in Africa and Asia or the attempted Japanese colonial empire in East Asia, which was modeled on the US hypocritical doctrine of “America for the Americans”, for *some* Americans of course.

      We are talking of imperialism in its broader terms and that’s exactly what Hitler promised Germans and very particularly the German oligarchs: an Empire. An empire that was so extremely powerful in terms of self-sufficiency that the US think-tanks estimated that the whole Americas and the British Empire together were at a disadvantage with it. Hence they estimated that they had to add China to the loot and so they forced Japan to a war these did not want (because they could not win).

      What Merkel and Schauble are doing today is not substantially different. Of course many details are different but the essence is the same. And they probably know it although they will never admit to it.

      “I also think that they are utterly wrong in their assumption that capitalism can coexist with real democracy (not the mock one we have right now) – which has been the point of my arguments here for years now. And through sheer ignorance they might actually help real Nazis to come into power (like the Golden Dawn in Greece, for example) but I do not think that they WANT to do that”.

      Well, the USA, Poland and Sweden, who have been much more active than Germany in the Ukrainian coup, are actually promoting those very Nazis without any containment. Another thing is that the Ukrainian people is not particularly supportive of them and therefore the 17% of Ukrainians who bothered to vote in the last one-sided “elections” didn’t mostly vote for them but for their pseudo-democratic allies (but is there any difference?) I don’t have any reason to think that Germany specifically is particularly implicated in the promotion and organization of Nazi or other fascist groups but the Deep State of NATO (Gladio network) is without doubt, and that includes the German secret services (direct heir of the Nazi secret service for Eastern Europe), as we know for several recent scandals inside Germany itself.

      But again this is twisting the matter, focusing not on the essence of the imperialist process but on the details such as iconography or formal “democracy”. In Spain the clones of Merkel et al. are right these weeks banning most forms of street protest, why should I care if they are formally or openly adhering to a Fascism (that they have never condemned but rather aided) or not: what matters are facts, not forms. If someone punches me, I don’t think it’s relevant what they say or what clothes they wear but the fact of the aggression itself. If someone robs or enslaves me, I don’t really care what is their formal ideology or the pretexts they use to justify their crime, what matters is the crime and abuse I’m suffering.

      “… when german conservatives backed Hitler, they also thought that they could control the beast and they mostly did it”…

      Yes and not just the German oligarchs, also the British were heavily implicated, in Germany as in Spain. Not sure how much they controlled it but it’s clear that it served their general anti-communist purposes. Only when the open ruthless imperialism of the Nazis threatened to challenge Anglosaxon supremacy by means of conquering Russia, they reacted.

      ” I would like to refer you to an excellent series of interviews that german Journalist Harald Schumann did with various economists politicians and troika representatives for his film on the devastating effects of the Troika regime on greek society”.

      I believe I’m missing a link here.

    • PS- No missing link, sorry, I was reading the email alert but the videos are here in the site. Thank you, Hubert, I’ll check them.

    • OK, Hubert: I checked the two fragments you mentioned and they are indeed interesting. Very particularly the one by Yanis, which is somewhat revealing about the core problems of the EU, i.e. the German-French unequal balance. Naturally Yanis is also very much right in the sense that while no solution is applied, only “cortisone”, extend-and-pretend, the problem is getting much worser and in fact I’d dare say that that it has been getting much worser already for quite a long time.

      But in the end it’s the “empire” issue anyhow: IF Germany applies Yanis’ common sense proposal, it loses its hegemonic position to a large extent: the empire collapses into a much more horizontal union and that is something that Germany (at least German oligarchs) do not want. It has to do with France but it’s not something only about Germany and France, it’s something affecting the very essence of what is the EU and very particularly the Eurozone.

      As for Krugman’s opinion on what motivates politicians and other leaders to adopt their public stands, I think he’s being naive. The example of Cospedal saying, for the second time in few years: “we have worked very hard to plunder this country” (http://www.publico.es/politica/cospedal-le-falla-subconsciente-hemos.html – in Spanish only), evidences that, at least at some level of consciousness, they know way too well what they are doing. And it’s the same when Schauble fences off the German responsibility on the Spanish cajas’ crisis with that “we didn’t force them at gunpoint” absurdity: he’s just attempting to defend the indefensible. Schauble is not dumb: he does know but doesn’t care as long as he can transfer the burden to others and he will use any argument for that. The big problem is that the private cajas’ costs have been intently transferred to the Spanish state, precisely to save the investments of those speculators, German or not, and now are being burdened on people who had nothing to do with the speculation, which are the bulk of Spanish citizens, and who can’t even pay for it anyhow.

      It’s a clear case of organized looting, colonial looting in the case of Germany and corrupt “comprador” elite looting in the case of Spain. And they know it very well.

    • @Maju

      “Why would you work if you can’t even pay the very basics with the salary you get? Wouldn’t you be better off begging? Or even in jail or dead?”

      That is a very good question. I don’t know about Spain but in my own country, as a result of the german austerity (=’internal devaluation’) programme, there are in fact now millions of working poor who have full-time jobs at salaries that can barely cover the costs of living. (Which explains the drop in official unemployment rates). And there are roughly one million of them whose wages are so low that they have to be subsidized by the state in order for them to be able to pay for their basic needs. At the same time, while the german social security system is certainly still much more generous than the greek one, the unemployed – especially those under the age of 25 – are forced into working under these conditions, regardless of their education or profesional skills, under threat of losing all social security benefits and being reduced to live on the streets and beg for money.

      “It’s basic maths: how much does a worker cost? The cost of living, at the very least. So if the cost of living is high, salaries cannot be low. ”

      In a working national economy, basic math proves that prices start dropping if wages start declining, because no sane retailer would increase the price of his supply of goods or services if the demand is decreasing because his potential customers lack the financial means to purchase what he wants to sell.
      However, if governments are forced (or let themselves be forced) to conduct austerity programmes that evidently do not work at all, in a much more rapid fashion than it was done in Germany, all this goes to hell and the national economy is not a working one anymore. Which I presume is the case in Spain as well as in Greece or any other of the countries in which such measures are being forced on the people.

      So no. Basic math, I’m afraid, is not what this is about. It is about reducing unit labour costs in one’s own national economy by any means possible in order to gain competitive advantages vis-a-vis other countries. It is about treating the labour market like any other market, where – seen from the predominant neoclassical point of view – demand (=jobs) will create itself if only supply (=labour costs) becomes cheap enough. It is about the absurd monetarist theory that inflation (=rising costs of living) is generated by central banks printing money and – to put it bluntly – it is about not giving a shit about the costs of living of the average worker or about wether their salaries fit their basic needs or not. After all, it is called supply-side economics for a reason.

    • “In a working national economy, basic math proves that prices start dropping if wages start declining”…

      Yes, reluctantly so but anyhow it will happen sooner or later. But that’s deflation, which is much worse by all measures than inflation: in the short term it may look good for common people but it’s terribly bad for business, so soon the economy goes in depression mode (or stagnates in it, if it was already there). So a deflationary economy is not a “working economy”, only moderately inflationary ones are.

      “However, if governments are forced (or let themselves be forced) to conduct austerity programmes that evidently do not work at all, in a much more rapid fashion than it was done in Germany, all this goes to hell and the national economy is not a working one anymore. Which I presume is the case in Spain as well as in Greece or any other of the countries in which such measures are being forced on the people”.

      The very concept of “austerity” is a fallacy because there is no austerity for the wealthy, no or minimal fiscal control, no extra taxes for those who have too much, no fines for those who abuse the system, no cuts in police or military expenditure or in the salaries of politicians, etc. When Euro-parrots talk about “austerity” they mean only one thing: lower salaries, lower social spending and even lower educative and R+D expenditure (what has a dramatic negative long-term effect in the national productivity), and that is not generally the core problem.

      Spain has some differences with Greece because as Krugman duly noted it was not heavily indebted before the crisis struck. Most of the debt is clearly illegitimate, because it was transferred from private business (essentially Bankia) to the state. Obviously Bankia should have first been declared bankrupt and only then the state should have intervened the remaining skeleton in order to refloat the bank and cover for the lesser assets that are legally protected by the state (small accounts and nothing else). That would have transferred the impact to lenders but why should I care?!, let the banks collapse, as long as there is some healthy public banking, we need no other banks at all. What Iceland did (initially) was the right thing to do, but neither Dublin nor Madrid wanted or dared to do the same, even if it was the obvious right choice.

      The problem is that the system is rigged by those who control decision making in Brussels, imposing privatization of public savings banks (but not in Germany, how odd!), imposing that states save private banks beyond common sense, imposing free markets even for companies which are partly based in tax havens such as Luxemburg, Andorra or the many English colonies with especial status. Those making the decisions are not just the German and French oligarchies (and lackey politicians) but they are also the Spanish bankers and politicians as well (they have a weight, they can force the situation much more than Greece can) but they do nothing other than blaming Brussels for their own actions or inactions. Meanwhile they are all, one after another, being brought to court for corruption, often in relation with Bankia.

      So the problem with Spain is that it’s for all practical purposes a mafia state, very particularly (but not only) under the conservatives. One that will not bat an eyelash while throwing the population into utmost misery in order to comply with their bosses of the international banker mafia, be them Spanish, German, French or Anglosaxon. That means also that the problem is much bigger than just the Spanish branch of this mafia, that the mafia is, if not global, at the very least pan-NATO, and that explains what you mention about your country, which I infer is the USA, and where the situation is indeed not much better than in Spain or Greece in many aspects, even if formal unemployment figures are lower.

      And that’s also why we don’t easily get access to unbiased information re. key issues like Ukraine or Venezuela or even proper economic analysis about what is going in Europe. We get one-sided propaganda all the time instead because we are ruled by a banking mafia dictatorship. And that’s why Yanis, Tsipras and all the Syriza government have it so extremely difficult, I’d dare say effectively impossible, to make a breakthrough with their basic common sense proposals, because that kind of common sense is too democratic and sensible for the actual rulers behind the curtain, their (myopic) interests and their determination. Nothing short of a revolutionary push will force their hand.

      “Basic math, I’m afraid, is not what this is about. It is about reducing unit labour costs in one’s own national economy by any means possible in order to gain competitive advantages vis-a-vis other countries”.

      Maybe but my point is that you can only force that so much and that “so much” is exactly measured by the cost of living. You can only squeeze so much juice from an orange: there’s a natural limit. You can only do that if you lower the cost of living and that’s precisely what subsidized housing (and other welfare) does. If you have to pay 700 € for rent, you can’t be as cheap labor as someone who only pays 300 € for example. If you pay excessive costs for electricity or health care or schooling or as indiscriminate taxes such as VAT, you can’t work for as little as they want you to.

      You cannot effectively lower salaries unless you also lower the costs those salaries pay for, either via social subsidies or by lowering the prices. I guess it’s a classical paradox, the basic Marxist contradiction, in which Capital tries to increase prices and lower salaries beyond reason and measure, causing the structural crises, one of which we are immersed in. It’s basic math in the end.

      So the German economy works only because it exports, and it mostly exports to other EU states, in most of which competition is hampered by German-like costs (or worse, because they lack German-like welfare, which pushes down the salary cost, effectively subsidizing the local companies in indirect form). The German economy manages to work thanks to the post-modern “Reich” that is the Eurozone. In this sense, I do not think that a German exit from the Eurozone would be any problem for most states, rather a blessing, because those countries (their productive capital) would (partly) lose an unfair competitor.

      Maybe France would be harmed somewhat (I don’t really understand why, unless it’s implied that Germany is purchasing the French acquiescence – agricultural subsidies?, it’s not like EU is redistributing that much money anyhow) but countries like Spain would be clearly much better off. Instead I would think that the cost for German business would be quite massive if they lose half of their markets overnight.

      “After all, it is called supply-side economics for a reason.”

      Maybe but that’s not economic science, just an irrational faith. And if the witch-doctor doesn’t manage to bring some rain, he will eventually lose all followers or worse. It’s been already eight years of “drought” already…

    • @Maju

      “[…] and that explains what you mention about your country, which I infer is the USA, and where the situation is indeed not much better than in Spain or Greece in many aspects, even if formal unemployment figures are lower.”

      Why on earth would you think that by ‘my country’ I was refering to the US? Let me quote myself from the end of my initial comment:

      “I am sad to say that as a german I could not be more ashamed of what my government and the majority of my fellow countrymen who support it are doing to the greek nation and to european democracy itself – out of sheer ignorance.”

      And, of course, a deflationary economy is not a ‘working’ one. I merely tried to explain why the ‘austerity’ programme conducted within my country (Germany!) is still regarded as a success story by the german elites and by the government they have installed and by the media they mostly own to keep the public stupid and lull people into silence while they keep on lining their pockets at the expense of the majority of german and european citizens (not to mention the exploited masses of the developing world.).

      “You cannot effectively lower salaries unless you also lower the costs those salaries pay for, either via social subsidies or by lowering the prices. I guess it’s a classical paradox, the basic Marxist contradiction, in which Capital tries to increase prices and lower salaries beyond reason and measure, causing the structural crises, one of which we are immersed in. It’s basic math in the end.
      So the German economy works only because it exports, and it mostly exports to other EU states, in most of which competition is hampered by German-like costs (or worse, because they lack German-like welfare, which pushes down the salary cost, effectively subsidizing the local companies in indirect form).”

      Again, I mostly agree. Except for the fact that in the past (until the late 90s) the relatively generous social security-system in Germany actually helped keep wages up, not down. Which is exactly why the glorious german welfare state has also been under heavy attack from the neoliberal ideologues who are running things in my country (Germany!) nowadays, ever since the whole Idea of ‘austerity’ (i.e.: the reduction of labour costs, of taxes for the wealthy and of labour market regulations) as a means of increasing global competitiveness began to become the new religion.
      If unemployment benefits are reasonably high, it actually strengthens worker’s and – most importantly – labour union’s bargaining positions! Destroying collective bargaining power is one of the core elements of the whole scheme, in Germany as well as in every other country, where neoliberal capitalism has usurped democracy.
      Prices are comparatively low in my country (Germany) because salaries are equally low. Not the other way around. The fact that for many people in the southern eurozone this is not the case only proves the stupidity of the whole austerity scheme.
      Also, poverty levels are rising even in my country (Germany) – albeit at a slower rate than elsewhere, because the so called ‘reforms’ were slowly implemented over many years, instead of forcing them down people’s throats at a moment’s notice like it is being done now in the deficit countries. While they might still be able to get by somewhat better than workers in southern or eastern Europe, the majority of the german workforce can no longer afford to buy german cars or build their own houses.
      Besides, lowering overall costs of living to accommodate lower wages is not something that can easily be done by government intervention, especially not if it imposes upon itself moronic measures like the fiscal pact or constitutional debt limits, as has also been the case in Germany. As a result of that, german state- and especially communal governments, many of whom are essentially bankrupt (like the one in Berlin, where I live), have reduced public employment, neglected maintenance of infrastructure, cut spending on schools and universities and sold public housing to the private sector at firesale prices on a large scale. Which are exactly the kind of ‘austerity’ measures that the northern eurozone, led by Germany, has been imposing on the past Greek governments (and which the current Syriza-led government is desperately trying to avert), only at a much more rapid rate than has been done here (in Germany), and thus multiplying the ill effects of this idiocy to an unbearable level.

    • “Why on earth would you think that by ‘my country’ I was refering to the US?”

      Because of low salaries that don’t pay for the rent. I was precisely arguing that Germany’s flat historical housing prices have helped to keep the salaries low because that’s a good deal of the bottom line of what a salary represents. And you said something like the situation in “my country” is similar. And happens that German salaries are on average 64% higher than in Spain, and that the German minimum wage is exactly double than in Spain, while home prices (both rent and purchase) are generally higher in Spain than in Germany.

      So I thought you were talking about what the national McDonald’s strikes highlight for the USA and the horrible living conditions of a quickly growing low segment of the working class, totally deprived of everything (because in the USA there’s no welfare almost at all). I know that some Germans, particularly pensioners, are in bad situation but I can tell you that pensioners in Spain are much worse because there are not even “minijobs” for them.

      “Again, I mostly agree. Except for the fact that in the past (until the late 90s) the relatively generous social security-system in Germany actually helped keep wages up, not down”.

      That’s not necessarily bad. In fact a social wage works better than a minimum wage when guaranteeing the minimal purchasing power of workers: it means that, if you work, you are getting something for your work worth it, not just crumbs and flogging. It’s bad for the bourgeois class, which has to renounce to some of its profits, but that’s precisely what a social (social-democrat or Keynesian) economy is about: redistribution of part of the profits in order to keep society healthy and stable.

      It’s also good for productivity because that’s the difference between slavery and free work: that, unlike a slave, a free worker is motivated by his salary (and a low salary and bad working conditions only motivate slacking). So salaries in general should be significantly higher than the cost of life, aiding that way to the formation and maintenance of a vibrant tertiary economy.

      “Prices are comparatively low in my country (Germany) because salaries are equally low. Not the other way around”.

      Well, not at all when compared to Spain (sources: Eurostat, Numbeo):
      · Avg. net salary (year, after taxes and welfare): 36,000 € (Ge) vs 22,000 (Sp)
      · Min. wage (month): 1500 € (Ge) vs 750 € (Sp)
      · Rent (month) of a 3-bedroom apartment: 800 € (Germany urban non-center) vs 950 € (Madrid non-center)

      So a min. wage worker couple cannot afford to rent an apartment in Madrid but a single min. wage worker can in Germany. As simple as that. Either you force housing prices to collapse via state intervention (housing welfare) and counter-speculative measures or Spanish workers can’t survive. But nobody in the oligarchy is interested in doing what must be done, because they’d lose too many profits in the way.

      In my understanding, housing prices in Germany are low because the state wisely avoided, by political means, the harmful “brick bubble” that was the main driver of Spanish economic growth in the 90s and early 2000s. It did not just affect Spain but also Britain and the USA and other EU countries like France or Italy, but not Germany. And that allows Germany a lower bottom line when dealing with salaries. Even then salaries are much higher than in Spain.

      Nobody ever seems to talk about this issue: salaries vs. cost of life (very particularly housing costs) but it is the core issue affecting the Eurozone. The only thing you hear about this is how to “contain” the collapse of housing prices driven by lack of demand, i.e. not what interest workers, or even productive sector bourgeoises (who would want to be able to pay lower salaries) but what interest speculators alone.

      “Besides, lowering overall costs of living to accommodate lower wages is not something that can easily be done by government intervention”…

      It all depends on priorities. As I just mentioned, Germany did it (wise) while the rest were foolishly doing the opposite. It’s about the only thing that can be done in a globalized capitalist frame, else you get the humanitarian catastrophe that shatters Greece, Spain and other states. And such a catastrophe can only lead in one direction and is not fascism (fascism offers no solution whatsoever, just some xenophobic demagogy), the direction is to break the rules of engagement, to challenge the globalized capitalist paradigm itself, to stop the mindless looting Capitalist has degenerated into (or maybe always was about).

      That’s the situation Greece is in: basically it’s given only one choice: become the Haiti of Europe, perpetually burdened by debt it cannot pay, throwing its society into collapse. But it has another choice in fact: to become the Cuba of Europe (or rather the Venezuela or Nicaragua of our continent), challenging the rules of engagement and putting the ball back into the Euro-core bourgeois yard. It’s a dangerous choice because it will be countered with all the might of the still semi-solid Capitalist system, but what else? It’s clear, sadly enough, that the common sense social-democrat proposals of Yanis et al. are not going anywhere and the Greece people demands effective action. And not just the Greek people.

      That’s the “hidden card” of Syriza in their negotiations: it’s not just about bakruptcy or Grexit (damage that can be absorbed) but about the possibility of changing the rules altogether… and succeed. They will probably have to play that card however because nobody seems to even blink, thinking it is a bluff. I don’t know if they will do but sooner than later someone will, there’s no other option in the current European state of things.

    • @Maju

      Let me be perfectly clear: I had no intention to compare the situation in Germany to the one in Spain, not to mention Portugal or Greece. Of course, even the working poor in Germany are a lot better off than the ones in those countries, or in many eastern european member-states of the EU, who nobody seems to care about these days.
      But I have to say, the notion of the german government making wise decisions to prevent people from slipping into poverty is a myth, or an echo of the past, maybe. Today, just like everywhere else in the free world, losing one’s job is regarded as a personal failure, a lack of individual competitiveness, for which society does not bear responsibility.
      It’s true, there was a time when things were different, but that ended shortly after the reunification – or I should say: after the organized looting of what was left of the former GDR – and culminated in the effective destruction of the once mighty german labour unions by a social-democrat chancellor.
      Public housing for example, as I mentioned before, has been on a steep decline ever since state and local governments started to liquidate their assets in order to keep financially afloat in the all-permeating holy spirit of austerity. Germany may not have had a problem with real estate bubbles in the past, but it is clearly working its way towards a major one right now, because even the allegedly strong german economy does not seem to provide lucrative opportunities for investors anymore and so everyone, including private households, is investing their savings in what we call ‘Betongold’ (‘concrete gold’), driving housing prices and rents in certain areas through the roof. On top of that, a lot of foreign capital, especially from the southern Eurozone, for fear of being turned into Drachmas or Lira, is now flowing into Germany and is also invested heavily in housing and real-estate projects. I should add that by that I don’t mean the construction of new tenements but the purchase and renovation of existing ones in order to sell them at a profit or attract wealthy tenants, resulting in the old ones losing their homes, because they can no longer afford to pay the rent. The federal-, state-, or local governments are doing exactly nothing to prevent this and for the aforementioned reasons are often actively aiding the investment firms in their quest to destroy affordable housing in urban areas.
      Again, I am not saying that this is even remotely as dire a situation as in many other european countries. I just wanted to explain that the notion of germany still being a ‘social’ market economy is wildly exaggerated and I feel a strong need to make a point of how incompetent my government really is and how it does not give a damn.
      I can agree with everything else you are saying.

  • Just read that Yanis has been replaced by Euklid Tsakalotos (2nd in rank in the Foreign Affairs Ministry) as visible face in the negotiations with Brussels, although Varoufakis still retains overseeing powers. A related change is the replacement of Yanis’ right hand Nikos Theocharakis by G. Chouliarakis, “considered close to Vice-President Yannis Dragasakis”. Source (es): http://www.publico.es/internacional/tsipras-aparta-al-ministro-varoufakis.html

    I have no idea what this means, if anything at all.