This past August marked the second anniversary of the Greek debt crisis and the third major piling on of debt on Greece in August 2015 by the Eurozone \u00e2\u20ac\u02dcTroika\u00e2\u20ac\u2122 of European Commission, European Central Bank, and the IMF. That 2015 third debt deal added $86 billion to the previous $230 billion imposed on Greece\u00e2\u20ac\u201dall to be paid by various austerity measures squeezing Greek workers, taxpayers, retirees, and small businesses demanded by the Troika and their northern Euro bankers sitting behind it.
\nStudies by German academic institutions showed that more than 95% of the debt repayments by Greece to the Troika have ended up in Euro bankers\u00e2\u20ac\u2122 hands.
\nBut the third debt deal of August 2015, which extends another year to August 2018, was not the end. Every time a major multi-billion dollar interest payment from Greece was due to the Troika and their bankers, still more austerity was piled on the $83 billion August 2015 deal. The Troika forced Greece had to introduce even more austerity in the summer of 2016, and again still more this past summer 2017, to pay for the deal.
\nLast month Syriza and its \u00e2\u20ac\u02dcrump\u00e2\u20ac\u2122 leadership\u00e2\u20ac\u201dmost of its militant elements were purged by Syriza\u00e2\u20ac\u2122s leader, Alex Tsipras, following the August 2015 debt deal\u00e2\u20ac\u201dhailed as some kind of significant achievement that the private banks and markets were now willing to directly lend money to Greece once again. Instead of borrowing still more from the Troika\u00e2\u20ac\u201dthe bankers representatives\u00e2\u20ac\u201dGreece now was able once again to borrow and owe still more to the private bankers instead. Pile on more private debt instead of Troika debt. What an achievement!
\nGreece\u00e2\u20ac\u2122s 2012 second debt deal borrowed $154 billion from the Troika, which Greece then had to pay, according to the debt terms, to the private bankers, hedge funds and speculators\u00e2\u20ac\u2122 which had accumulated over preceding years and the first debt crisis of 2010. So the Troika simply fronted for the bankers and speculators in the 2nd and 3rd debt deals. Greece paid the Troika and it paid the bankers. But now, as of 2017, Syriza and Greece can indebt themselves once again directly to the bankers by borrowing in public markets.
\nWhat it shows is that supra-state institutions like the Troika function as debt collectors for the bankers and shadow bankers when the latter cannot collect their payments on their own. This is the essence of the new, 21st century form of financial imperialism. The Supra-State prefers weaker national governments to indebt themselves directly to the banks and squeeze their own populace with Austerity whenever they can to make the payments. But the Supra-State will step in if necessary to play debt collector if and when popular governments get control of their governments and balk at onerous debt repayments.
\nSyriza came to power in January 2015 as one of those popularly elected governments intent on adjusting the terms of debt repayment. But after a tragic, comedy of errors negotiation effort, capitulated totally to the Troika\u00e2\u20ac\u2122s negotiators after only seven months.
\nThe capitulation by Syriza\u00e2\u20ac\u2122s leader, Alex Tsipras, in July 2015 was doubly tragic in that he had just put to a vote to the Greek people a week beforehand whether to reject the Troika\u00e2\u20ac\u2122s deal and its deeper austerity demands. And the Greek popular vote called for a rejection of the Troika\u00e2\u20ac\u2122s terms. But Tsipras and Syriza rejected their own supporters, not the Troika, and capitulated totally to Troika terms.
\nThe August 2015 3rd debt deal quickly thereafter signed by Syriza-Tsipras was so onerous\u00e2\u20ac\u201dand the Tsipras-Syriza treachery so odious\u00e2\u20ac\u201dthat it left opposition and popular resistance temporarily immobilized. That of course was the Troika\u00e2\u20ac\u2122s strategic objective. Together with Tsipras they then pushed through their $83 billion deal, while Tsipras simultaneously purged the Syriza party to rid it of elements refusing to accept the deal. Polls showed at that time, in August-September 2015, that 70% of the Greek people opposed the deal and considered it even worse than the former two debt agreements of 2010 and 2012. Other polls showed 79% rejected Tsipras himself.
\nTo remain in power, Tsipras immediately called new Parliamentary elections, blocking with the pro-Troika parties and against former Syriza dissidents, in order to push through the Troika\u00e2\u20ac\u2122s $83 billion deal. This week, September 20, 2017 marks the two year anniversary of that purge and election that solidified Troika and Euro banker control over the Syriza party\u00e2\u20ac\u201da party that once dared to challenge it and the Eurozone\u00e2\u20ac\u2122s neoliberal policy regime.
\nThe meteoric rise, capitulation, collapse, and aftermath \u00e2\u20ac\u02dcright-shift\u00e2\u20ac\u2122 of Syriza raises fundamental questions and lessons still today. strategies by governments and states that make a social-democratic turn in response to popular uprisings, and then attempt to confront more powerful neoliberal capitalist regimes that retain control their currencies, their banking systems, and their budgets as in the case of Greece.
\nThe following is an excerpt from the concluding chapter of this writer\u00e2\u20ac\u2122s October 2016 book, \u00e2\u20ac\u02dcLooting Greece: A New Financial Imperialism Emerges\u00e2\u20ac\u2122, Clarity Press, which questioned strategies that attempted to resurrect 20th century forms of social-democracy in the 21st century world of supra-State neoliberal regimes. It summarizes Syriza\u00e2\u20ac\u2122s \u00e2\u20ac\u02dcfundamental error\u00e2\u20ac\u2122\u00e2\u20ac\u201da na\u00c3\u00afve belief that elements of European social democracy would rally around it and together they\u00e2\u20ac\u201di.e. resurgent social democracy and Syriza Greece\u00e2\u20ac\u201dwould successfully outmaneuver the German-banker-Troika dominated Euro neoliberal regime that solidified its power with the 1999 Euro currency reforms.
\nSyriza and Tsipras continue to employ the same error, it appears, hoping to be rescued by other Euro regime leaders instead of relying on the Greek people. Tsipras-Syriza recently invited the new banker-president of France, Emmanuel Macron, who this past month visited Athens. Their meeting suggests Tsipras and the rump Syriza still don\u00e2\u20ac\u2122t understand why they were so thoroughly defeated by the Troika in 2015, and have been consistently pushed even further into austerity and retreat over the past two years. But perhaps it no longer matters. Polls show Tsipras and the rump Syriza trailing their political opponents by more than two to one in elections set to occur in 2018.
\nEXCERPT from \u00e2\u20ac\u02dcLooting Greece\u00e2\u20ac\u2122, Chapter 10, \u00e2\u20ac\u02dcWhy the Troika Prevailed\u00e2\u20ac\u2122.
\nSyriza\u00e2\u20ac\u2122s Fundamental Error<\/p>\n
To have succeeded in negotiations with the Troika, Syriza would have had to achieve one or more of the following\u00e2\u20ac\u201d expand the space for fiscal spending on its domestic economy, end the dominance and control of the ECB by the German coalition, restore Greece\u00e2\u20ac\u2122s central bank independence from the ECB, or end the control of its own Greek private banking system from northern Europe core banks. None of these objectives could have been achieved by Syriza alone. Syriza\u00e2\u20ac\u2122s grand error, however, was to think that it could rally the remnants of European social democracy to its side and support and together have achieved these goals\u00e2\u20ac\u201despecially the expanding of space for domestic fiscal investment. It was Syriza\u00e2\u20ac\u2122s fundamental strategic miscalculation to think it could rally this support and thereby create an effective counter to the German coalition\u00e2\u20ac\u2122s dominant influence within the Troika.<\/p>\n
Syriza went into the fight with the Troika with a Greek central bank that was the appendage, even agent, of the ECB in Greece, and with a private banking system in Greece that was primarily an extension of Euro banks outside Greece. Syriza struggled to create some space for fiscal stimulus within the Troika imposed debt deal, but it was thoroughly rebuffed by the Troika in that effort. It sought to launch a new policy throughout the Eurozone targeting fiscal investment, from which it might benefit as well. But just as the ECB was thwarted by German-core northern Euro alliance countries, the German coalition also successfully prevented efforts to promote fiscal stimulus by the EC as well. The Troika-German coalition had been, and continues to be, successful in preventing even much stronger members states in France and Italy from exceeding Eurozone fiscal stimulus rules. The dominant Troika German faction was not about to let Greece prevail and restore fiscal stimulus, therefore, when France and Italy were not. Greece was not only blocked from launching a Euro-wide fiscal investment spending policy; it was forced to introduce \u00e2\u20ac\u02dcreverse fiscal spending\u00e2\u20ac\u2122 in the form of austerity. <\/p>\n
Syriza\u00e2\u20ac\u2122s insistence on remaining in the Euro system meant Grexit was never an option. That in turn meant Greece would not have an independent central bank providing liquidity when needed to its banking system. With ECB control over the currency and therefore liquidity, the ECB could reduce or turn on or off the money flow to Greece\u00e2\u20ac\u2122s central bank and thus its entire private banking system at will\u00e2\u20ac\u201dwhich it did repeatedly at key moments during the 2015 debt crisis to influence negotiations. <\/p>\n
As one member of the Syriza party\u00e2\u20ac\u2122s central committee reflected on the weeks leading up to the July 5 capitulation, \u00e2\u20ac\u0153The European Central Bank had already begun to carry out its threats, closing down the country\u00e2\u20ac\u2122s banking system\u00e2\u20ac\u009d. <\/p>\n
The ECB had actually begun turning the economic screws on Syriza well before the final weeks preceding the referendum: It refused to release interest on Greek bonds it owed under the old debt agreement to Greece from the outset of negotiations. It refused to accept Greek government bonds as collateral necessary for Greek central bank support of Greece\u00e2\u20ac\u2122s private banks. It doled out Emergency Lending Assistance, ELA, funds in amounts just enough to keep Greek banks from imploding from March to June and constantly threatened to withhold those same ELA funds when Troika negotiators periodically demanded more austerity concessions from Greece. And it pressured Greece not to impose meaningful controls on bank withdrawals and capital flight during negotiations, even as those withdrawals and money flowing out of the country was creating a slow motion train wreck of the banking system itself. The ECB, in other words, was engineering a staged collapse of Greece\u00e2\u20ac\u2122s banking system, and yet Syriza refused to implement any possible policy or strategy for preventing or impeding it. <\/p>\n
For a more detailed analysis of the respective strategies and tactics of Syriza and the Troika in 2015 and after, and the role played by individual leaders and organizations, see the concluding chapter of Jack Rasmus, \u00e2\u20ac\u02dcLooting Greece: A New Financial Imperialism Emerges\u00e2\u20ac\u2122, Clarity Press, October 2016, pp. 231-57. Dr. Rasmus is also author of the recently published, \u00e2\u20ac\u02dcCentral Bankers at the End of Their Ropes?: Monetary Policy and the Coming Depression\u00e2\u20ac\u2122, Clarity Press, August 2017.<\/p>\n","protected":false},"excerpt":{"rendered":"
copyright Jack Rasmus 2017
\nDr. Rasmus reviews events in Greece since the August 2015 debt agreement with the Troika, describing how the Troika has demanded, and received, further tightening of austerity measures in 2016 and again in 2017 as condition of disbursement of credits to Greece required by the 2015 debt deal. The \\’rump\\’ Syriza government continues to agree to further austerity. Greece now gets to borrow from private vulture bankers once again, which is hails as a \\’great achievement\\’, substituting private debt for Troika debt. The article adds an excerpt on \\’Syriza\\’s Fundamental Error\\’ from Dr. Rasmus\\’s October 2016 book, \\’Looting Greece: A New Financial Imperialism Emerges\\’, by Clarity Press (see book icon this homepage and \\’Reviews\\’ on toolbar for review of book).<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":[],"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/www.kyklosproductions.com\/posts\/wp-json\/wp\/v2\/posts\/333"}],"collection":[{"href":"https:\/\/www.kyklosproductions.com\/posts\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.kyklosproductions.com\/posts\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.kyklosproductions.com\/posts\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.kyklosproductions.com\/posts\/wp-json\/wp\/v2\/comments?post=333"}],"version-history":[{"count":0,"href":"https:\/\/www.kyklosproductions.com\/posts\/wp-json\/wp\/v2\/posts\/333\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.kyklosproductions.com\/posts\/wp-json\/wp\/v2\/media?parent=333"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.kyklosproductions.com\/posts\/wp-json\/wp\/v2\/categories?post=333"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.kyklosproductions.com\/posts\/wp-json\/wp\/v2\/tags?post=333"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}