by Manolis Spanakis

Friday, 18 May 2012

On the "Greek" crisis

Tonight or never (Ce soir ou jamais) of 15 May, 2012
Televised magazine of French national television channel France 3; tonight’s second part (00:51-01:43) is a discussion on the Greek crisis


Ira Feloukatgi, Greek journalist, poet
Michel Vakaloulis, Greek philosopher, lecturer in Paris
Jean Quatremer, journalist Liberation
Christian Saint-Etienne, economist
Jacques Sapir, economist
Claude Hagege, linguist
Daniel Cohen, economist
Michela Marzano, philosopher

Approximate transcription:

[presenter] Greece: the subject of anxiety Nr 1; Greece that has no government no more

[spot] Starts with pictures of Chyssi Avgi (Golden Dawn) big boys and some declarations of their chief against the measures of rigor

[narrator] A breaking entry to the parliament: The neo-Nazi party which never had more than 0.29% now achieves 7% and will have 21 MPs

[spot] Continues with pictures of a peaceful demonstration with smiling Tsipras in the middle and some declarations by the latter.

[narrator] The small party of extreme left is the great winner of these elections; now second and wants to pass an anti-austerity message to the European leaders. Instead, the two pro-rigor parties have collapsed.

[narrator translating Tsipras] SYRIZA refuses to participate in a government with those who signed the austerity measures, and be complicit with those that ruined Greece

[narrator] True that the Greeks voted at about 70% against the austerity measures but they are 80% to want to keep the Euro

[narrator] The ultimatum of the CE: application of the measures or exit from euro provokes the rage of Cohn Bendit

[Cohn Bendit in spot] Parallel with Versailles for the Germans; we bring Greece to catastrophe and then we say it is a catastrophe; this is unacceptable

[Feloukatgi] The elections have functioned as a referendum like that proposed by Papandreou and refused by Sarkozy. 78% of the Greeks say they cannot bear it with 500 € per month and all social gains abolished. It is always the same who pay.

[Vakaloulis] Small history of the 32 past years of Greek client-politics by the two parties. SYRIZA is not an "extreme" left but the equivalent of "Front de Gauche" or of the "European Left" party, of which Tsipras is the vice president. For arithmetical but also for political reasons - as Tsipras said, we cannot put the wolf to watch the sheep - no government could be formed this time. Greece had 7% recession last year and similar for 5 consecutive years; and it is, of course, out of the question to form a government with the two parties that are responsible of this immense disaster and that the people have repudiated. After the new elections, it is possible that there will be a new formation of the left which may create a new context.

[Quatremer] Some numbers about small parties and abstention. This elections were demanded by a "client-oriented" traditional conservative, A Samaras, who is the incarnation of the Greek disease, in the worst moment for personal ambition, despite everybody's warnings. He thought that with his clientist methods he will take the usual 30% and will become prime-minister. So all this disaster is due to one single man who is the incarnation of the Greek disease.

[Saint-Etienne] The Greek problem is only the manifestation of a much deeper crisis. Euro was created without the conditions required for its success being met. No central economical government, no federal budget, no co-ordination, huge difference in economies between north and south. The Greek crisis has simply brought to surface that other fundamental crisis. The south needs - but cannot - be re-industrialized in the same speed as the north can and that causes an export-import imbalance. This is particularly acute in the case of Greece because there is practically no industry remaining there.

[Sapir] Greece exports agricultural products to Balkans. Also, there was a naval industry. Both activities were done in $ and have been destroyed because of the high €/$ exchange rate.

[Hagege with Feloukatgi and Quatremer] The rich and the church do not pay taxes. The Greek state does not (cannot) control the rich. The situation is pre-revolutionary. There is no other solution but a revolution, a violent revolution.

[Cohen] There is, of course, a Greek crisis but these is also a European crisis. May be taxation is not sufficient but is not null. It is 40% compared to 44% of France. Some arithmetic proving that the losses of wealth and the debt cannot be explained only by missed taxes. Instead, the catastrophe is explained by an erroneous management of the crisis in the vicious circle of austerity causing recession which is then managed with more austerity causing more recession. The Greeks want to stay in the Euro zone while rejecting the measures because their intuition is that they have fallen in a absurd trap. This is exactly what happened in the 30s; he explains in detail.

[Saint-Etienne] This analysis is exact but not sufficient; a federal structure is also required for a viable Euro. If there is no political will to construct a economical and monetary federation we go all in the disaster.

[presenter] Jacque Sapir, you just came back from Greece; what did you tell them? to exit euro?

[Sapir] No; we should know, there is no way to oblige a country to exit Euro. This is legally impossible. There is no legal framework and all the black mails, wherever they come from, are absolute nonsense (vide de sense). What I have told them is this: if SYRIZA takes the government and if Europe stops payments, then they should requisition the Greek central bank and print Euros. Of course, this would be a total rupture with the agreement; but this is technically possible. We have known an example of a monetary zone that exploded in exactly this way. 1993 the Soviet Ruble - do you remember? Yes (Daniel Cohen); we were together in Moscow at that time. The Soviet Union exploded because Ukraine, and few other countries, decided to monetize in this way their commercial deficit with Russia. The Greeks have this arm in their hands.

[Quatremer] The nuclear button, you mean

[Sapir] Absolutely!

[Saint-Etienne] But Euros have an ID number.

[Quatremer] He (JS) proposes that they can violate the stability agreement; they can violate everything.

[Sapir] The ID number is only on the Euro notes. But a large part of the monetary mass is the scriptural money and on this there is no ID number. I completely agree with Daniel Cohen, we are living the policy of deflation of the 30s. The austerity plans applied by Chancellor Brüning at the beginning of 1930 which, by the way present absolutely impressive similarity with the austerity plans applied today in Greece, Spain, and in Portugal. It is EXACTLY the same. The result...

[Hagege] The Nazis!

[Sapir] Exactly ! the unemployment increased from 14% to 30% at the end of the 30s. Certain, we must deal with austerity. The problem is that Germany is not prepared to do any concession and this is where we are going to have a blockage.

[Feloukatgi] Sarkozy saw it is not going to work and suggested, at the beginning to restructure everything but then Merkel "fell on it" and blocked everything and Sarkozy forgot about it all. Now the Greeks pose their new hopes on Hollande.

[presenter] But we also have the case of Spain and Italy. Look...

[spot] Pictures of huge demonstration of the indignant in Madrid and some interviews.

[Narrator] 100 000, perhaps more, angry Spanish; The People - United - Will Never - Be Defeated [translating "El pueblo unido jamas sera vencido"].

[spot] Pictures of riots against tax offices in Italy.

[Marzano] We see in Italy exactly the same thing as in Greece. The popularity of M Monti drops at spectacular rate. The pact was originally based on three principles: austerity, certainly, but also equality and growth. But nether equality is there - it is always the same who pay - nor growth. By the way, the situation is well known in Italy also from the 30s.

[Hagege addressed to Vakaloulis] You have not mentioned the growing neo-Nazi movement in Greece which is reminiscent of the election of Nazis in Germany.

[Vakaloulis] Certain, the neo-Nazis obtained 7% of the vote this time but, we must say, there was already an extreme-right party in Greece, ultra-xenophobe, ultra-orthodox, ultra-nationalist, called LAOS. This use to obtain 5-6%. But their leader has made the fatal mistake to collaborate with PASOK and ND in the last government. This burned completely their percentage and they could not enter the parliament. We must also say that, because PASOK and ND had nothing else to propose in order to attract voters, they played the card of the immigrants. There was a massive turn of the electoral campaign to the right. The socialist minister of Civil Protection applied an operation "coup-de-ballet" of those "dirty" immigrants, who "pollute", who are "drugged", from the center of Athens. So, there was a right turn of the electoral campaign just as it also happen in France, by the way.

[presenter] Exactly, talking about France, look at the revision forecast of growth in France.

[spot] Report on dull growth forecast from Brussels.

[Cohen] Technical analysis.

[Cohen] We accuse the Greeks to be "messy" but the Spanish we a MODEL of "good students" and so were the Irish. And yet gangrene is spreading in Spain. When a state, like California, bankrupts in the US, this does not affect the health of the banks because these are protected by a federal mechanism. It is precisely this mechanism that misses from Europe.

[Cohen with Saint-Etienne] Argument on whether, the political federalization should precede economical federalization, or vice versa.

[Cohen] A central European bank mechanism is the absolute minimum requirement for avoiding crises like this.

[Saint-Etienne] This mechanism is federal and requires a political federation; and the Germans will never accept that.

[Cohen] The German wise men, the 5 wise advisors of Merkel, have advised to create institutions of exactly this type.

[Sapir] All this is nice, but we should know that European rules are inferior to the German constitution; and this is an extremely important asymmetry in Europe. So, the European rules must respect the German constitution (except if the German people allows; addition by Saint-Etienne accepted by Cohen). Now, it is POSSIBLE to change the German Constitution. The problem is, we need time. The second point is that vicious circle that you (Cohen) have just mentioned. This is what happens in Spain. One day, Spain will need and ask for this support from the European bank.

[Saint-Etienne] And the day Spain will do that, Italy and France will do the same.

[Sapir] If there is a way to make Germany move forward...

[presenter]... except to bombard them!

[Sapir]... yes, yes, this is also a solution (Sapir is the author of "What if we continued the 40s war with Germans?”)

[Quatremer] The problem is that there is growing power of decision making in Brussels without the necessary democracy behind; democracy that Sarkozy has always absolutely refused. The Germans have always asked for this federal jump; it is the French who refuse it.

[Hagege] It is not an economical Europe but rather a political Europe what we need.

[Saint-Etienne] The question is now, with which countries we should build the political federation, the 27? the 17? the 7?

[Presenter] And Greece in all that, since we are talking about Greece?

[Vakaloulis] A German philosopher said that there is no people (or country) that cannot change. I remind you that Greece had the second highest growth rate in the world (7%) after Japan from the 50s to 74. The take-home message is that we cannot reform an economy against the people, or peoples.

[Hagege to Vakaloulis] So, why Greece has fallen into depression?

[Vakaloulis] This is a long story that can be summarized into the system of clientist politics installed by PASOK and ND.

[Feloukatgi]... and those parties have never been brought to Justice (Feloukatgi)

[Cohen] During the construction of Europe, we have always thought that economical unity will inevitably bring political unity and we have completely neglected the question of citizenship. We do not learn European languages, for example.

[Saint-Etienne] An economical union cannot function without political union.