[Marxism] Greece should reject the Eurozone’s latest ultimatum; The Financial Attack on Greece, Michael Hudson
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Wed Jul 8 19:59:32 MDT 2015
Greece should reject the Eurozone’s latest ultimatum
by Jerome Roos
ROAR magazine, July 8
. . .
Given this constellation of forces and the acute economic emergency at
home, there seems to be only one sensible thing for Tsipras to do
right now: to fly back home and inform his people that he really tried
to restart negotiations in good faith but was rebuffed by the
creditors, who presented him with yet another ultimatum and yet
another disastrous and self-defeating austerity program.
This announcement should then immediately be followed by a series of
rapid unilateral moves to stave off financial collapse while formally
staying within the euro, at least until the government can get the
proper preparations in place for a more radical rupture with the
These unilateral moves would include taking over the four systemic
banks, issuing an emergency decree to seize the central bank,
replacing its governor and taking control of its secret reserves, and
immediately starting to issue fresh liquidity (in the form of IOUs and
20 euro bills printed by the Bank of Greece without the ECB’s
approval) to keep the economy going.
As Ambrose Evans-Pritchard reports, Tsipras rejected this precise
course of action after Sunday’s referendum, deeming it too risky and
too confrontational. But now that the creditors have taken their
financial blackmail to a whole new level and the domestic economic
emergency is spinning out of control, it looks like he will soon run
out of other options. The choice — rupture or surrender — is still the
same, but the circumstances have changed dramatically. Now the streets
are full and the banks are empty. This is the time for bold action.
Last Sunday, 61% of Greeks said NO to austerity and financial
blackmail. Next Sunday, Tsipras should do the same.
_ _ _ _ _ _ _ _
Jerome Roos is a PhD researcher in International Political Economy at
the European University Institute, and founding editor of ROAR
The Financial Attack on Greece: Where Do We Go From Here?
by Michael Hudson
Counterpunch, July 8
. . .
Imposed by the monopoly of inter-governmental financial institutions –
the IMF, ECB, U.S. Treasury, and so forth – creditor financial
leverage has become the 21st century’s new mode of warfare. It is as
devastating as military war in its effect on population: rising
suicide rates, shorter lifespans, and emigration of the age-cohort
that always have been the major casualties of war, young adults.
Instead of being drafted into the army to fight foreign foes, they are
driven from their homes to find work abroad. What used to be a rural
exodus from the land to the cities from the 17th century onward is now
a “debtor exodus” from countries whose governments owe unpayably high
sums to creditor governments and to the banks and bondholders on whose
behalf they impose their policy.
While pushing the world economy into a state of war internationally,
high finance also is waging a class war against labor – and ultimately
against governments and thus against democracy. The ECB’s policy has
been brutal toward Greece this year: “If you do not re-elect a
right-wing party or coalition, we will destroy your banking system. If
you do not sell off your public domain to buyers we will make life
even harder for you.”
No wonder Greece’s former Finance Minister Janis Varoufakis called the
Troika’s negotiating position “financial terrorism.” Their idea of
“negotiation” is surrender. They are unyielding. Official creditor
institutions threaten to isolate, sanction and destroy entire
economies, including their industry as well as labor. It transforms
the 19th-century class war into a purely destructive meltdown.
. . .
Every nation has a right to defend itself against attack – financial
attack just as overt military attack. That is an essential element in
the principle of self-determination.
Greece, Spain, Portugal, Italy and other debtor countries have been
under the same mode of attack that was waged by the IMF and its
austerity doctrine that bankrupted Latin America from the 1970s
onward. International law needs to be updated to recognize that
finance has become the modern-day mode of warfare. Its objectives are
the same: acquisition of land, raw materials and monopolies.
. . .
Current eurozone rules – the Maastricht and Lisbon treaties – aim to
block governments from running budget deficits in a way that spend
money into the economy to revive employment. The new goal is only to
rescue bondholders and banks from making bad loans and even fraudulent
loans, bailing them out at public expense. Economies are obliged to
turn to commercial banks for loans to obtain the money that any
economy needs to grow. This principle needs to be rejected on grounds
that it violates a basic sovereign right of governments and economic
Once an economy is fiscally crippled by (1) not having a central bank
to finance government spending, and (2) by limiting government budget
deficits to just 3% of GDP, the economy must shrink. A shrinking
economy will mean fewer tax revenues, and hence deeper government
budget deficits and rising government debt.
The ultimate killer is for the ECB, IMF and EC to demand that
governments pay their debts by privatizing public infrastructure,
natural resources, land and other assets in the public domain. To
compound this demand, the Troika have blocked Greece from selling to
the highest bidder, if that turns out to be Gazprom or another Russian
company. Financial politics thus has become militarized as part of
NATO’s New Cold War politics. Debtor economies are directed to sell to
euro-kleptocrats – on terms financed by banks, so that interest
charges on the deal absorb all the profits, leaving governments
without much income tax.
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