In Greece, Austerity Kindles Deep Discontent - WaPo

[WillyT]

In Greece, austerity kindles deep discontent
By Anthony Faiola - WaPo
Published: May 13

<snip>

Athens — Already struggling to avoid a debt default that could seal Greece’s fate as a financial pariah, this Mediterranean nation is also scrambling to contain another threat — a breakdown in the rule of law.

Thousands have joined an “I Won’t Pay” movement, refusing to cover highway tolls, bus fares, even fees at public hospitals. To block a landfill project, an entire town south of Athens has risen up against the government, burning earth-moving equipment and destroying part of a main access road.

The protests are an emblem of social discontent spreading across Europe in response to a new age of austerity. At a time when the United States is just beginning to consider deep spending cuts, countries such as Greece are coping with a fallout that has extended well beyond ordinary civil disobedience.

Perhaps most alarming, analysts here say, has been the resurgence of an anarchist movement, one with a long history in Europe. While militants have been disrupting life in Greece for years, authorities say that anger against the government has now given rise to dozens of new “amateur anarchist” groups, whose tactics include planting of gas canisters in mailboxes and destroying bank ATMs.

Some attacks have gone further...

<snip>

More: http://www.washingtonpost.com/world/in-greece-austerity-kindles-deep-discontent/2011/05/05/AFUQGy2G_story.html

:kick:

[xchrom]

1. Recommend

[dkf]

2. Yup they don't want to pay but they want to receive.

Why do we feel sorry for them again?

[Hannah Bell]

3. why are you here?

[WillyT]

4. Apparently Representing The ConservaDems...

also known as DINO's.

:shrug:

[dkf]

10. Well I am certainly not left wing.

I'm more of a pragmatist I would say. As time goes on I've learned that there is more to the story than we get from politicians or the media. They would rather ring our buttons and not let us see the reality so that we support what they want us to.

What I like about Obama is that when I take apart what he wants it generally makes sense. I like that he is smarter than me. :)

[Commie Pinko Dirtbag]

55. Yeah, and the Sahara is certainly not a snowy place.

[badtoworse]

6. I think she asked a good question

They spent way beyond their means, but unlike us, they can't just print more Euros.

[madrchsod]

9. no they did`t spend beyond their means....

what happened is the wealthy did`t pay their fair share of taxes. they under reported income and moved cash out of their countries.

then throw in disaster capitalist`s across the world and is there any wonder why countries are failing?

by the way, Portugal was never in danger of failing. goldman sachs and the bond rating companies destroyed their economy on purpose.

[dkf]

11. It's not just the wealthy that escaped taxes it's everyone.

Even their Doctors do things under the table. Geez.

[Hannah Bell]

13. i repeat, why are you here?

[dkf]

42. I'm a Democrat, not a socialist or communist.

Not sure where you are.

[girl gone mad]

37. This isn't the cause of Greece's troubles.

Why do you consistently refuse to educate yourself on these topics?

Tax avoidance has been a way of life in Greece for decades. It's nothing new, and it' isn't anywhere near the heart of the current crisis.

Is this is what you call spending way beyond their means?



The dark blue line labeled (G) is government spending. Where is the massive spike which would indicate a huge increase in services received, but not paid for, as you claim?

It's not there. As it turns out, your neo-liberal spin is complete fiction. Quelle surprise.

What did actually occur was a collapse in net exports (NX) and investment (I), corresponding with the global financial crisis and linked closely to the unfortunate exchange rate Greece was locked into when they signed the Maastricht Treaty.

[dkf]

43. "tax avoidance has been a way of life in Greece for decades".

Isnt that what I said? How can that be a way of life that supports one of the most generous entitlement programs in Europe?

[girl gone mad]

47. Then why are you trying to blame the current debt crisis..

on a situation which is not new to Greece or even unique to Greece?

I showed you the data on Greek GDP. There was no massive surge in government spending. There was, however, a sudden decline in exports and investment. This wasn't caused by a failure to collect taxes. It was the result of the financial crisis and foreign banking malinvestments coming home to roost. In the midst of a collapse in private sector spending, how can tax hikes and public sector spending cuts, both of which will only pull more money out of the economy, be good for the people of Greece? Has such neoliberal buffoonery ever succeeded in bringing prosperity to any country?

Germany has generous entitlements and lots of tax evasion. Germany also has a healthy economy at present. Germany has been the beneficiary of the EMU. Its primary trading partners, including Greece, were locked in to onerous exchange rates and then given artificially low interest rates and lured into borrowing heavily in a currency they have no control over. One would have to be extremely naive to blame Greece's circumstances on domestic tax policy.

[dkf]

49. Deficit spending only works if someone is willing to fund it.

You of all people should know the shenanigans Goldman pulled to disguise Greek debt. The problem is they were underfunding for years and they decided to disguise it with Enron accounting.

But all countries, had they no debts would have been able to take on debt in these bad times without much consequence. The problem is when you are already so overburdened with debt and you want to issue more and more, investors become very uninterested in providing funding.

[dkf]

44. NPR: Greece's Bottom Line: Too Many Tax Cheats

By Eric Westervelt

Morning Edition, March 25, 2010 · The Greek government is vowing to finally crack down on tax evaders as the country reels from an out-of-control debt that has shaken international markets and confidence in the euro. The issue will dominate another summit meeting of European Union leaders in Brussels Thursday.

On top of controversial plans for deep cuts in public sector wages and tax increases, the Greek government — which took power in October 2009 — says a central pillar of economic recovery is getting Greeks to pay all their taxes.

But the new effort faces enormous challenges — including apathy, a culture of tax evasion, as well as bureaucratic inertia and technical obstacles.

http://www.npr.org/templates/text/s.php?sId=125125500&m=1

[girl gone mad]

48. Germany Becomes Tax Haven for Firms and Wealthy

http://www.spiegel.de/international/business/0,1518,646558,00.html

German Finance Minister Peer Steinbrück has been railing against tax havens such as Switzerland and Luxembourg with harsh rhetoric. But he has paid too little attention to completely legal loopholes -- such as having subsidiaries on Malta -- that allow German corporations and the ultra-rich to minimize their tax burdens.

...But the minister's rage against tax havens risks obscuring a much bigger problem: A completely legal tax avoidance industry is flourishing right at home in Germany. It is an industry that thrives on the mistakes made by ministries and the parliament in drawing up tax legislation. And hardly any other industry is as successful, irrespective of the current economic situation, or operates as efficiently.

While ordinary German workers are at the mercy of the tax authorities, millionaires and corporations use aggressive tax models to make themselves appear to be artificially poor -- and it's completely legal. In fact, seminars on "International Tax Structuring" are even tax-deductible in Germany as professional training.

What the national treasury loses in the process is far from insignificant. The German Institute for Economic Research (DIW) has calculated that there is a gap of €100 billion between the demonstrated profits of corporations and partnerships and the profits they have reported for purposes of taxation. "This points to tax breaks and structuring options with which companies can lower their taxable profits or shift them abroad," writes the DIW.

[bluestate10]

18. While Goldman Sachs has much to atone for, using the company as THE

boogieman for all wrongs is just stone headed. Portugal and Greece spent money, in some cases, which they did not have. If those countries did not properly tax their rich people, whose problem is that?

[Hannah Bell]

12. why are *you* here? btw, you don't know shit about what's going on in greece.

[badtoworse]

30. So why don't you enlighten us?

Their debt as a percentage of GDP is among the highest in the world. That sure smacks of overspending to me.

http://en.wikipedia.org/wiki/List_of_sovereign_states_by_public_debt

[girl gone mad]

38. According to your own source, their debt to GDP is 142.80%..

well below that of Japan. So why isn't Japan facing a similar crisis and threatening to drastically reduce services, raise fees, sell off national assets and cut government budgets, if this is merely an issue of profligate spending?

What do you think our debt would look like if it were priced in a currency we had no control over? As an example, maybe you should consider our debt priced in gold or Euro over the past decade.

[badtoworse]

41. I'm not familiar with how Japan's debt is structured or how they incurred it

They apparently have strong enough cash flows to service that debt. Greece clearly does not. Perhaps Japan's debt is laddered such that it does not have to roll over large amounts in any particular year. Perhaps their recent years' deficits have been small and they haven't needed to finance their current costs with debt. Perhaps they are better at collecting taxes. I don't have an informed opinion about that but in any case, Japan is doing a much better job managing its economy than Greece is.

As far as your second point goes, if that happens (some would say when), we would be in very deep shit. Our way of life would change in a very short period of time because we would no longer be able to print money to monetize our debt. We would be faced with the same austerity measures that Greece is facing. Imported goods (such as petroleum) would become much more expensive and we might see anarchy as governments could not afford to pay entitlements or even pay police and firemen. We have been able to get away with our level of spending and borrowing becasue the dollar is the world's de facto reserve currency. Your scenario, i.e. our bebt becoming denominated in another currency, would happen if the world turned to a different currency for reserves. I am personally very concerned about that and believe it could happen in a few years if we don't make significant changes in our fiscal policy

[dkf]

7. Because I'm more supportive of Obama than most here.

What he is doing generally makes sense to me.

I'm the one who is planning to donate and work for his campaign. Are you?

[Hannah Bell]

14. since what he's doing = gop lite, you would be.

[bluestate10]

19. President Obama is moving policy that can pass and make a difference.

That is far more than I find progressives doing. The progressive hero of DU progressives, Dennis Kucinich has got passed what, like two bills during his entire congressional career. Neither bill had any substance. Better to be a pragmatic moderate and move slowly toward a progressive society than be a progressive and don't get shit accomplished.

[Hannah Bell]

27. yes, destroying public education, attacking unions & continuing the war in the ME *will*

"make a difference" but it's not the difference *I* voted for.

If you think we're slowly moving toward a more progressive society you're delusional.

Completely the opposite in most ways.

[Nye Bevan]

21. "Obama = GOP"? Why are *you* here? (nt)

[girl gone mad]

5. Of course you have no sympathy for the people of Greece..

whose wealth is being concertedly stolen from them.

Day after day you are here defending the criminal bankers.

[dkf]

8. Greece is in trouble because they have a culture of not paying taxes.

How you support a government and services with that attitude is beyond me.

And my point about the bankers is we seem to have not put in proper laws to prevent what they were doing that would pertain to the heads of the firms. If there aren't the laws then how can you prosecute? We have a high burden for criminal activity, mostly rising to conscious, premeditated fraud that is provable.

It just seems futile to think we are going to jail them if we have nothing to charge them with.

I read the articles from W. Black on how they prosecuted the S&Ls but he didn't explain how it directly pertained to any exec, say Blankfein. Do we prosecute based on outcomes then where anyone in charge gets thrown in jail if the thing goes awry? Sounds more like Chinese justice.

[Hannah Bell]

15. du rules forbid my saying what i believe of your posts

[Harmony Blue]

16. The culture of not paying taxes lies

with the rich of the country.

Trying to insinuate that it is all of Greece (Poor and middle class) is misleading. By using misleading information it only strengthens the position of KKE (Communist Party of Greece) and the Republicans of this country (U.S.). In other words, extremists will prevail if we do not open up honest dialogue and disclosure of information.

[socialist_n_TN]

32. That "disclosure of information" is what MOST

Marxists that I know are in favor of. I imagine the KKE would be in favor of that also. You know like opening up the books of the capitalist class and their toadies to see where all the wealth has gone.

Honest dialogue is also something you don't get from the capitalists. Instead you get all the reasons (propaganda) why THEY should continue to take larger and larger portions of the wealth and the people should get less and less.

Fuck 'em. Their day is done. BREAK WITH THE BOURGEOISIE!

[suffragette]

17. Reverse Robin Hood with Goldman Sachs walking off with privatized profits

while the Greeks have to pay the socialized risk.

This austerity plan is about robbing the poor to pay (what's already been plundered by) the rich.

While you may be technically correct that laws weren't in place to prevent this, the purposeful and shady circumventing of the rules contributed hugely to this mess, yet they walk away with profit while the citizens of Greece are raked over hot coals. Technically correct, perhaps. Ethical or a sustainable way to conduct business or run a country - hardly.

http://www.ft.com/cms/s/0/5eef731c-212a-11df-a6b2-00144feab49a.html#axzz1MM8R5pJY

Pledge on probe

Concern intensified in Brussels on Wednesday over the role of investment banks in helping Athens manage its debt a decade ago, despite efforts by Goldman Sachs to explain its conduct publicly, writes Joshua Chaffin in Brussels.

Arlene McCarthy, vice-president of the EU parliament’s economic and monetary affairs committee, pledged to seek a full investigation. “Goldman Sachs have tried to justify their involvement in hiding Greek debt, saying in effect that others were doing it too; that even if wrong it wasn’t technically illegal,” she said.

Ms McCarthy’s comments came after Gerald Corrigan, a senior Goldman banker, acknowledged on Monday that currency swaps the bank arranged for Greece should have been more transparent. At the same time, Goldman said the swaps complied with EU accounting principles then in effect, and cut Athens’ debt by only €2.4bn.


http://www.spiegel.de/international/europe/0,1518,676634,00.html
At some point Greece will have to pay up for its swap transactions, and that will impact its deficit. The bond maturities range between 10 and 15 years. Goldman Sachs charged a hefty commission for the deal and sold the swaps on to a Greek bank in 2005.

~~~


But in the Greek case the US bankers devised a special kind of swap with fictional exchange rates. That enabled Greece to receive a far higher sum than the actual euro market value of 10 billion dollars or yen. In that way Goldman Sachs secretly arranged additional credit of up to $1 billion for the Greeks.

This credit disguised as a swap didn't show up in the Greek debt statistics. Eurostat's reporting rules don't comprehensively record transactions involving financial derivatives. "The Maastricht rules can be circumvented quite legally through swaps," says a German derivatives dealer.

~~~

At some point Greece will have to pay up for its swap transactions, and that will impact its deficit. The bond maturities range between 10 and 15 years. Goldman Sachs charged a hefty commission for the deal and sold the swaps on to a Greek bank in 2005.





In the meantime, Iceland, having determined they would privatize the risk as well as the profit, is recovering while nations such as Greece and Ireland, which have been forced to socialize the risk, are not.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=439&topic_id=1059150&mesg_id=1061981

[Nye Bevan]

20. For some reason we are supposed to feel sorry for all the Greeks who lie about owning swimming pools

ATHENS — In the wealthy, northern suburbs of this city, where summer temperatures often hit the high 90s, just 324 residents checked the box on their tax returns admitting that they owned pools.

So tax investigators studied satellite photos of the area — a sprawling collection of expensive villas tucked behind tall gates — and came back with a decidedly different number: 16,974 pools.

That kind of wholesale lying about assets, and other eye-popping cases that are surfacing in the news media here, points to the staggering breadth of tax dodging that has long been a way of life here.

Such evasion has played a significant role in Greece’s debt crisis, and as the country struggles to get its financial house in order, it is going after tax cheats as never before.

http://www.nytimes.com/2010/05/02/world/europe/02evasion.html

As someone who actually pays the taxes that I owe, I find it hard to drum up too much sympathy for these people.

[leftstreet]

22. I feel sad for the Greek working class, not the ruling class n/t

[Nye Bevan]

24. The problem is that tax evasion seems to exist at every level in Greece.

“There are many people with a house, with a cottage in the country, with two cars and maybe a small boat who claim they are earning 12,000 euros a year,” Mr. Plaskovitis said, which is about $15,900. “You cannot heat this house or buy the gas for the car with that kind of income.”

....

Whatever the reason, Kostas Bakouris, the president of the Greek arm of the anticorruption organization Transparency International, said that Greeks were constantly facing the lure of petty corruption. “If they go to the mechanic, it is one price without a receipt and quite a bit more with it,” Mr. Bakouris said.

http://www.nytimes.com/2010/05/02/world/europe/02evasion.html

[leftstreet]

25. How does that explain 20-30% wage cuts, 40% unemployment?

:shrug:

[girl gone mad]

40. Tax avoidance and tax evasion are also common in Germany.

Please explain how it is that this type of economic activity can bring one EU country to its knees, while another thrives.

[Hannah Bell]

28. what a load of hooey.

[Nye Bevan]

31. An interesting and thought-provoking argument.

You have obviously studied the Greek situation closely, and your response is cogent and very well argued. Since I was quoting the New York Times I would certainly suggest that you contact them directly with your thoughts. Very probably they will run a correction stating that their article was hooey.

Thanks again. :thumbsup:

[badtoworse]

35. What an erudite response - nt

[readmoreoften]

51. Can you just go to Free Republic and be done with it. Because if you belong to the Democratic Party

I want a smaller tent.

[Commie Pinko Dirtbag]

54. +1

[Commie Pinko Dirtbag]

53. Excellent description of the rich fucks who are trying to deflect blame to the poor.

Yep, "don't want to pay but they want to receive" indeed. Getting away with it too.

[starroute]

23. I suspect "anarchists" are going to be the new "Commies"

The War on Terror has been kind of limping along as a replacement for old-style anti-communism -- but it never served as effectively as an excuse for repressing domestic discontent and it could easily fizzle out altogether if the money behind it dries up.

Glenn Beck's targets -- community organizers, scary black people, and Bill Ayers -- are also half milquetoast and half imaginary.

Anarchists, on the other hand, are real and sometimes willing to resort to violence, and they have already been demonized in the media. The only piece missing is the kind of hysteria needed to justify a massive wave of repression, but that could be ginned up overnight if it became useful.

The article cited in the OP is more sympathetic to the left than most -- but even that refers to the "left-wing violence that plagued parts of Europe during the 1970s and 1980s" without mentioning the right-wing false flag operations and neo-fascist plots that were part of the same picture.

It also refers to "a 'flash mob' that saw hundreds occupy and vandalize London’s famous Fortnum & Mason’s food store" -- but as nearly as I can tell from press accounts, the people who occupied the store were polite and peaceful, and the only damage was to windows broken by the mob outside. (http://www.guardian.co.uk/uk/2011/mar/28/cuts-protest-uk-uncut-fortnum)

For whatever reasons (apathy, distractions, being spread too thin, the huge number of young men in the prison system), the US hasn't yet seen the kind of social upheaval that is already starting in Europe. But I think we need to study what is happening over there very closely -- along with our own history of dissent and repression -- to be prepared when it reaches our shores.

[socialist_n_TN]

33. Well the article itself said that Greece, et.al., were

a year into the "austerity" that is just being discussed in the USA today. Our time's coming. I hope we fight back like the Greeks have.

[starroute]

36. Trouble is they're rolling out the tools of repression in advance

Grand juries are particularly nasty because they can give you immunity against your will to force you to testify -- and then keep you in jail indefinitely if you refuse.


http://wlcentral.org/node/1768

05/14/2011

There are three high profile federal grand jury investigations. For each one, the argument could be made that the grand jury is chilling political action or seeking to criminalize people for associating with certain groups that are not charged with committing any crimes but instead are unsavory and illegitimate to the government.

The investigations being referred to are the investigation into Anonymous that is based in San Jose, California, the investigation into antiwar and international solidarity activists that is based in Chicago, Illinois, and the investigation into WikiLeaks that is based in Alexandria, Virginia.

[socialist_n_TN]

46. You know it's always been there...........

They just damp it down when there's no danger of working class solidarity. It's only when they amp up the repression and we start taking steps towards uniting that they dig out the old Red Scare again.

[starroute]

50. Absolutely

But the question is whether we can formulate any better response this time than we did in 1917-27, or 1947-54, or 1968-75.

We have more tools available, models for direction action, and potential allies. But now and then I get a sick feeling that I've been through this particular Groundhog's Day before and it's not going to end any differently this time.

[socialist_n_TN]

56. I'm sure the Bolshies in in Tsarist Russia

thought the same at times leading up to '17 and they were able to overcome. :) They did it for the future even if they didn't think that they would see it. A revolutionary has to be the ULTIMATE optimist.

Overthrowing a system that's as entrenched as capitalism could NEVER be an easy thing. All we can do, IMO, is do what we can given our historic time frame. At some point it's inevitable that it WILL collapse and something will need to be there to replace it. We do what we can to make sure it's us that does the replacing with an economic democracy.

We do have more instantaneous ways nowdays with the Intertubes and all to get the education out to the masses. But the organizing is STILL the toughest part of it and quite frankly something that most of us aren't good at. Still we DO have to continue to try.

[readmoreoften]

52. Both the anarchists and the old Stalinist communist party are obstacles in Greece.

There is a great contingent of leftist revolutionary socialists. The old CP is actually so reactionary that the fascists WANT them to win power because they trust them. Soft-anarchists are fine and in line with the revolutionary socialists. Hard anarchists have been real problematic idiots--for example, the assholes who killed the workers who were locked in by their bosses. They're so disruptive and apolitical that they might as well be working for the rightwing.

[socialist_n_TN]

58. Hey read you might know this.........

Are any of the major non Stalinist left, Trotskyist?

And although they ARE Stalinist, I've got to admit that I've been impressed by the KKE. At least by God, they're MILITANT about this austerity shit.

[Wounded Bear]

26. I just read a book called: "1848"

I could see a lot of what we are experiencing now in it.

It's about the evolutions in the late 1840's wrapped around the upsurgence of the labor movement and Communism.

Good read, and applicable to what is going on now.

[Starry Messenger]

29. k&r

[socialist_n_TN]

34. Well the article was OK I guess, but.........

it DID conflate the anarchists with Marxists and they are pretty far apart in beliefs.

I'm sure there's enough wealth in Greece to keep things going for the people. It's just all been concentrated into fewer and fewer hands over the last couple of decades. It needs to be expropriated from those few hands and given back to the people.

[Harmony Blue]

39. In Greece

There are many political coalitions and parties, so very complex to explain how Anarchists and Marxists can stand shoulder to shoulder, but when they are threatened by predatory Capitalists like the IMF, they will unite together. Here are all of the main parties, and the remaining parties are too many to list, and are considered minor parties anyways.

There is Neo Demokratia (New Democracy), which probably is the only Capitalist party that I know of. Using the U.S. political spectrum they would be considered conservative liberals (eg DLC).

PASOK (PanHellenic Socialist Movement), which some argue is the main communist party of Greece, but they call themselves more socialist than communist.

KKE is the communist party of the Greece, and their leader Aleka Papariga is very vocal about the goals of the party.

LAOS is a religious party, Orthodox Christian, which obviously is the most conservative.

SYRIZA which is a Democratic socialist party that considers itself to the far left, near the KKE.

Demokratiki Aristera is another Democratic socialist party that is far left.

Demokratiki Symmachia is a Democratic centrist party, and probably the only one in Greece, arguably Neo Demokratia can be considered centrist, but not when using the Greek political Spectrum for comparison.

Oikologiki Prasinoi is the Green party, and relatively newly formed to organize the Environmentalist movement in Greece.

[socialist_n_TN]

45. Thanks for the primer. I'm assuming that they do

coalitions to form governments. Which is the Trotskyist party? :) Although the Greek Communist Party has impressed me with it's militancy. They don't act bureaucratic Stalinist like most of the European CPs.

[Harmony Blue]

57. I do not know of a Trotskyist party in Greece

but I wouldn't surprised if one did exist. The KKE I would describe as mainly Maoist though, but it could be argued the movement had to re-invent itself after losing the civil war that happened in Greece, and may have had Trotkyist roots.

The KKE is often on the leading edge when it comes to fighting for worker rights, as well as the rights of illegal immigrants. It would take too much time to try to explain to the average American how a communist party involved in the political process is good overall for Democracy.

[socialist_n_TN]

59. If you go back to the Greek civil war, it's probably

not Trotskyist. It's more than likely still Stalinist. In form anyway. Even the Maoists were Stalinist in form, although more peasant based than urban proletariat.

Even as an old Trot though, I still have to give credit where credit is due. For a (probably) Stalinist group of commies, they sure are militant. Go KKE! At least they're showing themselves to be uncompromisingly on the side of the working class/poor. That's good to see ANYWHERE.

[socialist_n_TN]

60. BTW, harmony welcome to DU..........

I hope you post more. And more regularly.