Wednesday, November 23, 2011

How to Overcome the Impasse of the Written Pledge Demanded by the EU from Greece's Major Politicians

By Con George-Kotzabasis—November 23, 20011

The following proposal was sent to the leader of the Greek Opposition Antonis Samaras on 11-23-2011.

Dear Mr Samaras,

The following proposal might overcome the impasse of the signed guarantee without Greece losing its dignity and amour propre

The German politicians, like the Minister of Finance Wolfgang Schauble, who illogically and doltishly insist and persist in their demand that the leader of the Greek Opposition, Antonis Samaras, sign the Memorandum of the 26th of October as a condition of releasing the sixth packet of financial assistance to Greece, can be likened as an intellectually unguided German torpedo that sunk the Lusitania of Greek dignity and respect that are embodied in the democratic constitution and parliamentary institutions of the country. It was to the latter institutions and to the interim transitory government led by Lucas Papademos that the leader of the Opposition had made an explicit, unequivocal, and unconditional commitment to accept and implement (Subject to some modifications in regard to its implementation.) all the obligations emanating from the Memorandum. Therefore one is nonplussed with this EU demand for a written pledge by the leaders of the three major parties when all of them accepted all the conditions of the Memorandum unequivocally and unconditionally in Parliament and by giving their vote of confidence to the Interim Government of Lucas Papademos who was to initiate the implementation of the decisions of the 26th of October.

Surely the Germans are not so stupid, or they could be, as to disregard this essential and irremovable commitment the major parties made to the conditions of the Memorandum and demand in its place a formalistic signature. One therefore cannot avoid the suspicion that there might be a hidden agenda behind this ostensibly doltish demand, i.e. the “Sarajevo assassination” of Greece by the Germans, its ousting from the Eurozone by forcing Greece to default and to depart from the European Union. The leader of the Opposition must eschew from falling into this trap, if indeed, such a trap is set in the wings by the leaders of the European Union. But the “assassination of Greece” from the Eurozone could trigger an internecine economic war in Europe that could not be contained, as the sires of such a sinister plan might have hoped, and would lead both to the destruction of the euro and the European Union. Thus it is incumbent on Antonis Samaras’ statesmanship to be not only the saviour of Greece but also the saviour of Europe. This could be accomplished by the following stratagem. The leader of the Opposition giving a written guarantee of the acceptance of all the conditions of the Memorandum as demanded by the troika, but not sending it to the leaders of the European Union but sending it to the Greek Prime Minister, Lucas Papademos. And the latter will convey to the European leaders the consummation of the signed guarantee by the major parties that the former demanded as the sine qua non for the release of the sixth instalment. Hence, the consignment of the written guarantee within the precincts of the Papademos Government will shun any genuflection on the part of Greece toward Europe that would stigmatize and slur the dignity and amour propre of Greece.

Tuesday, November 15, 2011

Radical Liberals Condemn and Disparage Technocrats

The following exchange took place between an American radical liberal and me on the appointment of the two technocrats Mario Monti and Lucas Papademos as prime ministers of Italy and Greece.
Bruce Wilder says,
You seem to have lost the essential premise: the “looming economic catastrophe” is largely the creation of the technocrats, and “all the misery that implies” has been embraced by the technocrats with all the enthusiasm an 18th century physician had for purgatives and bleeding.

Con George-Kotzabasis says,

Bruce Wilder, your “essential premise” walks on crutches. In a physical crisis in which you might lose your leg you don’t stop from going to a surgeon just because there are bad surgeons about. To label all surgeons (technocrats) as incompetent and refuse to go under their knife is to lose your leg. That is why your argument, factually and intellectually, waddles on crutches.

Bruce Wilder says, 11.13.11 at 6:09 pm
Con George-Kotzabasis @ 105
If your life was threatened by a growing cancer, affecting your lungs or your kidneys, and you went to a surgeon, and the surgeon said, “To save your cancer, I recommend amputation of your leg,” I would hope you would run from the room, with your legs still intact.
These particular neo-liberal technocrats are just these sorts of mad incompetents, prescribing senseless maiming in place of a treatment plan. There are, apparently, no politicians available, to stand up and veto the insanity, “brave” and “charismatic” or otherwise.
The corruption and incompetence of the politicians—indeed, the whole polity—in Greece and Italy—played nearly as critical a part in the epidemiology of crisis as the neoliberal technocrats. It is worth remembering that the popular support for the European project has often rested on the hope of improving the quality of governance and institutions. For all the grousing over the minutiae of Brussels and the trivia of Strasbourg, the hope of European Union was always to promote high-minded, principled liberal institutions as a prophylaxis against authoritarianism and populist corruption. This was, I suspect, always a very big part of the appeal of the euro: German monetary policy for the South, an internationally respected currency immune to runaway inflations, etc. The Italians, as I recall, embraced the euro ahead of every other country; they were overjoyed to be rid of the lira, the joke currency of Europe, so inflated in value that coins were impractical—phone booths required a special token and street vendors gave candies in place of change. The euro is very popular in Greece as well, and I suspect that that popularity, as much as the fecklessness of politicians, is a factor in preventing Greece from taking the obvious step of unilaterally embracing default in abandonment of the euro. (Purely from a technocratic point-of-view, the equivalent of a competent surgeon would be a technocrat doing the preparations in secret, which would make a unilateral return to the drachma feasible. That’s the “right” thing to do for Greece, from a “technical” standpoint and from the standpoint of protecting Greece from the “amputation” of privatisation and a prolonged deflation. An efficient calculating machine would have been crystal clear from the outset that, on the numbers alone, Greek default was inevitable; delay could only prolong and intensify the suffering.)
The Big Picture, here, may well be that economic and institutional centralization has found its limits, at least for the moment. Certainly, the neoliberal architectural principles employed over the last 25 years are a bust. Are we so stupid that neofascism must follow? Many would say that authoritarianism was always an implied part of the neoliberal agenda.
Con George-Kotzabasis 11.14.11 at 2:10 am
Bruce Wilder
In serious discussion it is wise to enter it carrying a sieve in one’s hands to separate the wheat from the chaff.

Your crystal clear “efficient calculating machine” that would implement your proposal of default, would be no other than a wise, brave, imaginative, and humane TECHNOCRAT. So what exactly you have against technocrats? They are OK if they adopt your plan and only transported to Hades in toto for their mortal sins, if they don’t! Default was and is always an option. The distinguished economist Deepak Lal and exponent of the Austrian School of economics, long ago suggested such a schema. Lucas Papademos and Mario Monti both presumably have this option in their arsenal to be used as a last resort if everything else fails. But before they use this ‘nuclear’ option, they must try, and be given the right by all objective analysts and commentators, to resolve this economic crisis by ‘conventional’ means that could avoid a default which would open a big hole in their countries GDP and throw their people into pauperization for decades to come.
Bruce Wilder says, 11.14.11 at 2:37 am
Instead of “support the troops”, we are now asked to support the neo-liberal technocrats.
Con George-Kotzabasis, are we to take no account of the part the technocrats played in “designing” the euro? Are we to take no account of the failure of the ECB to carry out bank supervision or to regulate derivatives? It is a little late in the progress of neoliberal disaster capitalism to be attributing good faith, let alone expertise, to these bozos.

Friday, November 4, 2011

In Greece Political Midgets on a High Wire Act

By Con George-Kotzabasis—November 02, 2011-11-02
Political midgets, a la Papandreou, have chosen to take the risk of the high wire act by this proposal of the referendum. Hoping that the people will vote for the lesser of two evils, i.e., accepting the debt deal as formulated in Brussels last week and rejecting default and departure from the euro zone. At a time when strong leadership is a prerequisite for diminishing the crisis that Greece is facing, Papandreou abdicates his own and passes it to the people through this future referendum. It’s as if the polloi had somehow a better knowledge and understanding of the critical dimensions of the economic situation and could provide a better solution to the crisis than the expertise of the economically and politically savvy.
Once again politicians, who are more concerned of holding power than of the future of their own country, are ready to prostrate themselves before and pay homage to the idol of the Demos. Papandreou facing in Parliament a no-confidence vote and the ousting of his government promptly announced a referendum that would decide the future of the country, hoping that this would allay the anger and opposition of the people against the austerity measures, imposed by the EU, and at the same time put an end to the disarray within his own government that itself stems from the revolt of the people. It’s clever politicking to avoid defeat and save for him the prime ministership. But he is doing this at the expense of the future well being of the country, as it would take years for Greece to recover from the shock of a default if the electorate voted for it, which is highly likely. This is no less than the revisiting of the ‘sinful’ genius of his pere who himself was the preeminent progenitor of the economic ills that Greece is presently plagued with. The fils merely continues , like father like son, the ‘sins’ of his sire in a more acute form and projects them into the future.
World Bank president, Robert Zoellick said that “if voters reject the plan, it’s going to be a mess.” Economists claim that the immediate effects of a default would probably be a 20 percent to 30 percent drop in domestic demand and a fall of 5 to 10 percent of domestic product. Evangelos Venizelos, the Finance Minister, and his deputy broke ranks and opposed the referendum, saying it would jeopardize Greek membership in the euro zone. Ilias Nicolakopoulos, professor of political science and close to the governing socialist party, stated that a “referendum would put the country in danger of blowing everything up.” In contrast, Henry Ergas writing in The Australian, on November 3, 2011, “Greek Vote a Banana Republic Moment,” praises Papandreou for having the “balls” to propose the referendum, and compares him to the gutsy warning of Paul Keating’s “Banana Republic.” He says, that “to call a referendum on the austerity program is hardly irrational. But he adds the caveat, “true, it is a gamble, and a risky one.” Nonetheless, “the best hope of what comes next must lie in securing a genuine popular mandate.”
Regrettably, however, Papandreou’s proposal of a referendum does not rise from his “balls” but from his impotence. Unable to lead and convince the country, as a weak leader, to accept the inevitable “scenario, Greece must face a lengthy period of austerity and structural reform,” Papandreou passes this leadership to the impassioned people to decide whether to accept or not this scenario. Professor Ergas’ quote of Sophocles, “truth is always the strongest argument,” though generally accurate, is misplaced in the context of a long corrupt electorate that the fiscal profligacy of past governments accustomed it to indulge in ‘free suntans’ in sunny Greece. In such circumstances, the only truth that this pampered electorate will accept is the continuation of these free suntans at public expense. And that is why they will vote NO to austerity measures and thus turn the referendum into an ogre for the future economy of Greece.
Fortunately the proposed referendum like the balloon it was fizzled out within twenty four hours. Under external and internal pressure Papandreou reneged his proposal and withdrew it. Tonight (November 4, 2011), he places his fate on the lap of the god, parliament, on a confidence vote. Even if he survives by the smallest margin his prime ministership is foreclosed.