Tuesday, October 25, 2011

State of Injustice?

Ekathimerini reports, EU deal will need a big majority:

A new bailout for Greece, currently being hammered out by European Union leaders as part of a broader rescue package for the bloc, will need a qualified majority of at least 180 in Greece’s 300-seat Parliament, Finance Minister Evangelos Venizelos suggested on Monday after telephoning opposition party leaders from Brussels to brief them on the progress of talks at an EU summit.

Asked by reporters late on Monday whether the government would seek a qualified majority when the rescue package reached in Brussels is put to a vote in Greece’s Parliament, Venizelos said that “such matters must be addressed with a heightened sense of responsibility and if possible voted through Parliament with a broad majority, not because this is a legal requirement but because it is a national imperative and political responsibility.”

The minister added that he had briefed party leaders on “the framework of negotiations, the basic figures, the crucial issues, the priorities and the risks.”

Earlier in the day, the leader of the rightwing Popular Orthodox Rally (LAOS), Giorgos Karatzaferis had indicated, in an interview on Mega television channel, that the government was planning to seek 180 votes for any deal reached in Brussels, instead of a simple majority of 151.

Prime Minister George Papandreou made no statements on Monday on his return to Athens from Brussels where he had stressed on Sunday that the debt problem was not Greek but European. On Tuesday Papandreou is to brief President Karolos Papoulias on progress in the debt talks before returning to Brussels for an emergency EU summit tomorrow which is expected to produce some sort of solution to Greece’s debt problem and set up a firewall against the crisis for the bloc as a whole.

According to sources, EU leaders have agreed on two things -- a haircut for holders of Greek sovereign debt to the tune of at least 50 percent and the recapitalization of the European banking system.

Sources told Kathimerini that Venizelos had referred to a “radical haircut” that would not be big enough, however, to threaten the stability of the Greek economy.

The FT reports that European negotiators have asked Greek debt holders to accept a 60 per cent cut in the face value of their bonds, a hardline stance that far exceeds losses agreed in a deal between private investors and eurozone authorities three months ago. If this happens, it could trigger CDS contracts.

This morning I watched a Greek morning talk show, Kalimera Ellada (Good Morning Greece), where they were talking about what this "radical haircut" (in Greek: kourema) means for the Greeks. Basically, Greece will be effectively shut out of international capital markets till 2020. As they said on the show: "They are saving the banks and asking citizens to slice our throats. Troika will give us 5 euros and expect 10 back but we can't access international capital markets. Instead, we will pay it back by cutting wages, pensions, and through zero growth."

Commenting on the state of affairs, Alexis Papachelas of ekathimerini reports, State of injustice:

I could see them walking along Vassilissis Sofias Avenue, a central Athens thoroughfare. They looked angry and tired, but also quite militant. They were nurses and doctors employed at state hospitals and still in their work clothes. I was thinking that none of the politicians who belong to Greece’s main political parties would have anything convincing to tell these people.

These people are not the big-name doctors who have grown used to receiving under-the-table payments or bonuses from pharmaceutical companies to prescribe their medicines rather than cheaper alternatives. These people never accepted bribes from the drug firms that leeched off the state coffers for so many years. They have read dozens of reports about corruption but are yet to see anybody ending up behind bars for it.

It is extremely unfair that people such as these, who have worked hard all their lives, are now being forced to take a drastic reduction in their salaries. I am not just talking about doctors and nurses, but also police officers, military men and other responsible employees who serve in crucial positions around the country. It’s extremely unfair that a military officer doing his service on a faraway island has to see his salary plummet while some of his more privileged colleagues are fighting to perpetuate their outrageous perks.

Since the early days of the crisis, the government of Prime Minister George Papandreou has opted for the easy option of imposing across-the-board cuts or its labor reserve scheme which would affect specific categories of employees.

If the government does not change its tune, the state apparatus will fall apart. It will lose staff that would have a lot to offer simply because they happen to be near the retirement age.

The riot squad officer guarding the Parliament will one day drop his shield and walk away because he is no longer able to stand the pressure of poverty and endless tension.

Great though the panic created by the pressure coming from the country’s international creditors may be, Papandreou and his administration must do everything they can to find ways to protect the heart of the state apparatus, and take action against idleness and waste.

Greeks know they're getting screwed on this deal which is why they're prepared to fight till the death. The message on the Greek flag says it all, Molon Labe, which means "Come and take them". It is a classical expression of defiance reportedly spoken by King Leonidas in response to the Persian army's demand that the Spartans surrender their weapons at the Battle of Thermopylae.

There is a new battle being waged all around the world, not just Greece, which will have far reaching implications. Italy is next. The crisis in Greece is just the beginning as states scramble to cut across the board or face the wrath of international bond markets and speculators, impoverishing many of their citizens. This is part of the deleveraging/ deflation era that lies straight ahead.

But there is a backlash happening right now among frustrated citizens. Even in the US, people are finally waking up. That nine-year old boy in the video below got it right, it's "the reverse of Robin Hood," stealing from the poor to bail out the rich. All those who dismiss or criticize the Occupy Wall Street (OWS) movement, including powerful hedge fund titans like Ray Dalio (see clip below and watch full Charlie Rose interview by clicking here), are in for the shock of their lives as these 'Occupy movements' morph into a global revolution.

That's what happens when impoverished masses wake up and demand justice. That's why the financial elite are scrambling to come up with something in the final stretch of eurozone crisis talks, clashing with lawmakers on the size of losses they are ready to accept on Greek bonds. The "gods of high finance" fear two things: nationalization of banks and even more ominously, social revolution and the wrath of hungry masses.

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