Colin Fox: Greek implications are far reaching

[bemildred]

As the opinion polls anticipated Syriza, the ‘Coalition of the Radical Left’, won the Greek 
 general election on Sunday and ushered in a dramatic new phase in European politics. Amid celebratory flag-waving and songs I heard the new prime minister Alexis Tsipras tell a crowd of 100,000 packed into Propylaia Square in central Athens his triumph was “a victory for all the peoples of Europe fighting against austerity” and a resounding defeat for bankers and the forces of neoliberal capitalism.

Not since the 1930s has such a “radical” left-wing party been elected to government in Europe. Syriza will govern outright after winning almost half the seats in the Greek parliament as it also secured the support of another anti-austerity party, the Greek Independents. The implications of its success will be far reaching as it will now take up seats on the European Commission and Nato.

What is so radical about Syriza? First it promises to cancel half of Greece’s debts having concluded they are now unpayable. Greece owes €319 billion (£238bn) to the European Central Bank and International Monetary Fund but Syriza insists Greece cannot pay. Its creditors, however, do not agree and demand the loans are paid back in full. The stage is set for a profound confrontation. There appears to be little mood for compromise on either side. Moreover, the leader of the Spanish anti-austerity party Podemos, Pablo Iglesias, has resolved to follow Syriza’s lead if he wins the general election there in November.

Equally, if not more important, to Greek voters was Tsipras’ promise to double the state pension and return the national minimum wage to 2008 levels. The Greek economy has shrunk by 25 per cent since 2008 and social security has collapsed as a result of the austerity measures imposed by the ECB in conjunction with previous Greek governments.

http://www.edinburghnews.scotsman.com/news/opinion/colin-fox-greek-implications-are-far-reaching-1-3671049

[bemildred]

1. Europe's centre-left, rattled by Syriza, wonders which way to jump

(Reuters) - European politicians at opposite ends of the spectrum celebrated the election victory of Greece's anti-austerity Syriza party on Monday, but Alexis Tsipras' post-communist triumph is forcing mainstream leftists to reconsider their position.

Tsipras has promised to reverse five years of "humiliation and suffering" caused by spending cuts, the price of a 240-billion-euro bailout from international creditors. His movement, now building a coalition with the right-wing Independent Greeks, will reject fiscal austerity and demand the country's foreign debt be partially written off.

That pledge poses a dilemma for mainstream social democratic parties that signed up to policies of fiscal discipline during the euro zone debt crisis.

They will now bk.reuters.com/article/2015/01/27/greece-election-left-idUKKBN0L011B20150127?rpc=401e assessing whether to veer further left and try to surf the public anger that carried Syriza to power. The alternative of sticking to fiscally orthodox policies carries a risk of being swept away by insurgent populist parties reacting to high unemployment and falling living standards.

http://uk.reuters.com/article/2015/01/27/greece-election-left-idUKKBN0L011B20150127?rpc=401

[bemildred]

2. Opinion: How Wall Street squeezed Greece — and Germany

SAN FRANCISCO (MarketWatch) — Europe’s political leaders and bankers would have you believe that the conflict between Greece and the European Union is a tug of war between a deadbeat nation and its richer ones who have come to the debtor’s aid time and time again.

Instead, what most of these leaders miss is that it’s a bank bailout in plain view.

What’s really happened is that since Greece ran into serious trouble repaying its debts four years ago, Germany, France and the EU have instituted what can only be described as a massive bailout of its own financial system — shifting the burden from its banks to taxpayers.

Last week, asset manager Mike Shedlock republished research by Eric Dor, a French business school director, and it shows the magnitude of the shift. To put it simply, German taxpayers are on the hook for roughly $40 billion in Greek debt. German banks? Just $181 million, though they do hold $5.9 billion in exposure to Greek banks. Those numbers are a flip-flop from where things stood less than five years ago.

http://www.marketwatch.com/story/how-wall-street-squeezed-greece-and-germany-2015-01-27

[bemildred]

3. . nt

[Fred Sanders]

4. Cancelling half the foreign debt will be a transfer of wealth from the top to the bottom.

About fucking time and a good start.

[bemildred]

5. It's indeed a good start.

And the right way to do it too, we need to un-hamstring these governments so it will be at least POSSIBLE that they might do their jobs.

[Fred Sanders]

6. Check out what Bolivia has done with unrestricted ability to implement socialist policies.

http://www.nytimes.com/2014/02/17/world/americas/turnabout-in-bolivia-as-economy-rises-from-instability.html?_r=0

[bemildred]

7. Yes. I like Morales. nt

[bemildred]

8. Pro tip for the Eurozone: Give Greece's Syriza what it wants

Syriza, a left-wing party, won a resounding victory in Greek elections over the weekend, running on a platform to roll back a vicious austerity program imposed by Eurozone elites. Now the leaders of the Eurozone must choose whether they will respect the will of Greek voters or double down on an austerity regime that has crippled the Greek economy.

New Greek Prime Minister Alexis Tsipras says his intention is not to leave the euro, but to renegotiate the terms of Greece's austerity package. If they have any sense at all, Eurozone elites will give Syriza what it wants.

Recall how we got here: Back in 2010, a newly elected Greek government discovered that previous governments had been cooking the books, and that Greece owed far more to its creditors than was thought. Running out of cash, the Greeks asked for a loan to avoid default.

The Eurozone "troika" — the IMF, the European Commission, and the European Central Bank — had the money. But the troika, led by German Chancellor Angela Merkel and the French, strongly disliked the idea of bailing out the Greeks. So in exchange for the loan it mandated sharp tax hikes, severe spending cuts, and a hollowing-out of the public sector — the equivalent of beating the Greek economy senseless with a pipe wrench.

http://theweek.com/articles/535811/pro-tip-eurozone-give-greeces-syriza-wants