To begin with, let’s be clear, neoliberalism is a criminal, murderous plague that knows no mercy. Neoliberalism is the root of (almost) all evil of the 21st Century. Neoliberalism is the cause for most current wars, conflicts and civil strife around the globe. Neoliberalism is the expression of abject greed for accumulation of resources by a few, for which tens of millions of people have to die. Neoliberalism and its feudal banking system, led by Wall Street and its intricate network of international finance, steals public infrastructure, public safety nets – public investments paid for by nations’ citizens – robs nations of their resources (labor, physical resources above-and underground) – by avid schemes of privatization, justified under the pretext of ‘structural reforms’ to ‘salvage’ poor but often resources-rich countries from bankruptcy.
Rescue by structural reform or adjustment is synonymous with deceit. Even IMF chief, Christine Lagarde, admitted that the model failed in Greece, thereby admitting that the notion of ‘austerity’ for the poor as a means for economic recovery is not working. – No news to most of us.
The neoliberal concept is no innovation of today. It was born in the 1930s in Europe as a response (sic) to the US depression of the 1930s. It was initially thought of as a moderate form of giving the private sector more liberty for initiatives and investments, while limiting government control.
The concept was revamped after WWII in Washington rightwing think tanks (sic), such as the American Enterprise Institute, the Heritage Foundation, Political Economy Research Centre and the like. In the UK developing hard-core neoliberalism was mostly in the domain of the Institute of Economic Affairs. Prominent, mostly Zionist ‘scholars’ elaborated the idea through the sixties and seventies into a market fundamentalism which was launched in the 1980s in the United States under President Reagan and in Europe under UK’s Prime Minister Thatcher. The concept culminated in the so-called Washington Consensus in 1989, depicting a series of ‘everything-goes’ market reform policies, to be adopted by the Washington based financial institutions, World Bank, IDB, IMF, FED, US Treasury.
Since then, neoliberalism has engulfed the world like brushfire. It knows no boundaries. It is influencing world economies like no other economic concept did before. If not by physical weapons and bloodletting wars, neoliberalism is also devastating lives, causing misery, destroying entire nations, by its financial instruments, chiefly represented by the Bretton Woods institutions, World Bank and International Monetary Fund – and lately also the European Central Bank (ECB), the economic sledgehammer of the European Union’s 19 Eurozone countries. The IMF, ECB and the European Commission (EC) have become known as the infamous ‘troika’, the cause for economic strangulation of the southern European nations – Greece, Portugal, Spain, Ireland – and even Italy.
Case in point is Greece. Last Friday, 20 February, Greece’s newly elected Prime Minister, Alexis Tsipras, and his Finance Minister, Yanis Varoufakis, of Syriza, the alliance of so-called left-wing parties, went through a marathon session of attempted negotiations with Brussels over her € 240 billion plus debt, due at the end of February 2015. They asked for a 6-month extension without any strings attached, meaning – no more socially debilitating austerity programs. Perhaps they were dreaming, or simply not listening to the utter arrogant advance warnings of Brussels’ elitist neoliberal talking heads, especially Germany’s financial hawk, Minister of Finance, Wolfgang Schäuble, and the ultra-neoliberal chairman of the group of the 19 Eurozone finance chiefs, Jeroen Dijsselbloem.
The latter said that Athens had given its “unequivocal commitment to honour their financial obligations” to creditors, and he will hold her to the promise. This commitment refers to Mr.Tsipras’ predecessor’s, Mr. Alekos Alavanos, Letter of Agreement signed with the EU.
The result was predictable. Tsipras who campaigned under the radical but noble stand of ‘no concessions’ to the lords of Brussels, and his Finance Minister, caved in miserably. They did not get a six months extension, but only 4 months – under the condition that Greece submits a comprehensive list of reforms and reform mechanisms byMonday night, 23 February; basically the same list of austerity measures agreed upon by Tsipras’ predecessor. Implementation of the reforms would be supervised by the troika. At the outset, Tsipras-Varoufakis meekly accepted the EU conditions.
As James Petras puts it in “The Assassination of Greece”:
“Every major financial institution – the European Central Bank, the European Commission and the IMF – toes the line: no dissent or deviation is allowed. Greece must accept EU dictates or face major financial reprisals. “Economic strangulation or perpetual debt peonage” is the lesson which Brussels tends to all member states of the EU. While ostensibly speaking to Greece – it is a message directed to all states, opposition movements and trade unions who call into question the dictates of the Brussels oligarchy and its Berlin overlords.”
During Friday, 20 February, while the financial marathon rambled on in Brussels, one billion euros were withdrawn from Geek banks, in anticipation of failed negotiations and possible expulsion of Greece from the Eurozone – the so-called Grexit.
It is unclear how Tsipras-Varoufakis are going to explain the hapless result brought back from Brussels to their electorate. It must remind those who can still remember how Andreas Papandreou, member of the Pan-Hellenic Socialist Party, elected as first PM after Greece was admitted in 1980 to the EU, betrayed his constituency. He promised them that Greece would exit NATO and the European Economic Community, that Greece would develop her own economy with economic growth at her pace. Soon after election he reneged on both promises. – Will the Greek people buy the Tsipras-Varoufakis ‘explanations’ for not honoring Syriza’s pre-election commitments?
Greece has various options. Tsipras-Varoufakis must know them. Perhaps they keep them hidden away until “the last ditch” moment. To begin with, they could have imposed and still can impose strict capital transfer controls, to avoid the outflow of precious capital from Greek oligarchs, capital that eventually is missing for rebuilding Greece’s economy and would need to be replaced by new debt. Although, this is basically against EU’s rule of free transfer of capital, Greece as a sovereign country, can roll back its EU vassal status, take back its sovereignty and do what every reasonable central bank would do in Greece’s situation – impose capital transfer restrictions. After all, the Euro is also – and still is – Greece’s currency.
The EU might not like it – nor would the Greek oligarchs – but it would be a bold step in the right direction. And should it result in Jeroen Dijsselbloem’s and Germany’s Wolfgang Schäuble’s boisterous threats of ‘sanctions’ – then so be it. – Why not call their bluff? – Submitting a letter on Monday that says just that – we are happy to accept your extension of 4 months, but are morally, socially and economically unable to meet your conditions of austerity. Period.
The EU has no interest whatsoever in a Greek exit. In fact, they are afraid of a Grexit, not only because of a potential default on the Greek debt, but it could open a floodgate for other southern European countries in distress to follow the Greek example. That would be the end of the Euro as we know it. It might be the final blow to the dollar-euro house of cards, house of casino money.
Tsipras–Varoufakis should stick to their promise – no more austerity programs. No more privatizations of public property, no more cuts in pensions and salaries; to the contrary, rolling back the cuts already administered, bringing back decent life conditions to the Greek people, gradually averting the illegal troika imposed misery.
Greece’s debt today stands at 175 % of her economic output. The best – and only decent and socially as well as economically viable option – is exiting the Eurozone by her own decision. Greece would be declared bankrupt. The Anglo-Saxon rating agencies would be quick in down-grading Greece financially to ‘junk’. The financial markets would shun her. No more money, but utmost pressure to repay what they can. Greece would be in the enviable position of negotiating debt repayment at HER own terms – à la Argentina in 2001.
No country can be left to starve, especially when the debt was contracted illegally or under coercion. International law allows renegotiation of such contracts – contracts signed under pressure or by corrupt governments.
Finally – or perhaps refreshingly – Greece could look east, to the Russia-China alliance. Their assistance under much more reasonable conditions is virtually assured. – Why insisting on following a defunct predatory system, when there are new promising development potentials looming on the horizon?
Peter Koenig is an economist and geopolitical analyst. He is also a former World Bank staff and worked extensively around the world in the fields of environment and water resources. He writes regularly for Global Research, ICH, RT, Sputnik News, the Voice of Russia / Ria Novosti, TeleSur, The Vineyard of The Saker Blog, and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe.