Goes Around, Comes Around

1. It's that time of the capitalist cycle again; that time when the previous agreements of Greece with its creditors, previously categorized as (pick one or more) harsh, necessary, draconian, necessary, savage, necessary, painful, necessary, when all that was previously shoved down throats and up asses, when all the signatures on the big fat T.O.U. (They Owe Us) known as an MOU... all that junk has run past its "sell by" date, and needs to be replaced with new and more harsh, necessary, draconian, necessary, savage, necessary, painful, necessary junk.

It's that time when Greece faces another structural review, another progress assessment, another audit, another check-up from the Troika-- IMF, ECB, European Commission-- to see if anyone can find anything resembling a pulse, anything that might indicate there's another bag of blood to be drained from a body stone cold; from flesh freeze dried, petrified and dessicated.

Enough of a pulse, that is, to warrant releasing another tranche, another 3 or 4 billion euros to the same or different Greek government so that the same or different government might immediately return the money in what is a Zombie Apocalypse version of charades:

"You pretend there have been some significant steps taken to 'restructuring the economy,' and we pretend to loan you money."

"You pretend to lend me money, and I pretend to pay you  back." 

Back to back and belly to belly, the same or different Greek government keeps the beat with a clave made of human bone.

2. Like last time, and like the next time, there are those who have doubts about Greece's condition.  Is it living?  Dead?  If it's dead, is this a corpse?

GDP down 26% over 7 years, with another decline registered in 2015?  Yes, but "signs of growth are returning" report the underwriters in their junk prospectus.

Non-performing loans at 40% of total loans, with default rates for consumer loans at 50 per cent? "Bank recapitalization has been successfully completed."

Exports and investment continue to decline, in lock-step with decline in the European Union? "Exports and investment are the keys to recovery."

Unemployment rate at 25 percent, like last time and like next time?  "Labor market reforms are urgently needed"... so that it's easier for employers to lay-off workers.

"Structural reforms essential..." this time like last time like next time to reduce the portion of GDP absorbed by the government?  Sure, but as GDP declines precipitously because of the government programs to reach compliance with the MOUs, the portion of GDP attributable to the government increases, expands.

Thirty-six percent of those age 16 and younger living in poverty, or at imminent risk of falling into poverty?  Not the Troika's worry, this time, like it wasn't the Troika's worry last time, like it won't be the Troika's worry next time.

3. Unlike last time, that great mass of professional, professorial, and professing leftists have little enough to say this time about the great opportunity the Syriza government represents.  No unrepentant Marxists, or Lenin's tomb raiders are out there cheerleading:  "Give me a T;  Give me an S..."

Syriza has had its 7 months of fame..  Alex who?  What was that other guy's name--the guy with the motorcycle?  The game theorist?  Begins with a V...?

No telegrams of support and congratulations flooding into Athens from the Panitchs and Gindins of the world.

Here's the only telegram that did arrive-- "In this life, you're on your own..." and that one was a mis-delivery, intended for Prince's funeral.  Oh well, it fits.

Short-attention-span socialists of the world unite!  You have nothing to lose, literally.  Others do, but that's not your problem, this time, or next time...Let's go crazy!  Let's get nuts!

4. Dearly beloved, we are gathered here today... let's see we need something old-- that's easy, the Troika; we need something blue-- how about the Aegean?  That's blue and we can use it in our tourism campaigns... and we need something borrowed... don't even ask, everything is borrowed; and we need something new...  Hmmmmm.... whatever could that be?

Here's something new:  this time the IMF is indicating it might not participate in this MOU; it may refuse to commit to funding the agreement.  The IMF is arguing that the Troika must commit to debt relief for Greece that will reduce the size of the debt by 2018, before the due dates on the bonds funding the bailouts.

Wolfgang Schäuble (he's a Tweeter! follow him at https://twitter.com/wolf_schauble) clutched his heart, but fortunately, he came up empty.  Burning rubber, Wolf wheeled around, fixed the managing-director of IMF, Ms Christine Lagarde, in his sights and said, "Sie sind nicht mehr in Frankreich, Madame Lagarde."  

Herr Schäuble is of the old school, the school that knows that the really important thing is the pretense at paying the debt.  The sanctity of the debt may itself be a pretense, but it maintains its power only through demanding real sacrifice.  Capital may be fictitious or not, but money is the real thing and has to be repaid, even if the repayment is an illusion.  The motion is what's important; the motion of repayment, like a tic, like a compulsion,  is its own reason, its own meaning.

Madame Lagarde,  well schooled in France at Nanterre La Défense, seasoned as Minister of Industry and Commerce, Minister of Agriculture, Minister of Finance in the governments of Chirac and Sarkozy, and under indictment in France for her responsibility or irresponsibility in the handing over of €404 million in government money to Bernard Tapie, thinks that Greece's debt is unsustainable.

Unlike Syriza and its once upon a time make believe it's too difficult to leave the EU supporters.- Lagarde believes the debt has to be reduced before the bonds come due because of that unsustainability. Lagarde recognizes that waiting to adjust the debt load by means of extending maturities, or allowing a partial moratorium, at the time the instruments come due, risks an unstructured, catastrophic default of Greece on the entirety of the debt before their maturity.  It is not a risk associated with sufficient reward to warrant the play.

Unlike the Syriza government and its supporters Lagarde recognizes that if the debt is not sustainable then default is inevitable.  She also knows that an "unsupervised" default represents a far greater threat to the domination of capital than it does to the welfare of the Greek people, who really would be better off if the entire system simply collapsed.

Delay in devaluing this debt that cannot be sustained, that is "protected" specifically by not being trade-able, exchangeable, of value in secondary markets, means the when the instruments "mature" their zero value will be realized, and all at once.  The IMF, the ECB, and the German government are then in the position of being the "bad bank," holding the non-performing assets, and will be placed in circumstances no different than those that currently plague the commercial banks of the EU.

Maintaining the debt at unsustainable levels, requiring unachievable primary budget surpluses of the government, also jeopardizes the big prize in this circle of jerks-- and that is the so-called labor reform measures.  The Greek government will be debilitated to the point where it cannot effectively function to discipline the working class and implement the abolition of labor protections, the roll back of pension guarantees.  That threat to that "project" of the bourgeoisie goes well beyond the borders of Greece.  Failure to achieve "labor reforms" in Greece due to insistence of primary budget surpluses and accumulating reserves to overpay an overvalued debt threatens the future of capitalism everywhere in Europe.

The managing-director is bourgeois.  She's not stupid.

The simple, humane, reasonable solution is immediate repudiation of the debt, the MOUs, and the Syriza government.

S.Artesian
May 14, 2016