16 July 2015 — The Wolf Report: Nonconfidential analysis for the anti-investor

The Hellenic Parliament has voted to approve, and will presumably implement, the demands of the Troika accepted on July 12 by the prime minister, who now states he doesn’t support the agreement although he will implement it, and urges its approval.  This comes five days after the prime minister promised “the bigger the ‘No’ vote [on the referendum regarding the Troikas final, but expired and off the table offer], the better the deal.”   It takes a lot of processing power, and storage capacity to keep up with the prime minister’s different positions.

Inside the parliament the vote was 229 in favor to 64 against.  Thirty two of the “no” votes came from Syriza MPs.  Deputies from Syriza’s coalition partner, the right-nationalist ANEL party, brought into government because of its principled agreement with Syriza’s original position of “no further memorandums, no further bail-outs,” voted unanimously for the agreement, which means the “principle” is now in direct contradiction to what it once was, but the partners are still allied.

The Tsipras government is now a minority government.  It depends for its existence on the support of PASOK and New Democracy and To Potami.  

Outside the parliament, the police are protecting the parliamentarians from the street protests with batons and tear gas, the purchases of which are not subject to Troika scrutiny.  

Well….a reader wanted to know why I thought “repudiating the debt was better than the status quo.”  There are multiple reasons.  First and foremost, there is no status quo.  That’s the critical point.  As bad as things are now, they will be much worse with the burdens placed on Greece through this agreement and the next memorandum.  Secondly, all those things forecast to occur if Greece repudiated the debt– “the loss of tourism, further drops in foreign investment, social turmoil”– will occur under the terms of the new memorandum, or without a new memorandum.  There is simply no possibility for “recovery,” if such a word even has meaning any longer, of Greece’s capitalism. 

The reader then asked “how would Greece defaulting be a better option for the prospects of a global revolution CONCRETELY?”  Concretely, repudiating the debt would pretty much bankrupt the ESM, jeopardize the ECB, and undermine the capital markets worldwide.  Now that in itself is not a seizure of power, but it’s not a bad start.  Concretely, repudiating the debt attacks the claims on labor that need to be enforced to preserve capitalist property.  Concretely, repudiating the debt threatens every mechanism of exchange, and control, that the European bourgeoisie have fashioned in their grand alliance of the European Union.  Concretely, repudiating the debt would have a tremendous impact on the poor, the pensioners, the unemployed of Greece posing the question of the purpose of production along class lines.  Concretely repudiating the debt would have an equally dramatic impact on workers in Spain, Portugal, Slovenia, Italy, France, the Netherlands, Austria, Finland, Germany, Hungary.  Concretely, repudiating the debt undercuts the appeal of the fascists to the unemployed, the youth, the marginalized.

Would Europe retaliate?  Of course.  Would Greek assets be seized?  Of course.  Would living conditions in Greece deteriorate?  Undoubtedly.  This isn’t 1960; Greece isn’t Cuba; and there is no Soviet Union to subsidize the country. But…

But…I flip the assertion right back to those who argue against repudiating the debt:  there is no choice.  The alternative to repudiating the debt has proven itself catastrophic.  Repudiating the debt is an essential first step to reversing the catastrophe.  Don’t take that step and nobody goes nowhere. 

Is it “hard”? Complicated?  Difficult?  Painful?  Of course.  And there is no alternative.

Back in the day, so many years ago that I can only dimly recall, after the collapse of Lehman Bros. and after Maiden Lanes 1,2,3, and all the special facilities, there was the same type of argument about TARP.  Then, Doug Henwood of the Left Business Observer, supported the TARP intervention to stabilize the credit-system, because (if I recall the argument correctly) the alternative was the collapse of the entire financial network, and a massive global depression.  The alternative it was thought was too horrible to contemplate.  Hence one had to support the government rescuing the bourgeoisie.

One did not.  One does not.  The collapse of the system is preferable to its maintenance, to its reproduction, to its recovery.  Because….the recovery of this system is much more horrible to contemplate than the after-effects of repudiating capitalism in part and in whole.  No I don’t think things have to get worse before they get better.  I just think capitalism gets worse without getting better.

July 15, 3015