VAROUFAKIS ON THE HIGHWAY

c 2015 Tristan Winter

Feb. 19, 2015

I don’t know how much of what I’d written was published because I avoid Facebook like the plague (in some parlous future people will probably say ‘I avoid the plague like Facebook’), but here are some updates and insights for those readers I’ve left gnawing their seats.

On Monday, Greece’s new Prime Minister Alexis Tsipras laid out plans to undo labor market deregulation and legislate protection against home foreclosures. But keep in mind that his internal moves are all dependent on his fight against external powers.

On that front, in the last couple of weeks, Siryza’s Finance Minister Yanis Varoufakis has torn through France, Britain, Italy and Germany, and met with as many as 100 European banks and other financial institutions. All this travelling is being done on economy-class flights, his office having scrapped its limos and even its security detail in order to re-hire the janitors. He also had uneasy meetings with EC head Jean-Claude Juncker. What he’s been doing is what Syriza promised: treating directly with lenders and lender nations and refusing to accept the interference of the Troika. The Troika is actually an auditing committee of the IMF, the European Commission (EC) and the European Central Bank (ECB), which acts like a parole board tormenting economic delinquents. What he’s saying is also what Syriza promised: that Greece does not want any more loans. The Syriza government believes it needs a continuance -a bridging period- of some mere months and the freedom to restructure the nation to be able to start fixing the devastation contracted by the previous governments.

No political body except Syriza itself anticipated any success. But just two days ago, European commissioner Pierre Moscovici drafted an agreement built around the following phrases: “…In particular, the Hellenic Government commits to implementing long overdue reforms to tackle corruption and tax evasion, and upgrade the public administration.” And: “(The above) forms the basis for an extension of the current loan agreement, which could take the form of a [four-month] intermediate programme, as a transitional stage to a new contract for growth for Greece, that will be deliberated and concluded during this period.” The first capitulation to reason is in the word growth.

To normal people, it seems self-evident that a nation’s economic activity must grow, not be boiled down to the bones, in order to pay its bills of whatever size. But the German-led institutions somehow couldn’t comprehend that.  A core cognitive problem is that the ECB -which Germany could have only joined if it followed the success of their own Bundesbank- maintains the Germanic taboo against inflation. Unfortunately, this sacrifices economic growth in exchange for the safety of zero inflation, so the hassle arises from zero inflation equaling zero growth. Growth is what the Greeks need both to service the loans and to repair their society. But the clowns at the financial institutions figured that continuous loans and extortions of national resources would keep Greece paying the interest, and so they actually ruled that the situation is ‘sustainable.’

Thus, the debt is ‘sustainable’ but never repayable. The Greeks had become lab rats on a wheel. Starving away.

Sustainability, however, has broader meanings when it is applied to the society that must exist to pay the creditors. Since the Greek system was dying, reforms are necessary to heal it at all, let alone sustain it. As the world saw, the reforms mandated by the Troika were strychnine. What reforms, then, does the new Greek government believe are required to put the country back in action? In Monday’s briefings Syriza showed the public documentation of its positions in the financial negotiations, including: No further recessionary measures such as pension cuts or value-added tax increases. during the interim bridging period, and a determination “to cut the Gordian Knot” of bureaucracy, reform tax, the justice system, media and dismantle cartels. To this, in their first 3 weeks in office Syriza launched bills, ministries and prosecutors to assess and staunch the national bleeding caused by privatization scams and oligarchical tax evaders. Both Syriza and its junior partner have decided to investigate the millionaire tax offenders on the famous Largarde list (the same list that the previous governments had in hand and did nothing about…except to prosecute with the threat of imprisonment the one Greek journalist who published the list (the legal pretense was ‘invasion of privacy’)). 

It seems that the Syriza perspective is that excessive capitalism is unsustainable. Indeed, while they are working -damn quickly- to save the country for the Euro, the Euro establishment and other national politicians have profited from the plundering that’s been going full steam since the crash. To see the full circle: the men who have been conducting colossal tax evasion, the corporate gods who actually cause the crashes, the banks that have been convicted of laundering billions for drug cartels and designated terrorist groups, have all increased their fortunes and continue to do so, with only the slightest of fines as punishment (the largest of which was equal to one month’s profit). For the laws are written to enable this sort of criminality, and any government levying a fine is simply trying to grab a cut of the action after the dirty job’s already done.

So we return to the notion of ‘sustainability.’ National governments and international organizations actually see this level of criminality as ‘sustainable,’ in the same way they view their botched economics as ‘sustainable.’

The problem is, it ain’t. Greed is, but neither the material goods nor the systems rigged to facilitate it are.