Monday, May 28, 2012

Common Sense about Greece

For Europe’s sake Greece must renege on its bailout commitments – my op-ed in Le Monde by Yannis Varoufakis

25 May 2012

Le Monde commissioned me to write an op-ed explaining my view that it is in Europe’s interest that Greece resists the ‘terms and conditions’ of its bailout package while staying within the eurozone. In effect, to explain why there is no contradiction between (a) the Greek people’s determination to stay in the eurozone, and (b) their tendency to vote overwhelmingly for parties that reject the terms of the ‘bailout’. For the french version, as published in Le Monde, click: Le prochain gouvernement doit refuser les termes de l’accord de “sauvetage”

For the english (original) version, read on … For Europe’s sake Greece must renege on its bailout commitments

Conventional wisdom has it that, if Greece wants to stay in the Eurozone, it must abide by the terms and conditions of its ‘bailout’ deal.

It is my considered opinion that the conventional wisdom is, once more, profoundly wrong. That Greece’s only realistic chance of staying in the Eurozone is to challenge the terms of its ‘bailout’ agreement. Moreover, I shall be arguing that such a challenge would be a great gift to Europe. Indeed, it may prove a prerequisite for the Eurozone’s survival.

Consider the following indisputable facts:

1.  A week ago the bankrupt Greek state borrowed 4.2 billion from Europe’s bailout fund (the EFSF) and immediately passed it on to the European Central Bank (ECB) so as to redeem Greek government bonds that the ECB had previously purchased in a failed attempt to shore up their price. This new loan boosted Greece’s debt substantially but netted the ECB a profit of around 840 million (courtesy of the 20% discount at which the ECB had purchased these bonds).

2.  During the same week, the fiscally stressed Spanish government was injecting large amounts of capital into Spanish banks. Simultaneously, to help finance the Spanish state, the ECB has provided large loans to Spanish banks (at 1% interest rate) which they then re-lent to their ‘saviour’, i.e. the Spanish state, at interest rates often exceeding 6%.

3.  For the Greek and the Spanish governments to be ‘allowed’ to borrow the monies involved in the operations described under 1 and 2 above, the ECB and the European Commission (plus, in Greece’s case, the International Monetary Fund) demanded of them that they deflate their economies through savage spending cuts which will, with mathematical precision, reduce the national income from which loans, new and old, must be repaid.

4.  Average interest rates in the Eurozone (even if we exclude the three countries that have fallen out of the markets and have received ‘bailouts’, and include Germany’s crisis-induced ultra-low rates) are at least 1.5% higher than nations with a higher average degree of indebtedness, e.g. the UK.

The German Chancellor (correctly) argues that we cannot escape a debt trap by accumulating more debt. However, consider facts 1,2 and 4 above: they constitute a typical case of adding debt to debt; of insolvent states borrowing in order to pay a Central Bank that is lending to insolvent banks which, at once, receive capital from insolvent states and lend to them part of the money they themselves borrowed from the Central Bank!

Is this prudential, austerity-driven, economics that a country like Greece must abide to? Or is madness-in-action? With such policies in place, is it any wonder that the Eurozone has already entered an advanced stage of disintegration?

Something must shatter this vicious cycle. If not, the Eurozone will soon join the Latin Union as a footnote in the economic history books of the future. But what could that ‘circuit-breaker’ be? Can President Hollande provide it? His willingness notwithstanding, he is hampered by the state of the French state’s finances and the accusation his criticism of austerity is a ‘cunning ploy’ to have Germany finance French ‘white elephants’.

This is where the next Greek government enters the scene as a potential circuit-breaker. Imagine if the incoming Greek Prime Minister were to try out something novel: Telling the truth! Addressing our European partners and telling them that, even if every Greek man, woman and child strove to stick to the nation’s ‘bailout’ commitments, Greece’s debt-to-GDP ratio will remain on an explosive path which guarantees an ignominious exit from the Eurozone. And then add:

·  that Greece will not borrow another euro from the troika until and unless a rational plan is in place

· that this ‘rational plan, must apply to all member-states, rather than privilege Greece at the expense of Ireland, Portugal, Spain etc.

· that until such a plan is in place, Greece will strive to live within its meagre means within the Eurozone, suspending temporarily all payments to all creditors

At that point, Europe will have to make a momentous decision. Either ignore this Greek call to sanity, and instruct the ECB to cut Greece loose (with devastating repercussions for the Eurozone as a whole), or choose to europeanise the banks throughout the Eurozone (i.e. recapitalise them directly by the EFSF, without that capital counting against national debt), europeanise investment projects (via the European Investment Bank) and europeanise part of the member-states’ debt (via eurobonds).

Am I proposing that Greece blackmail Europe? Certainly not. Since when is telling the truth and refusing to take loans that one cannot repay a form of blackmail? By taking this principled stance, Greece will be acting as a good citizen of Europe and will offer leaders like President Hollande a splendid opportunity to stop the rot that is nowadays consuming Europe’s body and soul.


“…Conventional wisdom has it that, if Greece wants to stay in the Eurozone, it must abide by the terms and conditions of its ‘bailout’ deal. It is my considered opinion that the conventional wisdom is, once more, profoundly wrong. That Greece’s only realistic chance of staying in the Eurozone is to challenge the terms of its ‘bailout’ agreement. Moreover, I shall be arguing that such a challenge would be a great gift to Europe. Indeed, it may prove a prerequisite for the Eurozone’s survival. Consider the following indisputable facts: (…) Am I proposing that Greece blackmail Europe? Certainly not. Since when is telling the truth and refusing to take loans that one cannot repay a form of blackmail? By taking this principled stance, Greece will be acting as a good citizen of Europe and will offer leaders like President Hollande a splendid opportunity to stop the rot that is nowadays consuming Europe’s body and soul.”

From the English translation of the recent Yannis Varoufakis article in Le Monde Le prochain gouvernement doit refuser les termes de l’accord de “sauvetage”

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Wednesday, May 23, 2012

Working Class Book Fair

Sunderland Working Class Bookfair
Sat June 16th

The next working class bookfair will be on Saturday June 16th 11 till 5pm in the Museum Vaults, Sunderland; 33 Silksworth Row Sunderland Tyne And Wear SR1 3QJ.

A broad range of literature, mags, books and ephemera, and different groups will be represented, and this mixture will hopefully strengthen the progressive movement and its politics. We aim to have an open and tolerant atmosphere, where discussion is encouraged.

This bookfair is organised at a time of economic crisis and political crisis. What passes for democracy is in desperate need of serious change. The Politicians lie and the media spread it in collusion with the police to form what passes for the news of everyday life. Power and money corrupt, and cause wars, its time to think our way beyond these limitations and do something about it.

The developing economic crisis, unemployment, Metro Cleaners dispute, struggles against cuts, the large demonstration in London on Oct 20th, and the way forward for the movement are going to be topics for debate over; soft drinks, Tea & coffee, beer, and not forgetting the all important meat & veggie barbecues.

Books, mags and pamphlets will cover at least; local and general history, Marxism, environment, football and other sport, culture, railways, mining, fiction, social science, co-operatives, economics, Anarchism, international relations, socialism, trade unions, sex, drugs & rock n' roll ... :)

This is an open invite to all fellow travellers and troublemakers to come on down to the June 16th bookfair and have a great time.

We would especially welcome comrades who travel across the North, such as friends in York, Leeds, Carlisle, Dumfries, Berwick, Middlesborough and lots more.

Tyne & Wear Left Unity, Sunderland Welfare Action group, the Industrial Workers of the World, SPGB, Class War, NUM, Mayday books, North East Anarchists, the Black Bloc (if we can find them), UKUNCUT, students, teachers and lecturers, Former AEi cables workers, Metro Cleaners & Sunderland College lecturers currently in dispute and many more are invited.

For further details please visit:


Friday, May 18, 2012

The Answer to Cameron and the Attack on the State

Mariana Mazzucato, The Entrepreneurial State, 146 pages, Demos 2011, ISBN 20119781906693732, £10, free download at

This is a really important little pamphlet from the Professor in the Economics of Innovation at the Open University and Economics Director of the Centre for Social and Economic Research and Innovation in Genomonics (Innogen). Mazzucato shows convincingly that the major innovations in our modern world -- the Internet, bio-technology, the new nano-technology -- which we tend to attribute to clever individuals at Apple, Google, Microsoft, companies such as GlaxoSmithKlein and venture capitalists, all in fact emerged from state financed networks, institutions and public enterprise, as in Silicon Valley. The first risk-taking investment was always from the state, and it was the state, she demonstrates, that not only fixed and regulated markets but created them. Capitalists took over what the state had launched with fundamental, long-term research, and capitalists made a lot of money in the process, profit which should, Mazzcato emphasises, have been shared with the people who took the first risks. And because these profits are used to finance political parties, governments listen to their paymasters and not to the needs of their peoples. This argument does not just apply to recent developments in the United States; historically in the UK, the steel industry, coal, canals, railways, flying and medicine were all first developed by public bodies; and UK Conservative Parties, notably under Mr Cameron’s leadership, are no less indebted to the rich than their American opposite numbers; and, regrettably, Labour leaders in Britain, too, have fallen for the blandishments of high finance.

What is it, then, that public enterprise can achieve where private enterprise fails? Mazzucato argues that private enterprise looks only at the short term and avoids not so much risks, which may be calculable, but uncertainty. Public enterprise sets no such limitations, but takes advantage of ‘creative destruction’, in Schumpeter’s phrase, to build anew. What is more, Mazzucato insists, public organisation can supply the networks of ideas and action between researchers, producers and consumers that even large corporations lack. She gives examples in the United States of Small Business Innovation Research (SBIR) and the Advanced Technology Programme (ATP), and the similar Advanced Research Projects Agency – Energy (ARPA-E) and, in 2009, the new multi-million dollar Energy Frontier Research Centres (EFRCs). But, while the US Department of Energy is allocating millions of dollars through matching funds and loan programmes to support the development, by public and private enterprise, of production facilities for solar panels, photo-voltaics, electric car batteries, and bio-fuel projects, the UK Coalition Government is cutting back even on the small support it now supplies to advancing green technology.

The lesson which Mazzucato draws in conclusion for the UK is only too clear: an underdeveloped ecology of networks of research and government procurement systems has to be replaced by the creation of systems designed, in her words, to ‘wrench technological progress out of UK business, under the leadership of the Technology Strategy Board (TSB) with a much expanded budget. The funds now given to flat subsidies of research and development activity and small businesses must be diverted and greatly increased to support a truly entrepreneurial state, where innovation is combined with collaboration. The inequality in rewards to the private and public sectors for risk taking has become totally unacceptable and only perpetuates an unproductive system, which fails to support equitable and stable economic growth. This is not only a question of addressing the threats of climate change with a new green technology, but also of advancing the whole welfare of the people.

The Trade Union Congress is organising an open conference, ‘After Austerity: What’s Next?’, at Congress House, London on 26 June 2012, at which Mariana Mazzucato will speak, and all these important questions will be discussed. We should join them.

Michael Barratt Brown

TUC - ‘After Austerity: What’s Next?’
Tuesday 26 June 2012 09:30 - 17:00
Congress House, Great Russell Street, London, WC1B 3LS

With the country facing a decade of economic stagnation we need real change if we are to secure jobs and living standards for the future.

•Growth is the only long-term solution to getting our public finances back in shape, but where will it come from?
•With another generation scarred by youth unemployment, and job losses in public and private sectors, how can we create more as well as better jobs?
•A growing gap between the rich and the rest helped cause the crash, but what can we do about it?
•As tackling climate change is increasingly presented as a barrier to growth, can a low carbon economy be part of the solution?

'After Austerity' will debate the answers.

Our aim is to host as wide ranging a debate as possible on the key challenges for our economy in the years ahead - boosting jobs and living standards, securing fairer pay at the top and the bottom, developing industrial policies that work and securing the transition to a green economy.

To achieve the scale of debate we are aiming for we hope as many of you as possible will be there taking part – and if you'd like to register you can do so here:


For all those interested in the themes of this important conference, IN PLACE OF AUSTERITY, a new book by Dexter Whitfield, uncovers the realities of commissioning, localism, 'big society' empowerment fraud, and the systematic undermining of public services and the welfare state. It perceptively exposes the scale of disempowerment, dispossession and disinvestment, and analyses the dominant rationale, which continues to underpin the financialisation and personalisation of public services, accelerating marketisation and privatisation on an unprecedented scale. This is a vitally important book for trade unions as well as for civil and community organisations.

Published by Spokesman, £18

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Thursday, May 10, 2012

The Greek people choose

At the Greek Parliament: Maria Sotiropoulou of International Physicians for the Prevention of Nuclear War, Tony Simpson, Alexis Tsipras, and Panos Trigazis of SYNASPISMOS.

The Greek people choose
By Tony Simpson

The clean lines of the Parthenon, high up on the Acropolis, stood out clearly in the early March sunshine. Down below, outside the Greek Parliament, a man pushed his supermarket shopping trolley down the hill towards Syntagma Square, where much of the public drama of Greece’s contemporary tragedy has played out prior to the recent general election. Balanced across the trolley was a discarded metal bath, on its way to be sold for a few euros. So it is that some residents of Athens eke out their existence in 2012.

Inside the Parliament, I met with Alexis Tsipras, the 38-year-old leader of SYNASPISMOS, part of the SYRIZA Coalition of the Left, which is attracting support from increasing numbers of Greek voters, as the general election on 6 May clearly showed. SYRIZA won almost 17% of the vote, up more than 12 percentage points since 2009 when it polled 4.6%. Now it has 52 MPs, four times more than previously. This vote put SYRIZA within just 2% of the Conservatives, New Democracy, the largest party. Under the Greek electoral system, the largest party automatically receives an additional 50 seats, so New Democracy, although its vote declined by 14 percentage points on Sunday, now has 108 Members of Parliament, an increase of 17 since 2009! This 50 seat ‘bonus’ masks the sharp decline of the Conservatives who, having lost the 2009 election with 33.5% of the vote, have now lost a further two-fifths of their voters. A large part of the Conservative loss (10.5% of the vote) went to the Independent Greeks, a new party on the democratic right, which campaigned on a staunchly anti-IMF platform. PASOK, the Socialist party, saw its vote decline by 30 percentage points (from 43.9% in 2009 to 13.2%) and its Parliamentary representation shrink from 160 to 41. The KKE Communist Party’s vote rose slightly to 8.5%, adding five more MPs to make a Parliamentary Group of 26. The new Democratic Left party, which split from SYRIZA in 2009 and absorbed some of PASOK’s recent losses, won 6% of the vote and 19 seats. Several smaller parties, including the Greens and the Social Contract (a splinter from PASOK, on similar lines to the Independent Greeks’ splinter from New Democracy) collectively received some 19% of the popular vote, but individually received insufficient support to cross the 3% threshold required to enter the Parliament. The nationalist LAOS (5.6% in 2009) also dropped to 2.9% and failed to win representation, while Golden Dawn, an anti-immigration fascistic party, polled almost 7%, gaining 21 seats as it entered Parliament for the first time. Turnout was about 65%, so that one in three electors didn’t cast a ballot. This drop in voter participation is partly attributed to economic difficulties which prevent the poorest voters from travelling from larger population centres to their own towns to vote.

Prior to the election, SYRIZA consistently emphasised that the previous Greek Parliament no longer had the legitimacy to approve legislation imposed as part of the austerity programme, particularly after the removal of PASOK Prime Minister George Papandreou and his replacement by the unelected Lucas Papademos. The laws in question included those lowering salaries and the minimum wage, and abolishing collective agreements between trade unions and employers. Parliament failed to represent the will of the people in voting for such legislation, which would demolish social gains achieved over decades. In fact, some PASOK and New Democracy Members refused to vote for the punitive austerity measures brought before them by Mr Papademos at the behest of the International Monetary Fund, the European Central Bank, and the European Commission, the so-called ‘Troika’. Mr Papademos is himself a member of the influential Trilateral Commission (like Mario Monti, appointed about the same time as Prime Minister of Italy) and was formerly a Vice President of the European Central Bank. He replaced Prime Minister George Papandreou of PASOK, in November 2011, seemingly at the behest of Mrs Merkel and others.

‘The bailout is for the bankers,’ Mr Tsipras confirmed at our meeting in March. Not a euro is for the people. On the contrary, the majority of Greece’s eleven million citizens are expected to swallow bigger and bigger cuts in their living standards, although they are already amongst the poorest in the European Union. Greece constitutes about 2.5 per cent of the European economy. With Ireland, its output is amongst the smallest of the Eurozone group, and shrinking year on year so that its debt to GDP ratio becomes increasingly unsustainable as output falls and unemployment rises. The ‘treatment’ is killing the patient.

The debt crisis is a European crisis, which is at its most acute in Greece. In response, Chancellor Merkel of Germany, with some help from Mr Sarkozy, the defeated French President, has pushed through the European Fiscal Compact, which looks increasingly unlikely to be ratified by all 25 signatories. (The UK and Czech Republic did not sign.) But only 12 ratifications are necessary for the Compact to take effect.

The Austerity Treaty, as the Fiscal Compact is known in Ireland, is supposed to enforce fiscal discipline and balanced budgets. In so doing, it will drive down economic activity even further, at a time of low or non-existent growth, raising the prospect of a deep slump spreading across the European Continent. Meanwhile, Ireland will hold a referendum on the Austerity Treaty on 31 May. The “no” vote is mustering sizeable support, with the Campaign for a Social Europe, Sinn Fein and others taking the initiative. Memories of the initial defeats of the Nice and Lisbon Treaties by the Irish electorate remain fresh.

In Greece, Mr Tsipras is acknowledged as one of the most incisive critics of the severe austerity policies that were pushed through the Parliament there by previous governments. The second Memorandum of Understanding, signed by Mr Papademos and the Troika, commits Greece’s payments to bondholders via a Luxemburg account. Thus the so-called ‘bailout’ funds are circulated to international banks, without benefiting the Greek people. Greek national assets would apparently serve as collateral against non-payment.

Mr Tsipras has positioned SYRIZA on the side of all those whose livelihoods are threatened by the increasing austerity imposed by the Memorandums signed by previous Greek Governments. The Greek electorate have thought long and hard about what is happening to them and their country, and they have repudiated such commitments made without their consent. Indeed, Mr Papandreou was somehow prevented from holding a referendum on the second Memorandum. When they finally had their chance, the Greek people spoke clearly in rejecting austerity. “Some people interpreted the election result as a vote of anger,” says Mr Tsipras. “They are making a mistake. It was a mature and conscious choice.”

Tony Simpson is editor of The Spokesman journal of the Russell Foundation ( He was invited to Athens by the Byron League for Philhellenism and Culture on the occasion of the 200th anniversary of Lord Byron’s landmark maiden speech in the House of Lords in defence of the Luddites.

With grateful acknowledgements to Theo Iliadis of The Paragraph for his help and guidance.

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Thursday, May 3, 2012

Free Shaker Aamer

There are serious concerns about Shaker Aamer's health, after more than ten year's confinement in Guantanamo Bay. He suffers constant pain caused by various medical conditions. His lawyer, Clive Stafford Smith, who visted him in November 2011, says that Shaker is slowly dying in Guantanamo. Shaker was cleared for release more than five years ago and faces no charge or trial. There now appear to be attempts to remove him to Saudi Arabia, from where he fled 28 years ago. Shaker resided in Britain before his unlawful detention in Guantanamo, and his wife and family live here. The children haven't seen their father for more than ten years.

An epetition to return Shaker Aamer to the UK is available to sign:  

Tuesday, May 1, 2012


“There have been numerous historical epochs where something massive and “new” sweeps the globe, moments such as the revolutions and revolts of the mid 1800s, the massive working class struggles of the early 1900s, and the massive political and cultural shifts and anticolonial struggles of the 1960s, to name only three. We believe we are in another significant historic epoch. This one is marked by an ever increasing global rejection of representative democracy, and simultaneously a massive coming together of people, not previously organized, using directly democratic forms to begin to reinvent ways of being together...”
— Marina Sitrin and Dario Azzellini

May Day: The Secret Rendezvous with History and the Present
Occupied Media Pamphlet Series

"It was September 19, 2011, a group of twenty participants in Occupy Wall Street were standing in a circle in Liberty Plaza (formerly known as Zuccotti Park, named after John Zuccotti, CEO of the park’s owners Brookfield Office Properties, in 2006), discussing what it means to facilitate an assembly, and what the role of facilitators is and can be. At one point it was suggested that, “our role is to help create the most horizontal space possible.” In response, a young woman asked, “what does that mean; horizontal?” Another young woman responded, “you know, what they did in Argentina,” and then another asked what that was.

Later, in a university setting in New York City, a discussion was taking place with regard to the Occupy movements, then just two months underway, with assemblies organized in more than 1,500 towns, cities and villages in the U.S. alone. A young participant in the Occupy movements spoke of how the assemblies are horizontal, using horizontalism. A well-known academic responded that it was amazing how the creation of horizontalism in Occupy Wall Street had spread so quickly around the world. Over the days, weeks and months in the plaza, and now throughout the country, so many conversations and relationships being developed were and are reminiscent for us of the past twenty years of autonomous creation within movements in Argentina, Mexico, Bolivia and Venezuela, as well as the U.S./European Global Justice Movement.

In Spain and Greece, where we have recently traveled to meet with people in the movements, we also found that people are both speaking and organizing in ways that are so similar to what we have seen in Latin America, yet it is often without any knowledge or reference to those movements. At one point we began to wonder if there was a way to share some of these experiences and stories from Latin America so as to put them in dialogue with the movements in the US and Europe. And then Dario and Marina met with Greg, and decided to create a book in an attempt to do just that. This pamphlet is an introduction to the book – with a particular focus on May Day.

Happy May Day!"

For further information on this pamphlet and others like it please visit: