STOCK MARKET WATCH -- Thursday, 2 July 2015

[Demeter]

5. THE GREEKS SPEAK (AND FRIENDS OF GREEKS)

PM Tsipras says Greek creditors didn’t accept reform plan

...In his official Twitter account Tsipras said the international creditors have never been so persistent in rejecting reform plans, neither in Ireland nor in Portugal...

http://twitter.com/abarden/status/613639293974638592/photo/1

MORE AT http://rt.com/business/269359-greece-debt-crisis-tsipras/

Breaking with Creditors’ Power: The Importance of the Greek Debt Audit By Fanny Malinen

http://www.informationclearinghouse.info/article42233.htm

The world’s eyes are once more on Greece. I had the opportunity to visit Athens in mid-May, joining a knowledge exchange organised by the Political Economy Research Centre at Goldsmiths, University of London. The Greek government had just days before paid their international creditors with money from pension funds and other public organisations. There seemed little reason for optimism that the government would not give in to the pressure and accept the austerity that would come with the next debt payments.

I was told the city was far less militarised than during the previous government, even though there is still a riot police bus near every square. I could feel a whiff of expectations in the air of the city. People seemed to like the governing party Syriza mostly because they were not the previous government. Yet the government was not at that point standing strong against the creditors that own 80 per cent of Greece’s debt: the European Commission, European Central Bank and IMF. What has changed in the last few weeks?

Can't pay or shouldn't pay?

Of course, there are many factors. It has long been clear to economists – and most people who are not high-ranking EU officials – that it is impossible for Greece to pay its debts in full. But 'can’t pay' is different from 'shouldn’t pay'. The argument is gaining traction that the loans to Greece never benefited the people and should therefore be written off.

In April the speaker of the Hellenic Parliament, Zoe Konstantopoulou, launched a Truth Committee on Public Debt. The committee consists partly of international experts, many of whom also participated in the similar process that led to Ecuador defaulting on billions of dollars’ worth of loans to international creditors in 2008. Many of the Greek participants are not affiliated with Syriza. Giorgios Mitralis, a member of CADTM (Committee for the Abolition of Third World Debt) Greece, told us that, surprisingly many are officials who had worked for the previous government. There are also grassroots activists who have been campaigning for a citizens’ debt audit since 2011 – a reminder that Greece’s rejection of austerity has grown out of years of hard work by social movements.

The Debt Truth Committee published its first findings this week. 'Greece not only does not have the ability to pay this debt, but also should not pay this debt, first and foremost because the debt emerging from the Troika’s arrangements is a direct infringement on the fundamental human rights of the residents of Greece,' it states. 'Hence, we came to the conclusion that Greece should not pay this debt because it is illegal, illegitimate, and odious.' The European Central Bank over-stepped its mandate by imposing political conditions on its loans. Other EU countries’ bilateral loans did not benefit the Greek people but instead European financial institutions. The IMF knew that the conditions attached to their loans were undemocratic and in breach of human rights Greece is obliged to respect under domestic and international law. These are some examples of the illegal, illegitimate and odious nature of the Greek debt.

MORE Fanny Malinen is a London-based freelance journalist and member of Debt Resistance UK, which challenges debt injustice on a personal and political level. She went to Athens as part of a knowledge exchange organised by the Political Economy Research Centre, Goldsmiths, University of London, with support from the ESRC.

Where did the Greek bailout money go?

Less than 10% of the money was used by the government for reforming its economy and safeguarding weaker members of society...Only a small fraction of the €240bn (£170bn) total bailout money Greece received in 2010 and 2012 found its way into the government’s coffers to soften the blow of the 2008 financial crash and fund reform programmes.

Most of the money went to the banks that lent Greece funds before the crash.

Unlike most of Europe, which ran up large budget deficits to protect pensioners and welfare recipients, Athens was then forced to dramatically reduce its deficit by squeezing pensions and cutting the minimum wage.

MORE http://www.theguardian.com/world/2015/jun/29/where-did-the-greek-bailout-money-go?CMP=ema_565

Joseph Stiglitz: how I would vote in the Greek referendum

http://www.theguardian.com/business/2015/jun/29/joseph-stiglitz-how-i-would-vote-in-the-greek-referendum?CMP=ema_565

The rising crescendo of bickering and acrimony within Europe might seem to outsiders to be the inevitable result of the bitter endgame playing out between Greece and its creditors. In fact, European leaders are finally beginning to reveal the true nature of the ongoing debt dispute, and the answer is not pleasant: it is about power and democracy much more than money and economics.

Of course, the economics behind the programme that the “troika” (the European Commission, the European Central Bank, and the International Monetary Fund) foisted on Greece five years ago has been abysmal, resulting in a 25% decline in the country’s GDP. I can think of no depression, ever, that has been so deliberate and had such catastrophic consequences: Greece’s rate of youth unemployment, for example, now exceeds 60%.

It is startling that the troika has refused to accept responsibility for any of this or admit how bad its forecasts and models have been. But what is even more surprising is that Europe’s leaders have not even learned. The troika is still demanding that Greece achieve a primary budget surplus (excluding interest payments) of 3.5% of GDP by 2018....

...It is hard to advise Greeks how to vote on 5 July. Neither alternative – approval or rejection of the troika’s terms – will be easy, and both carry huge risks. A yes vote would mean depression almost without end. Perhaps a depleted country – one that has sold off all of its assets, and whose bright young people have emigrated – might finally get debt forgiveness; perhaps, having shrivelled into a middle-income economy, Greece might finally be able to get assistance from the World Bank. All of this might happen in the next decade, or perhaps in the decade after that.

By contrast, a no vote would at least open the possibility that Greece, with its strong democratic tradition, might grasp its destiny in its own hands. Greeks might gain the opportunity to shape a future that, though perhaps not as prosperous as the past, is far more hopeful than the unconscionable torture of the present.

I know how I would vote.

Joseph E. Stiglitz, a Nobel laureate in economics, is University Professor at Columbia University. His most recent book, co-authored with Bruce Greenwald, is Creating a Learning Society: A New Approach to Growth, Development, and Social Progress.

Starvation Is The Price Greeks Will Pay For Remaining In The EU By Paul Craig Roberts

http://www.informationclearinghouse.info/article42157.htm

...if the Russian and Chinese governments had any sense, they would pay Greece to default and to leave the EU and NATO. The unravelling of Washington’s empire would begin, and the threat of war that Russia and China face would go away. The Russians and Chinese would save far more on unnecessary war preparation that saving Greece would cost them.

Dr. Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. Roberts' latest books are The Failure of Laissez Faire Capitalism and Economic Dissolution of the West and How America Was Lost.