Can Democracy Save The Greeks?

Ode To Joy! Syriza supporters cheer as their party's victory is announced, But will the people of Greece be able to successfully reoccupy the democratic institutions emptied out by the twin evils of neoliberalism and austerity?

 

GREECE, the birthplace of democracy, is now the test of whether democratic governments still possess the power to effect meaningful change. If it passes the test, then the election of the left-wing Syriza Party, on 26 January 2015, will mark the beginning of the end of the 30-year neoliberal experiment. But, if it fails, then the growing perception that democracy has become an empty shell, incapable of delivering anything more than more of the same, will harden – not only in Greece, but across the whole world.

 

There are those who suggest that, when it comes to democracy, the neoliberal doctrines of the political class have acted like a neutron bomb. For those unfamiliar with the term, the neutron bomb was one of the Cold War’s most abhorrent creations. It’s great “selling point” was that its detonation, while killing human-beings by the million, would leave key infrastructure intact. Ready and waiting, following a suitable interval, for occupation and use by the “victors”.

 

According to the neutron bomb metaphor, neoliberalism has eliminated the vital human elements of our democratic system. The mass participation in political life for which New Zealand was justly famous (roughly a tenth of our adult population once belonged to a political party and the numbers voting frequently exceeded 90 percent of registered electors) has dwindled dramatically, reducing our democratic institutions to empty, echoing shells. The awful uniformity, both in terms of the political choices on offer, and the politicians offering them, is thus explained.

 

The Syriza Party’s stunning victory in the Greek general election is significant precisely because it has allowed the Greek people to re-occupy their country’s democratic infrastructure. The resulting surge of hope that has swept through the Greek population – evident in the highly emotional responses of ordinary Greek citizens interviewed on the streets of Athens by the world’s bemused media – is at once the new Prime Minister’s, Alexis Tsipras’, greatest asset and the source of his greatest vulnerability.

 

The neoliberal financiers of the European Union are adamant that the Greek people will not be released from the debt obligations imposed upon them by the profligate borrowings of corrupt politicians more than a decade ago. The devastating austerity programme overseen by the so-called “Troika” (the European Central Bank, the European Commission and the International Monetary Fund) which has seen unemployment soar to 1 in 4 of the workforce, and the incomes of those lucky enough to still have a job slashed by as much as 40 percent, must, according to Greece’s unyielding European creditors, remain in force.

 

The neoliberal elites’ assumption has always been that by forcing savage reductions in the size and scope of Greece’s public sector, the confidence of her private sector would soar, investment would surge, and before you could say “Long live the Eurozone!”, the Greek economy would have grown its way back to prosperity.

 

In the real world, however, events have unfolded very differently. Health cuts left the chronically ill without medicine. Wage cuts led to mortgage defaults and homeless families. Confidence collapsed. Investment dried up. Emigration soared. And when the desperate victims of austerity protested, their political representatives, pledged to defend the almighty Euro, called out the Riot Police.

 

When the Greeks voted-out the politicians responsible, they discovered to their horror that the replacements were just as committed to implementing the Troika’s austerity programme as their predecessors. When tested, political parties nominally of the Left turned out to be practically indistinguishable from their supposed ideological rivals on the Right. In the end, politicians from the traditional parties felt obliged to join forces against what they saw as the unrealistic and unreasonable demands of the electors. Isolated and vilified as traitors, the Greek political class would have struggled to detect the irony in Berthold Brecht’s famous suggestion that it might be easier for the Government “To dissolve the people and elect another.”

 

Greece’s electors have now delivered their emphatic reply to the brutal economic absolutism of successive neoliberal governments. The halls of the democratic Greek Republic, for long the exclusive preserve of neoliberal technocrats and their local political collaborators, are now ringing with the excited voices of the Greek People.

 

And the peoples of the European Union, themselves no strangers to the brutalities of austerity, are listening. If Syriza is to succeed, it is to this audience that it must appeal.

 

This essay was originally published in The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 30 January 2015.

Learning From Cyprus

A Prophetic Voice: It is difficult to imagine a more profound breach of trust between the State and its citizens than for it to reach into their bank accounts and steal their savings. The political and financial crisis gripping Cyprus, precipitated by the IMF and the European Central Bank, will have a profound effect on ordinary peoples' political expectations all around the world.

THE CYPRIOT MATRIARCH who hid her life savings under the mattress doesn’t look quite so silly now – does she?

 

It’s difficult to conceive of a bigger betrayal of trust than the one unfolding before our eyes on the Mediterranean island of Cyprus.

 

We are told as children that the safest place for our money is in the bank. More than that, the building up of personal savings is encouraged by politicians and bankers as the mature and responsible course that all good citizens should follow.

 

Imagine the consternation, then, when the Cypriot Government announced that it was about to reach into the savings accounts of its citizens and commandeer a portion of them to meet the demands of the International Monetary Fund and the European Central Bank.

 

Failure to oblige these all-powerful financial institutions will see the multi-billion-Euro loan Cyprus so desperately needs to stave off bankruptcy withheld.

 

Upon hearing this incredible news, Cypriots immediately rushed to the nearest ATM to empty their accounts – only to discover that the banks had shut the machines down.

 

The Cypriot Government then poured even more fuel onto its citizens already blazing fury by announcing a “bank holiday” until the Cypriot Parliament – called into emergency session – was ready to pass legislation legitimising the IMF/ECB-sponsored bank heist.

 

Astoundingly, the European Union Summit, held in Brussels just days before the crisis broke, was so sanguine about the outcome of the Cyprus bail-out negotiations that it hadn’t even included them on the main agenda. According to a Bloomberg report, they would be dealt with “at a separate meeting of euro-area Finance Ministers.”

 

As news of the Cyprus bank raid spread across other debt-stricken European nations, and stock markets around the world registered the shock, the arrogant unwisdom of assuming innocent citizens would supinely acquiesce in their government’s garnishing of their life savings quickly became evident.

 

Apparently not one of the European leaders gathered at Brussels had thought to review the last occasion that ATMs were switched off and a government informed the world that it was messing with its citizens own money.

 

Argentina in 2001 experienced a similar debt and banking crisis. The outcome was the largest default ($US132 billion) on a sovereign debt in modern history – the very nightmare that European Union leaders most fear.

 

Not that Cyprus is large enough, in either political or economic terms, to bring the EU to its knees all by itself. But what those Finance Ministers apparently did not consider was the demonstration effect of the IMF/ECB-sanctioned Cypriot raid on the citizens of those EU nations also facing debt and banking difficulties.

 

A Spaniard, or an Italian, or a Portuguese, with his or her life savings deposited one of their country’s leading banks will now be asking themselves: “What if the situation turns critical here? What if the IMF and the ECB demand something similar from our own government? Doesn’t it make more sense for me to put my money somewhere else? Somewhere safe? Somewhere my government can’t get its hands on it?

 

The Cypriot bail-out “deal” was as ill-considered as it was high-handed. God knows what the “end-game” is.

 

And, just before you mentally congratulate yourself on being born a New Zealander, take a look at what Finance Minister, Bill English, and the Reserve Bank Governor, Graeme Wheeler, are cooking-up.

 

It’s something called Open Bank Resolution (OPR) and the National-led Government reckons it’s the best solution on offer to a major bank failure.

 

Under OPR, if a bank fails, all its depositors will have their savings reduced to fund the institution’s financial recovery. In other words, if the men and women who run the major New Zealand banks decide to follow the example set by American and European financial institutions, and sail themselves into waters they can’t sail out of, you and I will be on the hook to bail them out.

 

And, according to Bill English, we’ll have nobody to blame but ourselves. Apparently, it’s up to us to scrutinise the performance of the banks in which we have money deposited – and act accordingly. Never mind that, as the Greens’ Russel Norman objected in his press release: “Not even sophisticated investors like Merrill Lynch saw the global financial crisis coming.”

 

That’s true. But the world has seen what’s coming to the people of Cyprus.

 

We have been warned.

 

This essay was originally published in The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 22 March 2013.

Lengthening Shadows

The Sons of Cain: Youthful members of the Greek fascist party, The Golden Dawn, celebrate the news that their party has won 21 seats in the Greek Parliament. The frantic efforts of neoliberal European financiers and politicians to shore up the Eurozone is opening the door to extremist political parties not seen since the 1930s. The promoters of austerity have sown dragons teeth.

FRANCE has a new, socialist, president. Greece, no government at all. The world’s stock markets oscillate between greed and fear. Only the world’s editorialists seem content to reassure us that, in spite of appearances, very little has – or will – change.

But, if they’re right, then we are all imperilled.

Because all those reassuring editorials are based on one, chilling, assumption: that democratic politics no longer has the power to countermand the world’s bond dealers and currency traders. That, in any showdown between the power of the people, and the power of global financial markets: it’s the people who will lose.

Except they won’t – not in the long run. Because, if the weapons of democracy fail them, the people won’t stop fighting, they’ll simply reach for new, undemocratic, weapons.

The editorial writers of The Economist, The Wall Street Journal, and even our own New Zealand Herald, in their rush to shore up the crumbling intellectual edifice of neoliberalism, and downplay the significance of the French and Greek elections, have failed to digest all of the news emerging from those contests.

In their eagerness to paint Monsieur François Hollande as some sort of professional, weak-kneed, say-one-thing-on-the-hustings-but-do-another-in-the-Elyseé-Palace French politico, they have forgotten who helped him across the line in the crucial run-off ballot. It was the Front National, the supporters of Marine Le Pen, who, either by abstention or active rejection, sealed the fate of President Nicolas Sarkozy.

If the global financial markets make it impossible for Monsieur Hollande to keep faith with the French electorate. If the overweening power of German capital is permitted to humiliate and “discipline” France’s leader – to the profound dismay of his countrymen, then to whom, exactly, do you think they will turn? Certainly not to the Socialist Party, nor to the equally discredited Gaullists. No, they will turn in their hundreds of thousands to the party of the Far Right. The Party that would tear up the treaties binding France to the European Union. The party that would close the borders of France, not simply to immigrants, but to the exports of France’s neighbours. The party that would bring the Eurozone, and the dream which inspired its creation, crashing down in the name of economic nationalism and “France pour les français!”

Those editorial writers also appear to have missed the ominous success of The Golden Dawn. These Greek fascists, with their Nazi-style salutes and their Hellenic version of the Swastika, won 21 seats in the Greek Parliament last Sunday. Their nostalgia for the days when the Colonels ran Greece, and the jails were filled with leftist intellectuals and trade union activists, casts a grim shadow not only over Greek politics, but over the whole of Europe.

The neoliberals’ hatred of history blinds them to the fact that the world has stood before where it stands today. In the 1930s: in the midst of the Great Depression; with millions unemployed; and the political leaders of the “civilised world” unable to conceptualise any way out of the deepening economic crisis except to cut and cut and cut; the way was cleared for the extremist demagogues of Right and Left. Men who preached the primacy of politics over economics: politicians who specialised in identifying scapegoats; butchers who slew them in their thousands.

President Franklin D. Roosevelt. His stimulus package, known as the New Deal, rescued American capitalism from its enemies to the Left and the Right, and made Keynesian economics the default setting of Western governments for nearly fifty years.

The one great exception to the economic folly of deflation and austerity was the administration of President Franklin Roosevelt. His “New Deal” offered a “third way” between the Scylla of Italian and German fascism and the Charybdis of Soviet communism. In faraway Sweden, and here in New Zealand, social-democratic governments followed Roosevelt’s lead – constructing societies that became the envy of the world.

Too many nations did not. Inevitably, the world was rescued from economic failure by that most terrible and irresistible of “stimulus packages”. Those who had declined the peaceful path to economic success were subjected to the awful audit of war.

There are worse things than fiscal deficits.

How does one account for millions of human losses?

This essay was originally published in The Dominion Post, The Otago Daily Times, The Waikato Times, The Taranaki Daily News, The Timaru Herald and The Greymouth Star of Friday, 11 May 2012.