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World Economic Crisis


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#1 John Simkin

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Posted 14 February 2012 - 09:28 AM

David Blanchflower is one of the few economists telling us the truth about the economic crisis. Blanchflower is the Bruce V Rauner professor of economics at Dartmouth College, New Hampshire, part-time professor at the University of Stirling, and a research associate at the National Bureau of Economic Research and a visiting scholar at the Federal Reserve Bank of Boston. He was an external member of the monetary policy committee at the Bank of England from June 2006 to May 2009.

Here is an article that he wrote for the Guardian today:

http://www.guardian....vidblanchflower


During the latter part of 2008, central bankers around the world worried secretly that the death spiral was approaching. The concern was that it was too late to stop economies crashing. In the event, concerted international action on both monetary and fiscal policy prevented collapse – although they did get pretty darn close to the precipice.

Interest rates were cut to zero. Banks and even car companies were rescued. Massive amounts of liquidity were made available. There were tax cuts, cash for clunkers and even fridges, along with schemes to help the young unemployed. Plus the collapse came very quickly.

In the UK, then Chancellor Alistair Darling had only a few hours notice that the Royal Bank of Scotland was about to fail. The fear was that cash machines around the world would close, banks would fold and stock markets would tank within hours. This was a once-in-100-year shock: in my view, without such unprecedented intervention, unemployment rates in the US and Europe could well have risen to over 24% – which is where they are already in Greece and Spain.

Stimulus worked, simple as that.

Germany threw wads of cash at the problem, notably through its short-work (or Kurzarbeit) programme, by which companies could temporarily move employees onto shorter work schedules when demand was weak. Companies paid only for the hours worked, while the government provided up to two thirds of the workers' remaining wages. As a result, German unemployment fell, whereas the percentage of jobless in the US reached double digits in October 2009 in the United States.

Other European countries, such as the UK, saw much smaller increases in unemployment than I had expected, given the scale of the shock. But this thing is not over, not by a long way. Unemployment is now falling in the US and rising in many eurozone countries including France, the Netherlands, as well as all the PIIG countries of Portugal, Ireland, Italy and Greece; plus the UK.

Even with all that loosening of macroeconomic policy, output still fell sharply in most countries during 2008 and 2009; and even today, many have not returned to pre-recession levels of output. If we take the first quarter of 2008 as the start of the recession, output is still markedly lower in Denmark (-5.4%); Finland (-2.2%); Greece (-9.4%); Ireland (-12.1%); Italy (-4.4%); Spain (-3.2%) and the UK (-3.8%). Data presented by NIESR last week showed that the current recession in the UK, for example, has lasted longer and is of comparable depth, than the Great Depression and after four years of what JM Keynes called "the long, dragging conditions of semi-slump", not even half of the loss has been recovered. The main countries that have more than recovered their lost output are Canada (+2.9%); Germany (+1.8%); Sweden (+3.7%) and the United States (+0.8%).

That brings us to Greece, whose government is trying to negotiate the umpteenth and final package to solve the problem. Output is down, as I noted above, and still falling. The Greek government faces a €14.5bn bond payment on 20 March that it looks extremely unlikely to be able to make. Ten-year bond yields have reached 29.8% in Greece – and they are now 11.6% in Portugal, which is also going to have to be rescued. Germany has taken away any hope Greece had of recovery.

On 9 February, the Hellenic statistical authority, which is Greece's central statistical office, published data on the labor market and industrial production (pdf), which suggests the Greek economy is headed over the cliff. This is a Great Depression for Greece and its 11 million inhabitants.

In the latest month for which we have data, the number of unemployed for November 2011 increased by a massive 126,000, compared with October 2011, to stand at over 1 million. The unemployment rate in November 2011 is now 20.9%, compared to 18.2% in October 2011. The youth unemployment rate is 48%, and the unemployment rate for females (24.5%) is higher than for males (18.3%). Evidence from other measures of labour market slack are equally horrendous: the number of employed decreased by 406,000, compared with November 2010 (a 9.4% rate of decrease), and by 165,00 persons compared with October 2011 (a 4.0% rate of decrease).

Industrial production in Greece is falling through the floor. The Production Index in Industry (IPI) in December 2011 (pdf), compared with December 2010, was down 11.3%, while manufacturing production decreased by 15.5%. As might be expected, consumer confidence in Greece has also collapsed, as can be seen from the chart that plots the EU Commission's survey of consumer confidence.

Source: EU Commission So, don't expect the consumer to start spending any time ever. Portugal and Italy don't look far behind.

The major problems in Greece that are constraining growth have still not been addressed. According to the United Nations, Greece ranks 100th in the world in terms of the ease of doing business, just beaten out by Yemen, in 99th place, and Vietnam, in 98th place. It ranks 135th in terms of the ease of starting a business and 158th in terms of paying taxes, below Uzbekistan in 157th place. Without reforms to its product and labor markets, alongside the introduction of a fully-functioning tax system with enforced compliance, Greece has no future and is headed to inevitable default.

The only issue is, how disorderly will it be? It's not so much that the Greeks won't pay, it's that they can't. Greece remains uncompetitive.

For all the deals being signed in Athens and Brussels, the Greek people have worked out that they have no hope; protest and social unrest now looks a rational option to the ordinary people who are bearing the cost to bail out European banks. Cuts in the minimum wage right now are probably not very smart politics.

Greece does still have a card to play – which is "one down, all down". An exit from the euro would result in a depreciated drachma, which would potentially give a much needed boost to tourism. And that sounds better than all other alternatives currently on offer. There is still time for Germany's Angela Merkel to get out her cheque book; but otherwise, it's all over – and quite possibly very quickly.

This really is what a death spiral looks like.


#2 John Dolva

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Posted 14 February 2012 - 11:03 AM

David Blanchflower is one of the few economists telling us the truth about the economic crisis. Blanchflower is the Bruce V Rauner professor of economics at Dartmouth College, New Hampshire, part-time professor at the University of Stirling, and a research associate at the National Bureau of Economic Research and a visiting scholar at the Federal Reserve Bank of Boston. He was an external member of the monetary policy committee at the Bank of England from June 2006 to May 2009.

Here is an article that he wrote for the Guardian today:

http://www.guardian....vidblanchflower


During the latter part of 2008, central bankers around the world worried secretly that the death spiral was approaching. The concern was that it was too late to stop economies crashing. In the event, concerted international action on both monetary and fiscal policy prevented collapse – although they did get pretty darn close to the precipice.

Interest rates were cut to zero. Banks and even car companies were rescued. Massive amounts of liquidity were made available. There were tax cuts, cash for clunkers and even fridges, along with schemes to help the young unemployed. Plus the collapse came very quickly.

In the UK, then Chancellor Alistair Darling had only a few hours notice that the Royal Bank of Scotland was about to fail. The fear was that cash machines around the world would close, banks would fold and stock markets would tank within hours. This was a once-in-100-year shock: in my view, without such unprecedented intervention, unemployment rates in the US and Europe could well have risen to over 24% – which is where they are already in Greece and Spain.

Stimulus worked, simple as that.

Germany threw wads of cash at the problem, notably through its short-work (or Kurzarbeit) programme, by which companies could temporarily move employees onto shorter work schedules when demand was weak. Companies paid only for the hours worked, while the government provided up to two thirds of the workers' remaining wages. As a result, German unemployment fell, whereas the percentage of jobless in the US reached double digits in October 2009 in the United States.

Other European countries, such as the UK, saw much smaller increases in unemployment than I had expected, given the scale of the shock. But this thing is not over, not by a long way. Unemployment is now falling in the US and rising in many eurozone countries including France, the Netherlands, as well as all the PIIG countries of Portugal, Ireland, Italy and Greece; plus the UK.

Even with all that loosening of macroeconomic policy, output still fell sharply in most countries during 2008 and 2009; and even today, many have not returned to pre-recession levels of output. If we take the first quarter of 2008 as the start of the recession, output is still markedly lower in Denmark (-5.4%); Finland (-2.2%); Greece (-9.4%); Ireland (-12.1%); Italy (-4.4%); Spain (-3.2%) and the UK (-3.8%). Data presented by NIESR last week showed that the current recession in the UK, for example, has lasted longer and is of comparable depth, than the Great Depression and after four years of what JM Keynes called "the long, dragging conditions of semi-slump", not even half of the loss has been recovered. The main countries that have more than recovered their lost output are Canada (+2.9%); Germany (+1.8%); Sweden (+3.7%) and the United States (+0.8%).

That brings us to Greece, whose government is trying to negotiate the umpteenth and final package to solve the problem. Output is down, as I noted above, and still falling. The Greek government faces a €14.5bn bond payment on 20 March that it looks extremely unlikely to be able to make. Ten-year bond yields have reached 29.8% in Greece – and they are now 11.6% in Portugal, which is also going to have to be rescued. Germany has taken away any hope Greece had of recovery.

On 9 February, the Hellenic statistical authority, which is Greece's central statistical office, published data on the labor market and industrial production (pdf), which suggests the Greek economy is headed over the cliff. This is a Great Depression for Greece and its 11 million inhabitants.

In the latest month for which we have data, the number of unemployed for November 2011 increased by a massive 126,000, compared with October 2011, to stand at over 1 million. The unemployment rate in November 2011 is now 20.9%, compared to 18.2% in October 2011. The youth unemployment rate is 48%, and the unemployment rate for females (24.5%) is higher than for males (18.3%). Evidence from other measures of labour market slack are equally horrendous: the number of employed decreased by 406,000, compared with November 2010 (a 9.4% rate of decrease), and by 165,00 persons compared with October 2011 (a 4.0% rate of decrease).

Industrial production in Greece is falling through the floor. The Production Index in Industry (IPI) in December 2011 (pdf), compared with December 2010, was down 11.3%, while manufacturing production decreased by 15.5%. As might be expected, consumer confidence in Greece has also collapsed, as can be seen from the chart that plots the EU Commission's survey of consumer confidence.

Source: EU Commission So, don't expect the consumer to start spending any time ever. Portugal and Italy don't look far behind.

The major problems in Greece that are constraining growth have still not been addressed. According to the United Nations, Greece ranks 100th in the world in terms of the ease of doing business, just beaten out by Yemen, in 99th place, and Vietnam, in 98th place. It ranks 135th in terms of the ease of starting a business and 158th in terms of paying taxes, below Uzbekistan in 157th place. Without reforms to its product and labor markets, alongside the introduction of a fully-functioning tax system with enforced compliance, Greece has no future and is headed to inevitable default.

The only issue is, how disorderly will it be? It's not so much that the Greeks won't pay, it's that they can't. Greece remains uncompetitive.

For all the deals being signed in Athens and Brussels, the Greek people have worked out that they have no hope; protest and social unrest now looks a rational option to the ordinary people who are bearing the cost to bail out European banks. Cuts in the minimum wage right now are probably not very smart politics.

Greece does still have a card to play – which is "one down, all down". An exit from the euro would result in a depreciated drachma, which would potentially give a much needed boost to tourism. And that sounds better than all other alternatives currently on offer. There is still time for Germany's Angela Merkel to get out her cheque book; but otherwise, it's all over – and quite possibly very quickly.

This really is what a death spiral looks like.


http://www.debtdeflation.com/blogs/

#3 John Dolva

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Posted 15 February 2012 - 03:45 PM


Greece: A brutal experiment on people's lives
Sunday, February 12, 2012 By Afrodity Giannakis, Thessaloniki
[photo] Anti-austerity protesters, Athens, February 9. Greek unions launched a two-day general strike on February 10 against new extreme austerity measures the “troika” of the International Monetary Fund, European Central Bank and European Union is seeking to impose on the southern European nation. The deal will give Greece a new “bail-out” worth 130 billion euros (A$161 billion) in return for fresh spending cuts.

Amid ongoing street protests and building occupations, the Greek cabinet approved the deal on February 10. Six cabinet members resigned in protest. Greek parliament was scheduled to vote on the deal on the evening of February 12.

Below, Afrodity Giannakis writes from Thessaloniki on the impact of the austerity on Greek society.

* * *

I work as a permanent English teacher in a Greek village, where I drive every day from my home in Thessaloniki.

A few days ago, I was looking for a magazine in my neighbourhood at about 9am before going to work. I found that all the shops in the block had put up the shutters, except for one closer to my home, which did not have the magazine, anyway.

Shops closing down is a common occurrence in neoliberal capitalist Greece, but the situation has rapidly deteriorated since May 2010. That was the time of the first memorandum, imposed on Greece by the “troika” (the European Union, the European Central Bank and the International Monetary Fund — IMF) and the Greek Panhellenic Socialist Movement (Pasok) government.

Shop owners are forced to close because of the steep plunge in consumption, combined with higher government fees and other expenses.

I drove along the national road to go to work, about 45 kilometres from Thessaloniki. Until recently I worked 80km away from home. Last year I worked 700km away and it is highly uncertain where I will be placed next school year.

Far-away placements have been commonplace for Greek teachers for a long time. What is new is the rising casualisation, intensification of work and overall job insecurity.

Now, it is going to be almost impossible for teachers to make ends meet if they have to move away from home. Having a job at all is also highly uncertain.

The reason is that the troika, in close collaboration with the unelected Greek government imposed by the troika, has decided on more public sector sackings.

Crippling cuts

The plans are part of the second memorandum agreement between the troika and the Greek government.

This memorandum includes cuts of 14.3 billion euros between 2012 and 2015, starting with 3.3 billion euros this year.

With 11 million Greek people, these sums come up to a high amount per head. This is all the more shocking if we consider that a huge proportion of Greek people live in extreme poverty.

The number of Greek people living at or below the poverty line is more than 3 million and rising.

The new agreement includes 150,000 public sector sackings to be be carried out by 2015. As a start, 15,000 public servants will lose their jobs this year.

Immediate sackings of 22,500 temporary and casual teachers has also been raised.

The troika has persistently pushed immediate cuts to military personnel numbers. This may be cause for concern in the light of recent official statements that anything is possible in Greece.

From the first memorandum on, measures first raised years ago have finally been implemented. The attacks on the Greek people seem to be part of a well thought-out plan.

For example, the capitalists and their political representatives have long demanded an end to public service job permanency. They have also aimed to do away with collective agreements.

Furthermore, ex-Pasok prime minister George Papandreou had arranged to hand Greece over to the IMF before his party won the 2009 elections.

The measures against the Greek people are unprecedented. People are in a constant state of stress, not knowing what is coming next.

My friends, colleagues, comrades — most people I come across — don't seem to smile in the way they used to. They seem thoughtful, less happy, lost, even depressed.

The immediate effects of the public sector sackings will be higher unemployment (the official figure is now 20.9%) and deepened recession.

In my job, after the sackings of temporary and casual teachers, face-to-face teaching hours will rise for those remaining. Needless to say, there will not be an accompanying salary rise.

These austerity measures are taking place against a background of deteriorating conditions for students and teachers.

There is a shocking shortage in school books, about 2000 schools closed down in the last school year, class sizes have risen and funding for education has dropped to 2.75% of the gross national product.

Schools do not have enough funding for photocopying paper or central heating. In this year’s freezing winter, students and teachers have had lessons with their coats on. Schools have been forced to shut down due to inadequate heating.

The recession will be worsened by the 22% cut in the minimum wage (32% for workers under 25). The minimum wage will fall to 600 euros (A$741) gross a month (473 euros clear, less for young people) from the 739 euros gross specified in the National General Collective Agreement.

The estimated loss is three months wages per year. This comes on top of the huge wage cuts since 2010.

The unemployment benefit, pensions and bonuses will be also be affected. The dole will go down to 369 euros a month from 461 euros.

The minimum wage cut will trickle down to all wage brackets.

Pensions are also going to be slashed. Pensions in public enterprises such as the Greek electricity company, as well as salaries and job permanency, are set to be worst affected. The explanation given is to make these enterprises more “competitive” before privatisation.

Closing down

Driving to work costs me almost 300 euros a month, while my salary has gone down to 800 euros a month clear, from over 1200 before the first memorandum.

Public service salaries have been cut by about 40% since the first memorandum. The most recent cuts, of up to 50%, were made last October. Another big salary cut is planned for later this year.

I am still managing to hold on to my car; using public transport for work would be very inconvenient.

Many people have given up their cars due to financial hardship. Soaring petrol prices, as well as rises in car registration and car insurance fees, have compounded the problem.

About 160,000 number plates were handed in to the taxation department at the end of the 2010 financial year. Last year, the number exceeded 250,000.

Not surprisingly, petrol consumption dropped by 22% last year, causing more than 1500 petrol stations to close in the past two years. Thousands of jobs were lost as a result.

Driving to work, I took a detour to avoid paying the predatory road tolls. On top of the high car registration rates and high petrol consumption tax, Greek people have to pay costly road tolls to private companies.

I kept looking for the magazine as I drove slowly through three villages. The sense of devastation wasn’t as pronounced as in bigger towns or cities, but a lot of shops seemed to have closed down recently, with shop and merchandise signs still on them.

I finally found a kiosk still in operation, in the last and biggest village. I finally bought my magazine.

On the same day, during my break, I was unable to find a National Bank of Greece branch in the village where I work. I spotted a branch office in the central square. It seemed to be under renovation, but it turned out the branch had closed down.

I had similar experiences looking for a doner kebab place, a particular petrol station, a particular bank where I used to pay my natural gas bills and a big cosmetics store I used.

All shut down, empty and dusty, with some of the signs still on and the windows serving as billboards.

A huge number of homeless people can be seen living in open-air spaces. There are 25,000 homeless people in Athens alone, driven out of unused public spaces by the Pasok-affiliated mayor.

Many homeless people are dying during this year's extremely harsh winter.

Public welfare services, as well as schools and hospitals, are all but demolished.

People are driven to sordid poverty and despair, as working rights are abolished and public enterprises and resources are sold off. At the same time, rising taxes, along with relentless price rises, are unbearable.

Tens of thousands of households and small businesses have had their electricity cut off due to unpaid bills.

Many children faint in schools after they go hungry for days because their parents can't afford to buy food. There has been a huge rise in the number of children sent to orphanages.

In many areas, the church or neighbourhood groups give out mess to paupers. People scavenging rubbish bins for food is now a common sight in Greece.

The Greek ministry of health reports psychological problems and suicide rates have risen dramatically.

New deal

In an attempt to deceive the people, Greek ministers have claimed they negotiated hard with the troika before signing the agreement. They put on a big show of trying to stop further bonus cuts, which were supposedly finally stopped.

Government officials are also talking about economic growth. On February 4, after a lengthy talk with the troika, the Greek finance minister, Evangelos Venizelos, called on all Greek people to stay united and do their bit “to save the country”.

By implementing more and more austerity measures, the government deepens the recession and devastates the lives of the overwhelming majority of the people.

Last November, the head of the European Commission Task Force for Greece, Horst Reichenbach, said that Greece was not ready for investment, as it hasn't hit rock bottom yet. You don't need a major in politics or economics to see what’s in store for the Greek people.

The people are angry at the pro-memorandum political forces. Pasok is polling 7-9.5% (coming fifth), the other major party, the conservative New Democracy has about 19% and far right Popular Orthodox Alert (LAOS) has dropped to 4%.

The Communist Party of Greece (KKE) and Coalition of the Radical Left (Syriza) are polling about 9% each.

The left must take advantage of this historical opportunity, join forces and help the Greek people reclaim their lives. They have to show the way forward, instead of passively waiting for elections.

We must thwart the capitalists’ plans. This nightmare has to stop and the capitalists will not stop unless we stop them.


From GLW issue 910
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#4 Douglas Caddy

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Posted 15 February 2012 - 05:00 PM

Is Western Democracy Real or a Facade?
The Divine Right of Money
by PAUL CRAIG ROBERTS
February 14, 2012

http://www.counterpu...right-of-money/

The United States government and its NATO puppets have been killing Muslim men, women and children for a decade in the name of bringing them democracy. But is the West itself a bastion of democracy?

Skeptics point out that President George W. Bush was put in office by the Supreme Court and that a number of other elections have been decided by electronic voting machines that leave no paper trail. Others note that elected officials represent the special interests that fund their campaigns and not the voters. The bailout of the banks arranged by Bush’s Treasury Secretary and former Goldman Sachs chairman, Henry Paulson, and Washington’s failure to indict any banksters for the fraud that contributed to the financial crisis, are evidence in support of the view that the US government represents money and not the voters.

Recent events in Greece and Italy have created more skepticism of the West’s claim to be democratic. Two elected European prime ministers, George Papandreou of Greece and Silvio Berlusconi of Italy, were forced to resign over the sovereign debt issue. Not even Berlusconi, a billionaire who continues to lead the largest Italian political party, could stand up to the pressure brought by private bankers and unelected European Union officials.

Papandreou lasted only 10 days after announcing on October 31, 2011, that he would let the Greek voters decide in a referendum whether or not to accept the austerity being imposed on the Greek people from the outside. Austerity is the price charged by the EU for lending the Greek government the money to pay to the banks. In other words, the question was austerity or default. However, the question was decided without the participation of the Greek people.

Consequently, Greeks have taken to the streets. The conditions accompanying the latest tranche of the bailout have again brought large numbers of Greeks into the streets of Athens and other cities. Citizens are protesting a 20 per cent cut both in the minimum wage and in pensions larger than 12,000 euros ($15,800) annually and more cuts in public sector jobs. Greek taxes were raised 2.3 billion euros last year and are scheduled to rise another 3.4 billion euros in 2013. The austerity is being imposed despite Greece’s unemployment rate of 21 per cent overall and 48 per cent for those under the age of 25.

One interpretation is that the banks, which were careless in their loans to governments, are forcing the people to save the banks from the consequences of their bad decisions.

Another interpretation is that the European Union is using the sovereign debt crisis to extend its power and control over the individual member states of the EU.
Some say that the EU is using the banks for the EU’s agenda, and others say the banks are using the EU for the banks’ agenda.

Indeed, they may be using each other. Regardless, democracy is not part of the process.

Greece’s appointed–not elected–prime minister is Lucas Papademos, He is a former governor of the Bank of Greece, a member of Rockefeller’s Trilateral Commission, and former vice president of the European Central Bank. In other words, he is a banker appointed to represent the banks.

On February 12 the appointed prime minister, whose job is to deliver Greece to the banks or to Brussels, failed to see the irony in his statement that “violence has no place in a democracy.” Neither did he see any irony in the fact that 40 elected representatives in the Greek parliament who rejected the bailout terms were expelled by the ruling coalition parties. Violence begets violence. Violence in the streets is a response to the economic violence being committed against the Greek people.

Italy has formed a second democratic government devoid of democracy. The appointed prime minister, Mario Monti, doesn’t have to face an election until April 2013. Moreover, according to news reports, his “technocratic cabinet” does not include a single elected politician. The banks are taking no chances: Monti is both prime minister and minister of economics and finance.

Monti’s background indicates that he represents both the EU and the banks. He is former European advisor to Goldman Sachs, European chairman of the Trilateral Commission, a member of the Bilderberg Group, a former EU Commissioner, and a founding member of the Spinelli Group, an organization launched in September 2010 to facilitate integration within the EU, that is, to advance central power over the member states.

There is little doubt that European governments, like Washington, have been financially improvident, living beyond their means and building up debt burdens on citizens. Something needed to be done. However, what is being done is extra-democratic. This is an indication that Western elites–the Trilateral Commission, the Council on Foreign Relations, Bilderberg Group, the EU, transnational corporations, oversized banks, and the mega-rich–no longer believe in democracy.

Perhaps future historians will conclude that democracy once served the interests of money in order to break free of the power of kings, aristocracy, and government predations, but as money established control over governments, democracy became a liability. Historians will speak of the transition from the divine right of kings to the divine right of money.

PAUL CRAIG ROBERTS was an editor of the Wall Street Journal and an Assistant Secretary of the U.S. Treasury. His latest book, HOW THE ECONOMY WAS LOST, has just been published by CounterPunch/AK Press. He can be reached through his website.

#5 Steven Gaal

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Posted 17 February 2012 - 12:12 AM

Greece: A brutal experiment on people's lives
Sunday, February 12, 2012 By Afrodity Giannakis, Thessaloniki
[photo] Anti-austerity protesters, Athens, February 9. Greek unions launched a two-day general strike on February 10 against new extreme austerity measures the “troika” of the International Monetary Fund, European Central Bank and European Union is seeking to impose on the southern European nation. The deal will give Greece a new “bail-out” worth 130 billion euros (A$161 billion) in return for fresh spending cuts.

Amid ongoing street protests and building occupations, the Greek cabinet approved the deal on February 10. Six cabinet members resigned in protest. Greek parliament was scheduled to vote on the deal on the evening of February 12.

Below, Afrodity Giannakis writes from Thessaloniki on the impact of the austerity on Greek society.

* * *

I work as a permanent English teacher in a Greek village, where I drive every day from my home in Thessaloniki.

A few days ago, I was looking for a magazine in my neighbourhood at about 9am before going to work. I found that all the shops in the block had put up the shutters, except for one closer to my home, which did not have the magazine, anyway.

Shops closing down is a common occurrence in neoliberal capitalist Greece, but the situation has rapidly deteriorated since May 2010. That was the time of the first memorandum, imposed on Greece by the “troika” (the European Union, the European Central Bank and the International Monetary Fund — IMF) and the Greek Panhellenic Socialist Movement (Pasok) government.

Shop owners are forced to close because of the steep plunge in consumption, combined with higher government fees and other expenses.

I drove along the national road to go to work, about 45 kilometres from Thessaloniki. Until recently I worked 80km away from home. Last year I worked 700km away and it is highly uncertain where I will be placed next school year.

Far-away placements have been commonplace for Greek teachers for a long time. What is new is the rising casualisation, intensification of work and overall job insecurity.

Now, it is going to be almost impossible for teachers to make ends meet if they have to move away from home. Having a job at all is also highly uncertain.

The reason is that the troika, in close collaboration with the unelected Greek government imposed by the troika, has decided on more public sector sackings.

Crippling cuts

The plans are part of the second memorandum agreement between the troika and the Greek government.

This memorandum includes cuts of 14.3 billion euros between 2012 and 2015, starting with 3.3 billion euros this year.

With 11 million Greek people, these sums come up to a high amount per head. This is all the more shocking if we consider that a huge proportion of Greek people live in extreme poverty.

The number of Greek people living at or below the poverty line is more than 3 million and rising.

The new agreement includes 150,000 public sector sackings to be be carried out by 2015. As a start, 15,000 public servants will lose their jobs this year.

Immediate sackings of 22,500 temporary and casual teachers has also been raised.

The troika has persistently pushed immediate cuts to military personnel numbers. This may be cause for concern in the light of recent official statements that anything is possible in Greece.

From the first memorandum on, measures first raised years ago have finally been implemented. The attacks on the Greek people seem to be part of a well thought-out plan.

For example, the capitalists and their political representatives have long demanded an end to public service job permanency. They have also aimed to do away with collective agreements.

Furthermore, ex-Pasok prime minister George Papandreou had arranged to hand Greece over to the IMF before his party won the 2009 elections.

The measures against the Greek people are unprecedented. People are in a constant state of stress, not knowing what is coming next.

My friends, colleagues, comrades — most people I come across — don't seem to smile in the way they used to. They seem thoughtful, less happy, lost, even depressed.

The immediate effects of the public sector sackings will be higher unemployment (the official figure is now 20.9%) and deepened recession.

In my job, after the sackings of temporary and casual teachers, face-to-face teaching hours will rise for those remaining. Needless to say, there will not be an accompanying salary rise.

These austerity measures are taking place against a background of deteriorating conditions for students and teachers.

There is a shocking shortage in school books, about 2000 schools closed down in the last school year, class sizes have risen and funding for education has dropped to 2.75% of the gross national product.

Schools do not have enough funding for photocopying paper or central heating. In this year’s freezing winter, students and teachers have had lessons with their coats on. Schools have been forced to shut down due to inadequate heating.

The recession will be worsened by the 22% cut in the minimum wage (32% for workers under 25). The minimum wage will fall to 600 euros (A$741) gross a month (473 euros clear, less for young people) from the 739 euros gross specified in the National General Collective Agreement.

The estimated loss is three months wages per year. This comes on top of the huge wage cuts since 2010.

The unemployment benefit, pensions and bonuses will be also be affected. The dole will go down to 369 euros a month from 461 euros.

The minimum wage cut will trickle down to all wage brackets.

Pensions are also going to be slashed. Pensions in public enterprises such as the Greek electricity company, as well as salaries and job permanency, are set to be worst affected. The explanation given is to make these enterprises more “competitive” before privatisation.

Closing down

Driving to work costs me almost 300 euros a month, while my salary has gone down to 800 euros a month clear, from over 1200 before the first memorandum.

Public service salaries have been cut by about 40% since the first memorandum. The most recent cuts, of up to 50%, were made last October. Another big salary cut is planned for later this year.

I am still managing to hold on to my car; using public transport for work would be very inconvenient.

Many people have given up their cars due to financial hardship. Soaring petrol prices, as well as rises in car registration and car insurance fees, have compounded the problem.

About 160,000 number plates were handed in to the taxation department at the end of the 2010 financial year. Last year, the number exceeded 250,000.

Not surprisingly, petrol consumption dropped by 22% last year, causing more than 1500 petrol stations to close in the past two years. Thousands of jobs were lost as a result.

Driving to work, I took a detour to avoid paying the predatory road tolls. On top of the high car registration rates and high petrol consumption tax, Greek people have to pay costly road tolls to private companies.

I kept looking for the magazine as I drove slowly through three villages. The sense of devastation wasn’t as pronounced as in bigger towns or cities, but a lot of shops seemed to have closed down recently, with shop and merchandise signs still on them.

I finally found a kiosk still in operation, in the last and biggest village. I finally bought my magazine.

On the same day, during my break, I was unable to find a National Bank of Greece branch in the village where I work. I spotted a branch office in the central square. It seemed to be under renovation, but it turned out the branch had closed down.

I had similar experiences looking for a doner kebab place, a particular petrol station, a particular bank where I used to pay my natural gas bills and a big cosmetics store I used.

All shut down, empty and dusty, with some of the signs still on and the windows serving as billboards.

A huge number of homeless people can be seen living in open-air spaces. There are 25,000 homeless people in Athens alone, driven out of unused public spaces by the Pasok-affiliated mayor.

Many homeless people are dying during this year's extremely harsh winter.

Public welfare services, as well as schools and hospitals, are all but demolished.

People are driven to sordid poverty and despair, as working rights are abolished and public enterprises and resources are sold off. At the same time, rising taxes, along with relentless price rises, are unbearable.

Tens of thousands of households and small businesses have had their electricity cut off due to unpaid bills.

Many children faint in schools after they go hungry for days because their parents can't afford to buy food. There has been a huge rise in the number of children sent to orphanages.

In many areas, the church or neighbourhood groups give out mess to paupers. People scavenging rubbish bins for food is now a common sight in Greece.

The Greek ministry of health reports psychological problems and suicide rates have risen dramatically.

New deal

In an attempt to deceive the people, Greek ministers have claimed they negotiated hard with the troika before signing the agreement. They put on a big show of trying to stop further bonus cuts, which were supposedly finally stopped.

Government officials are also talking about economic growth. On February 4, after a lengthy talk with the troika, the Greek finance minister, Evangelos Venizelos, called on all Greek people to stay united and do their bit “to save the country”.

By implementing more and more austerity measures, the government deepens the recession and devastates the lives of the overwhelming majority of the people.

Last November, the head of the European Commission Task Force for Greece, Horst Reichenbach, said that Greece was not ready for investment, as it hasn't hit rock bottom yet. You don't need a major in politics or economics to see what’s in store for the Greek people.

The people are angry at the pro-memorandum political forces. Pasok is polling 7-9.5% (coming fifth), the other major party, the conservative New Democracy has about 19% and far right Popular Orthodox Alert (LAOS) has dropped to 4%.

The Communist Party of Greece (KKE) and Coalition of the Radical Left (Syriza) are polling about 9% each.

The left must take advantage of this historical opportunity, join forces and help the Greek people reclaim their lives. They have to show the way forward, instead of passively waiting for elections.

We must thwart the capitalists’ plans. This nightmare has to stop and the capitalists will not stop unless we stop them.


From GLW issue 910
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Its not 'greek' to USA poor,they know more,they live it.
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#6 Steven Gaal

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Posted 21 February 2012 - 10:14 PM

Its not 'greek' to USA poor,they know more,they live it.
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[/quote]
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SPAIN
link http://uk.news.yahoo...-110524512.html

#7 John Dolva

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  • Interests:remembering the two towers of 13,000 children that fall down, dying of starvation, preventable diseases, lack of clean water and basic health needs every 1 1/2 hours 24/7/365...
    9/11? Bah...
    ...Viva Che'...
    living in a nice world

Posted 22 February 2012 - 04:01 PM

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FEATURED THIS WEEK
Greek people take to streets to defy austerity, repression
Hundreds of thousands protested around the Athens parliament on February 12. Tens of thousands protested in Thessaloniki, the country's second biggest city, and sizeable protests took place in other Greek cities. The rallies were organised in opposition to the new austerity package signed by the Greek government and the “troika” of the International Monetary Fund, European Central Bank and European Union (EU).

#8 Steven Gaal

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Posted 22 February 2012 - 04:59 PM

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FEATURED THIS WEEK
Greek people take to streets to defy austerity, repression
Hundreds of thousands protested around the Athens parliament on February 12. Tens of thousands protested in Thessaloniki, the country's second biggest city, and sizeable protests took place in other Greek cities. The rallies were organised in opposition to the new austerity package signed by the Greek government and the “troika” of the International Monetary Fund, European Central Bank and European Union (EU).

======================vvvvvvvv============================
Britain to heat up later ??
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