Saturday, May 19, 2012

Greece's Alexis Tsipras: 'It's a war between people and capitalism'

The Guardian ran a very interesting interview with Alexis Tsipras, the leader of Syriza party in Greece, who wants to require the lenders to recognize their losses on the Greek debt, end the policy of austerity and implement a growth agenda.

He wants to abandon the Japanese model and pursue the Swedish model for handling a bank solvency led financial crisis.  He wants the banks to absorb the losses on the excesses in the financial system and protect the real economy and its citizens from the devastating consequences of trying to support the excess debt.

For regular readers, there is a certain sense of deja vu as this theme appeared in an April post (If Greece's government cared about its citizens, it wouldn't bailout the banks), a March post (Under the Japanese model, Greece is heading for hell) and a February post (Do nations exist for capitalism or their citizens?).

"I don't believe in heroes or saviours," says Alexis Tsipras, "but I do believe in fighting for rights … no one has the right to reduce a proud people to such a state of wretchedness and indignity." 
The man who holds the fate of the euro in his hands – as the leader of the Greek party willing to tear up the country's €130bn (£100bn) bailout agreement – says Greece is on the front line of a war that is engulfing Europe
A long bombardment of "neo-liberal shock" – draconian tax rises and remorseless spending cuts – has left immense collateral damage. "We have never been in such a bad place,"... "After two and a half years of catastrophe Greeks are on their knees. The social state has collapsed, one in two youngsters is out of work, there are people leaving en masse, the climate psychologically is one of pessimism, depression, mass suicides." 
Please re-read his description of the social costs of implementing the Japanese model and protecting bank book capital levels at all costs.
But while exhausted and battle weary, the nation at the forefront of Europe's escalating debt crisis and teetering on the edge of bankruptcy is also hardened. And, increasingly, they are looking towards Tsipras to lead their fight. 
"Defeat is the battle that isn't waged,"...
"You ask me if I am afraid. I'd be afraid if we continued on this path, a path to social hell … when someone fights there is a big chance that he will win and we are fighting this to win."... 
The enemy is not Berlin, until now the biggest provider of the monumental rescue funds keeping the debt-stricken economy afloat. 
"It is not between nations and peoples," he says. "On the one side there are workers and a majority of people and on the other are global capitalists, bankers, profiteers on stock exchanges, the big funds. It's a war between peoples and capitalism … and as in each war what happens on the frontline defines the battle. It will be decisive for the war elsewhere." 
Greece, he says, has become a model for the rest of Europe because it was the first country to fall victim to the enforcement of hard-hitting 'growth through austerity' policies pursued in the name of resolving the crisis....
These policies are needed to support the Japanese model.
Under the current rescue plan, which has seen Greeks being subjected to relentless spending cuts and tax increases – including a dramatic drop in pay and pensions – it is the international financial system, and more especially banks, that are gaining most, he insists. 
"Who is surviving, tell me?" he asks. "Greeks aren't … The loans are going straight to interest payment and banks."
The only winners under the Japanese models are the bankers.
The other point that Tsipras wants to make is that he is not against the euro or monetary union. Fears that the country is about to exit the eurozone are about terrorising people to keep the status quo. They are why the country has seen "more then €75bn" of cash taken out of Greek banks since the outbreak of the crisis in Athens in December 2009....
Faced with possibility of having bank accounts that are currently in euros converted to drachmas that are worth half as much, naturally Greeks are taking money out of their banking system.

Notice, it is the threat of the currency conversion that makes the depositors nervous and not the simple fact that all the Greek banks are insolvent.
"We are not against a unified Europe or monetary union," he insists. "We don't want to blackmail, we want to persuade our European partners that the way that has been chosen to confront Greece is totally counter-productive. It is like throwing money at a bottomless pit." 
Over the past two years Athens had received two bumper bailouts from the EU and IMF: €110bn in May 2010 and then €130bn in March this year but the stringent fiscal adjustment programmes demanded in return for the aid are clearly not working, he says. 
"In six months we will be forced to discuss a third package and after that a fourth," he predicts, if the emphasis is not now put on re-energising Europe's most moribund economy through development and growth. 
"European tax payers should know that if they are giving money to Greece it should have an effect … it should go towards investments and underwriting growth so that the Greek debt problem can be confronted because with this recipe we are not confronting the debt problem, the real issue."....
Actually, the bailouts of Greece are really just an unnecessary bailout of the EU banking system.

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