The Time Has Come To Cut Greece Loose

My article on Greece and its re-current Troika problems in the Huffington Post and in the Greek version of the website, in Greek.

img_20160502_151923.jpg

@iGlinavos

 

Advertisements

IMF and Greece, the breakup

wpid-wp-1437223992462.jpeg

The IMF has been on its way out of the Greek Rescue programme for a while now.

The band-of-bandits of Mr Tsipras is getting ready to celebrate ousting the IMF. Before you join in the dance in Syntagma Square, listen to my podcast on what the IMF is, what it does and what it did (and did not do) in Greece.

This is a February 2017 lecture on what the IMF is and what it does. The discussion on the role of the IMF in Greece is from 44’30” onwards.

Enjoy and feel free to comment using the discussion options in this post.

@iGlinavos

A message of hope for 2017 from Greece

Did you enjoy 2016?

img_20161223_134007

Pretty much everyone I met who is not Greek and does not visit Greece regularly has had the same question for me in 2016: “So, how are things in Greece, its quiet now, no? Better?”.

This post answers this question (if you were minded to ask) but also unexpectedly carries a message of hope in these dark times, a little indication of how 2017 might be the beginning of a recovery for Europe (at least) despite the annus horribilis 2016.

quicksand1

How are things in Greece? I think the closest parallel is drowning in quicksand. So long as you don’t move, nothing gets better. If you try and move, you sink a little deeper.

Syriza’s government has been a circus of horrors, whichever way you look at it. Since they took power in 2015 (as has been well documented in this blog) they have lurched from one disaster to another, from one conflict to another, from one (endless) ‘negotiation’ to another. They have achieved a series of ‘political solutions’ which is code for defeat and capitulation. They have interpreted the demands of Greece’s creditors in the most destructive and senseless manner, to the degree that even the IMF thinks the country is dying, stuck in a mire of growth chocking measures.

Most of the time Syriza has done nothing to improve the situation in the country (staying put in the quicksand). Some of the time (usually after botching another round of ‘negotiations’) they have legislated a new raft of fiscal measures (wiggling in the quicksand and sinking a little deeper).

Nothing has improved in Greece and nothing is changing for the better. My answer to my earnest enquirers is that Greece continues to sink as people slowly eat away any left over cash saved before the crisis. This is not to say that some have not benefited. Syriza friends and family are finding jobs in new PM’s offices. Syriza journalists are being hired at resurrected ERT. The party goes on for the few, for a little while longer. Far-right lunatics (forming the junior coalition partners) continue to bless fighter jets, while police cars cannot move for the lack of fuel. There is ample comedy, within the tragedy.

No, things are not improving in Greece.

So where is the message of hope for 2017 the headline to this post advertises?

Greece has been one of the first places where the wave of populist lies and ‘anti’ propaganda led a band of bandits to power. Greece pioneered the escape to fantasy in 2015, proudly followed by the British people electing to torch their economy through Brexit and the Americans electing to have a stab at torching the world by voting for Trump.

As the first piece of this puzzle of a (often farcical) rerun of the 1930s, Greece may be a good place to speculate on possible futures.

I had argued in 2014, mistakenly believing that those who speak nonsense and act crazy are putting on a show to excite the mentally handicapped sections of the electorate (I was wrong, they are stupid, devious and crazy), that a failure for Syriza would leave the political system in such a sorry state, the electorate would lurch further to the extremes after having witnessed the failure of both establishment parties and their populist antagonists. Who would benefit? Golden Dawn, the Greek neo-nazi (but fat and hairy) variant was first in line.

Alas, this does not seem to be happening. The failure of Syriza to drag Greece out of the quicksand is shifting support to traditional parties, like New Democracy (under its new centrist leader Mitsotakis). Syriza’s antics have served to demystify the idea of the ‘left’ as morally superior. Tsipras has laid bare for all to see how what he leads is not ‘the left’ but a group of opportunist, amoral, ignorant and incompetent power-hungry populist have-beens. Even a population as jaded as the Greeks, after 6 years of crisis, realise that the ability to govern and a broad plan (even a Euro-friendly one) is better than banditry and chaos lorded over by power-mad buffoons.

And here is the message of hope for 2017. After the populist experiment has failed, people can come back from the populist abyss. Perhaps the explosion of discontent that brings the sewer to power dissipates after the experience of governance via populists. Perhaps even the attempt to blame ‘others’ for failure won’t convince people who suffer the consequences of bad decisions.

I admit that things look bad at the moment for Europe and the world. There is a chance however that in 2017, Germans will trust Angela Merkel with another term, ensuring continuity for the European project. The French could return a mainstream president (anyone but Le Pen), thus ensuring the stability of the Euro, The Italians could keep at bay the populist buffoonery of Beppe Grillo.

Britain may ameliorate its Brexit experiment in self-harm.

Unfortunately, the Americans cannot help us here, as Trump is entitled to run a world-wide, real-life version of the Apprentice for 4 years. If the world doesn’t end on his account, we may look back at 2017 as the year that things came back from the brink.

They might. Considering the alternative, they must.

Cheer up and enjoy your mince pies.

img_20161223_134025

@iGlinavos

I fought the Law and the Law won, till now

This post first appeared on the new SLSA Blog, it is reproduced here in full:
greek-riot-police-clash-w-001
As the troubles of Deutsche Bank remind us of the heady days leading to the collapse of Lehman, we have a good opportunity to reflect on financial rescues and resistance to the austerity that resulted, at least in Europe. While on the systemic level resistance to bailouts, and rescues with their associated conditionality may sound counter-intuitive (if there had been no rescues our economies and lives would look very different now), there is significant impetus to resist on the personal level.
 
A pensioner who as suffered repeated reductions in payments due to financial consolidation mandated by rescue conditionality; a judge who has seen incomes slashed; employees made redundant; depositors bailed-in; investors subject to haircuts; and many more have strong personal incentives to resist. Add to these financial market players who object to QE and ECB “helicopter money” and you have a strong constituency for action, despite the fact that no one would have preferred policy makers to let the market ‘creatively destroy’ itself in a Europe-wide experiment in Schumpeter’s gale.
 
The obvious vehicle for resistance is the law. How can the law then be used to protect personal interests in a hope to reverse austerity, or at least protest in individual cases?
 
The first question to ask is what to complain about?
Rescue programmes, usually in the form of MoUs between European institutions and countries in difficulty have required fiscal discipline and the reduction of budget deficits, including action on state debt levels. This led to what is widely perceived as a one-size-fits-all austerity recipe imposed on countries receiving assistance (Ireland, Portugal, Cyprus, Greece). The consequence of the implementation of these MoUs has been an uneasy mix with domestic legal provisions. In a number of cases, mandated measures have been judged unconstitutional, especially when they involved lay-offs, changes to labour laws and reductions in salaries, or increases in pension contributions. Claimants have sought to invalidate these decisions both in their implementation phase (in national courts) and at their origin (in European courts). Other claims are directed to the European Court of Human Rights in Strasbourg.
 
Many cases have been about violations of property rights. For example as a result of the Cypriot bailout, the islands two main banks  had to be restructured. The terms of the rescue required a bail-in of investors and depositors during the re-organisation. Those who saw part of their investment disappear have complained about deprivation of possession in national and European courts. In Greece too have expropriation type claims surfaced, mostly centered on losses incurred during Greece’s debt haircut, another instance of bailout mandated cuts. Claimants in this case have taken their arguments both to national courts and international investment tribunals.
 
The second question is who to complain about?
Here things get more problematic. The structure of Eurozone rescue programmes had European institutions negotiate with member states agreements, which were then signed and monitored by consortia involving, or led by, international institutions (like the IMF and the ESM). The problem with this arrangement is that while one can sue their government in national courts, European institutions in European Courts, and both in human rights courts, it is more difficult to challenge the actions of international institutions. A technical jurisdictional barrier therefore has served to shield the administrators of bailouts and MoUs from the bulk of claimants. This all however recently changed.
 
Something’s different
The European Court of Justice recently offered judgment on a case involving Cypriot claimants against European Union institutions for losses suffered due to the forced bank restructure mentioned earlier. Because actions related to the Cyprus bailout were handled by the ESM, so far there was an irremovable jurisdictional barrier to anyone who wanted to complain in a legal action about the involvement of the EU. The ECJ, for the first time however said that the tasks allocated to the Commission by the ESM Treaty oblige it to ensure that MoUs concluded by the ESM are consistent with EU law. The consequence is that the European Commission should refrain from signing MoUs whose consistency with EU law is in doubt. Suddenly the jurisdictional barrier disappeared.
 
Shall everyone run to the courts then?
Not quite yet. The court did not decide that the Cypriot MoU was illegal and ordered no compensation for Cypriot investors. The measures taken in Cyprus were judged as necessary and proportionate in the circumstances. Nonetheless, recent jurisprudence is significant as it breaks down the barrier between European institutions and international-treaty based structures that have sprang up to deal with the needs of euro-area crisis response. This opens the door to legal challenges to the bailout programmes of the EFSF/ESM offering an avenue to a plethora of claimants to unpick the questionable legal underpinnings of conditionality and austerity policies. There are a lot more claims challenging austerity and its consequences over and beyond property deprivation. Lawyers all over the European South are open for business.
running-to-court
@iGlinavos

What would be worse than Labour losing the next election?

corbyn-poster

What would be worse than Labour losing the next election?

The answer to the above question is: Labour winning the next election.

I am no friend of the Tories, the right, Brexiteers. But I can tell you one thing, observing recent history teaches us that when the likes of Corbyn and his team take power, bad things happen.

The obvious parallel with Corbyn’s Labour Party is Greece’s Syriza. The hard left that we thought extinct is alive and kicking. Not only that, but in dire circumstances, like the Greek crisis, or the Brexit coming rupture, it is capable of taking power.

Why should we fear Corbyn and his brand of reactionary, resurrected hard left? Again, Greece is a good example. While the left says the right things and pretends to want the right things, it is both incapable of delivery on its promises and more often than not dishonest.

Behind the facade of interest for the common man often hide people hungry for power. Not only are they hungry for power and privilege, they are so sure of their own ‘goodness’, they will stop at nothing in taking for themselves what they think they are owed. Add to this a belief that the system is corrupt, that the traditional elite is illegitimate and the usual Marxist mumbo jumbo and you have the perfect mix: A group of people who will wreck havoc on the very people they claim to represent.

Tsipras and his comrades in Greece have demolished the western, modern character of the state (there was one, albeit flawed) in their year and a half in power. They have stolen and pillaged with the belief that they are better than anyone that came before them, purer, newer, more correct. When faced with the consequences of their hypocrisy they replied: The others have been doing this for 40 years, it is our turn.

To add insult to injury, they are incompetent even in their piracy. There is corruption and dodgy dealing everywhere, but there is a difference in level, extent and (if you want) finesse. There is a difference between an overweight gourmet and an obese glutton. I am not trying to excuse the ill-takings of previous administrations here. I am trying to show that the hard left does the same, more of it, worse of it, with less attempt at hiding it. It steals and robs and gloats about its moral superiority. Oh, and it cannot govern on a very basic level. It is staffed by people who are rabid ideologues, yet incompetent in administration. See Varoufakis as a great example.

Greece’s Syriza left is an abomination. Further more, it is undemocratic. We learned in practice what was predictable in theory, that people who disdain the institutions of the state, that see everything in terms of conspiracies and plots, have little respect for democracy itself. Ask Minister of Propaganda Pappas.

Corbyn’s ground-up, ‘movement’-led operation is staffed by people of the same mentality. Agitators cannot govern. They do not even want to, most of the time. Hopefully they do not get the chance.

The reaction of supporters of Corbyn’s win has shown what they are made of. There is a lot of the familiar, we won, you shut up attitude you get from the victorious Leavers (people of similar mind-frames). You do not want this newly energized mob coming anywhere near Downing Street.

What should the PLP do? It should defect to the LibDems and help build an anti-Brexit (or in any case anti hard-Brexit) coalition of centrists. What should sensible center left voters do? They should quit Labour and also join forces with the LibDems in opposing any plans for a catastrophic hard Brexit. Everything else can wait. The future of the Labour Party is irrelevant. The future of the country matters to all.

@iGlinavos

 

How to incarcerate the nation’s media owners for 60 hours

adeies ktirio

One way to get rid of a tiresome free press is to instigate a great big purge following a (conveniently incompetent) failed coup. Another, perhaps less dramatic way, is to shut down media outlets that the government dislikes under some pretext, like broadcast licencing. While Turkey went for option a, Greece, having a less ambitious (or perhaps competent) leadership group is going for option b. Greece indeed has a unique ability to take international standards and mutate them onto 1960s style farcical episodes in political manipulation. The latest example of modernisation through a somersault back through history is the saga of TV licences.

Greece’s radio and TV broadcasting domain was never under secure legal footing, since non-state controlled media started springing up. The first ones were city run radio stations (by non-administration aligned local governments in 1987). These were followed by the land re-transmission of international satellite channels. Nationwide private channels launched in 1989 after the law was changed to allow their operation. There was never a public auction of broadcast licences and pretty much everyone in the early 1990s attempted to launch a TV channel at least on a local level. Most only broadcast back then (and even now) very old National Geographic documentaries, leading to my long held aversion to penguins.

Syriza, in its Stalinist fervor to ‘clean’ up the ‘systemic’ ‘corrupt’ ‘oligarchic’ media, that also happen not to support it, commissioned a ‘study’ from the University of Florence that decided exactly what the commissioner wanted to hear. That the Greek media market could only support 4 nationwide TV channels on top of the (lots of) ERT-run state ones that no-one of course watches. I do have to admit though that we watched quite a few (bad) French movies on ERT2 over our holiday. Now, one would say that what the market can hold is determined by the market itself, not the government. One could also say that private TV stations are businesses, if their creditors want to pull the plug they can do so. It is not up to the government to decide their financial viability. One also has not met “Propagandaminister” Pappas.

Mr Pappas engineered the organisation of an auction for these 4 licences which will reduce the number of national private television stations from seven to four. Existing broadcasters who don’t win a license are required to go off the air within three months, the government has said. The government is running itself the auction, despite the constitutionally mandated role of an independent (currently defunct) National Broadcasting Commission in such matters. But the constitutionality of the auction is not the only problem. The way in which the auction is conducted is farcical. One is used to closed bids in these types of processes and to strict confidentiality. After all the idea is to maximise revenue for the state. While however the bids are normally submitted through a process of sealed envelopes or online in a staged process, the Greek auction is taking place by locking up under police guard in a disused government building the media executives bidding for licences and their entire support staff for days! As the Washington Post reports, gathered in a government building in the Greek capital, executives from eight companies started the auction early Tuesday, with offers beginning at €3 million ($3,341,250) and increasing in increments of €500,000.

Apart from this being very funny to watch for a government with a deep hatred of ‘non-party’ media and journalists, it is highly irregular. The whole process in fact reeks of illegality and is almost certain to be demolished in court actions. While the 60 hour show was going on, the doors of the building were plastered with interim injunctions requested by the participants in the process against each other, and everyone outside against the government and the participants in various combinations. The Conseil d’Etat is also in the process of deciding on a challenge to the constitutionality of the process.

Lets summarise what is wrong with this. First of all, who gets national broadcast licences cannot be determined by the government in a democratic state (especially one as political, vindictive and disrespectful of the free press as this one). Secondly, the constitution requires that a process is followed, and the government itself says that additional thematic and regional licences will be determined by a different process involving the independent regulator. So why not this auction? You will find not a single lawyer who agrees with the process. It is simply unconstitutional for government to decide the number of licences. Thirdly, no opposition party agrees with this process. The chief opposition says they will repeal the law and the auction as soon as they come into power. Fourth, none of the participants agree with the process, and all have complained in courts already trying to block it. Fifth, technology and market reality has nothing to do with the 4 licences limit. Sixth, the only criterion being the money offered is nonsensical for a public tender process on broadcast media. If money is the only thing that matters porn channels could get all 4 licences. That would be fun, but not necessarily in the public interest. Seventh, all participants are on an equal footing, new entrants to the media field alongside those with 27 years of investment and experience. This cannot be right, especially when the plan is to shutter the stations that fail to obtain a licence at the cost of hundreds of jobs, never mind the irreversible blow to freedom of the press.

I was opposed to the move of Samaras to close ERT in 2013 in a show of force and commitment to austerity policies. I had said at the time that black screens in the place of stations people grew up with is not a hallmark of a democratic state. Imagine the opposite situation created by Syriza now, black screens in the place of the private channels who sprung up in 1989 to defend and establish a free press. I am sorry to say that 2016 is way worse than 2013 both in terms of symbolism and in content. After all, we never watched ERT, while we all watch SKAI, MEGA and the rest of them.

mega-channel-logo-old

@iGlinavos

The limits of choice 

Recent events, the Brexit referendum, Trump’s rhetoric, the Turkish coup have led to intense discussions about democracy, popular choice and the limits of consultation.

The referendum specifically has been a lot about letting people choose and respecting their choices. In fact these debates are nothing novel, there are centuries of reflection behind them, from Plato onwards. I too have contributed to library shelves on democracy and choice.

A bite-sized summary of this literature is that there are limits to the ability to choose and on the content of that choice. I had argued for instance when reflecting on Greece’s crisis that the Greeks should be given a choice between the horrors of austerity and the tragedy of Grexit. I had argued that they would suffer anyway, but the democratically selected pain was better than the other option.

Yet, I fought against Tsipras Greferendum, why? The reason is that choice with incomplete information amidst lies and populist propaganda is not democratic, it is the semblance of choice. It serves not the people, if anything it makes marginalisation worse.

The same criticism can be brought against the Brexit referendum. Was it choice? What does Brexit mean?  Was it a vote against migration and damn the consequences? Was it a vote in favour of more democracy? No one knows. What everyone knows is that it empowered a section of the establishment to do something. What this something is, we are all in the dark.

Was the Turkish coup an assault against democracy or the last attempt of the Kemalist establishment to resist the islamification of Turkey under a modern day Sultan?

Are there and should there be limits to democracy? Absolutely. Human rights and the rule of law are limits on democracy, and necessary ones.

Democracy does not mean mob-rule. It does not mean shouting slogans and then having the civil service figure out a corresponding policy response.

Tsipras Greferendum, the Brexit referendum, Erdogan’s win over the putchists mean something, but they do not necessarily mean democracy.

@iGlinavos