Newsletter July August 2015

Editorial

After the July 11th agreement, something PM Tsipras said he did not agree with but still followed suit to avoid plunging Greece into an ever deeper crisis, people realize now comes a time to adapt to whatever needs to be done. They anticipate difficult times, are depressed after having had up high their hopes for another kind of settlement but even Syriza itself realizes mistakes have been made and they under estimated the power and hardened position of other Euro zone ministers aside from hard liner Schäuble. This self critical awareness indicates that Syriza as a party finds itself still in a transition from being an up-shoot party of the opposition to becoming a party of governance. It has to learn to avoid the pitfalls of the media, for speaking into the microphone or posting messages on twitter is not yet really politics. They had to realize that nothing moves in reality, if not in agreement with the other partners and if with no power whatsoever safe the morality of not being a party of the corrupted ones.

However, Syriza faces the difficulty as well within its own ranks. There is a hard core of Leftist within Syriza who do not believe in any compromise. Some of them have written off the European Union altogether. Consequently they perceive any negotiation as a hopeless case since the Neo-Liberal attitudes dominate and cannot be persuaded to adopt more favourable measures with regards to Greece. Moreover, they are ready to accuse Tsipras to be a traitor even though he signed the agreement while stating that he does not agree with the measures which are being proposed. That hard core of moralists shun away from working out real solutions insofar as they prefer to uphold enemy pictures in order to demonize politics. Within such a current of thought goes as well the slogan before you can create something new, you must destroy first.

A lot more should be said about this religious undercurrent since this highly moralising attitude prevents them from critical self reflections as to where they are at high risk to become not merely unfair towards others, but unjust in their absolute condemnations. If it is a worrying sign that the press engages in stereotypical images, all the more it becomes difficult to see how a political solution can be found, given such hard core rejections of everything having to do with politics, while believing at the same time only politics based on convictions which are not compromised will serve the purpose of bringing about a better world. It is a worrying trend all over the world and poses the question about not only about those who have been practising corruption of all kinds, but about the future generations since they are without a feasible political orientation and therefore tend to belong to the anarchists, if not drift off into isolation and therefore are inclined to emigrate rather than sticking around.

With August 18th another deadline, the Greek negotiation team has been meeting in Athens with its creditors although this was not originally wanted by Syriza. During the months since January 25th and the election victory of Syriza, there has been more talk about wishing to leave behind a post-colonial state of mind than wishing to come to terms with the Troika. Naturally all kinds of conclusions, most of the negative ones, are drawn by those who wanted Syriza to succeed in altering the EU policy towards member states within the Euro zone and yet deeply in debt like Ireland, Portugal, Spain, Italy and even France. Since a lot of animosity was created between Greece and Germany, there is a need to follow that up even once the Third Bailout Agreement has been worked out and hence a third Memorandum of Understanding in place.

One of the key objection critics of the compromise in the making relates to the age of retirement being now fixed at 67, with the compromise that this shall not affect those who have retired until June of this year. These critics say because of that there is no point in negotiating any further. For they take this as proof that the intention of the creditors is to drive Greece even deeper into recession. If Greece is to get out of this mess, then it has to do so on the basis of its own strength. Therefore, they advocate as the only conceivable solution that Greece exists immediately from the Euro zone and if need to be as well from the European Union.

It has been attested that the July 11th agreement will have a lasting impact upon the European project, and may prove to be the beginning of the end. A lot of blame is given to Germany and in particular to Schäuble and Merkel for having adopted a narrow national viewpoint and wishing to impose in a most rigid way rules which have never been kept either by Germany or by many other Euro zone members. Critics interpret this as further proof that Greece is meant to be an exemplary test case for upholding rules at the expense of the welfare of the people themselves. No wonder when the Conservative FAZ - Frankfurter Allgemeine Zeitung - poses the rhetorical question, whether or not Germany has allowed itself too much by not showing some degree of flexibility so as to allow Greece to have a breathing space. After all five years of recession is not exactly life in paradise.

The crisis became known in 2009, even though it had erupted already in the streets of Athens on Dec. 6th 2008 when Alexandros was killed, and the entire youth revolted against what they saw as being a corrupt society. The changes since then have been tremendous The past five years were hard to take. Alone the loss of businesses, and therefore jobs underlines the fact that Greece seems to have entered a permanent crisis. It is, however, hard to imagine that cutting lose from the Euro zone and the controlling mechanisms of the European Union that the solution shall be found faster and sooner than what is right now the case. So any advocacy of a Greek exit must be able to convince even worse developments can be averted by making such a move. I am not sure of the claim that a return to a national currency which can be devalued is the magic solution that everyone thinks it is. It is like hedging the illusion finally to have your own say in how to run affairs when in fact having no money makes you in any situation over dependent upon outside sources of funding. In short, national thinking would be on the rise as if such an illusionary autonomy can be reached without a much higher economic and political cost.

One thing should not be ignored in terms of the five years behind us. Socrates Kabouropoulos would say many people have gone through a lot by now and therefore learned a great deal. Thus the question is whether this experience gained over the past five years can be used in another way than merely destroy the European project? I wonder if it is really possible to dismiss so easily all the positive values of seeking solutions within the European rather than the national framework? Habermas has pointed out to govern together with other European member states is a learning process Europe has to go through, in order to link up with world governance. There is the problem of a larger scale and therefore the risk of people at local level being completely out of touch with what is going on in Brussels, but if 70% of the Greek people wish to stay inside the Euro zone and the European Union, then because there is sufficient trust that European institutional framework conditions are for the benefit of all in Greece, and not its opposite.

Even if disappointed, the vote for Syriza in January was based on a wish to know what is really happening. People have still to grasp in full how such a huge deficit came about and why since the crisis broke out, this deficit has increased, not decreased? Krugman has given some answers to that question, but despite all criticism on neo Liberal positions in favour of austerity measures, these counter arguments have not been convincing sufficiently to sway the opinion of many European Ministers of Finance.

On hand of three different articles can be shown that now vital premises are set, while the critical evaluation continues whether the July 11th agreement can be translated into a real working hypothesis with all sides willing to learn what are policy measures which work in a positive way. Without such a hypothesis, no learning shall take place and this has been precisely the key problem until now. Apparently since the July 11th agreement, things have changed for the better.

1. "Greece needs wide debt relief to avoid permanent depression, think-tank warns" Larry Elliott Economics editor. Wednesday 5 August 2015 http://www.theguardian.com/business/2015/aug/05/niesr-warns-on-further-greek-austerity

Here arguments for a Grexit have to be scrutinized as to why this course preferred to a restructuring of the debt? Unfortunately all along the real problem of debt has not been dealt with. Of course, the problem is sheer insurmountable and no one knows really the solution. That is why the term 'unsustainable' debt is invoked over and again, but especially Germany does not wish to hear of any kind of hair cut until the Third Bailout Agreement has been sealed and therefore as the critics fear Greece locked in a negative situation for the next fifty years or more.

If recourse is taken to the simple notion of a national economy being a sovereign state which can devalue its own currency, thereby prompting exports and a revival of the economy, then that depends upon a kind of automatism and an over simplified causal effect. Governments in general seem unable to combine fiscal, monetary and economic policy, while it is doubtful if devaluation or re-evaluation of the own national currency will bring about the necessary turn around in the economy.

How else to eliminate the debt? Syriza set up a debt commission, but the final preliminary report declared everything to be "illegal" debt as if in retrospect legitimate and democratically elected governments of the past had all acted without legitimacy. Such an approach does not stand up to the debt incurred due to many bad practices in the past and would lead only to adopting a wrong approach to debt servicing. After all a debt means obligation to repay what was borrowed and therefore was money spend but its sources not real earnings but easy credits. Hence often a comparison is drawn to how East Germans got into trouble when they rushed to consume in the first days after the opening of the wall.

Definitely the article points out that the UK think tank is of the opinion without a hair cut of up to 50% Greece will never have a chance to recover. The question is how realistic is such a forecast or prognosis? Essentially debt is a problem of how the costs of a debt are not evenly distributed but a specific part of the population is burdened while others go scotch free. This means debt is also a moral crisis in terms of not having a just distribution of burdens, responsibilities and benefits.

2. "Yanis Varoufakis: Europe Must Reform Or Face Destruction" REUTERS/Marko Djurica by Sarkis Zeronian4 Aug 2015 http://www.breitbart.com/national-security/2015/08/04/yanis-varoufakis-europe-must-reform-or-face-ritidestruction/

Varoufakis seems not to heed the advise of Jürgen Habermas who criticizes the use of either/or alternatives since they are only fake alternative ones. Like the referendum itself was not clear either / or since Tsipras stated even if the no vote wins, Greece will stay in the Euro zone and in the European Union.

Varoufakis claims the main mistake is that the nation state has come under attack by the European Union. But what is the intention of everyone joining the European Union, if not to give up certain national Rights and instead to gain in international voice?

Varoufakis displays something similar to another influential voice, namely that of David Harvey who comes ever closer to a highly sophisticated conspiracy theory. This is the case when politics is being expounded at global level as if the bad guys are out to get the good guys. If one follows such a logic, then the world is no longer a friendly one but a hostile one. No wonder if everything then is taken as punitive measures and in return it becomes legitimate to keep up the polemic. That was the style practised during the hey-days of the Student revolt in 1968 and meant to downgrade the other so much that any argument brought forth was no longer worth being listened to. The political a priori was no longer of the Kantian distinction but an enemy picture which made any dialogue and compromise impossible.

3. "Greece and lenders strike upbeat tone, deal seen on bailout" ATHENS | By Angeliki Koutantou and Lefteris Karagiannopoulos http://www.reuters.com/article/2015/08/04/us-eurozone-greece-bailout-idUSKCN0Q90YU20150804

According to Euclid Tsakalotos, negotiations are going really well or better than expected. It is said this time the Greek negotiation team is well prepared. It matters when compared to the time under Varoufakis. All the more important is therefore to compare the claims and predictions made by Varoufakis with what is happening in reality on the ground, so to speak. It was said that the July agreement entailed a need for the Greek government to give a sign of good will, and everything else can be worked out. Thus the advise of Katherimini is for the Extreme Left who wish to destroy the negotiations and the chances of Greece to stay in the Euro zone that even if you have the power to destroy, political responsibility and wisdom is shown when not using this power.

Comparing these three articles, it says a lot about the current state of affairs with Tsipras facing a hard core opposition within Syriza, and that makes governance not any easier.

Hatto Fischer

Athens 5.8.2015

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Newsletter July August 2015

Editorial