Tag Archives: euro

Total eclipse of the hEaRT

total eclipse by Manos Symeonakis

A cartoon about the Greek Radio & TV’s closure by Manos Symeonakis for the Cartoon Movement.

Greek cartoonists on Merkel’s visit

I always loved to calm fears and tensions with some sense of humour. It’s a humanising effect that is becoming more and more rare during the troubled times this country is going through. Plus, I’ve nothing against Merkel – I keep all my frustration and anger against the austerity, this type of austerity, and the lack of a way-out plan. But, that’s another, huge discussion. Here are some cartoons by Greek cartoonists on the Angela Merkel visit to Greece (I think she landed at the time of writing of this line).

By Dimitris Hatzopoulos

By Dimitris Georgopalis

Translation: Angela Merkel is holding a sign that says AUSTERITY

By Dimitris Hatzopoulos

Translation: REPENT… MERKEL IS COMING…

By Kostas Mitropoulos

Translation:

Soldier: Presnt arms!

Merkel: Are the arms German, Antonis?

By Petros Tsiolakis

Translation:

Samaras: Are the austerity measures enough, Madam?

Merkel: You are pitiless! I bleed with what you are doing.

(sing on the right has a euro-swastika symbol and writes New Occupation)

By Panos Maragos

Translation:

Merkel: What is this Paul [Thomsen of IMF]? The Greeks don’t live in slums, neither do they survive with acorn!!

Paul Thomsen (holding the troika report): The reforms are not completed yet Mrs Merkel.

Last but not list, another one of Dimtris Hatzopoulos. It’s a bit older (I think it was published a week ago) and it’s not directly linked to Angela Merkel. But I really like his style so here you have it.

By Dimitris Hatzopoulos

A message of Hope for the Greek People: the case for a basic income

I received this message to the Greek people by Stanislas Jourdan, an independent journalist who until recently was working for French newspaper La Tribune. The text was originally posted here and I am reposting it here.

Defaulting on its debt and exiting the eurozone is certainly the best thing to do for Greece now. However, this won’t fix all the damages Greece experienced these last years of economical dictatorship. Greece needs more than that. Greece needs a new hope. I think what Greece needs is a basic income.

Let’s face it: far from preserving Greece from bankruptcy, European leaders are denying the simple fact that Greece is already a bankrupt country. Yet the Greek State cannot pay its hospitals’ medicine providers, delays VAT reimbursement, and even the central bank of Greece is printing euros to bail out insolvent banks.

More than never, now is time for a realistic diagnostic: if something might help Greece preserve its economy, defaulting on its debt burden is certainly the first step. Leaving the eurozone would be the second. If necessary, temporarily printing money to fill the budgetary gap, would be another possibility.

These three simple things would relieve every greek citizen from the repayement of an odious debt, it would lead to devaluation of the new drachma thus reinforcing competitivity of the Greek economy. In the end, this would supposedly tackle the vicious circle of economical depression. Theoritically, at least.

Practically, I know things are not so easy, and that these three steps raise a lot of different issues, and will not magically solve all the problems. So, how can we do better than that ? How can we build a better future in Greece, beyond the default ? How can we make this decision progressive and desirable ?

I am not Greek nor i am living there, however, through a lot of readings and some talks with Greek people, i think i have an idea about what is happening there. And I have been thinking of some part of a solution…

A confidence deficit

I feel that what Greece needs the most is much beyond economical measures. The most precious thing Greece has lost these last years is confidence. Confidence in itself, confidence towards others citizens, neighbours, confidence in the future, not to mention confidence in politicians.

This has to be fixed, but deeply relies on economical issues. You cannot ask people to trust each others when they are suffering from hard economical pressures. When you’re too poor to feed yourself or your children, well, things like morality, common sense, or citizenship becomes all relative. This is no more than a human thing, right ?

Moreover, confidence cannot be reached when people feel totally unequal towards some of their fellow citizens. There are studies (notably French ones) that prove this point: the more social welfare is unequal, the more people feel jealous and aren’t willing to play by the rules. They would try to take advantage of the system as much as they can and/or feel others are doing.

What i am saying is that Greece cannot get back on its feets as long as a new social contract is written democratically. And such a contract as to be built upon equality.

The basic income scenario

I don’t have any magic wand, but there is an idea that has been emerging for some years now, here in France, but in many other countries as well : the basic income guarantee. What’s that ? Basically, this consists in giving every citizen a monthly grant. Let say a minimum of 300€ a month for every Greek (this amount should be debated democratically). More from wikipedia:

A basic income guarantee is a proposed system of social security, that regularly provides each citizen with a sum of money. (…) Except for citizenship, a basic income is entirely unconditional. Furthermore, there is no means test; the richest as well as the poorest citizens would receive it.

In others words, if you earn a salary, you also earn the basic income. This detail is important: it means more incentives to work than just receiving the basic income. Of course, the richer actually reimburse the basic income they earn through taxes.

The counterpart of this basic income would be a removal of most of the current social grants, and (at least) a reduction of pensions grants, and unemployment allowances, thus downsizing the government intervention in terms of administration weight and bureaucracy. Also, this would imply big reforms towards a simplification of the greek fiscal system, perhaps with something like a flat tax.

Greece is in debt crisis, and i suggest to spend more?

Humm, yes and no. On the one hand, yes Greece needs a stimulus, on the other hand, the basic income should be funded partially through the transfer of existing budgets, thus not increasing the total budget of the Greek government, but rather optimizing it.

Now that said, i am not a specialist in the Greek economy and have no idea about the figures we are talking about. Defaulting on the public debt will probably help, but might not be sufficient. In this case, the central bank would to the rest.

Indeed, let’s not forget that if Greece were to exit the eurozone, Greece could then ask its central bank to print money and provide the funds this measure requires. I know this is a sensible topic for many economists, but before throwing me some Weimar-like arguments, please mind that Greece has been suffering from a big bank run for two years now, therefore deflation is more a threat than inflation right now. Growth is being slashed down because of a lack of money, not because of a lack of production factors.

And even though inflation were to rise, let’s not forget that giving a basic income to everyone, you are actually compensating the poorest from an hypothetical loss of purchasing power. Furthermore, in a situation where the government doesn’t manage to collect taxes properly, monetary-driven inflation is actually another way to tax people (the richer, by the way) and fund public spendings. As long as everyone truly benefit from the money you print (and not only the civil servants for instance), i think we can agree this is fair.

And at least, once in History, a central bank in the world would actually behave in favor of People and not only for banks and governments…

Greece badly needs a new Hope

I know this sounds like just another utopia. But this is a very serious proposal i have been advocating for, here in France for several years now.

And I am not alone supporting the idea. For many years, economists have been working on and defending such an idea (some of them, like James Tobin, got Nobel prices). Some countries such as Canada and the United States even experimented such a system. At a wider scale, Brazil also implemented a basic-income like system, called the Bolsa Familia. If you are curious, I highly recommend you to read some papers about these experiments: researchers not only found great results about economical output, but also in terms of Education, health and security issues.

Still, people keep on telling me « people will stop working ! ». And i say : « Of course, the others would ! But you wouldn’t, right ? ». Only once for two year, one person admitted to me he would take some rest before going back to work, so i guess not so many people would actually stop working (as the experiments show, overall).

So what about you ? Would you really stop working ? Or would you simply look for a way to create wealth accordingly to your own values and beliefs ? And if you think so, then wouldn’t it be a good idea to allow such a move in everyone’s life ?

There are many reasons that makes the basic income a good solution, from the end of extreme poverty, better redistribution of wealth and productivity gains, the inversion of the bargaining power in the society (to the civil society), and recognition of the non-market economy. I suggest you to read this text (here in greek) if you want to understand a bit more the vision of the society behind this proposal.

Again, i know this sounds crazy, utopist, or whatever reaction this raises for you. But doesn’t Greece need a new hope now ? Don’t protesters, occupyers, indignados, all over the world need a dream ? At least mine is technically feasible.

Now it’s up to you to embrace it, and make it a reality.

Stuck to the euro

"Despite everything, I remain in the eurozone" by Giannis Kalaitzis

Europe’s worst nightmare

Another article, this time from New York Times’ Landon Thomas Jr., talking about the possibility of a military coup in Greece (see this and this for previous mentions).

It would be Europe’s worst nightmare: after weeks of rumors, the Greek prime minister announces late on a Saturday night that the country will abandon the euro currency and return to the drachma.

Instead of business as usual on Monday morning, lines of angry Greeks form at the shuttered doors of the country’s banks, trying to get at their frozen deposits. The drachma’s value plummets more than 60 percent against the euro, and prices soar at the few shops willing to open.

Soon, the country’s international credit lines are cut after Greece, as part of the prime minister’s move, defaults on its debt.

As the country descends into chaos, the military seizes control of the government.

To read the rest of the article click here.

Greece, a Baklava Republic

An interesting overview of today’s Greece, by Vanessa Andris for the Huffington Post.

It is not at all unreasonable that any intelligent person trying to make sense of Greece’s recent maniacal antics is now desperately asking, “What is this, a banana republic?”

Well my friend, no, not exactly. This is a Baklava Republic.

Welcome to a country stuck in its own syrup. A place where a prime minister, Mr. Papandreou, calls for a public referendum on a bailout deal without even notifying the finance minister who has spent months negotiating the deal with the lenders and his fellow Greek ministers. A republic where one egomaniac, Antonis Samaras, can autocratically hold an entire terrified nation and trembling world markets hostage by refusing to sign an agreement- which he publicly says he agrees to.

Greece, a country which a year ago seemed centuries ahead of the Arab Spring is now regressing so quickly into the most hideous practices of Baklava Republics that any kind of spring for them seems light years away.

The Greeks have exasperated their supporters and all but exhausted even the EU, the stakeholder with maybe the most to lose from their demise. They have displayed such primitive responses to difficulties that no one in the global community really wants to deal with them anymore.

In one year, and particularly in the last month of unpredictable counter-productive episodes, the Greeks have virtually alienated themselves from the civilized world they themselves fathered centuries ago.

If you think that what Sarkozy and Obama said about Netanyahu while their microphones were on was bad, imagine what they and the EU and IMF might rightfully be saying about the Greeks. And note the Baklava parallels between the Greek and Israeli leadership, starting with a lack of transparency and ending with complete impossibility.

Since the debt crisis began, we have watched our beloved Greece, dizzy with fatigue and despair, teetering on the fulcrum of its future, leaning first northwest like an insecure sophomore posturing to fit in with the polished seniors of the EU.

Then suddenly like all people under stress, reverting to her primal training on how to survive. Swooning now east to circle around the Mediterranean tragically re-identifying herself with cousins from ancient civilizations that have made minimal progress in their development; Turkey, Iran, Iraq, Syria, Lebanon, Israel, Palestine, Jordan, Egypt, and even Libya.

These are the Baklava Republics, a continuum of countries related by variations on one pastry, characterized by a pathetic lack of process skills, rule of law as it serves individual agendas, leaders incapable and disinterested in self-regulation, and proud of their willingness to destroy any and everything in the name of defending their dignity.

A string of countries differentiating themselves from the rest of world with a combination of primary commitment to face-saving, a need to create drama, and a defiance of reality so insanely illogical and destructive that people world-wide see them as nuts.

Not sure whether a given country could be considered a Baklava Republic? Here’s a litmus test: Are the leaders instantly insulted by anything that can be construed as questioning their honesty or good intentions? Is their best defense acting as if they have been monumentally offended? Do they regularly elevate issues to fight or flight dramas?

From Samaras to Ahmadinejad, we see the masters of Baklava Republic tactics regularly enact a predictable but no less maddening three-act drama.

Act One: Outrage: A question about duplicitous behavior is met with incredulous anger; “You dare to question me?”

Act Two: Arrogance: “You have insulted me and anyone who would be so ill-mannered is so far beneath me that they are unworthy of my cooperation.”

Act Three: Threat: “I am a victim, rightfully volatile now because of your behavior. Either provide me a face-saving way to get out of this or I will sabotage this process, set fire to the whole country, commit mass invasions, and/or make my child a suicide martyr. It’s dignity or death.” (Additional Baklava Republic specialty: Add concocted conspiracy theory and implication that the alleged perpetrator is evil, sinful, or crazy to Act Two).

To read the whole article click here.

Living in Greece at the end of November 2011

I just checked today’s newspapers and they had few exciting headlines. However, yesterday’s front pages would probably cause either panick or depression to a society somewhere in North Europe. As I stood there, watching all the post-apocalyptic headlines, I realized that in some years I will be saying that this is how it was to live in Greece at the end of November 2011.

Firstly, I will begin with the cover of this week’s Economist which has been reproduced, partly or as a whole, by several Greek newspapers.

Economist

“Eleftheri Ora” newspaper, which is a fringe paper that hardly sells a bit above 2.000 copies per day, has chosen to reproduce the whole Economist front page. Oh yes, with no reference at all. This paper is famous for its populist content, full of conspiracy theories, front pages of dead monks whose prophecies are now becoming reality, and so on. Actually I think that a daily translation of the paper’s front page could offer enough material for a separate blog. Anyway, when I think that usually it should be the last one in these posts of translated front pages due to its lower circulation. I only place it first here because of its relation to the Economist’s cover.

Eleftheri Ora

Title: The evil plan of the New World Order’s “Messiah”

Another newspaper which chose to use the euro meteor illustration is Dimokratia.

Dimokratia

Title: The Wehrmacht is approaching Europe

Overhead title: Everyone is talking about the coming financial Armageddon

“Ethnos” newspaper was the only one to reproduce the whole Economist front page, thus indirectly referring the source.

Ethnos

Title: A whole town is sleeping in the streets

Overhead title: Social shock – more than 20.000 homeless around Greece

Eleftherotypia and Kathimerini highlighted the continuing struggle of the Egyptians at Tahrir square.

Eleftherotypia

Title: The extra tax will be paid too by unemployed who worked even for one day (in 2011)

Picture’s caption title: Tahrir square does not succumb

Kathimerini

Title: Suffocation around the euro zone

Picture’s caption title: Egyptians overwhelm Tahrir square

Ta Nea

Title: Run Lucas Run! (a cartoon depicts Lucas Papademos in the body of Pheidippides, the first “marathon runner”)

Overhead title: A 100-day race for the government

Eleftheros Tipos

Title: Last chance for saving the euro

Overhead title: Germany leads euro zone off the cliff

Avriani

Title: Countdown for the euro

Don’t mention the R word

Here’s a very interesting article from BBC on the possibilities of a bank run. I suggest to anyone interested in the Greek and European financial crisis to read it. The article was written by Laurence Knight, BBC Business editor.

R is for run. As in bank run.

If you’re wondering what a bank run is, think of Northern Rock. It is a sensitive topic, not least here at the BBC.

But it is a subject that is being increasingly discussed by investors and economists in the eurozone. One can assume it is also being discussed in private by European policymakers too.

Because the fact is that Europe’s banks already face what amounts to a slow-motion run by big institutional investors.

They’re not queuing up at branches. Instead they are withholding their money at the click of a mouse.

Major US money managers and lenders are pulling out of the eurozone, as is clear from the cost to eurozone banks of borrowing in dollars right now, which has returned to extreme levels last seen during the global financial crisis.

Moreover, data from the European Central Bank (ECB) suggest that Europe’s banks themselves are losing confidence in each other – though not yet quite as badly as in 2008.

They have increasingly been putting their cash in the safe hands of the central bank, rather than lending it to each other, despite the punitively low interest rate the ECB pays them.

The rest of the article is here.

Conspiracies, Coups and Currencies

The murmurs about Barack Obama being forced out began in Berlin and Beijing. After his party lost the midterm vote, there were hints that a government of technocrats would be imposed on America, to save the country from a debt crisis and the world from a depression.

As the debt-ceiling negotiations stalled out over the summer, a global coalition — led by Germany, China and the International Monetary Fund — began working behind the scenes to ease Obama out of the White House. The credit downgrade was the final blow: the president had lost the confidence of the world’s shadow government, and his administration could no longer survive.

Within days, thanks to some unusual constitutional maneuvering, Obama resigned the presidency and Michael Bloomberg was invited to take the oath of office. With Beijing issuing veiled threats against our currency, Congress had no choice but to turn the country’s finances over to the Senate’s bipartisan Gang of 6, which in turn acceded to Chinese and German “supervision” of their negotiations. Meanwhile, there was a growing consensus in Europe and Asia that only a true global superstate could prevent the debt contagion from spreading …

FOR Americans, the scenario that New York Times columnist Ross Douthat just imagined is a paranoid fantasy, the kind of New World Order nightmare that haunts the sleep of black-helicopter watchers and Trilateral Commission obsessives. But for the inhabitants of Italy and Greece, who have just watched democratically elected governments toppled by pressure from financiers, European Union bureaucrats and foreign heads of state, it evokes the cold reality of 21st-century politics. To read the whole article click here.

The run-up to the Greek economic crisis (Part 4)

This is the 4th part of Greek journalist Pavlos Papadopoulos’ article on the run-up to the current Greek economic crisis, published by “To Vima” newspaper (16/10/2011). The first part of the article is here, the second part is here and the third part is here.

“Neither Papandreou nor any of us believe in the Memorandum” says a Minister. “I’ll remind you that the Medium-Term Program was fifth in the row when discussed at the Cabinet, right after the legislation for companion dogs. The whole government is in denial”. This denial led to a blackmail, using the drachma. On Friday 6 May 2011 Papaconstantinou traveled to Luxembourg for a secret meeting with several powerful euro zone Finance Ministers, presided by the Eurogroup head, Jean Claude Juncker.

According to the most probable version the cause of that meeting was that, some days earlier, Papandreou had implied at a talk with German officials that the Memorandum’s policy and the German strictness on its implementation could make Greece return to the drachma. This indirect threat annoyed the Germans. It is alleged that Wolfgang Schaeuble himself leaked the information to Der Spiegel Magazine, which posted it in its web edition that Friday evening, after the closure of euro zone banks, in order to drag the Greek government into a disorderly retreat.

Despite the upheaval that was caused in Athens, Papandreou delayed for two hours (!) to allow the then government spokesman Giorgos Petalotis to issue a rudimentary rebuttal. He first wanted to learn the European partners’ reaction to the “Greek ultimatum”. The reaction was not a polite one. Papaconstantinou was attacked by Juncker and and Schaeuble, while Jean Claude Trichet left the meeting within a few minutes. The “Greek blackmail” collapsed but it inspired Schaeuble to examine the famous “Plan B”, which is a “euro zone without Greece”. Despite all these, the Greek demands for a new bailout program with decreased interest rates and a prolongation of the deadlines for loan repayments were accepted. It was exchanged with a deeper “domestic devaluation” (of prices and incomes) through a Medium-Term Program which almost led to the fall of the government.

George Papandreou with Dominique Strauss Kahn

Papandreou maintained a secret communication channel with Dominique Strauss Kahn, looking for a platform for IMF intervention in Europe. Within the Papandreou family the IMF is thought to be an organization with a positive impact around the world. Papandreou’s brother, Nikos Papandreou, who participates decisively in the administration of the country (though always in backstage), was a supporter of the recourse to the IMF. The Papandreous believed that an advanced “international” model of administration should be applied to Greece. They have underestimated the fact that IMF means submission.

The Pushkin Cafe in Moscow

While the prime ministerial mind was lying in Washington D.C., where the IMF headquarters are, Moscow brought Greece closer to… Tel Aviv. The first secret meeting between Papandreou and the Israeli PM, Benjamin Netanyahu, took place at the Russian capital’s Pushkin Café. Greece would provide Israel an alliance and the gateway it needed to push the Leviathan deposit’s natural gas towards Europe. The energy diplomacy with Israel (which couldn’t start paying off but in 5-10 years) was considered a basic component of the strategy for the avoidance of bankruptcy (!). So this is why time was passing by and the government was taking zero efficiency measures, the government’s staffing was carried out through open.gov (unless Nikos Papandreou was intervening in order to promote persons of his own influence into key-posts) and the Ministers were in a constant state of confusion when it came to strategy and responsibilities.

George Papandreou in Davos (January 2010 - photo by Reuters)

The real shock for the Prime Minister came at Davos, at the end of January 2010. “The Hungarian Prime Minister approached me and told me to take measures” Papandreou said to the Cabinet meeting that he called right after his return. “Things are different compared to how they were a month ago” added Papaconstantinou. The Social Democrat Hungarian Prime Minister, Ferenc Gyurcsany, had recent experience with the IMF and wanted to share it with Papandreou. Some time later, he would be defeated at the elections by the Right. After Davos, the atmosphere within the Greek government was like a funeral. They had realized that they “lost” the time. Likewise they also lost the banks. “For a long time they believed that the warnings from bankers were only about the banks’ interests” say sources from the banking sector. They were too late to realize that the state’s exclusion from the markets is accompanied by a similar exclusion of the banks, having as a result the postponing of lending to individuals and corporations which slows down the economic activity, spreads poverty and increases unemployment.

The European Mechanism which was presented in 25 March caused the markets’ attack to Greece instead of making them not to do so. Why would the markets lend a state when they can much more safely lend the Mechanism that would then lend the state? Greek bond yields skyrocketed in mid-April 2010. On Friday 23 April, the Prime Minister had a planned visit to the tiny island of Kastellorizo, which had to do with issues of regional development. During Wednesday and Thrusday before the trip the telephones in the Maximou Mansion and the Finance Ministry didn’t stop ringing. Heads of governments and Finance Ministers of big states were calling Papandreou and Papaconstantinou. They were demanding that Greece recourses to the Mechanism because the crisis was hitting bank trust towards their own countries jeopardizing their future.

“Are we going to cancel the trip to Kastellorizo?” Papandreou was asked by his associates. “Why should we cancel it? Life goes on” he replied and added “I will make the announcements from Kastellorizo”. The circumstances necessitated a purple tie. In a surreal scenery, with a small fishing boat sailing in the picturesque port, the Prime Minister called forth metaphors from the Odyssey.

He wasn’t wrong. The odyssey for Greece had just started and he was aware of it. This is why he avoided signing the Memorandum. He wanted to avoid an odyssey of an agreement which could chase him forever. The new “social contract” was signed only by Finance Minister Papaconstantinou. Probably the only Minister who really believed that the Memorandum could actually save Greece…

The Memorandum was signed only by George Papaconstantinou

End of Part 4 of 4.