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Who is to blame for the new Tax and Cuts Tsunami striking Greeks?

If one can follow and stomach the Greek news in recent days, he will be stunned about the amount of additional direct and indirect taxes the Greek taxpayers will have to pay in 2017. A total of 2.5 billion euro – that’s the verdict of the draft Budget 2017.

Where will the money come from after 7 years of austerity cuts, private sector wages in the form of a bag full of peanuts and unemployment at 24 percent? How much more can Greeks tighten the famous belt in order to squeeze money out of nothing?

greece-austerity

I truly have no idea.

Even if the Greek financial teams threaten to grab anything people might own: deposits, cars, living room furniture, tv sets, toilet brushes and dust and mites under the mattresses.

How will they seize something from nothing?

I truly have no idea what the left-wing government is up to. Strip taxpayers while they walk in the park? Is this surreal overtaxation a strategy to blackmail the European lenders to surrender to the idea of debt restructure and pull the International Monetary Fund on the Greek cart again?

Of course, this is the simplified approach of the Greek debt issue and the internal devaluation that continues without a break.

The more academic approach claims that the whole issue has to do with the  European Central Bank (ECB), IMF and EU bureaucracy – which refused to loosen their demand that Greece impoverish its economy to a degree worse than the Great Depression.

“The IMF and ECB do not even consider their destruction of Greece’s economy to be a failure,” writes James Galbraith, an American economist and former aidee of ex finance minister Yanis Varoufakis.

“The fight against Greece was, in a nutshell, a rejection of parliamentary democracy after the incoming Syriza coalition of left-wing parties won election in January 2015 on a platform of resisting austerity and privatization.

The world has seen the result: In contrast to the support given to countries with right-wing regimes, the ECB and IMF tightened their financial screws on Greece. The incoming finance minister, Yanis Varoufakis – who had been Galbraith’s faculty colleague at Austin, Texas – asked Galbraith to join him in February to help develop an alternative to the austerity being demanded. They were optimistic that reason would prevail: an awareness that the creditors’ program of “cutting wages and income without providing any relief from private debts (such as fixed mortgages) merely deepens debt burdens and forces people into bankruptcy and foreclosure.”

That was the optimistic and scientific approach. Reality showed that reason did not prevail. On the contrary, under maestro and choir-leader Wolfgang Schaeuble the lenders performed the epos “Austerity Till The End of The Days” in perfect harmony.

Counter Punch that publishes a review of Gabraith’s book notes that “This book reflects Galbraith’s disappointment at how matters turned out so disastrously.”

I do not want to write a long analysis here about how Varoufakis/Galbraith academic errors and philosophical approach and strategy took the matters to “turn out so disastrously.”

I do not have time and the nerve to do this, I want to avoid that my blood pressure  skyrockets.

The point is that while Galbraith’s “disappointment” translates into $$$ from a book sales, Greeks’ disappointment translates into Zero Euro to buy food, pay rents,  secure water and electricity supply, deal with depression due to long-time unemployment, over taxation and no future.

I am truly fed up with the economic crisis, the austerity and the no way out.

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20 comments

  1. Galbraith and Varoufakis in my opinion were correct. They had a plan which, as we later came to know, would lead to the parallel currency (IOYs) in combination with Varoufakis, as a finance minister, not paying the multi-billion sum “owed” to the ECB. These were sound plans of resistance and would have created chaos in the Eurozone, possibly resulting in the collapse of the Euro. They were the last big guns to defend the country. They would have worked, I believe. What any strategic plan and any defensive weapon cannot do, however, is counteract the traitors within. We know now that defense forces were compromised, Alex and his pals saw to this.
    All Yanis and James can do now is expose the crime to the rest of the world; they do just that. History will not be kind to the Quislings who are in power now, however, and its punishment, when it comes, may still surprise us all.

  2. On another note: this government (and the previous ones) has no reasoning or logical argument for the blind taxation they impose. They just received orders by the Troika’s High Command to expedite the demolition because the Führer wants to have her coffee ASAP in the newly acquired land. They don’t want money for taxes; they want houses, real estate and all property of any citizen. Well-known tactics, previously applied by Adolf to seize the properties of the Jews…

  3. keeptalkinggreece

    IMHO, THE momentum for Grexit was 2010 – back then it would have created EZ havoc as funds & banks & insurance funds were still holding GR bonds. Varoufakis was 5 years late and was experimenting on a reality that was not there anymore. Grexit after 6 years of economic crisis with 25% unemployment & a destroyed middle class? Please.

  4. They are not so much Quislings as lily-livered cowards, afraid to fight for their country lest they lose their lives. They have this in common with all of Europe’s politicians, with the possible exception of the neo-Nazi types across much of Eastern Europe.

  5. Yes. I wrote this, more or less, in a letter published in the Athens News then. My letter was in response to a letter from 20 idiot Greek (mostly US-based) economists, telling the Greek people that austerity economics would be a very good thing, and they should accept everything imposed on them by the Troika.

  6. You got wrong. It was exactly for the reasons you mention that Varoufakis did not want to attempt exiting the euro in 2015. This is why the IOYs denominated in euros. They could have been followed by a country default while in the euro.

  7. I tend to believe that they are just traitors and conscious salaried employees of the Germans. The Greek term is “γερμανοτσολιάδες” from the era of the occupation in WW2. If you look at the “laws” devised by the Troika and put in front of these MPs to vote positively for, I cannot imagine any sane human being saying yes to those, unless either a paid traitor or a moron. But is it possible to have 150+ morons in every voting session? Hence the former…

  8. You make no sense Ianni. You sound like one of Guest’s 20 economists.

    KTG is right: we should have grexited in 2010. IF this was all about economics.

    The reality though is that none of this is about economics, it is about western politics at the macro scale.

  9. Giaourti Giaourtaki

    To think that a “leftist” government would be any different is naive, just look at all the capitalistic crimes the brothers and sisters of Syriza have committed all over Europe when in government, selling inner-city state owned homes to blood-thirsty wallstreet-werwolves for gentrification is just a blueprint.
    The only reform capitalism deserves is the cure of destruction: Deutsche Bank gave their managers 24.4 billion in boni and this only between 2009 to 2015.
    Varoufakis might have had cool ideas but in reality libertarians rot in Greek prison cells for opposing the maniacs and don’t get cornered for showing a finger of its real story nobody ever cared but hey, the Krauty talk-master had to resign.

  10. I don’t see where I make no sense. I don’t disagree with you or KTG; the best period for exit was in 2010 and should have been utilised. What I said, is that with this opportunity lost (the traitor called Geoffrey saw to it), the only way to react in 2015 was what Varoufakis tried to do, only to be betrayed by another “prime-minister”, as it were. Stories of simple treason.
    Guest’s twenty economists have nothing to do with my argument or my thinking.

  11. Hmm. IN my view, the problem has always been that all choices are suboptimal, and all choices are also contingent on the responses of powerful political players, such as Germany and the IMF. This leaves us unable to make definitive statements about what should be the best strategy now, and even makes retrospective analysis controversial. But let me try.
    ~
    First, it was very clear that in 2010 Greek politicians held cards that no longer exist. That was a time when German and French banks were vulnerable, and in negotiations Greece should have been able to get better terms. However, when you elect an idiot as prime minister (and one who used a merchant bank as his principal economic advisor!!), then you basically have lost the game even before playing. Greece made no demands, offered no policy options, and basically passively asked for help. That is not negotiating: it’s called begging.
    ~
    Secondly, as part of these non-existent negotiations, Greece needed to bluff that it was prepared to exit the euro, if needed. It should not have declared a desire to exit, nor should there have been a referendum on the matter. When Merkel told Malakas Papandreou to hold a referendum on euro membership, she should have been told publicly to go fuck herself. (Instead of which, Papandreou started crying and complaining about being treated badly.)
    ~
    Thirdly, by the time that Varoufakis came into political office, Greece had no tangible threats to use. He was negotiating from a position of pragmatic weakness (whereas Papandreou should have been able to negotiate from a strong position). There was no reason, still to want to exit the euro — because the cost of doing so would be catastrophically high. Therefore, the parallel currency plan was developed. But this could only be a short-term plan: I never understood what V would do if the Germans called his bluff and forced a eurozone exit.
    ~
    Finally, as always, the cost of exiting the eurozone remains a terrible one. However, it does seem realistic to claim that the comparative costs would be lower in 2010 than in 2017. This is hindsight: few people other than hardline marxists advocated euro exit in 2010. The reason that we did not openly suggest it, is that we did not think the Germans so suicidal and obsessive that they would lead the whole of Europe into major economic decline. Expecting politicians to behave rationally sometimes works: but there are many major historical exceptions, and we are living through one of them.

  12. The EU is has imploded
    Germany is so bankrupt that it is not funny .. due to the mismanagement of .. OLD GERIATRICS .. greedy old men & women who should have been retired decades ago.
    Read Wall Street news & see for yourself how broke Germany The Great is.
    Has it occurred to anyone in Greece to say no.
    It must be fear .. the politicians are afraid that their bribe money will be stopped.

  13. I fully agree. Geoffrey Pap, however, was not only a moron but also quite a conscious traitor. If he himself could not understand anything, others in his cabinet could. How did they all go along? Varoufakis even back then was shouting on the need to use a strategy based on what you mention. There is no explanation of such a behaviour other than the talk of money. Somebody was willing to pay and “somebodies” were willing to receive and to vote accordingly.

    Now, our friends the Germans. I have to quote Maggie Thatcher on this. Wikileaks has revealed a telegram of hers to Mitterrand just after the wall fell, where she mentioned: “Don’t accept the unification; if they unite they will do the same again”. It is in the genes of this race to cause wars and fights. Their blind obsession to conquer far exceeds their ability to assess the risks, even for themselves. They will keep on going blindfolded down the road of the austerity madness in the hope that they will be the only ones to reign in the midst of the scorched earth of Europe. It is not that they believe that austerity is good; they have just created a convenient weapon of mass destruction. Let us hope that Russian winter comes fast.

  14. AS far as the disastrous Papandreou government is concerned, don’t forget the overweighted and fake-named Venizelos. It was he who thought up the property tax as a way of collecting money from people least able to pay. This guy, more than dimwitted Georgie, is personally responsible for the parlous condition of the majority of Greek citizens.
    ~
    As far as Maggie is concerned, the only good idea she had in her life was that German reunification would be a mistake for Europe. Unlike all the crappy and disgusting ideas she had, with this one she mentioned the idea once then quietly dropped it. Of course, the analysis is not without controversy. However, it is not necessary to invoke your culturalist argument — that Germans spent centuries waging war on neighbouring countries. Two simple facts should have been enough for the idiot French and others to grasp the dangers: (1), that reunification would be very costly (similar to raising the income of all of Greece to that of Germany); (2) that if successful,l it would reinstate Germany as the largest and richest country in the EU. This would radically change the balance of power in Europe, in favour of Germans.
    ~
    However, we have been cursed for decades with low-quality politicians across Europe. The only guy with a functioning brain is Putin — probably the person with the least education of the lot of them. This tells us something about the quality of education as well as politicians.

  15. Fully agree on Putin; he, above all is a patriot for his own people (irrespective of possible mistakes), something the corrupt European equivalents are not. I think corruption and bribery must be an element of it all. I cannot explain for example how 17 other countries (Germans excepted) in this ridiculous body they call “Eurogroup” were only too happy to see Greece constantly torn to shreds and not think that their turn is around the corner. Even a ten year old can see that – the Germans did not even bother to hide anything. This is where I conclude there must be serious Mafia-style bribing/blackmail taking place all over the political spectrum of the EU.

  16. Giaourti Giaourtaki

    One has to dig deeper to figure that it was Mitterand who wanted the Euro, therefore he gave his o.k. to “Wiedervereiterung” plus giving Kohl the chance for the fraud regarding the war-reparations that were due to pay after reunification by calling it not (re)unification but inventing the “joining of GDR.”
    Anyway Germoney has no right to exist after war and holocaust, it should have been given away to all their victims – I hope the fat creep in his wheelchair is reading this and dies upon it

  17. Mitterand calculated, wrongly as it happens, that by creating the Euro France would be able to exercise a huge amount of control over the United Germany and the EU. The UK, more pragmatic and sensible, warned that he would fail, and so it has proved to be. All this policy has done is create a new German Empire, the Fourth Reich.
    At the end of the Second World War Germany should have been broken up into small states that use to exist before unification in 1871. That would have destroyed German power. All that has happened is we are now back with the same problems at the start of the 21st century as we had at the start of the 20th.
    Brexit has cemented German power, which is why Merkel was so awkward with Cameron. Again France has miscalculated. She thinks that with Brexit she will recover her position and power within the EU. Actually she will end up a German province. The French should have made common cause with the British when they had the chance and had they done so we would have a much better EU than today. Glad we are leaving.

  18. Seeing as the carrot offered to Germany for the eurozone was a cheaper currency to aid their ailing exports at that time, it suggests that the French were economically illiterate — attaching more importance to silly political games than to economic power. Moreover, after “reunification” Germany became the largest country by population size — and therefore very dangerous for the rest of the EU. Nor should we forget that in order to deliver the low-valued euro, France pushed hard for countries like Greece and Portugal to get into the euro as quickly as possible.
    ~
    The fundamental analysis is that the EU has prioritised politics over economic realities. This is the stupidest thing a politician can do — regardless of ideology or objectives. And this pure incompetence and stupidity continues, with no sense of direction about anything at all. It doesn’t matter whether we discuss central banks, the eurozone, the global banking crisis, EU economic failure, collapsing economies like Greece, the refugee crisis and the pitiful response of the EU, the refusal of EU countries to obey EU law (while picking on Greece for bureaucratic technical breaches of the Schengen Border Code), international trade (the outrageous TTIP negotiations behind closed doors, with the intent of just imposting it on the citizens of Europe)… the list is endless. Pure arrogant incompetence, with no end in sight.

  19. We basically agree on it. I have always believed that the Euro was a bloody stupid idea, and seeing the poverty and misery created in Greece I am more convinced than ever that I was right to oppose it. And the lessons of Greece is one reason why I decided that the EU was impossible to reform so the only option for the UK was to vote to ‘Leave’.

  20. I live for the day when I would see Germany collapse after the dissolution of Deutsche bank, while their exports go to hell. I live for the day their BMWs and VWs lie useless in their yards awaiting for non-existent Chinese and US customers, while thousands of their workers are laid off.
    Revenge is sweet and warms my (now bleeding) heart.