Moon of Alabama Brecht quote
January 26, 2015

Should Syriza's Choose The Soft Or The Hard Path?

So Syriza won in Greece. It formed a new government in coalition with the small, rightwing Independent Greece party. Before the election Syriza announced a program that would have Greece stay in the Euro but renegotiate conditions for loans.

I hope that was a ploy. Yves Smith describes the difficulties with Syriza's soft path:

The nut of that problem, as we will see, is that while may be a very estimable-sounding position, it may not be as pragmatic as it appears. Greece likely has better odds of winning concessions if it is less reasonable, since the Germans and the even more implacable Fins are convinced that the periphery countries are immoral beggars who deserve to be ground into the dust if they cannot or will not pay their debts. Greece is unlikely to be able to shake the perception in the North that they have the upper hand and can force Greece to heel, giving at most only fairly minor concessions.

Greece’s best hope is if it there is an upsurge in popularity of other anti-austerity and anti-Eurozone parties in the rest of Europe. And they are more likely to rally support in the rest of the Eurozone if they take bold positions rather than careful, studied ones. And even then, that may not be enough for them to resolve the deep-seated problems they face. It isn’t simply that they face a very difficult challenge politically vis-a-vis the Troika, but that even if they get most of what they want, their policies do not look likely to generate enough demand to pull Greece out of its ditch.

Like Ian Welsh I would argue for Greece to take a harder course, at least during negotiations and, if those fail, to really walk the walk:

Greek debt is at a level which is effectively impossible to pay off and has been made much, much worse by all the “aid packages” and “bailouts” given by their “fellow” Europeans. (Aka. they should have defaulted years ago.)

As for the Euro, Greece can’t print it, and Greece will need to print money.

I worry that Syriza is serious about negotiating on the debt. There is essentially no chance the Troika (well, really, Germany) will give them acceptable terms on a writedown. Negotiations should be intended only to go on long enough to demonstrate that a good deal is not possible. While they are ongoing, the Greeks should be preparing for Grexit and repatriating all the resources they can.

Greece would become another pariah of the "western" world and Ian, correctly in my view, thinks that is a position in which it is not alone and which can be used to Greece's favor:

The media is playing this as an anti-austerity vote, and it is. But voting anti-austerity for a country like Greece which can’t feed itself, has no oil, and doesn’t have a lot of industry, is one thing: not being austere is another. If the Greeks want a decent life again, they will have to take on some of the most powerful nations in the world and at least fight to a draw.

Many nations are in the same boat as Greece is: Russia, Iran, Venezuela, Argentina. Greece needs to make the necessary alliances with such countries and it needs to align with the rising Chinese block.

Doing this requires a psychological step that Greeks may be unwilling to take: a recognition that their interests do not lie with Europe; an understanding that Europeans are willing to see them impoverished, homeless and dead. Greeks who are living in the past and think the EU is about prosperity for everyone in the EU need to learn otherwise.

Syriza might go the more radical path. If not it is likely to fail and then the door will be open for the hard right to take power and to start wars to divert the attention from the ever falling economy.

Posted by b on January 26, 2015 at 17:29 UTC | Permalink

next page »

European people have won a decisive battle in Greece, but they must fight harder now to win the war.

Posted by: nmb | Jan 26 2015 18:00 utc | 1

Yep, we'll find out soon whether Syriza's professed commitment to the neoliberal monetary union in the run up to the election was posturing or sincere. If the latter, Greeks will not find salvation in Syriza, and Syriza will crash and burn as they will not be able to fulfill their promises. The eurozone structure imposes severe constraints on member states' fiscal powers, which is the most effective policy tool a government has for regulating aggregate demand. Greece's government cannot make up the shortfall in private domestic spending using a foreign currency which subjects it to credit markets. It needs to restore its currency-issuing power, which will give it maximum policy flexibility and freedom from credit markets. Only then will the government be empowered to fill the spending gap and get Greeks employed again.

Posted by: ee | Jan 26 2015 18:07 utc | 2

The Greeks are clearly desperate. Tsipras is an unconvincing figure. I found his victory speech shallow and unoriginal, calling out old clichés about dignity and freedom, and already it seems tracking back on anti-austerity rhetoric. Will he walk the walk or just talk the talk? Well, probably neither - later presenting some half-arsed restructuring deal as a victory to the people of Greece. I expect his approval ratings to plummet faster than Hollande's once the penny drops that he's just another charlatan. Whether or not he will be lynched from a lamppost remains to be seen.

If Ukraine has taught us anything it's that real change can only be obtained through violence and anarchy.

Posted by: Pat Bateman | Jan 26 2015 18:09 utc | 3

"Syriza might go the more radical path. If not it is likely to fail and then the door will be open for the hard right to take power and to start wars to divert the attention from the ever falling economy"


I am afraid Syriza will be but a temporary blip. Hope to be wrong, always...


"If Ukraine has taught us anything it's that real change can only be obtained through violence and anarchy"

Real change can be made by not supporting the elite classes of asses, through withdrawing out support, belief and money. And going back into our own community. Violence and anarchy brings chaos exactly that which the psycho elites want and plan for

Posted by: Penny | Jan 26 2015 18:19 utc | 4

Greece needs to take the path that Ian Welsh writes about. I posted about the same thing over at NC. If they decide try and stay in the eu they will only be another pawn of the western banksters to be looted.

Posted by: jo6pac | Jan 26 2015 18:21 utc | 5

Syriza would do well to start out negotiating just to prove that negotiation is impossible with "partners" like the troika. That first step will give legitimacy to Syriza's real actions that follow.

Exhaust all negotiations before starting an economic war with Europe because there *will* be an economic war on Greece if Syriza follows through on its promises. Greeks need to know that their leaders tried every option before economic war.

Posted by: yellowsnapdragon | Jan 26 2015 18:35 utc | 6

@5 jo6pac

It's less important that Greece leave the EU than that it leave the monetary union (EMU). The two are not co-extensive, although it was originally intended and probably still envisioned that all EU members be part of the EMU. But the EMU is fundamentally flawed in that it restores gold-standard like strictures on its member governments. That is by neoliberal design, but it's economically illiterate. No country should be in the EMU as it is currently designed. To the extent the rest of Europe will not allow Greece to remain in the EU while exiting the EMU, then it should leave the EU (or rather allow itself to be kicked out by the rest of the EU after leaving the EMU).

Posted by: ee | Jan 26 2015 18:36 utc | 7


Elites are likely banking on the rise of the radical right when they destroy Syriza through economic war. That's the plan, I'm betting.

Posted by: yellowsnapdragon | Jan 26 2015 18:40 utc | 8

"the hard right to take power and to start wars"

How would the Greek hard right start a war? Greece is not a huge military power. Is it supposed to go to war with Turkey over Cyprus?

Posted by: Edward | Jan 26 2015 19:40 utc | 9

And Russian bonds hve just been degraded to junk status:

Posted by: ralphieboy | Jan 26 2015 20:16 utc | 10

My fear is the leadership of Syriza being bought off, a common scenario for politicians. If they are really going to walk the walk, their chance of survival most likely will be to look towards Russia, and China. If they do that, and can hang in for a while, they may start some dominoes falling in other countries like Spain, Italy, and maybe Ireland. I somehow doubt they have it in them, but we can hope. It does seem that people around the world are catching on to the neo-liberal, TINA scam. Really all it should take is someone taking the first plunge.

Posted by: Kraken | Jan 26 2015 20:18 utc | 11

@9 Like in Ukraine, a civil war. No need to cross borders.

Posted by: yellowsnapdragon | Jan 26 2015 20:19 utc | 12

No way that Syriza will stop the EU/aid program.
We will see something like continual with small changes, who benefits of that politically I dont know. Rightists? Or even more leftists support?

Posted by: Anonymous | Jan 26 2015 20:44 utc | 13

Syriza like Podemos in Spain has ruled out abandoning the eurozone. This as most commentators are noting limits the amount of leverage Tsipras has in negotiations with the troika. Yves Smith's scenario is that eurogroup head Jeroen Dijsselbloem will string out talks as long as possible and maybe toss some crumbs for social spending, the thinking being that Syriza needs time to convince its voters they have done all they can do before abandoning them to the insatiable maw of neoliberalism. At the end of her Naked Capitalism piece Yves Smith quotes her colleague Lambert Strether comparing Syriza to Obama 2008.

I don't think so. If Tsipras were an Obama type he would have brought Syriza into a coalition with the Pasok or New Nemocracy years ago. I think Syriza is anticipating that the troika is going to do something stupid like demand total fealty and bring about a market crisis when Greek defaults looks likely.

Posted by: Mike Maloney | Jan 26 2015 21:06 utc | 14

@ b:

"Many nations are in the same boat as Greece is: Russia, Iran, Venezuela, Argentina. Greece needs to make the necessary alliances with such countries and it needs to align with the rising Chinese block."

Yep! Like a Salmon swimming up-stream, the Greeks are at a fork in the stream. Blunting the finance capitalists drive to implement a "Global Plantation", won't be easy, they'll need alliances.

Posted by: ben | Jan 26 2015 21:30 utc | 15

Bill Mitchell's take:

Greek elections - a solution doesn't appear to be forthcoming

Posted by: paulmeli | Jan 26 2015 21:46 utc | 16

Like a Salmon swimming up-stream...

Or Salman — either will do.

Too bad about Golden Shower — it kind of just fell apart and imploded.

They don't make fascists like they used to.

Posted by: Cold N. Holefield | Jan 26 2015 21:47 utc | 17

Was the Greek fighter jet that crashed in Spain today a little warning?

Posted by: Mina | Jan 26 2015 22:06 utc | 18

Before being too forlorn about Syriza's chances in squaring off against the austere neoliberal consensus we should first savor the victory of the Greek voters.

It was a little over four months ago that the Scots buckled at the polls based on a shameless fear-mongering campaign waged by both the Conservatives and Labor; even Paul Krugman, liberal lion, got into the act, scolding Scots that they were headed for ruin if they opted for independence.

The Greeks ignored the fear-mongering. Twenty-five percent unemployment means a lot of people feel they don't have much left to lose. I think Tsipras is canny enough to keep voters mobilized behind him.

Posted by: Mike Maloney | Jan 26 2015 22:06 utc | 19

Before being too forlorn about Syriza's chances in squaring off against the austere neoliberal consensus we should first savor the victory of the Greek voters.

Syriza's stance against the neoliberal consensus was tainted before the election. They have stated definitively that they intend to remain in the Eurozone, which is a de-facto endorsement of neoliberalism. The Euro experiment is neoliberalism writ large.

Posted by: paulmeli | Jan 26 2015 22:40 utc | 20

I am not sure if leaving Euro zone would help Greece. The problem is that debt is too large to be realistically paid back, so they are a bad risk, so they get high interest rates, so it is even less possible to pay back, while the austerity decreases GNP and tax revenue, thus making it even less possible, so there is a financial death spiral.

As the debt is in Euros, switching the currency to drachmas would not help. However, they may basically get out of international banking system, which requires having own currency, and continue on "pay as you go" basis. Basically, what Argentina is doing. Everything being equal, it is better to be in the system, but there is a point where it is not a good deal.

One issue is that it was very irresponsible for previous Greek leaders to borrow so much, and for the lenders, to extend that much credit, whether to the government, or to real estate schemes etc., speculative private sector.

Posted by: Piotr Berman | Jan 27 2015 0:05 utc | 21

It is truly sad what passes for Radical Left in Europe today especially when the first word uttered by their leader is 'Compromise' to calm the turbulent Marketeers.

It would have been inspiring to see a Hugo Chavez like leader speak fearlessly about the stink of sulfur coming from Brussels and Berlin.

Posted by: Wayoutwest | Jan 27 2015 0:15 utc | 22

It should be noted that Greek turnout rates are very high, so this isn't the sort of meaningless US election cycle where one group gets disgusted and stays home leading to a hollow victory for the other ... and then two years later vice versa (as hollower and hollower the victories get). The new Syriza voters are, to a large degree, people pulled in from other parties if my analysis is correct.

In that sense, this is a genuine move in the mind of the Greek electorate. They see that they have been good little torturees, and that nothing has gotten better. They see that they have tried to go along with the troika's "plans" and are still facing enormous social disaster.

I read this that the Greek people are ready for a showdown. I'm sure they are well aware what this means (and it means more pain) but like Iceland (whatever the parallels may and may not be) they have a chance to recover - finally.

I agree that Greece has to look to building bridges beyond the EU, but I think its best chance is to remain inside, to stand up for its value inside the European government, and present itself as a point of hope and work with other anti-austerity parties in Europe. In that sense - showing that their main opponent is the bureaucrats of the EU, and not their fellow working-class Greeks - I think the alliance with the center-right nationalists is a brilliant move.

Of course it may just be that there is a violent reaction from oligarchy and the rightists in the EU, in which case there are too many Greeks with too little to lose. If the oligarchs try anything like this, I think it will lead to much bloodshed and destruction. They should be very careful. You can only push people so far - and I believe this election has shown their limits.

I see no need to second guess Tsipras at this point. Whatever his personal charisma, he's shown commitment and seriousness and had stayed on this road for many years. What's more, the structure of Syriza isn't one where he can survive as the leader while not carrying out the will of the parties that make up the coalition. As I understand, there are a lot of organizational parallels between Syriza and PSUV - the coalition of socialist parties that brought Chavéz to power in Venezuela.

Posted by: guest77 | Jan 27 2015 0:16 utc | 23

There is certainly a smell in the air after the post @22. You're either the worst negotiator on the planet, or a transparent provocateur.

Posted by: guest77 | Jan 27 2015 0:57 utc | 24

In this bar, and the world at large, where we are starved for any bit of good news, I will take the victory of Syriza as something most remarkable. It makes sense that Tsipras will have to go through the motions of negotiation, if for no other reason than to make a demonstration to the Greek people, of what will probably prove to be the intransigence of those in the EU, with whom the new government is to have talks.

Once the Greeks see that all that is on offer, is for them to continue to get the shaft, Syriza will gain that much more support when they are compelled to quit the talks. It would be surprising and make no sense if Tsipras just rolls over; and a better bet would be that he will reject any further financial enslavement for his suffering country.

The laurel branch Greece is waving for all to see, is primarily a victory over fear, an escape from the paralysis of fear. And with newfound belief and determination and courage, who is to say that they cannot express their natural right of sovereignty again, in their own land.

Posted by: Copeland | Jan 27 2015 0:57 utc | 25

I'm at a loss here. I hope someone can help me. Don't knowledgeable people understand that Greece's "debt" is nothing more than "money" created out of thin air and "loaned" at interest? So please help me understand what there is to pay back? Create it out of thin air and give it to them. And to whom should it be given? Soros? Rothschild? Screw 'em. They create all they want. This is about the welfare of the people of Greece. It's not about the welfare of the Powers That Be. Let them eat cake. As far as I'm concerned tell the blood sucking bastards to go to Hell. It's where they belong and their Master is waiting.

Posted by: Scott | Jan 27 2015 1:17 utc | 26

thanks b. and mike @19, copeland @25 and the many others here who i agree with.

scott@26. that is a less subtle description of wat @2ee is recommending..

the way i see it is if a country loses its financial independence and hands it over to some other authority, it is essentially in a losing situation.. now whether greece has a bold and strong enough minded leader with that kind of vision might be too early to tell. we'll see. i wish the people of greece well and wish i lived in a country with that kind of coter turnout...

Posted by: ..james | Jan 27 2015 1:30 utc | 27

Doing this requires a psychological step that Greeks may be unwilling to take: a recognition that their interests do not lie with Europe; an understanding that Europeans are willing to see them impoverished, homeless and dead. Greeks who are living in the past and think the EU is about prosperity for everyone in the EU need to learn otherwise.

But Greeks thought they were Europeans, and didn’t realize the contempt that French and Germans had for them....

This says a lot if not everything.

One aspect of the EU, often neglected, is that is the White Man club, and Christian one at that. Therefore, the Club is racist as well. While Greece, in popular history, is "cradle of Western civilization" it is not the European Core country! I would say that technicalities about leaving the EU are easier than those psychological and cultural ones. This is rather neocolonial relationship between "periphery" and "core".

The country that doesn't have own/issue currency isn't sovereign, pure and simple. Weakness of Syriza's won is that still 30+ percent voted for the right wing parties so behind Syriza is not majority of Greeks.

Posted by: neretva'43 | Jan 27 2015 1:46 utc | 28

The sooner the Greeks get rid of its “Europeanness”, i.e. illusion of its identity, Another Europe is Possible won't be just empty slogan, it will be reality.

Posted by: neretva'43 | Jan 27 2015 2:20 utc | 29

If Tsipras and Co are genuine in their committment to dragging Greece out from under the crooks who bribed and corrupted the earlier ersatz-socialist regime in order to steal Greece's sovereign and economic resources, the strategy will bear little resemblance to that they outline in the media.
The most interesting aspect of all this is the choice of ultra-social conservatives Anel as junior coalition party.

In itself this seemingly 'odd-couple' arrangement tells us Tsipras chose not to try and draw anyone from the pseudo-leftist former government party or breakaways. I reckon he is smart enough to know that there is no such thing as a trustworthy neo-liberal, and that if his private strategy is radically diferrent from the public pronouncements he has made, he cannot afford leaks when tangling with the assholes who have taken control across this planet.

Amerikans may find the choice of an allegedly anti-gay judeophobic party as peculiar even damning, but for the rest of us who live in countries where mainstream right wing parties are happy to support LGBT, pro-zionist, pro-choice platforms, we have witnessed the once monolithic support for leftish politics from gay, zionist and women's issue voters, shift to the right into sometimes extreme neo-liberalism once those voters believe the rightist parties' stance is 'bearable'.

The same "I'm alright Jack" attitude which allowed blue dog democrats to support assholes like ronald reagan once unions had won the battle for higher living standards for white working men, now permeates all manner of single issue groups originally nutured by the neo-liberal politicians who moved old school socialist political parties away from economic issues and into 'identity politics'.

There should be nothing surprising here, humans are built to regard food in the belly, a roof over yer head and the same for yer family as being their primary motivation. This prioritisation is innate, not culturally engendered.

Way back in the 1940's that Maslow bloke pointed out the self-actualization issues which I believe comprise most of the aims and objectives of these identity politics groupings, are only considered to be of vital importance to most humans, once physiological and safety needs have been met.

So mainstream media will haul Tsipras and co over the coals about his new friends but few in Greece including former supporters of LGBT, feminist and other human rights pressure groups, will give a toss as long as Greek people's access to food, housing and medical treatment gets better.

Once that happens every sleazy pseudo-leftie pol will be looking for a cushy spot on the bandwagon, the government should be able to carefully select the less venal and hubris pickled pols from amongst those low-lifes if the demands of Anel go over the top.

If Syriza have actually won an election without having their organisation back-doored by creeping neo-liberals that will be a big first for the world and the first sign of light on a horizon that has been dark for decades.
In normal circumstances such political movements cop the Robert Mugabe treatment - damned in the media incessantly until some electoral by-law prohibiting the movements appearance on the ballot paper is introduced and accepted by the masses without much objection.

Posted by: Debs is dead | Jan 27 2015 2:33 utc | 30

@Debs is dead

Perhaps supplemental to your #30

The Likely Cause of Addiction Has Been Discovered, and It Is Not What You Think

Posted by: Uncle $cam | Jan 27 2015 2:56 utc | 31

The only way Greece can win is to leave the EU and the Euro.

Posted by: MRW | Jan 27 2015 4:12 utc | 32


I am not sure if leaving Euro zone would help Greece. The problem is that debt is too large to be realistically paid back, so they are a bad risk, so they get high interest rates, so it is even less possible to pay back, while the austerity decreases GNP and tax revenue, thus making it even less possible, so there is a financial death spiral.

They can refuse to pay off the debts.

Posted by: MRW | Jan 27 2015 4:13 utc | 33

DEFAULT! The word that cannot be uttered.

Posted by: Alberto | Jan 27 2015 4:51 utc | 34

@ 21 Piotr Berman

"As the debt is in Euros, switching the currency to drachmas would not help."

The good thing about being a nation of people is that you can do what you want and the rest of the world can't do a thing about it unless they are willing to send an occupying army. Greece can dictate the terms of any repayment, including redenominating the debt in drachmas.

"One issue is that it was very irresponsible for previous Greek leaders to borrow so much, and for the lenders, to extend that much credit, whether to the government, or to real estate schemes etc., speculative private sector."

The great thing about being a currency issuer is that debt denominated in that currency is illusory. Currency-issuing governments don't have debt in any meaningful sense. They do (voluntarily) make promises to pay people currency in the future, but when you have the power to create the currency, this obligation isn't meaningfully burdensome.

Posted by: ee | Jan 27 2015 5:47 utc | 35



Posted by: MRW | Jan 27 2015 7:57 utc | 36


I think that Syriza's alliance with the Independent Greeks has positive aspects as well protecting its 'left' flank from neo-liberal moles.

Greece has a big problem with the uniforms, backed by the CIA, just tacking over governments. When they lose they turn over the table and shoot those who won.

Inviting the Greeks who feel the same way they do about the Troika and the debt and the theft of Greek sovereignty by the Germans but whose recourse is to the right rather than to the left, making common cause with them, giving them a place in the government and working with them to contain Golden Dawn (definitely CIA inspired) is a good move.

Everyone is quick to write-off Syriza ... from the safety of their arm chairs in northern Europe or North America ... my heart and best wishes go out to them. They've won the damn election! They're in power!

They might be unable to prevail. They might even mess up themselves. But right now I wish them the very best and hope,that, for all our sakes, they succeed.

And that, in doing for themselves, offer to the rest of us 'critics' a model : how to stfu, put one foot in front of the other and just do the things that must be done in order to effect democracy.

Posted by: jfl | Jan 27 2015 8:23 utc | 37

Sorry, but all those people who say that Greece's euro debt can be ignored at will are sadly mistaken.
Unilateral abrogation of such euro debt will result in Greece's blacklisting from the EU - and Greece very much would be affected severely by this. Sure, this might be better in the long term, but the short term effects would be catastrophic - even worse than the austerity imposed to date.
The analogy would be Greece jumping into a blowtorch when what's going on now is Greece sitting in a pot like a frog being slowly boiled.
Syriza, if they're wise, will use the threat of Grexit as a means of negotiating down the austerity regime along with a major restructuring of the euro debt, or ideally finding some form of mutually agreed upon (and EU face-saving) exit terms in which Greece agrees to pay what it owes, but is allowed to exit and use its own currency for future obligations.

Posted by: c1ue | Jan 27 2015 8:29 utc | 38

@35 until those with real goods are unwilling to accept that worthless paper. this idea a country can print all the currency they want and producers will be happy to sell them goods for that currency is ludicrous. do you think the arabs and russians are that stupid to be paid in worthless drachmas for oil? yes, they may sell oil for mykonos as a trade!

Posted by: ab initio | Jan 27 2015 8:30 utc | 39

The game is pretty rigged and unless a country has some commodity such as a resource which is unavailable elsewhere it is very difficult to simply default on loans.
But lets imagine that Greece does default, as I understand it Greece can just about feed its population so no one would starve but how would it pay for those commodities that it cannot create withinn Greece?
The cabal of money lenders will simply get court orders to freeze any assets held overseas they believe belongs to any greek entity.

The assholes are always big on explaining that private debt is private when some corporation based within a nation borrows up large, but when a debt held by a private entity doesn't pay up the nation is held to account in a form of neoliberal collective financial guilt. Ask the people of Iceland or Ireland about that.
Greeks of course already know this is the case because that is how they got landed in this mess.

The only thing that Greece could do would be to hope that Russia and Iran do manage to set up an alternative to the western financial system but the odds of that aren't great unless both Iran and Russia can convince China to go along with the idea to the point where China will accept the Russo-Iranian currency in payment for the consumerist goods which humans all over our planet crave.

Whilst China is able to stand up to the fukUS et al cabal, it is difficult to see how putting pressure on the US dollar system is a plus for China particularly in the short term since China holds trillions of dollars of amerikan paper and that paper would be substantially devalued should any alternative reserve currency be established.

I want to see Greece pull this off but walking away from the euro and/or giving the moneylenders the finger is probably not the best route because Greece is just too small not to be placed under economic siege by the assholes and once that happens, humans being what they are, the new government will quickly lose its mandate.

Tsipras must be smart, subtle and secretive to deal with the issues carefully, facing the EC down and calling em a bunch of cunts may make everyone feel good for a time but it is a loser in the long run.

As I wrote above, he may have the right stuff, his seemingly off the wall choice of a coalition partner has wrong-footed his opponents who it seems, expected him to cut a deal with some established leftist faction, all of which have likely been penetrated by the neolibs using bribery blackmail and extortion.

Posted by: Debs is dead | Jan 27 2015 8:43 utc | 40

Good discussion here guys.

One option for Siriza that no one seems to mention though:
They could start lengthy trials of corrupt officials/oligarchs that took-on the massive debt.
Further, they could say that the money ended up being embezzled, and it's up to the courts to decide exactly by whom. Thus they could not "not pay" but "delay payment" for "foreseeable future" (while the courts are delivering).
Force majeure and all that... That should buy them some considerable maneuver time to negotiate a better deal with Russia/China (the BRICKs).

I agree that if Greece wants to make it out of this (as a sovereign nation) they MUST re-align their foreign policy and ally with Russia/China. They'll be the first of the many anyway, and this will turn out to abe quite a visionary step. Who knows, half a century from now, Tsipras nd the Greeks might be called visionary...the avantgarde of Europe.

However this pans-out: This was major victory for the Greeks. I applaud them!
(all this coming from a Macedonian, no less)

Yes, I do envy them...quite a lot. Wish the populace here revolted against our American/European/NWO overlords, like the Greeks did. Sadly - not bound to happen in near term. Give it another century though...and it might. Or perhaps not.

Posted by: Seen it | Jan 27 2015 8:45 utc | 41

@Uncle Scam @31 thanks for that it makes interesting reading it has been apparent for some time that neither the prohibition nor the 'addiction is a disease - treatment will fix everything' models are worth spit out in the world.
It makes sense that positive changes to the environment people live within allows most humans to make positive changes to their lives.

Posted by: Debs is dead | Jan 27 2015 8:50 utc | 42


I think that Syriza's choice of coalition partners was good. Not only does it prevent neo-liberal moles from seeping in from the 'socialist' ooze, but it may well prevent a putsch from the right. The CIA/Greek uniforms habitually turn over the table and shoot the winning players when they lose.

Forming a coalition with the Independent Greeks - people who like the Syriza supporters are enraged at their sovereignty being seized by the Germans, at the surrender to the Troika, and at the absurd debt, but who fall right rather than left when they do fall - may well prevent a Golden Dawn coup. It never hurts to add masses to a mass movement. 'Right' or 'left' mass counts.

If the Independent Greeks are put in charge of the uniforms, talk the talk, calm them down, and if together Syriza and the Independent Greeks can improve the situation ... the CIA strikes out this time. And Syriza and the government are strengthened.

Posted by: jfl | Jan 27 2015 9:27 utc | 43


It was fairly easy to understand when the RINO-RINO Congress of 1000 Years took their seats and started cranking out legislation, like the one giving the International Banksters full access to Americans' passbook savings, in the same week that Draghi announced QE1 for EU. American passbook savings are meant to be LOOTED to bail-in the Ubers' EuroTrash Junk Bonds.
Duhhh! Same M.O. since the Coup of 2000, you'd have to be deaf, dumb and blind not to see.

But I just could NOT figure out what these other three bills were for:

To make 5 percent across-the-board rescissions in non-defense, non-homeland-security, and non-veterans-affairs discretionary spending for each of the fiscal years 2015 and 2016. (Introduced in House - IH)[H.R.58.IH]

To make 2 percent across-the-board rescissions in non-defense, non-homeland-security, and non-veterans-affairs discretionary spending for each of the fiscal years 2015 and 2016. (Introduced in House - IH)[H.R.49.IH]

To make 1 percent across-the-board rescissions in non-defense, non-homeland-security, and non-veterans-affairs discretionary spending for each of the fiscal years 2015 and 2016. (Introduced in House - IH)[H.R.39.IH]

Together they cut -8% percent across the board --- except National Police State and MIC.
That's HUGE, much bigger than Sequestration they had to be dragged and kicking towards,
except, of course, it excludes MIC, their paymasters.

But still, -8% on $3.4 TRILLION Federal budget over two years, and figuring ex-Defense is 49% of the budget, amounts to a vast sum of ~$270 BILLION being put into some escrow slush fund before the 2016 elections. ?What could that $270 BILLION possible go towards? I$I$?

And then I read this today:

"Greek voters swung to the once-marginal left-wing party after five years of punishing austerity measures demanded under 240 billion euro (**$268 BILLION**) bailout deals threw hundreds of thousands of people out of work and left nearly a third of the country without state health insurance."


Which proves unequivocally that George Carlin was right, "And now they're coming for your Social Security. And you know what? They'll get it, they'll get ALL of it! They don't give a FVCK about you. They don't give a FVCK about you. They don't give a *FVCK* about you!"
[Like how Carlin imitated Jesse Jackson's three-times call-and-response preacher-style.]

And nobody seems to notice, and nobody seems to care.

Arbeit Macht Frei, baby!

Posted by: ChipNikh | Jan 27 2015 10:08 utc | 44

Scott at 26. According to Lordon (who knows whereof he writes), 19 jan. 2015, quote

la restructuration de la dette grecque de 2012, telle qu’elle a eu pour effet, après digestion du haircut par les créanciers privés, de remettre la plus grande part des titres grecs aux mains des créanciers publics – l’Union européenne (UE), le Mécanisme européen de stabilité (MES), le Fond monétaire international (FMI) et la BCE détenant ensemble 254 milliards d’euros [5] contre 44 au secteur privé.

Greek debt: 44 billion owed to private sector, and 245 to public sector, to the EU, the ECB, the European stability mechanism, and the IMF.

The bulk thus is in public hands. And that is why Merkel has said that a Grexit is now possible (or whatever her words were.)

Now if Super Mario can lob QE about as he pleases…the debts could be simply wiped away or be re-paid at some relatively painless rate (low %, endless years..) Problem: German and Nordic instransigence, and it sets a precedent, plus imho would create such trouble in the EU that Greece would have to leave - along the lines of c1ue at 37.

And while I am still thinking about Greece’s budget, there is another taboo - its GINORMOUS military budget. I’ll dig up some numbers.

Posted by: Noirette | Jan 27 2015 10:32 utc | 45

Greece is caught between a Rock and a Hard Place.
The Rock refers to continued austerity
and the Hard Place refers to keeping the Euro as your national currency.

If Greeks were to reject the continued austerity option, then the Germans/EU
will give the Greeks the option to leave the Euro (ie do an "Iceland")
(and presumably default on their debts) and Greeks would rather stay with the Euro (at present)

ps if Germans/Troika/EU were to offer Greece some easing of the austerity program,
then other parties/countries in EU would want same debt relief as offered to Greece
(ie Podemos/Spain, Five Star Movement/Italy,etc).
This the Germans etc wont be able to do.
So possible breakup of Euro/EU looms in the distance,perhaps.

ps Euro currency is currently falling like a stone, likewise interest rates.
isnt this "good" for the likes of Greece Italy Spain Ireland Portugal etc,
so perhaps breakup of Euro might not be so inevitable after all.
They've always wanted a weak currency, and now they're getting it.

Posted by: chris m | Jan 27 2015 10:47 utc | 46

no wonder noone likes austerity other than the creators/enforcers
GeorgeMonbiot ‏@GeorgeMonbiot 51m51 minutes ago
I love the description of #austerity as "fiscal waterboarding".

Posted by: brian | Jan 27 2015 11:41 utc | 47


As the debt is in Euros, switching the currency to drachmas would not help. However, they may basically get out of international banking system, which requires having own currency, and continue on "pay as you go" basis. Basically, what Argentina is doing. Everything being equal, it is better to be in the system, but there is a point where it is not a good deal.

Posted by: Piotr Berman | Jan 26, 2015 7:05:16 PM | 21

Bill Mitchell:

First, since when is it the Troika’s role or right to determine whether debts incurred by non-Troika institutions and individuals, presumably in good faith, be cancelled – arbitrarily and unilaterally?

I certainly do not think the Troika has that right. It has already assumed it can trample on the rights of workers in Greece and other nations and impoverish them. The Troika has no rights in my view and Greece should stop dealing with it as a body.

The Troika is not the overseer of the – Treaty of Lisbon – which amended the two core treaties of the EU, the Treaty on European Union and the Treaty establishing the European Community.

You won’t find any role for the Troika. None of the institutions in the Troika are democratically elected nor are accountable to any citizenry.

Second, I do not support the cancelling of the debt. I support a redenomination of it in a new currency, which is the sole right of the democratic country who issues that currency under monopoly conditions.

Lex Monetae or ‘The Law of the Money’ is a well-established legal principle, backed up by a swathe of case law across many jurisdictions, and is internationally accepted.

It states, broadly, that the government of the day determines what the legal currency is for transactions and contractual obligations within its national borders. There is thus no question that a nation currently using the euro could abandon it, introduce its own currency, and require all taxes to be paid and all contracts to be denominated in that currency.

Lex Monetae also has been taken to mean that if, say, an Italian had borrowed US dollars from a London bank operating under English law, the definition of the ‘currency’ for the purposes of resolving this contract is governed by US law.

Finally, the principle also means that if a government changes its currency and re-denominates at some given parity, all contracts must be honoured at the re-denominated rate.

Lenders know that Lex Monetae is well-established principle and could be invoked during the course of a debt contract. In that sense, the risk associated with a redenomination (principally exchange rate changes) should be factored in to the decision.

The idea that the Troika would just cancel out debts that it neither incurred or were responsible for would not be factored into any reasonable decision-making environment.

The only exception I would make to the debt cancellation would be the credit the Troika itself arranged. The exception is that the Troika forced the Greek government to issue liabilities under English law in order to gain further bailout assistance, thus anticipating the application of Lex Monetae, in the case of an exit.

Notwithstanding that act of bastardry, the discussion suggests that all public debt should be re-denominated into the local currency at the going parity on day one.

Posted by: c | Jan 27 2015 12:30 utc | 48

Military expenditure. The no. often quoted is 4% of GDP. That number obviously comes from NationMaster / their sources (SPIRI etc):

Averages: for G7 2.1, High income OECD, 1.9, NATO 1.8, EU 1.7, Eurozone 1.7. Italy: 1.7. Switzerland: .8, Argentina .7

UK 2.7. USA 4.6. Russia 4.3

These nos are (in part) somewhat dated, but one sees them in many places.

The World Bank however gives a different calculation (2013, note 1) Greece: 2.5 (down from 2.7 in 2010, see below.) Leaving aside Oman the highest is KSA with 9, then Israel at 5.6. Denmark: 1.4 Under 1: Argentina, Austria, Belgium, etc.

Germany 1.3, France and UK, 2.2, USA 3.8, Russia 4.2

Now as to the sums spent, that is hard, because the comparisons are always rather meaningless (cost of living, conversion to dollars, military expenditures defined, counted differently, etc.)

Budget in billions of US dollars. Greece: 10. Ireland 1. Denmark, Austria 2. Belgium 3. Switz 4. Portugal 5. Sweden 6. Spain 25. Italy 38 and Germany 49. France and UK 62 (highest Europe)

Where does the money go?

Greece has 14 armed personnel per 1000 ppl. Highest: after Eritrea, Israel, 27. It resembles the average of ME and N. African countries which is 13. Other countries with 14: Lybia (under K.), South Korea.

Average NATO and EU: 5. USA: 4.

According to wiki, Greece has 1,268 battle tanks (wtf?) …

Naturally enough Greece buys its stuff from the EU and the US, one OK Guardian article 2012. “Just under 15% of Germany's total arms exports are made to Greece, its biggest market in Europe..” “No other area has contributed as heavily to the country's debt mountain.”

A more detailed professional paper: PDF but not long, details the cuts that have been made.

1. See how different the numbers are - from 4% to 2.5%! - many tend to simply quote what suits.

Posted by: Noirette | Jan 27 2015 13:12 utc | 49

Posted by: Piotr Berman | Jan 26, 2015 7:05:16 PM | 21

The solution is obvious and very simple. Cancel the debt that cannot be paid. A Greece free of bad debt will be a better credit risk than a Greece burdened with an impossible to pay off mountain of debt. So, after the bad debt is rejected, interest rates on new debt incurred will be lower. (All of the preceding happened when Argentina canceled its debt.)

Move on and deficit spend using a very weak drachma, and try as best as possible to replace imports with domestic products. The very weak drachma will create a boom in tourism, we can be sure of that.

Posted by: fairleft | Jan 27 2015 13:13 utc | 50

Posted by: jfl | Jan 27, 2015 3:23:17 AM | 37

Agree! Choosing to ally with the nationalist, populist right is perhaps the most positive sign that Tsipras may 'get' that the anti-austerity negotiations are impossible and so EU exit is to end austerity is both necessary and inevitable. If Tsipras sees that ahead and he's gonna go for independence, want someone _really_ committed to the same thing. The Independent Greeks leader is that, I think, more clearly than Tsipras is, actually.

Posted by: fairleft | Jan 27 2015 13:28 utc | 51

There are extremely few cases of nations canceling their debt owed to outsiders; there are a few cases of nations canceling debt owed to their own citizens.
However, the euro debt is not denominated in a currency owned by Greece. To cancel externally owned, euro denominated debt would very much be to make Greece a pariah - and doing so also means Greece will not be able to:
1) Conduct cross border transactions with Euro zone/EU nations
2) Be able to benefit from transit of Turk Stream gas
3) Any assets built up from tourist foreign exchange will be frozen/seized if at all accessible
Unilateral cancellation of Greece's external euro debt is thus a fantasy. If Syriza is able to negotiate a Grexit plus a survivable loan modification - including some form of small haircut whether rate, duration, or coupon, that's the best that can be realistically expected.

Posted by: c1ue | Jan 27 2015 13:29 utc | 52

We should remember how Iceland handled a similar situation. Repudiate the "created" foreign debt and jail the people who were responsible for it. And Iceland is doing just fine. Perhaps that is why we never hear anything about what they did. TPTB don't want that example to spread. All debt is illusionary. It's paper created out of thin air and loaned at interest. It was once called Babylonian Money Magic. If enough people or countries refuse to play the will collapse like a house of cards in a high wind. And then and only then...perhaps a better and more equitable system can be instituted. When it comes to Greece I would watch Russia/China. They have an opportunity to drive a stake into the ECB and the Fed. Let's see what the next move on the chessboard is. It should be interesting.

Posted by: Scott | Jan 27 2015 16:40 utc | 53

Iceland did not repudiate its external debt.

Posted by: ǝn⇂ɔ | Jan 27 2015 18:11 utc | 54

@Noirette, 49:

I'd heard awhile back that Greece for some reason had an abnormally and inexplicably high military budget, especially given its debt situation--thank you for these figures...

"According to wiki, Greece has 1,268 battle tanks (wtf?) …"

WTF? indeed! I had to check, and this wiki List of equipment of the Hellenic Army lists even more: almost 2000 Main Battle Tanks, nearing the number Germany used to invade Poland...

Last I checked, the neighboring terrain isn't exactly tank country, and Greece's historical rival Turkey is mostly across a sea... Then I remembered...

Posted by: Vintage Red | Jan 27 2015 18:27 utc | 55

"Iceland did not repudiate its external debt."

Where did you get this information?

"There were four pillars to Icelandic policy in the aftermath of the bust: external assistance, debt repudiation, currency depreciation and capital controls."

"Iceland's debt repudiation was considerable too. The three largest banks – Landsbanki, Kaupthing and Glitnir – collapsed in autumn 2008. Rather than nationalising them, the government allowed the banks to go into administration."

source -

Posted by: Alberto | Jan 27 2015 19:00 utc | 56

Thanks Alberto. I didn't feel like responding to trolls/defenders of the mythic. LoL. They did repudiate mortgage debt. That in of of itself is a repudiation of foreign debt. REMEMBER ALL "DEBT" IS AN ILLUSION it's created out of thin air and loaned at interest.

Posted by: Scott | Jan 27 2015 19:27 utc | 57

@Scott, 26:

"'debt' is nothing more than "money" created out of thin air and "loaned" at interest"

Fiat Lucre

Scott, are you just on MoA to get ideas for Dilbert???... ;-)

Posted by: Vintage Red | Jan 27 2015 20:45 utc | 58

Dilbert? Never read it. How do YOU think bankers get the money? Take it from savings accounts? LoL. Please learn about fractional banking and money creation before you troll me. If you are THAT ignorant about money creation you are not worth the time to respond to. If you call yourself "fiat lucre" you should know better. If you don't? You have my sympathy. Don't bother to respond with your nonsense. I have better things to do than reply to idiots. Go play your games elsewhere.

Posted by: Scott | Jan 27 2015 20:52 utc | 59

@Scott, 59:

I'm not trolling you, I was being humorous! From what you've written, I'm actually pretty sympathetic to your perspective on money, all the way back to its origins ("Babylonian Money Magic")... honestly!

Posted by: Vintage Red | Jan 27 2015 21:05 utc | 60

Hers you go "fiat"...Over the next 18 months, the European Central bank will create more than a trillion euros out of thin air and will use that money to buy debt. The following is how this new QE program for Europe was described by the Telegraph…argue with the ECB...not me. LoL. If you have no clue where your "money" comes from...change your name. The quote above is easily traceable. Please do your homework before you troll. If you're not a're a believer. And I have no time for believers. I leave "belief" to children and fanatics....which are you?

Posted by: Scott | Jan 27 2015 21:05 utc | 61

Apology accepted fiat. I am sorry for my reaction. Let us work together . Perhaps we are on the same page. Pretty sympathetic is an understatement I hope. We live in a world of make believe debt. We need to free ourselves from the delusion. If we can...then, and only then...will we be truly free. Identify the enemy of us all and go from there.

Posted by: Scott | Jan 27 2015 21:18 utc | 62

@ 52 c1ue

Apologies if this shows up multiple times, as it doesn't seem to be going through. I've removed a link which may be a culprit.

"There are extremely few cases of nations canceling their debt owed to outsiders"

I don't think that's true. There are many cases of sovereign default which affect external "creditors." (See the wikipedia entry.) Even the US has defaulted in recent history. In 1971, the US defaulted on every dollar possessed by every other sovereign government on the planet. (It had promised convertibility into gold of dollars presented to it by other governments, but unilaterally reneged on that promise without warning or compensation to dollar holders.) Russia defaulted in 1998 despite having its own currency (i.e., it was a voluntary political choice). Greece has already defaulted once during this crisis (the "haircut").

"To cancel externally owned, euro denominated debt would very much be to make Greece a pariah"

I don't know when you say "canceling" debt if you mean only canceling all debt or redenominating the debt at a specified conversion. Most governments that default agree to pay what they deem reasonable rather than simply outright refusing to pay anything. Regardless, I think you overstate the consequences of sovereign default (which is not to say that there are no consequences).

@ 59 Scott

Fractional reserve banking doesn't really exist. Banks do not lend out anybody's deposits. They lend by creating a demand deposit, which is a liability of the bank and an asset to the borrower. But the bank also gets an asset (the loan) and the borrower a liability (repayment). This nets to zero for the private sector, so bank lending creates no new financial assets in the private sector. All loans must be repaid and when they do, the money created by the bank vanishes. Bank lending is therefore said to be horizontal money creation.

Contrary to popular perception (and a lot of economics text books), bank lending is not constrained by reserves. It is constrained by the bank's capital assets. If a creditworthy borrower walks into a bank, it will make the loan regardless if the loan puts the bank beyond the legal requirements of reserve holdings. That is because the bank will simply borrow in the interbank market to make up the difference. It does this because it will make more interest off the loan it made to the borrower than it will have to pay on the loan it takes out from another bank. When there is an aggregate shortfall of reserves in the system from aggregate bank lending, the Fed backstops by adding reserves to the overall system via bond buying. This is why economists who know what they're talking about understand the money supply to be endogenous (demand determined) rather than exogenous (set externally).

The reality is that in a modern fiat monetary system only the government can inject net financial assets into the economy, and it does this through fiscal spending. When the Treasury cuts a check, there is no corresponding liability in the private sector. Thus, financial assets in that sector are increased. This is understood as vertical money creation.

It is generally a good thing for the public in a capitalist economy that financial assets be increased over time as this promotes economic growth and full employment. That is why it is the oligarchs and right-wingers who are always warning about government spending and deficits; increases in net government spending increase economic activity and, with that, increase labor bargaining power vis-a-vis capital.

Posted by: ee | Jan 27 2015 21:42 utc | 63

The Greeks will get rid of the criminals bankers!

Posted by: Leonny K Lys | Jan 27 2015 21:42 utc | 64

Hi ee. I would disagree that governments inject anything. It's central banks that do it. And ten minutes of research will show they are privately owned. Therefore, as I've said's just magic. Create it out of thin air and loan it at interest. Please prove that wrong. I've beaten them in court over it. If THEY couldn't disprove me...good luck. Gosh, WHERE does the money come from? Lots of presto-change-o, but bottom line? Out of thin air. Backed by what? You and your children and grandchildren. It's called debt slavery. It's been going on for thousands of years. It's genius...but evil. Sorry if you like it. Have fun with that. I prefer truth to beliefs.

Posted by: Scott | Jan 27 2015 21:52 utc | 65

Scott@59- I'm pretty sure pretty sure fiat lucre, er Vintage Red is not a troll. He's been posting here for a while and I've never read him as exhibiting troll like behavior.

However you being a new poster and seeing fit to school the community on trolling and then proceeding to call established posters trolls is definitely suspect. And a bit rude.

Posted by: Nana2007 | Jan 27 2015 22:28 utc | 66

@65 "Backed by what?"

The US military.

Posted by: ruralito | Jan 27 2015 22:33 utc | 67

Hi Nana2007...I'm proud to meet you. Please see 60 and 62. Just a misunderstanding...nothing more. Thank you for your scolding.

Posted by: Scott | Jan 27 2015 22:34 utc | 68

@68- nice to meet you too! I welcome your hoggish commitment to the truth.

Posted by: Nana2007 | Jan 27 2015 22:40 utc | 69

@ 65 Scott,

Fiat currency is backed by the government's power to imprison people who do not pay taxes in it. It is created from thin air, which is a good thing. Money is a social construct (a unit of account) which serves as the grease for economic activity. It makes sense, then, that the public have full control over its issuance. The central bank is part of the government, and it doesn't really matter what branch of the government creates money, but the reality is that it is, indeed, the Treasury via its spending powers that creates money. (It also destroys money via its taxing powers; money is constantly being created and destroyed as it flows out of and into the Treasury.) The central bank in a country with a monetary system like the US mostly just engages in various asset swaps, which does not inject net financial assets into the private sector. The central bank's role is to regulate the price of money (interest rates) as well as to ensure the smooth clearing of payments between banks. It's actually a rather impotent actor on the economy.

Posted by: ee | Jan 27 2015 23:17 utc | 70

Aye, Greece is the only African country located in Europe, my friend used to say.

Taking huge loans, expanding state property and employment, being a tourist destination without much other industry and selling their biggest harbour to Chinese sounds African, doesn't it?

I hope Iran, Russia and Argentina aren't stupid enough to pay for Greeks. China definitely is not, Venezuela can't.

Posted by: Michal | Jan 27 2015 23:20 utc | 71

Hi ee. No. Central banks are not part of any government. They are privately owned. Example...the "federal reserve" has as much to do with the government as Federal Express. Please research. It won't take long to find out the truth. Please don't just argue. Research. It's provable . If you don't wish to look into it I will point you in a good direction. And how can creating money out of thin air but loaning it at interest be a good thing? Granted...we would all like to do it, but it destroys lives and countries. Please research fiat money and it's effects on countries. I'm sure you are sincere. However any belief that private bankers creating money and enslaving us in is that a good thing?

Posted by: Scott | Jan 28 2015 0:14 utc | 72

@Noirette - very interesting as always. Of course we should note that nearly every bit of the heavy equipment if made in ... Germany and the United States.

Lord knows how much they overpaid for all of that junk. And it is junk - it has no use for anything except against the Greek people (though perhaps the US-sponsored Kosovar organ snatchers and drug dealers could be a good target).

Posted by: guest77 | Jan 28 2015 0:17 utc | 73

@Scott - do you follow Professor Steve Keen?

Posted by: guest77 | Jan 28 2015 0:18 utc | 74

@ 72 Scott,

The central bank is created by Congress. Its enabling legislation is the Federal Reserve Act (12 U.S.C. Sec. 221 et seq.). It is part of the government. It even has a .gov domain address. It is given a certain measure of independence by Congress, but that is a policy choice exercised by the government itself, revocable at any time the government chooses for any reason the government chooses. It itself explains:

The Federal Reserve, like many other central banks, is an independent government agency but also one that is ultimately accountable to the public and the Congress. The Congress established maximum employment and stable prices as the key macroeconomic objectives for the Federal Reserve in its conduct of monetary policy. The Congress also structured the Federal Reserve to ensure that its monetary policy decisions focus on achieving these long-run goals and do not become subject to political pressures that could lead to undesirable outcomes. So, members of the Board of Governors are appointed for staggered 14-year terms and the Chairman of the Board is appointed for a four-year term. Elected officials and members of the Administration are not allowed to serve on the Board.

The Federal Reserve does not receive funding through the congressional budgetary process. The Fed's income comes primarily from the interest on government securities that it has acquired through open market operations. Other sources of income are the interest on foreign currency investments held by the Federal Reserve System; fees received for services provided to depository institutions, such as check clearing, funds transfers, and automated clearinghouse operations; and interest on loans to depository institutions. After paying its expenses, the Federal Reserve turns the rest of its earnings over to the U.S. Treasury.

Posted by: ee | Jan 28 2015 0:41 utc | 75

ee....the fed pays postage. No government agency does that. They also pay property tax. No government agency does that. They also have stockholders. What government agency has stockholders? Yes they were created by Congress. That doesn't make them part of the government. Please research it. It isn't a debatable point. It's not. Don't be fooled. So let me see...your reference is the fed itself? I suppose I could ask Don Corleone if he was a mobster and when he said no I should take it as gospel? LoL. Research Jekyll Island. Research ANYTHING other than the horses mouth. You're far too smart to be fooled.

Posted by: Scott | Jan 28 2015 0:55 utc | 76

ee, they also have a seal of incorporation. Name an agency that has that. Gosh, Just do a half hour of research. Again....I've read your posts. You're sharp. Don't fall for it. Just look into it. Then you will know.

Posted by: Scott | Jan 28 2015 1:02 utc | 77

Here This will be a link to a court case where the court ruled the fed is privately owned. It will take a bit of research to find the truth. They hide it well. But this will be a start for you.

Posted by: Scott | Jan 28 2015 1:20 utc | 78

Alexander Mercouris has an article up at Russia Insider on the role Greece could play in ending sanctions on Russia:

"If the new Syriza led Greek government does nonetheless vote against the sanctions when they come up for renewal in March and July - a possibility that cannot be entirely excluded - then short of expelling Greece from the EU the sanctions will end. The legal position is clear. Without the unanimous agreement of all EU member states including Greece the sanctions cannot be extended.

Should Syriza screw up the courage to take this step then it is unlikely to find itself alone. It would have at least the tacit support of several EU states such as Austria, Slovakia, Italy and Hungary that are known to be unhappy with the sanctions."

This a hopeful moment for anyone holding out for a departure from the morally bankrupt western leadership- might as well enjoy it before the ugly fight breaks out. It's sure to come.

Posted by: Nana2007 | Jan 28 2015 1:23 utc | 79

Hi guest77. I'm sorry I didn't see your post. I apologize for the oversight. No sir..I've never heard of the gentleman. I will research him now.

Posted by: Scott | Jan 28 2015 1:24 utc | 80

@ 78 Scott,

That case does not hold that the Federal Reserve is not a government agency. It is only holding that it wasn't meant to be covered by the particular statute at issue in that case (the Federal Tort Claims Act). It is not a declaration of the Federal Reserve's status. From the opinion:

There are no sharp criteria for determining whether an entity is a federal agency within the meaning of the [Federal Tort Claims] Act, but the critical factor is the existence of federal government control over the "detailed physical performance" and "day to day operation" of that entity...

Given the legal standard and the independence granted the Federal Reserve by Congress, it's not terribly surprising that it was held not to be covered by this particular statute.

Posted by: ee | Jan 28 2015 1:40 utc | 81

Hi ee@81.'s a privately owned government agency? OK my friend. If you choose to believe that, it's your right. The facts are well known and not a secret. They are simply hidden in plain sight like most lies. Remember the seal of incorporation, the property taxes, the class A stockholders that we aren't allowed to see. I do not wish to debate this. I debated this matter thirty years ago with the head of the Chicago fed. He used the same arguments you did. He used circular logic and dazzling b.s. and lost the debate according to the vote in the audience. Again, you are too smart to be fooled by them. I ask you to please research it in depth. You will see.

Posted by: Scott | Jan 28 2015 1:54 utc | 82

Hey ee@81...I forgot the postage. NO agency pays postage. NONE. But the fed has to because they aren't an agency. If you think gov. agencies pay postage please find one. None of them do. But the fed does. 'Nuff said?

Posted by: Scott | Jan 28 2015 1:57 utc | 83

I like Steve Keen's example of motorbikes to explicate why western capitalism trumped socialism:

About 40 years ago, a then-girlfriend’s brother wanted to buy a 650cc motorbike, but he couldn’t afford the roughly $3000 it took to buy a Yamaha or a Kawasaki (let alone what a Harley or a BMW would have cost then in Australia). But he discovered that he could buy a 650cc Russian motorbike—the evocatively named “Cossack”—for a mere $650. So he ordered one. And I helped him unpack it.

It arrived in a wooden crate. Once that was removed, we were confronted by layer after layer of oil-soaked canvas. Once that was removed, standing on a wooden base and held down by rope was … a 1942 BMW, just like the one that Steve McQueen rode in the 1959 World War II movie The Great Escape. Whereas in the movie, Steve McQueen stole a bike from the Germans, in the real world the Russians simply stole the design from them, and continued making it 30 years after the War came to an end.

Why? Because it was the cheapest—most efficient—way to produce as many motorbikes as possible. And with no competition, there was no other firm producing a better motorbike that could compete for the Russian consumer’s rouble. The Russian motorcycle market was therefore admirably stable: Cossack had a 100% market share.

Nor was there any waste in demand: every Cossack produced was sold—in fact there was a waiting list years long to get one. The Russians had only started exporting them because, after the OPEC oil price hike in 1973-74, the shortage of foreign currency had become more important than the shortage of motorbikes.

So a focus on stability and efficiency gives you a motorcycle frozen in time. Meanwhile, in the West, the instability and waste of competition gave rise to the modern motorbike that—even in 1974—made a laughing stock of my friend’s Cossack. So real-world capitalism trounced real-world socialism because of its real-world strength—the creative instability of the market that means to survive, firms must innovate—and not because of the Neoliberal model that politicians of both the Left and the Right fell for after the collapse of socialism.

I question whether we're all better of with the Ducati Diavel on the road, and they have brought back the scrambler, but then I tend to feel technological innovation should have stopped with the bicycle.

Posted by: Nana2007 | Jan 28 2015 2:06 utc | 84

ee and Scott:

The Federal Reserve is an institution with public and private aspects; the individual Federal Reserve banks are similar. If you feel it or they are in essence a private institution, feel away.

But bottom line, the chair, vice chair and another 5 of the 12 Federal Reserve Board of Governors are appointed by the President and approved by the Senate. Finally, the entire set up is established by Congress and can be changed in any way Congress desires.

That said, in the real world of a political system run by and for the big banks and big corporations, nothing is more tightly under the control of Wall Street than the Federal Reserve system. For our purposes here, since this is not a legal advice site, that's what really matters and desperately needs to change.

Posted by: fairleft | Jan 28 2015 3:01 utc | 85

@84 Its a good story, but sort of an anecdotal one. I know I'll sound like an asshole for going into this (but what's new).

It wasn't a matter of "focus" really. It was a matter of history and circumstance. The Soviets were in an entirely different position following the war. Westerners just don't ever seem to get that. It's apparently impossible for Westerners - and especially white people from the settler colonies - to see the historical advantages they have had (based largely at the victimhood of others).

I have a lot of respect for Keen, but this idea that the USSR could have just "chosen" a different economic models considering the circumstances of the war and their history is a sort of western re-imagining of Soviet history as some bad oafish commies who just weren't slick enough to figure it out. Its a cute reading and feels good for westerners who want to see our victory in the cold war as one of "exceptionalism" and not the real reason: that of violence and militarism and historical advantage.

Maybe if the USSR had a long, uninterrupted overseas imperial history, a bevy of colonies and the desire to bleed them dry, the Soviet people could have had all sorts of motorcycles. Perhaps if they had a vast numbers of exploitable labor in the form of former slaves and migrants from the countries they destroyed through imperialism, they could have had more pantyhose.

But they didn't and they couldn't have.

Posted by: guest77 | Jan 28 2015 3:16 utc | 86

@Nana2007 - nothing against your bringing it up of course. ;)

Posted by: guest77 | Jan 28 2015 3:18 utc | 87

@ 85 fairleft,

I mostly agree. The bottom line is that the Fed as it exists is fully controllable by the public through the Congress. But of course that just raises the more fundamental question of how controllable Congress is by the public.

Regardless, although it's currently fashionable to think otherwise, I don't consider the Fed as having much influence over the economy or the society. The public's lack of control over Congress is a far bigger problem than any relatively impotent (in my judgment) change in monetary policy the Fed does. The Fed's biggest crime is failing to adequately regulate banks as it is empowered to do. And Congress's biggest crime is relying on monetary policy instead of fiscal policy to regulate the economy (among many other crimes like, you know, bombing and torturing people).

On topic, ultimately (and perhaps ironically), I agree with Scott's post 26 that the Greek treasury should just create the money it owes out of thin air and give it to its creditors.

Posted by: ee | Jan 28 2015 3:40 utc | 88

@guest77 #86:

this idea that the USSR could have just "chosen" a different economic models considering the circumstances of the war and their history is a sort of western re-imagining of Soviet history as some bad oafish commies who just weren't slick enough to figure it out.
I'm not sure why you ignore the fact that until the Bolsheviks seized power in an illegal coup (much as the Kiev junta did), Russia was capitalist and rapidly industrializing. The Soviets actually did choose an economic model: a false one, which is why the USSR ultimately collapsed.

The Bolshevik Revolution was at least as much of a disaster for Russia as the breakup of the USSR was. This is not to say that by his refusing to carry out reforms and by entering into WW I, Nicholas II was not at least as responsible for the disaster that occurred as the Bolsheviks were.

Posted by: Demian | Jan 28 2015 4:02 utc | 89

Syriza is a management tool of capitalism's ruling financial aristocracy, whatever it might be to the abused and exploited Greeks who voted for it in the recent election. Syriza's main task is to diffuse these people righteous and wholly justified anger at a system which is robbing them blind to prop up a parasitic and ever more degenerate overclass, and to continue to implement this overclass's "reforms" which serve that overclass and nothing and no one else.

Posted by: 1968ES330 | Jan 28 2015 5:00 utc | 90


Well put. I think it cuts both ways. For what it's worth the Russians still make those BMW knockoffs, mostly with sidecars, and from what I know they're still a rock solid bike-I believe the company is called Ural. The conclusion he draws remind me of the stories in the 80's of soviets smuggling blue jeans- the USSR was positively starving for blue jeans! Ridiculous.


I'm not so sure it was a false economy, or less false than our late stage capitalism which is headed for an epochal collapse. Future generations are going to hate us for the freedom we arrogated to ourselves to burn through a half billion years of fossilized sunlight in a few short centuries.

Posted by: Nana2007 | Jan 28 2015 5:17 utc | 91

@ Demian @ 89

Russia was a broken and defeated power about to be overrun By Germany. It was ruled by an absolute monarch and thousands of corrupt petty nobles in a feudal system that really had not changed since middle ages. The bourgeois revolutions that swept away the ancien regime in the rest of Europe had never reached Russia. Under the communists Russia literally wrenched itself, quite painfully out of the middle ages. The Capitalist plan, led by the US and Britain was the usual one of economic colonization and balkanization (as it still is) . There would be no Greater Russia as it exists today . And incidentally their wouldn't have been one to defeat Nazi Germany and liberate Auschwitz etc., Nazi Germany doesn't get defeated in the capitalist - wet dream alternate history.

Posted by: 1968ES330 | Jan 28 2015 5:20 utc | 92

@Nana2007 #91:
I don't know what you mean by "false economy". The point I was trying to make is that Marxism is just as much a false economic theory as the current mainstream Western economics which is underlies neoliberalism is.

@1968ES330 #92:

The bourgeois revolutions that swept away the ancien regime in the rest of Europe had never reached Russia.
I guess you have never heard of the February Revolution.
There would be no Greater Russia as it exists today [if the Bolshevik Revolution had not occurred].
I really don't see what basis you can have for making such a claim. The Bolshevik Revolution involved the persecution of the intelligentsia, which led to a shortage of state administrators, managers, engineers, and scientists, either because they were arrested or because they went into exile. Furthermore, the Bolshevik Revolution led to a several year long civil war. I don't see how a civil war helps a country develop its economy and improves its ability to defend itself from invasion by foreign powers. If the February Kiev coup was bad for Ukraine, as most people here believe, I think that one needs to conclude that the Bolshevik revolution was bad for Russia. If a revolution leads to a civil war, I think it's safe to say that the country in which it occurred would probably have been better off if the revolution had not happened.

Posted by: Demian | Jan 28 2015 12:15 utc | 93

Here Joaquin Flores, 27 jan 2015, on Greece’s difficulties - mostly about finance. A good read and relates to the discussion above about banks, money, etc.

Posted by: Noirette | Jan 28 2015 14:44 utc | 94

New Greece showing its trump card already?

Greece might block fresh EU sanctions against Russia | NewEurope|
Will Greece act as Russia's Trojan Horse? | NRC Dutch |

Posted by: Oui | Jan 28 2015 22:34 utc | 95

ATHENS - The new Greek government will not proceed with any energy privatisations, Greece’s new Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis, said during a crowded handover ceremony on January 28 in Athens.

“I’m talking about privatisations that are in process. There is no privatisation that will move forward in the field of energy,” he said, eluding a question about Greek natural gas grid operator DESFA that was sold to Azerbaijan’s SOCAR pending EU approval.

“We will support public companies as public companies and we will try to change their orientation. We will work more efficiently, more productively towards the social interest, towards the productive interest of the country and especially help the general reconstruction and exit from the crisis.”

Lafazanis, however, made it crystal clear that the planned privatization of Greece’s biggest power producer PPC, electricity grid operator ADMIE, and Hellenic Petroleum would be halted.

Signaling a change in regional energy politics, Lafazanis also slammed yesterday’s Statement of Heads of State and Government of the EU “that criticised Russia using Cold War rhetoric and prepared the ground for fresh sanctions”. “We don’t want decisions to be taken in absentia,” he said, accusing the EU of taking advantage of the government changeover in Greece to issue the statement without consulting Athens.

Posted by: okie farmer | Jan 28 2015 23:08 utc | 96

Greece can privatize some of their best Islands to pay interest on the debt. Later, Greece can incur more debt and privatize more islands. Then The Koch Bros can throw out all the greeks and privatize the whole country.

Posted by: fast freddy | Jan 28 2015 23:36 utc | 97
Already based on statements made by the new cabinet members, the SYRIZA-led government has pivoted away from many policies implemented by the previous governments.

Many of these were implemented as Memorandum obligations meaning that in effect the SYRIZA government has already turned its back on the terms of Greece’s bailout agreement (as indeed it said it would).

Here are some of the key changes:


SYRIZA has long opposed the privatization programme demanded by the country’s lenders in order to open up Greece’s economy and generate revenue to service the debt.

In his new role as Minister of Productive Restructuring, Environment and Energy, Panagiotis Lafazanis (of the more hardline ‘Left Platform’ within SYRIZA) told Mega channel that one of the priorities of his ‘super ministry’ would be to freeze all efforts to privatize the Public Power Corporation (DEH).

“The PPC will return to the state as a state-run company which will operate for the benefit of growth and with strictly productive, and of course environmental, criteria. It will be a new PPC which will provide important assistance for the country to move forward with productive restructuring,” Mr Lafazanis said.

Christos Spirtzis, the Deputy Minister for infrastructure also effectively announced that the government would move to halt the privatization of 14 regional airports, saying with regards to that effort, “The central position of the government is to stop the privatizations of infrastructure which serve and can help the development of the country.”

Similarly the new Deputy Minister of Shipping, Thodoros Dritsas stressed that the port of Piraeus would remain in public hands. Arriving to the swearing in ceremony yesterday, Dritsas told reporters, “The first thing we are in a position to announce is that the public character of Piraeus will be preserved and the privatization of OLP stops here,” indicating that the process to sell off 67.7% of the shares in the organisation that manages the port would be frozen.

Minimum wage & Pensions

Sticking to a pre-election pledge, Panos Scourletis, the Minister of Labour and Social Solidarity said that among the first legislative measures to be passed by the government would be the restoration of the minimum wage to 751 euros / month. Collective bargaining rights would also be strengthened and the prohibition of mass layoffs strengthened.

Skoureltis reportedly told ANT1 channel that, “Among the first draft laws are those which relate to collective contracts, forced mobilizations and of course all those that relate to protections in relation to the mass layoffs and with the return of the minimum wage to 751 euros.” He told the channel that the draft legislation was ready to be tabled in parliament.

Dimitris Stratoulis, the Deputy Minister of Social Security, speaking to the same channel also said that SYRIZA would honour its commitment to reinstating 13th pension payments and supplementary pensions to pensioners receiving less than 700 euros per month.

Public Sector Workers

The new Deputy Minister of Administrative Reform, Giorgos Katrougalos announced the re-hiring of state sector workers, such as cleaners, school guards, teachers and all those whose dismissal was based on “unconstitutional frameworks such as that of the mobility scheme.”

“It is our commitment and one of the first measures we will take. All of the dismissals will be recalled which have been done and which are unconstitutional, given that they are based on an unconstitutional framework such as that of the mobility scheme, with no evaluation prior to the dismissal. I remind you that we are talking about people such as the cleaners and school guards, the weakest of people who were the focus of the supposed reform efforts of the previous government. That is a first injustice which will be corrected.”


The Ministry of Education will reinstate administrative workers placed in the mobility scheme, roll back legislation expelling ‘eternal’ students and rehire school guards.

Cheaper drugs

Health Minister Panagiotis Kouroublis said his priority would be to reduce the cost of drugs for patients and address the problem of the uninsured.

“The first issue is to address the issue of the uninsured and the policies which were followed in specific areas such as drugs from which we believe that with our intervention there will be multiple benefits which can be reinvested in the system.” Kouroublis added that he would ask hospital administrations to provide accounting details so that he may get a better understanding of the situation.


While during the pre-eleciton campaign Alexis Tsipras stated that he wished to disarm riot police at protests, Yiannis Panousis, the Deputy Minister of Protection of Citizens, said that he was not in favor of such a move.

However he stressed that a relationship of trust had to be rebuilt between the police and the public, drawing a distinction between combating terrorism and policing a rally. “The police will have weapons at protests, but that doesn’t mean that they will intimidate and terrorize,” adding that the police needed to support, not undermine democracy.

Posted by: okie farmer | Jan 29 2015 0:39 utc | 98

@Demian #93

The February Revolution had minimal impact. Entrenched aristocratic and militaristic interests remained. With the Kornilov affair, the February Revolution very nearly took the same path as the German Revolution of 1918, with the Kornilov force in the role of the Freikorps and the Kerensky government in the role of the German Social Democrats. Head of state removed, but the same interests with their hands on the levers of state power.

If by the persecution of intelligentsia you are referring to the later purges, I could agree. But the Czarists hated the intelligentsia, driving them as a class towards the revolutionary side. The rift between the intelligentsia and the aristocracy, and the fears of the aristocracy that they could be creating a new class that would oppose them, was an impediment to industrialization in the last years of the old empire. A nation of docile peasants best suited the political interests of the aristocracy and they knew it.

Posted by: Thirdeye | Jan 29 2015 0:43 utc | 99

John Helmer on the complicated history of Russo-Greek relations:

It’s also a shift which the western powers and the Ottoman empire fought for three centuries to prevent. They succeeded against Empress Catherine II and Count Alexei Orlov’s fleet in 1770; he won the Battle of Chesme*; then betrayed the Daskalogiannis revolt against the Turks in Crete, and ultimately lost the war in the Med. The allies succeeded against Stalin between 1945 and 1949 because his priorities were further north. In 1974 NATO encouraged, and preserved the Turkish occupation of northern Cyprus, because Leonid Brezhnev’s Politburo couldn’t resolve its internal differences, feared to offend Turkey, and made one mistake of intelligence assessment after another. The way this story is told in Greek history, the Hellenes remember – they are reminded often enough — that in their direst hour, Russian promises of help against the infidels don’t materialize. There is even a Russian name in Greek for this betrayal. The failure to arrive in time in Crete and the bloody Turkish reprisals of 1770 are known in Greek by Orlov’s name as Ορλωφικά.

There will shortly be a new Greek security doctrine to identify and deter three enemies of state – Turkey, the US, and Germany – and the fourth, if it weren’t already so weak itself, Great Britain. For the secrets of this new doctrine, it won’t be useful to pore through fresh intercepts of what Tsipras, his foreign minister Nikos Kotzias, and his finance minister Yanis Varoufakis are confiding among themselves, according to the NSA, GCHQ and Bundesnachrichtendienst transcripts in circulation. Instead, it’s necessary to start reading the 26 speeches Thucydides (lead image) reported in his History of the Peloponnesian War 2,400 years ago. Thucydides has much in general, nothing particular to say about Russia. But there is a 245-year old term in Greek for the Russian ally who proves to be unreliable in war, faithless and corrupt in peace. That term is Ορλωφικά (Orlovika). For its history and application to Greece and Cyprus since 2013, read this. Russian officials who troop into Megaro Maximou, the prime ministry in Athens, to confide their congratulations and hopes for warmer relations aren’t more credible than was Count Alexei Orlov, the Empress Catherine’s emissary and naval commander in 1770.

Posted by: Nana2007 | Jan 29 2015 7:01 utc | 100

next page »

The comments to this entry are closed.