Frederick Douglass

"Power concedes nothing without a demand. It never did, and it never will. Find out just what people will submit to, and you have found out the exact amount of injustice and wrong which will be imposed upon them..." Frederick Douglass

Saturday, June 18, 2011

Potentially Good News From Greece

[ATHENS — Several thousand pro Communist union members marched through central Athens yesterday to protest the government’s latest austerity measures and plans to sell off state enterprises to appease international creditors.]

The reshuffle of ministers and the request by Papandreou for a vote of confidence is a farce, but that they feel the need to undertake these embarrassing ploys is a testament to the efficacy of the mass protests and strikes. Some progress, albeit meager and precarious, is being made.

According to Tyler Durden of Zero Hedge:

Spokes, meet stick. According to Reuters, Greece will seek approval from euro zone finance ministers on Sunday to agree to some changes in a mid-term austerity plan that parliament is expected to pass, the country's new finance minister said on Friday. And so the scramble for concessions begins. First Greece will demand a scrapping of all retirement age hike requirements, then public sector cuts, then everything else in the mid-term plan, until the second bailout is effectively without conditions. And now that Merkel has effectively thrown in the towel to her, and the CDU's, political reign by agreeing with the ECB's and France's demands, a move which will be brutalized by Der Spiegel in T minus 5 minutes, the fact that Europe blinked to Greece's bluff, just may mean that every demand out of Greece will be met. Or not. If the Troica tells Greece to go to hell, this could be the end of the bailout package.[1]

As you can see, Durden cares more for the profits of the banks and rich investors than the people of Greece who will have to suffer the hardships the austerity measures will inflict, but his lugubrious assessment is accurate. Whatever retrenchments the banks agree to will be directly attributable to the ferocity of the Greek resistance.

According to The Street Light,[2] Most of the debt is uninsured and held by sovereign wealth funds and individual investors. About thirty percent is covered by credit default swaps (CDS) issued by banks and insurance companies. The oligarchs are not concerned with individual investors, they have thrown them under the team bus several times in recent years, and governments have been prey items for capital for centuries now. However, their companies wrote the insurance policies which can be redeemed if Greece defaults. Prediction: The new deal (assuming there will be one) will include provisions which will force Greece to indemnify the CDS in question, or in some other way to shield the oligarchs from losses.

The Greek Bailout is, of course, a misnomer. The new clutch of loans is to protect large investors, mainly banks and national governments, who hold the bonds issued by the Greek treasury. International capital doesn't give a damn about Greece or its people, they have made that abundantly clear by the draconian concessions they have demanded as a condition of the loans, but their money is at stake should Greece default, hence their concern. Predictably, their exposure is not so great,[3] the controlled demolition of the world's economy in '08 was carefully planned and managed so that their houses would be spared and emerge the stronger for the catastrophe, that was the point. They have enough exposure to rightfully claim a seat at the post-collapse table, but not enough to threaten their hegemony over state and commerce. They are not in jeopardy, we are. So here now they preside over reconstruction, and exact pound after pound of flesh. The Greeks are fighting back, so should you.

Lastly, here's a link to an excellent audio synopsis of the first Greek "bailout." Scroll down to.
The Greek Bailout: A Capitalist Death Spiral . While I do not agree that capital is spiraling out of control, it is a detailed, insightful look at just how corrupt and unprincipled the international plutocracy is.