Playing with Greek fire

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13 February 2012

The Isles of Greece, the isles of Greece!

Where burning Sappho loved and sung,

Where grew the arts of war and peace,

Where Delos rose, and Phoebus sprung!

Eternal summer gilds them yet,

But all, except their sun, is set!

 

            Lord Byron’s Don Juan, canto 3, stanza 86 (1)

¡NO PASARÁN!

With Athens on fire last night (12 February 2012) as a result of mass violent protests, the Greek Parliament (Boule) ignored the voice of the people and, by 199 votes to 74, adopted the savage cuts in public spending demanded by Brussels  in exchange for an international  bail-out loan to stave off national bankruptcy.

“The rebellion has begun,” the veteran leftist MANOLIS GLEZOS is quoted in today’s Guardian as telling reporters in Athens. “These measures will never pass. They are a breach of our democracy.”

However, as a triumphant Francisco Franco retorted to the Spanish Republicans, “¡Ya han pasado!”

 

Still, as the saying goes, it’s not over till the fat lady sings – and will be a long time yet before that happens.  Parliament has talked the talk. The government now has to walk the walk.

Glezos may be right in the end. The austerity measures have been adopted in the Boule.  They may well not pass in the street.

Greece is expected to go to the polls in April. It could be fun.

A campaign to boycott German goods is also starting, the Germans being seen in Greece as the driving-force behind the humiliation of the externally imposed cutbacks.

The Prime Minister forcing the austerity package down the throats of the Greek people is LUKAS PAPADEMOS. Referring to the demonstrations outside the Boule, he told Parliament : “Vandalism, violence and destruction have no place in a democratic country and won’t be tolerated.”  Odd that he should talk about democracy. Papademos is a technocrat who has never faced the Greek people in an election. He is Prime Minister as a result of a cosy backroom agreement inside the Greek partitocracy – the bi-party arrangement whereby power in Greece alternates between the pro-establishment Panhellenic “Socialist” Movement (Pasok) and the equally pro-establishment New Democracy Party.

However, according to the BBC’s Gavin Hewitt, even some of the politicians who urged a vote in favour of the austerity measures do not believe in them.They apparently include Antonis Samaras, leader of the New Democracy party, who is said to favour a pro-growth strategy on the grounds that that austerity is locking the country into a cycle of decline. However, this did not stop Samaras threatening to expel from the party any of his parliamentarians who failed to vote in favour of the cutbacks – which he apparently doesn’t want.

 

You couldn’t make it up!

 

 

 

The mountains look on Marathon —

And Marathon looks on the sea;

And musing there an hour alone,

I dreamed that Greece might still be free.

Lord Byron’s Don Juan, canto 3, stanza 86 (3)

 

Readers will find below two authoritative accounts of the developments in Athens published today on the BBC website.

1. Euro crisis: Greek despair over deeper cuts

by Gavin Hewitt  (BBC), 13 February 2012

 

 

Last night witnessed Greek rage. At least 45 buildings were burned in the capital, 150 stores looted or smashed.

The violence sends a clear and unmistakable message to Brussels: they cannot bank on the new measures being implemented.

Many Greeks are in despair. They are against further austerity and yet they fear the unknown, bankruptcy and exclusion from the eurozone.

Late on Sunday night [12 February 2012] the [Greek] parliament voted to support the new spending cuts. It was a vote that revealed just how divided Greece is – 43 deputies rebelled.

On the streets there was fury, some of the worst violence in a long history of protest. The disturbances this time spread to cities away from the capital.

Europe’s leaders will now push on towards a meeting of finance ministers on Wednesday [15 February 2012]. The expectation is that they will approve a second bailout for Greece worth 130bn euros ($170bn; £110bn).

Without the extra funding Greece would face a default on 20 March, when it has to find 14bn euros.

This is not the deal that was envisaged, however. Both EU and IMF officials intended this second bailout to end the Greek crisis. The plan was to put the country on a sustainable path, with the target of reducing the debt to GDP ratio to 120% by 2020.

That will not be reached without eurozone countries, once again, having to find extra funding – perhaps 15bn euros or more.

Certainly, the fact that private investors will take losses on their Greek investments of up to 70% will reduce the debt mountain by about 100bn euros.

That deal is almost in place, although some uncertainty remains.

The bigger question relates to the Greek economy. It is shrinking for the fifth year. Businesses are closing, unemployment rising. The poverty on the streets of Athens is visible. The mood in the country is sullen and resentful. There is intense dislike of the EU, the IMF and the Germans.

A campaign is starting to boycott German goods.

What incenses people is the humiliation. Negotiations with Brussels are seen as negotiating the terms of surrender.

Even some of the politicians who urged a vote in favour of the new measures do not believe in them.

The politician leading in the polls, Antonis Samaras, believes that austerity is locking the country into a cycle of decline. He wants a spring election.

Europe’s leaders want his signature on a piece of paper pledging that he will continue with the spending cuts if he becomes prime minister.

Government officials say that in a couple of years there will be a budgetary surplus – if interest payments are excluded. Some say that in two years some of the reforms will begin to make the economy more competitive.

Perhaps.

There is a real chance that the Greek economy will decline, further undermining the plan that lies behind the bailout.

As far as Brussels is concerned the object is to buy time, to prevent a default and the risk it might undermine other economies. That might be achieved but Greece remains unstable.

 

2. GreeK MPs pass austerity plan amid violent protests

 

BBC, 13 February 2012

 

Greek MPs have approved a controversial package of austerity measures demanded by the eurozone and IMF in return for a 130bn euro ($170bn; £110bn) bailout.

The vote was carried by 199 in favour to 74 against.

Coalition parties expelled more than 40 deputies for failing to back the bill.

Tens of thousands protested in Athens, where there were widespread clashes and buildings were set on fire. Violent protests were reported in cities across the country.

Protesters outside parliament threw stones and petrol bombs, and police responded with tear gas. Scores of police and protesters were injured.

Prime Minister Lukas Papademos urged calm, insisting that the austerity package would “set the foundations for the reform and recovery of the economy”.

“Vandalism, violence and destruction have no place in a democratic country and won’t be tolerated,” he said in a speech in parliament before the vote.

The bill passed parliament easily as the two largest parties in the coalition – Pasok and New Democracy – account for more than two-thirds of the deputies.

The austerity measures include:

-15,000 public-sector job cuts;

– liberalisation of labour laws;

– lowering the minimum wage by 20% from 751 euros a    month to 600 euros.

Eurozone ministers must now ratify the measures at a meeting in Brussels on Wednesday [15 February 2012] before bailout funds can be released.

The ministers rejected proposals put forward by the Greeks last week, which they said fell 325m euros short of the cuts needed.

The BBC’s Mark Lowen in Athens says the public are increasingly angry with the austerity measures and feel that the impact is beyond the value of the bailout.

At least 80,000 people were reported to have joined demonstrations in Athens, with another 20,000 protesting in Thessaloniki.

Running battles with police continued in the capital until late on Sunday, although no new clashes were reported after the vote.

Protesters hurled flares and chunks of marble torn up from the square. Some had tried to break through a cordon of riot police around the parliament.

Several historic buildings, including cafes and cinemas, were set alight……

Violent protests also spread to other Greek towns and cities, including the islands of Corfu and Crete, according to state TV.

Finance Minister Evangelos Venizelos said the question was not “whether some salaries and pensions will be curtailed, but whether we will be able to pay even these reduced wages and pensions”.

“When you have to choose between bad and worse, you will pick what is bad to avoid what is worse,” he said.

Greece needs the bailout to make its next repayment on its huge sovereign debt. If it cannot make the payment, it will default and in effect become bankrupt.

Analysts say such a “chaotic default” could endanger Europe’s financial stability and possibly even lead to a break-up of the eurozone.

As part of the deal with international lenders, Greece will also be able to write off 100bn euros of privately held debt.

Earlier this week several ministers from the coalition government, including two from Pasok, quit in protest at the measures.

The leader of the far-right Laos party, the junior coalition member, announced his 15 deputies would not back the austerity measures.

George Karatzaferis complained that the measures amounted to Greeks being “humiliated” by Germany.

The eurozone bloc has demanded “strong political assurances” that the packages will be implemented regardless of which party wins a general election due in April.

BREAKING-POINT

The BBC’s Mark Lowen adds:

The flames have died down and the debris has been cleared by Athens authorities now well versed in post-riot clean-ups. But anger is building here and another spark could unleash yet more fury.

Eurozone leaders will breathe a sigh of relief that Greece has got over this latest hurdle and the Greek government will expect vital bailout funds to start flowing soon. But many ordinary people feel that their country took another leap towards breaking point last night.

The big question is when the next crisis moment will come. Is this simply kicking the can further down the road, with Greece’s debt level remaining unsustainable in the long run? And will this country – will Europe – at some stage feel that the sacrifices Greece is making to stay in the euro are simply too great?

——————-

This entry was posted in Economics, Europe, Germany, Greece, Literature, Politics and tagged , , , , , . Bookmark the permalink.

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