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A new dawn or a Golden Dawn? Trends, Risks and Scenarios for Greece

A new dawn or a Golden Dawn? Trends, Risks and Scenarios for Greece

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Do not go gentle into that good night.

Rage, rage against the dying of the light

Dylan Thomas

Paul Mason (Channel 4 economics editor): You know what happened the last time somebody tried to take power from the Greek oligarchy.

Yanis Varoufakis (Greece’s new finance minister): The good fight has to be fought independently of costs.

‘We are going to destroy the Greek oligarchy system’, Channel 4 interview, 23 January 2015

We haven’t chosen the terrain. We have inherited it. We have the government, but we don’t have power.

Salvador Allende

Allende is now president. The State Department thinks we can coexist with him, but I want you to make sure you tell everybody in the U.S. government that we cannot, that we cannot let him succeed, because he has legitimacy. He is democratically elected. And suppose other governments decide to follow in his footstep, like a government like Italy? What are we going to do then? What are we going to say when other countries start to democratically elect other Salvador Allendes? The world balance of power will change and our interests in it will be changed fundamentally.

Kissinger to Nixon, “Make the Economy Scream”: Secret Documents Show Nixon, Kissinger Role Backing 1973 Chile Coup, Democracy Now, 10 September 2013 (see also http://nixontapes.org/chile.html)

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Alexis Tsipras has been sworn in as the new prime minister of Greece.

It is a victory over the paralysis of fear.

fidel_1grTo me, Tsipras and Varoufakis bear a striking resemblance to Guevara and Castro in 1959 Cuba.

Unlike them, though, they are far left nonviolent revolutionaries democratically taking over a NATO country: Clause 40 of their party program advocates the “closure of all foreign bases in Greece and withdrawal from NATO”.

The immediate problem now is governing a country in very dire straits.

Austerity has been a plague for the Greek economy and society (An amazing mea culpa from the IMF’s chief economist on austerity, Washington Post, 3 January 2013) and the new government has been elected on the promise of putting a stop to this disastrous course of action (Alexander Kentikelenis et al., Greece’s health crisis: from austerity to denialism, Lancet, Volume 383, No. 9918, p748–753, 22 February 2014; Dimitris C. Anagnostopoulos, Eugenia Soumaki, The state of child and adolescent psychiatry in Greece during the international financial crisis: a brief report, Eur Child Adolesc Psychiatry (2013) 22:131–134; Rajmil et al. Impact of the 2008 Economic and Financial Crisis on Child Health: A Systematic Review, Int J Environ Res Public Health. Jun 2014; 11(6)).

varoufakis_tsipras-620x412It is not only Greek resilience that will be tested.

A Grexit would be far more catastrophic for an exceedingly vulnerable international financial system than the collapse of Lehman Brothers (Syriza’s victory in Greece could herald success for Europe’s populist parties in 2015 polls, SCMH, 26 January 2015).

Furthermore, the international alliance of emerging powers (BRICS+SCO) is eager to assess the IMF vis-à-vis Athens and Brussels. Unless it proves that it is no longer intent on pursuing the Washington Consensus, the Allies will seek a way to decouple from the international financial system, making it unviable and obsolete (The Great Human Renaissance – Towards a New World Order, FuturAbles, 9 January 2015).

I suspect that the IMF is not interested in self-immolation to allow certain Euro-American powerful interests to scapegoat Greece.

We shall see.

Alexis Tsipras (Syriza) & Pablo  Iglesias (Podemos)

Alexis Tsipras (Syriza) & Pablo Iglesias (Podemos)

A EUROPEAN (AND GLOBAL) CHANGE OF HEART

Critics of Syriza say that there is not enough money to run the state and repay the debt and that this is going to end in disaster, something worse than Argentina or Venezuela. Because the government cannot end austerity and deliver on their promises, Greeks will turn against them.

But Syriza’s alliance with anti-austerity right-wing Independent Greeks (Anel) means that the new government will be pragmatic and a tough negotiator: a mover and shaker.

Greece won’t be alone in this fight. The Spanish answer to Syriza, Podemos, may well win the next general elections in October (Radical Spanish Party Podemos Lead Polls for First Time, Newsweek, 3 November 2015).

An anti-austerity agenda could spread like a contagion across the continent.

Finnish Foreign Minister Erkki Tuomioja has declared that “[Tsipras’ election] is a slap at what I see as a very right-wing economic policy in Europe”.

French president François Hollande has expressed his “desire to pursue the close cooperation between our two countries in service of growth and the stability of the euro zone”.

Ireland and Portugal will support efforts to have Greece’s debts cut in half (Syriza economist: Greek debt must be cut to aid recovery, Telegraph, 20 January 2015; Why Ireland should support Greek plan to write down euro-zone public debt, Irish Times, 10 January 2015).

GreekPMOutside of the Eurozone, Russia, Iran, Venezuela and Argentina are countries that feel they have been unjustly treated and sanctioned by the West and have already realigned with the East (After the Crash – Those who have the gold make the rules, FuturAbles, 20 December 2014).

Greece could follow the same course, given that it wishes to remain on friendly terms with Russia (Tough EU Statement on Russia Didn’t Have Greek Consent, Officials Say, WSJ, 27 January 2015) and Turkey, another NATO member (Davutoğlu congratulates Greece’s Tsipras, invites him to Turkey, Today’s Zaman, 26 January 2015; Syriza Sees Greek Hub for Russian Gas as “Great Opportunity”, Natural Gas Europe, 16 January 2015).

Tsipras sees eye to eye with pope Francis’ take on banking, debt, profit and universal values:

We agreed on the need to continue the dialogue between the European left and the Christian church. There is a need to create an ecumenical alliance against poverty, inequalities, against the logic that markets and profits are above people.

Pope Francis the ‘pontiff of the poor’, says Greece’s Alexis Tsipras, Guardian, 18 September 2015

 The halving of the debt would be only too fair, given that at least 90 percent of the money has been used to bail out European and Greek private banks that  lent to people that they knew would not be able to pay back. It was irresponsible for the Greek leaders to borrow so much, but also for the lenders to extend so much credit. Lenders should shoulder half the burden for the consequences of their actions, unless we are prepared to reward reckless banking behaviour.

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Austerity is morally unconscionable as well as completely irrational, for it favours debt holders at the expense of the economy.

Given that most Greek debt is now owned by European Union institutions and the International Monetary Fund, an agreement should be feasible.

Germany, which had half of its debt forgiven thanks to the London Debt Agreement of 1953 (Greece and Spain helped postwar Germany recover. Spot the difference, Guardian, 27 February 2013) and whose companies have made the most of Greek corruptibility (Complicit in Corruption: How German Companies Bribed Their Way to Greek Deals, 11 may 2010), is not in a position to refuse a renegotiation of Greek debt:

Syriza’s policy is to demand a revision of the austerity measures that were imposed on Greece by a coalition of Germany, France, the International Monetary Fund, and indirectly the U.S. Treasury. Syriza says that it does not wish to leave the euro and will not do so.

Germany says it will not be “blackmailed” by Greece into altering its policy. Blackmailed? Little Greece can blackmail Germany?

In a sense the Germans are right. Greece under Syriza would be playing hardball. The euro zone has no treaty provision either for withdrawal or for expulsion. If the strong powers try to expel Greece from the euro zone, a large number of countries may rush to withdraw for good and bad reasons.

Soon the euro zone might not exist at all, with Germany the single biggest loser. So, from Germany’s (and France’s) point of view, the Greek demands are a lose-lose proposition. Germany at the moment sticks to its position but has softened the threat of expulsion. France has said that it is against expulsion. This serves Syriza’s objectives.

That Germany in particular loses whichever stance it now chooses is one of the political consequences of chaos. The world-system is self-destructing.

The world-system is in what the scientists of complexity call a bifurcation. This means that the present system cannot survive, and that the real question is what will replace it. While we cannot predict what kind of new system will emerge, we can affect the choice between the substantive alternatives available. But we can only hope to do this by a realistic analysis of existing chaotic swings and not hide our political efforts behind delusions about reforming the existing system or by deliberate attempts to obfuscate our understanding.

Immanuel Wallerstein, It is Painful to Live Amidst Chaos, Commentary No. 393, 15 January 2015

Finally, of primary importance is the fact that Beijing, Moscow and Ankara cannot afford to let Greece slide into chaos (Turkey plans new pipeline to Europe, Al Monitor, 3 December 2014):

The future of Athens matters in Beijing. In mid-December, Premier Li addressed a summit in Belgrade with 16 leaders of Central and Eastern European countries. To facilitate cooperation, China launched a €2.4 billion investment fund targeting these economies.

In Belgrade, a consensus was reached to create a land-sea express passage linking China and Europe, on the basis of the Hungary-Serbia railway and the Piraeus Port.

China’s cooperation took off in 2012, when Beijing announced a US$10 billion credit line for the region. These projects were aligned with Beijing’s efforts to expand China’s presence in Piraeus, where Cosco won a 35-year concession in 2009 to upgrade and run two container cargo piers, as a gateway to the Balkans and into Central and Eastern European economies.

Beijing‘s talks with Athens began when Pasok was still in power. Bilateral cooperation moved to a new level with the conservatives of New Democracy, Samaras’ party. If Syriza takes over, Tsipras, whose sympathies lie with the Chinese way, is likely to continue cooperation.

Overall, China‘s EU strategy is part of its grand strategy, which stresses the role of regional integration and connectivity in an increasingly multipolar world economy.

In Europe, Chinese foreign investment and portfolio allocations mean capital and jobs – both of which the old continent desperately needs to overcome its structural challenges.

Dan Steinbock, Through Greece, China’s EU strategy is winning friends, SCMP, 5 January 2015

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2016: NATO INTERVENTION IN GREECE TO RE-ESTABLISH PEACE AND SECURITY

Alas! we cannot rule out a civil war scenario in the future of Greece.

This is how such a scenario would play out.

A financial meltdown would set off a run on the banks, civil unrest provoked by Golden Dawn militants would further harm the drive to repair the country’s battered economy. If the army doesn’t get paid and the police forces are too heavily infiltrated by the Golden Dawn (Impunity, excessive force and links to extremist Golden Dawn blight Greek police, Amnesty, 3 April 2014; Greece: polls, over 50% of police voted for Golden Dawn, AnsaMed, 27 May 2014), there might be an increased risk of a military takeover.

Widespread social strife and instability would become a pretext for a NATO intervention in one of its member states governed by a party that, prior to the run-up to the elections, was openly hostile to the Atlantic Alliance and critical of sanctions against Russia (Greek Anti-Austerity Party Edges Toward the Mainstream in Foreign Policy, Bloomberg, 15 January 2015).

However, the decision to form an alliance with Greek nationalists signals Alexis Tsipras intention to avoid the bleak reality of political martyrdom, à la Salvador Allende or Rosa Luxemburg.

Panos Kammenos is a life insurance: Tsipras’ government is now far less vulnerable to right-wing plots to remove him from power.

He has also sent a message to Greek and European citizens: politics is not about moral perfectionism and divisiveness, but about wanting the best for one’s country and its people (fancy that!).

In light of the development of a very special relationship between Syriza and Podemos, I feel there is something deeply symbolic in the Greek NATO F-16 fighter jet crashing at a NATO Spanish air base in Albacete (European Analogy Of The Day: Greek F-16 Crashes In Spain During NATO Training, ZeroHedge, 26 January 2015; Greece’s Syriza victory gives strength to Spain’s anti-austerity movement, Fortune, 26 January 2015).

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2016: “I AM NOT TAKING PART IN ANY OF THIS ANYMORE” – GREECE AS A VIRTUOUS MODEL

Should the new government live up to their commitments, it would set an example for the rest of Europe and the world.

Greece might outperform Iceland in the anti-corruption and anti-fraudulent banking policies (Let Banks Fail Is Iceland Mantra as 2% Joblessness in Sight, Bloomberg, 27 January 2014; Wall Street Stunned As Iceland Dares To Jail Banker Involved In 2008 Crash, ZeroHedge, 20 November 2014; Iceland’s jailed bankers ‘a model’ for dealing with ‘financial terrorists’, RT, 14 December 2013).

They would seek to recover assets stolen by Greek oligarchs and they would take a hard line against criminal transnational financial interests.

This crusade against corruption would have far-reaching implications for the whole planet, because it resonates with a recent change of attitudes on the part of Chinese authorities, enacting a crackdown that has not spared some prominent Chinese and Western figures, including the Rothschild family (Mystery Surrounding Collapse Of Hong Kong Mercantile Exchange Deepens; Four Arrested, ZeroHedge, 25 May 2013; Xi’s war on corruption spreads to China’s executive MBAs, FT, 5 September 2014; Chinese President Xi Jinping Just Took His War On Corruption To A Whole New Level, Business Insider, 15 January 2015; China’s Investigation of Ex-President’s Aide Marks New Phase in War on Corruption, WSJ, 23 December 2014; China Accuses Alibaba of Lax Oversight of Merchants, Bloomberg, 28 January 2015).

Greece, Iceland and China seem to be bent on demonstrating that nobody is above the law and that there is no reason anymore to play by the unspoken Western rules of connivance.

I expect the new Greek government to call for trials of corrupt functionaries and oligarchs responsible for Greece’s massive debt and buy time, delaying payments for the foreseeable future.

If they succeed, the rest of the world will see that there are alternatives to neoliberal austerity and oligarchic tyranny (From a sociopathic civilisation to a socio-therapeutic civilisation, WazArs, 15 October 2014).

Among other things, debt repudiation could become a central issue of mass protests taking place in the United States (A Quiet Revolution in Helping Lift the Burden of Student Debt, NYT, 24 January 2015).

Should they fail, we will have to endure “democratic leaders” eulogising deceased Saudi tyrants (Saudi King Abdullah: Britain mourns a tyrant, the Independent, 23 February 2015) for a little longer.

At any rate, we should all strive to draw together those forces opposed to neo-liberal austerity which, currently, is the most deadly kind of political and economic extremism in the West, both for workers and entrepreneurs (Inequality Seriously Damages Growth, IMF Seminar Hears, IMF, 12 April 2014).

Similar patterns of thinking are occurring globally and they propagate through the internet. The awareness is mounting that the problems we face are not insurmountable, that they appear to be unfathomable only because we have not been allowed to address them seriously and rigorously.

For now, the Greeks seem to be ahead of the curve, a beacon of hope for Europe.

The Greek revolution could usher in a new social contract and a new way of thinking the relationship between the ruling class and the people: a New Renaissance.

Over the next five to ten years we will likely see an increased emphasis placed upon decentralization, human cooperation, political engagement, local self-determination, DIY, self-organizing, cross-cultural and globalised collectives, as the chief strategy to survive and prosper (cf. Nassim Nicholas Taleb, Antifragile: Things That Gain from Disorder).

This can only be done once Syriza forces humankind to solve, once and for all, the massive problem of sovereign and private debt-servitude.

Solon, a predecessor of Tsipras, established the seisachtheia, i.e. debt cancellation, to abolish debt bondage.

Bearing in mind that Iceland did not repudiate its external debt (The darker side of Iceland’s showcase recovery, FT, 17 July 2014), perhaps a more fitting comparison is with Julius Caesar:

Caesar’s approach was a measured one, striking a balance between the demands for total debt forgiveness from some prominent politicians, and the demands for return to status quo ante from conservatives in the creditor class, such as Cicero. Caesar sought at first some method to allow the crisis to ease by temporary measures. If coin were unavailable then debtors, many of whom presumably had not been insolvent before the crisis, should be able to honorably repay by their only available means, such as the turnover of properties. Since prices had fallen, pre-war prices would apply to pre-war debts. But still some recognition of debt was fair and necessary to maintain fides, and so as not to completely alienate the many influential members of the creditor class who were by these measures required to take some losses. Caesar’s approach was to share the pain. Debt relief was to be given in measured doses so that the economic system could right itself without undue hardship or bloodshed and without long-term damage to the financial system now heavily dependent on credit.

Caesar’s temporary relief measures gave something to creditors and debtors alike.

Theodor C. Albert, The Insolvency Law of Ancient Rome, Part I, December, 2005

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Podemos in Spain (Spain’s Podemos inspired by Syriza’s victory in Greek elections, Guardian, 26 January 2015) and a minority Labour government backed by the Scottish National Party (Scots want Labour government dependent on SNP, says Sturgeon, Guardian, 25 January 2015) will most likely drag two key European players to the left (As the people of Greece go to the polls, Labour should support Syriza’s plans, LabourList, 23 January 2015), achieving a more balanced political playing field and rescuing a continent subjected to an economic model that encourages inequality, two-party politics, greed, xenophobia, nationalism and the expansion of debt for the benefit of neo-feudal rentiers (Why austerity is a dangerous idea, Time, 18 April 2013; The age of rentier capitalism, Al Jazeera, 7 September 2014).

I see exciting times ahead. We are indeed on the brink of a peaceful, planetary revolution.

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Greek democracy in the European Union

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About stefano fait

Social forecaster/horizon scanner, entrepreneur, Arts and Culture reporter for "Trentino" & "Alto Adige", social media & community manager, professional translator, editor-in-chief of futurables.com, peer reviewer and contributor for Routledge, Palgrave Macmillan, University of British Columbia Press, IGI Global, Infobase Publishing, M.E. Sharpe, Congressional Quarterly Press, Greenwood Press. Laurea in Political Science – University of Bologna (2000). Ph.D. in Social Anthropology – University of St. Andrews (2004). Co-author of “Contro i miti etnici. Alla ricerca di un Alto Adige diverso” (2010)

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