Wednesday, July 01, 2015

More than Twice, Less than Zero

We all know what Marx said Hegel forgot.  We don't know what Marx would have said about the third time, or the fourth time, or the nth time.  And not just about historic personages; but about political parties, social "programs," about all the pathetic spectacle than makes up "revolutionary democratic socialism," "radical political economy," the attempt to put a "human face" on capitalism.

Here Karl, let me help:
"revolutionary democratic socialism"-- like the Holy Roman Empire, wrong on three counts;
"radical political economy"-- employment opportunities for oxymorons;
"capitalism with a human face"--  Jack the Ripper.

Marx wasn't one for brevity.  Let me help with that too.  More than twice, Less than zero.  Pathological.  Repetition compulsion.

Back in January, Syriza convinced the Greek voters that it could win a write-off of the Greek sovereign debt from the Troika; that it could obtain a "significant grace period in debt servicing;" exclude public investment from the restrictions of previous agreements; rebuild the welfare state; lead the country to productive reconstruction and recovery; increase public investment by €4 billion; gradually reverse all memorandum injustices; gradually restore wages and pensions to increase demand; provide incentives to small businesses for expanded employment; build a national reconstruction plan that would eliminate the humanitarian crisis, restart the economy, promote tax justice, regain employment, and deepen democracy.   All this, and at a profit too, with the cost of this grand economic program less than the revenues generated.  Everything would be just about perfect, and capitalist too.

Now Syriza's numbers were, pardon the expression after you look it up, μαλακίες. But then, who's counting?  Certainly not its supporters among the left.  Certainly not its battery of oxymoronists.

The numbers, however,  do get us to an interesting insight into Syriza's "game playing."  Syriza had convinced itself, and a large section of the Greek population, that the Troika would never risk the exit of Greece from the eurozone; would never force Greece into a state of insolvency.   Syriza portrayed itself as indispensable to Greece remaining in the eurozone, and it portrayed Greece remaining in the eurozone as indispensable to the Troika.

Nothing goes right once you start believing your own μαλακίες.

Syriza  figured that getting the last tranche of the funds provided by the 2012 Memorandum would provide the money to seed the clouds around its program with silver linings.  How much are we talking about here?  We're talking a really small amount-- like €7.2 billion (vs. total outstanding debt of more than €300 billion), with €1.6 billion of that payable to the IMF... today June 30.  So we're talking about €5.6 billion, less than the €10 billion that Cyprus needed when its banks went all pear-shaped.

That's it?   €5.6 billion?  That's all that was at stake?  No, that was not the stake.  At stake was another bailout of Greece. On top of debt forgiveness.  On top of a moratorium.

Greece is structurally incapable of retiring its debt in the next ten, twenty, or thirty years.   Greece is structurally incapable of generating sufficient revenues, no matter what level of austerity is applied, to meet more than a fraction of the costs of the "plan of four pillars."

Syriza's game, such as it was, was to capitalize its weakness. Literally.  Somewhere along the line, they believed not only their own μαλακίες, but the bollocks of others that if you owe enough, it's not your problem, it's the lenders. 

So let's pick up the thread of development again.  Syriza thinks it holds the trump cards in its empty hand.  Syriza believes its empty hand is the trump card.  Syriza can adjust, backdown, compromise, resubmit proposal after proposal because it has its eyes on the prize-- another bailout necessary to keep it functioning in the Eurozone.

The Troika recognizes the game for what it is.  It's determining strategy is to avoid another bailout.  It must avoid another bailout or the EFSF [European Financial Stability Facility] would be...depleted.  EFSF exposure to Greece is estimated at €141 billion,  about 30 percent of the European Stability Mechanism (ESM) lending capacity, and 20 percent of the total guarantees made by the eurozone member states.  Germany, France provide half the guarantee total, with Italy and Spain providing another 30 percent.  Any new bailout of Greece would have to retire the old debt, meaning either the debt gets redeemed by the mechanism, or its guarantors.

The Troika has its eyes on the prize also, and that prize is Italy where debt loads are too large to be guaranteed by the ESM; where the economy, having experienced triple-dip recessions cannot afford to meet further commitments to the stability facility.  The Troika knows what's at stake; what's essential to the functioning of the block of the European bourgeoisie.  And it ain't Greece.  Never has been.

Which gets, to the referendum scheduled for July 5 by Syriza.  Then the Greek electorate will be asked by Syriza to approve or reject the terms offered by the Troika in a sham presentation the likes of which the world hasn't seen since Spiro Agnew admitted his guilt, pleaded no contest, and proclaimed his innocence all at once.

For the "left" who have dutifully supported Syriza; which has proclaimed that negotiating the terms of the 2012 Memorandum was a lesser evil than leaving the Eurozone; which has argued that seizing the banks, establishing capital controls, expropriating major industries would "only make things worse," the "logic" -- if such a word can ever be applied to this conclave of  tics-- should compel it to agitate for a "YES" vote, as after all, the "real trouble" starts when and if Greece repudiates the debt; abrogates the 2012 Memorandum. 

But logic isn't the point, and the referendum is meaningless.  Five months later, five months of capital outflows, five months of economic deterioration, five months of not establishing a single pillar of its four pillars, Syriza wants a referendum on the terms for fulfilling a memorandum that has expired; on a program that no longer exists.  Timing is everything.

I stated previously that the referendum should not be boycotted. Now I don't think it matters if the referendum is boycotted.  It doesn't make a bit of difference.  The conflict is not now what it never was: initiating some nonsense "New Deal,"  separating austerity from capitalism,  establishing better terms as a "partner" with the bourgeoisie of the Eurozone.

The referendum is less than sound and fury signifying nothing.  It's less than zero.  A tic.  The trembling of a dead body.

July 1, 2015


  1. Anonymous4:47 PM

    What is even the difference between a yes vote and a no vote at this time?

    With Tsipras's new proposed deal - almost identical to the ECB/IMF deal - a no vote would just return to either (a) acceptance of what is essentially ECB/IMF terms or (b) some very minor negotiations before a new deal is agreed upon.

    It seems like endless depression for Greece unless the Greek people kick out Syriza and recognize that no parliamentary trickery can save them.

    Am I wrong in how i'm reading this?

    1. The Angry Internet6:12 PM

      Well, I agree, for whatever little that's worth...The spectacle of Tsipras screaming "blackmail" about a deal identical in nearly all particulars to one he offered himself is so embarrassing that most sympathetic commentators have already flushed it down the memory hole and are framing the referendum as an abstract defense of democracy, sovereignty, etc. The only defense I've seen of Tsipras' offer is that he proposed it knowing it would be rejected, thus painting the Troika as even more intransigent and boosting the case for a "no" vote. The problem here is that a Troika too stubborn to accept what was basically their own deal seems hardly likely to make any grand concessions after a "no" vote, especially with Tsipras, Varoufakis et al. insisting that Greece will stay in the euro no matter what, even if it means suing the EU. Their leverage here is nonexistent, not that they had any before—as our host notes, Syriza always delusional to think the Troika shared their attachment to keeping Greece in the eurozone, and frankly Tsipras is probably more eager to do that than Merkel.

  2. Anonymous1:31 AM

    I think it may be worse than that. They will be voting on a deal that is no longer on offer.

  3. The back and forth between Syriza and the EU is like what happened after the Cuban revolution. The EU will drive Greece to Socialism the way the USA drove Cuba to Socialism.

    1. You think? Uh... a) no armed combat revolutionary brigades in Greece under a central command, capable of defeating the existing military structure b) no mobilization of the urban and rural workers to seize estates, factories, property c) no Soviet Union to bankroll, and protect militarily, a "Cuba on the Aegean"

      Those are not just technical details.