STOCK MARKET WATCH -- Monday, 24 August 2015

[Demeter]

20. SLIPPING ON GREECE

European hard-left looks to Varoufakis amid Greek turmoil

http://www.france24.com/en/20150821-varoufakis-europe-radical-left-greece-turmoil-syriza-montebourg

...Amid the political upheaval that will likely lead Greece to a September ballot, attention is turning to one of Syriza’s most recognizable figures: the boisterous, motorcycle-riding former finance minister Varoufakis. Varoufakis stepped down from his post in early July, just hours after Greek voters rejected austerity measures in a nationwide referendum. As Tsipras followed suit – although for different reasons – on Thursday, the outspoken Varoufakis was uncharacteristically silent.

As the anti-austerity dream spun by Greece’s Syriza party is squashed by a new massive international bailout and more belt-tightening measures, former minister Yanis Varoufakis may be emerging as the new standard-bearer for Europe’s radical left...Varoufakis’s rebellious swagGER and open defiance of European finance ministers has earned him fans far beyond Greek shores.

He is the guest of honour at a prominent left-wing gathering in France on Sunday. Known as the Rose Festival (Fête de la rose in French), the event was first organised in the central town of Frangy-en-Bresse in 1973, but remained a local and quiet event for many years. It has nevertheless grown in importance under the stewardship of former Socialist MP Arnaud Montebourg, effectively kicking off each year’s political calendar for French Socialists. Montebourg and Varoufakis share the distinction of having quit their ministry jobs in protest of their government’s policies. Montebourg, considered to be on the far-left of the Socialist Party, was named France’s economy minister in 2012. But after publicly criticizing the economic policies of President François Hollande and Prime Minister Manuel Valls he was booted out of the government in 2014. The Rose Festival will not be Montebourg and Varoufakis’s first meeting. The two renegade ministers met in the Greek island of Aegina in late July while on vacation, even posing for a picture together.

Another photo-op will almost certainly be on Sunday’s schedule as Montebourg seeks to cash-in on Varoufakis’s popularity among left-wing sympathisers in France. Those who see in Varoufakis a man of conviction who, unlike Tsipras, chose to abandon his position of power rather than abandon his principles, will also be eager to know where he stands in the political storm brewing back in his home country. Speaking to French weekly L’Obs before Tsipras’s resignation, Varoufakis clearly distanced himself from his former boss, saying the party had “betrayed a majority of Greeks”.

“When we took office, Alexis Tsipras and I promised each other two things. First, that our government would try to surprise people by actually doing what we set out to do. Second, that if we could not keep our word, we would resign rather than betray our campaign promises,” Tsipras claimed. “I thought that was our pact.”

However, he did not go as far as saying he would part ways with Syriza. In fact, he appeared to defend the unity of the left-wing party.

“If the party fails to remain united despite members’ different opinions about the international bailout deal, it has no future. If it succeeds it will play the most important role in Greece for many years to come,” Varoufakis added.

Some experts said Varoufakis is at a critical crossroad, and that the path he decides to take will matter beyond the next Greek election.

“We are witnessing a very important change,” said Marc Lazar, a political scientist at France’s Sciences Po university and an expert of radical-left movements in Europe. “Will Varoufakis join those who already quit Syriza, will he start a new party with less radical positions, or will he remain alongside Tsipras? His decision will be very important for Greece, but also for Europe’s radical left."

Lazar said that Varoufakis had already supplanted Tsipras as the symbol of Greece’s rebellion against German-led austerity. From Podemos in Spain to the Left Front in France, radical left movements are now looking to Varoufakis for inspiration and guidance...Varoufakis acknowledged Greek voters had stood as an example for austerity-weary citizens across Europe, but had ultimately been let down by politicians, including himself... Syriza’s humbling was felt like personal injury by far-left activists and politicians in Europe. Some still hope that something other than endless austerity and debt await Greece and the rest of the continent. Those hopes now rest on the shoulders of Varoufakis, whether he likes it or not.


***************************************************

...Greek Prime Minister Alexis Tsipras on Thursday admitted that he and Syriza had failed to deliver on their campaign promise to reject austerity, saying the mandate he won in January had come to an end and that the debt-crippled country needed early parliamentary elections. His resignation and call for a new poll was seen as a bid to consolidate power by pushing out the more radical MPs within Syriza’s own ranks who voted against the bailout package. Indeed, at least 25 hard-left Syriza members split with Tsipras on Friday, announcing they would form a separate party...

“Syriza’s failure to implement its original programme is painfully obvious, and an embarrassment for all of Europe’s radical left,” Lazar told FRANCE 24. “What happened in Greece shows Germany’s overall supremacy, France’s weakness, and above all that it is impossible to change the status quo in the eurozone. Hopes were dashed.”

For now Tsipras has succeeded in keeping bankruptcy at bay, and keeping Greece in the eurozone. He is even likely to win a new mandate for Syriza next month, presiding over creditor-mandated spending cuts and taxes, just like his predecessors...

*************************************************

This article has been translated from the original in French: http://www.france24.com/fr/20150821-grece-syriza-yanis-varoufakis-gauches-radicales-europeennes-montebourg-fete-rose

VIDEO AT LINK--I REGROUPED THE ARTICLE TO SEPARATE THE TWO MEN

Greece's creditors demand casino rights, archaeological sites, selloff of EUR50B of national assets

https://boingboing.net/2015/08/22/greeces-creditors-demand-cas.html

Already sold: most of Greece's airports -- for sale: gas transmission, oil refineries, power company, post office, national highways, water company.

The creditors also want Greece's government ministers removed from oversight of national assets -- they'll be replaced with managers appointed by the creditors.

Why does this matter? First because it makes no sense to sell off valuable assets in the middle of Europe’s worst depression in 70 years. Those industries could generate revenues to help the Greek government rebuild the economy. In fact, the vast majority of the funds raised will go back to the creditors in debt repayments, and to the recapitalisation of Greek banks.

So the privatisations aren’t to do with helping Greece. The beneficiaries are corporations from around the world, though eyebrows are particularly being raised at the number of European companies – from German airport operators and phone companies to French railways – who are getting their hands on Greece’s economy. Not to mention the European investment banks and legal firms who are making a fast buck along the way. The self-interest of European governments in forcing these policies on Greece leaves a particularly unpleasant flavour.

Most important is the inequality this will entrench in Greek society for decades to come. Of course the fact that the state currently holds these assets is no guarantee of democracy. Clientelism is rife in Greece. But the answer is transparency and democracy, just as German citizens are currently trying to take back energy companies into collective ownership because they see this as a prerequisite for fair pricing and supporting renewable energy.

http://www.globaljustice.org.uk/blog/2015/aug/19/greece-sale-%E2%80%93-and-everything-must-go

Misinformation Hides Real Dimension of Greek “Bailout” By Roberto Savio

http://www.ipsnews.net/2015/08/opinion-misinformation-hides-real-dimension-of-greek-bailout/

The long saga on Greece is apparently over – European institutions have given Athens a third bailout of 86 billion euros which, combined with the previous two, makes a grand total of 240 billion euros. There is no doubt that the large majority of European citizens are convinced that this is a great example of solidarity, and that if Greece is not now able to walk on its own feet, the responsibility will lie solely with Greek citizens and their government. But this is only due to the fact that the media system has, by and large, ceased to provide alternative views … and some people even ignore that the bailout is a loan, and therefore increases the country’s debt. In fact, the productive economy of Greece saw very little of that money because the bailouts were merely financial operations and Greek citizens, not only did not see anything, they have even had to pay a brutal price.

The truth behind the operation has been aptly described by Mujtaba Rahman, the respected chief Eurozone analyst for the London-based Eurasia Group, who said: “The bailout is not really about a growth plan for Greece, but a plan to make sure the European Central Bank (ECB) and the International Monetary Fund (IMF) get paid, and the euro area does not break up.” And the purpose of this third bailout is clear. Of the famous 86 billion, 36 billion will go to pay the debt with the other European governments (and first of all Germany). Another 25 billion will go to recapitalize the Greek banks, because much capital left the country, heading for safer European banks. Another 18 billion will go to pay interest on the debt which Greece has been piling up. And, finally, seven billion will go to pay the debt of the state with Greek enterprises. So, seven will go to the real economy and nothing to the citizens, who will have now to go through several new drastic measures of austerity, which will further depress their standards of living and their ability to spend.

Financially, the bailouts have been a success. All the losses and bad exposure of European institutions have been passed on to Greece. Before the first bailout, French banks were exposed with bad bonds for 63 billion euros, now only for 1.6 billion with no losses. German banks have gone from 45 to five billion. What is intriguing is that a number of studies show that until the very last moment, when it was widely known that Greece was in deep crisis, European banks and investors continued to buy Greek bonds. Were they certain that Greece would pay? No, but they were confident that the Greek government would be rescued, and that they would therefore recover their investments, which is exactly what happened.

The financial system has now a life of its own and has nothing to do with real economy, which it dwarfs by being 40 times larger (if we judge by the volumes of daily financial transactions against the production of good and services). Capital is untouchable and circulates freely in Europe, unlike its citizens. And now there is a great wave of legislation to introduce lower taxation for the richest one percent! During the negotiations, one frequent accusation levelled against the Greeks was that they were unable to have their rich ship-owners pay their share of taxes. Of course, ship-owners place their money where it cannot be reached. But is this not hypocritical when we know that there are at least two trillion euros stashed in fiscal paradises, and that, just to give one example, nobody has got Ryanair to really pay taxes? Not to mention the fact that when he was prime minister of Luxembourg, European Commission President Jean-Claude Juncker granted secret tax rebates to over a hundred international companies?

Now Agence France Press has circulated a new astonishing study from the German Leibnitz Institute of Economic Research, which says that Germany has profited from the Greek crisis to the tune of 100 billion euros, saving money through lower interest payments on funds the government borrowed amid investor “flights to safety” and “these savings exceed the cost of the crisis – even if Greece were to default on its entire debt.” Meanwhile, a large number of studies point out how, by having a positive balance of trade with its European partners, Germany is in fact sucking capital from Europe.

Interpreting the third bailout and its conditions of austerity as a mere economic operation would be to commit a great error. No economist can believe that Greece will be able to pay back and not only because it has always had a fragile economy, with little industry and with tourism as its main source of income (aggravated by decades of mismanagement and the corruption of its traditional parties, the very parties that European leaders would like to see come back). Greece is already in recession and now the doubling of VAT is going to compress consumption further, also because there will now be further reductions in pensions and public salaries (which have been already cut by 20 percent). It is widely believed that the Greek debt will now reach 200 percent of its GDP, up from 170 percent prior to the bailout. How could any economist, even in the first year of studies, fail to understand that, by cutting consumption and raising taxes you are bound to depress an already depressed economy?

Well, it is no coincidence that the IMF, which is the Rotary Club of conservative economists, has refused to join this bailout. The IMF has said it will not put in any money unless European creditors (which is a diplomatic way of saying Germany) accept a restructuring of the Greek debt. It is clear that the bailout has not been a technical but a political operation. Many European leaders, starting with Juncker himself, intervened in last month’s internal Greek referendum, asking Greeks to vote against Prime Minister Alexis Tsipras. They indicated clearly and openly, in a campaign that the Wall Street Journal repeated in the United States, that the revolt against austerity and the neoliberal economy should be stopped dead in its tracks to avoid political contagion. For her part, German Chancellor Angela Merkel has declared on German television that she has come to the conclusion that °Tsipras has changed°. This has an air of dejà vu … was it not then British Prime Margaret Thatcher who, intent on destroying the trade unions, launched her famous TINA slogan – There Is No Alternative?

And is there no alternative to this kind of Europe?

Approvals for banking transactions gather pace

http://www.ekathimerini.com/200820/article/ekathimerini/business/approvals-for-banking-transactions-gather-pace

Around 60 percent of businesses’ requests to send money abroad are being approved by the Banking Transactions Approval Committee and the banks themselves. From July 29 to August 18, international transactions worth 2.97 billion euros were approved, against 5 billion euros across a similar timeframe before capital controls were introduced.

As highlighted by Greece’s banks, in the third week of capital controls the situation improved as such transactions reached the cumulative value of approved transactions for the first two weeks of capital controls.

A total of 10,331 requests were made, of which 8,509 were approved, 332 rejected, 373 withdrawn and 579 required additional processing. Of the applications approved, 1,293 were for amounts of less than 100,000 euros and 1,195 were for amounts of less than 150,000 euros.

The Greek International Business Association says Greece’s average monthly needs for imported products over the past six months came to 3.9 billion euros. July, September and October are the months with the highest value of imports, on average reaching 4.5 billion each month.