By Don Quijones, a freelance writer and translator based in Barcelona, Spain. His blog, Raging Bull-Shit, is a modest attempt to challenge some of the wishful thinking and scrub away the lathers of soft soap peddled by our political and business leaders and their loyal mainstream media. Originally published at Testosterone Pit
After four long years of “service”, the Troika’s frontline role in sustaining and exacerbating crisis conditions in Southern Europe is finally beginning to attract some of the attention it deserves. In my home city of Barcelona, a coalition of left-wing groups recently held an event to raise awareness about the Troika’s “neo-liberalisation” of Southern Europe. Even Europe’s shoe-shine institution, the European Parliament, has promised to launch an enquiry into the Troika’s operations after the European elections in May.
Since its inception at the beginning of Europe’s sovereign debt crisis, the unholy alliance between the IMF, the European Central Bank and the European Commission has visited untold damage on the economies and societies of a long and fast-growing list of countries.
A Three-Pronged Attack
In many ways, the conditions set by the Troika in the EU bail-out economies resemble those that a conquering army might impose on a country it occupies. The government of Greece, for example, has been reduced to mere vassal status as the country’s welfare state and public services are stripped to the bone by corporate vultures.
As the Chilean writer and political activist Luís Sepulveda said in an interview for the Greek documentary Catastroika, “What is happening in Greece is terrible. Democracy was born there and the international financial system now decides it should die there as well.”
As part of that ongoing process, the costs of privatisation have been borne almost exclusively by cash-starved Greek taxpayers, while the profits – initially estimated to be worth some 50 billion euros – go to the international creditors. Entire industries, from rail to water, ports and airports, roads and healthcare – industries that are meant to serve a vital public purpose and have received decades and decades worth of public investment – are now being sold off at car boot-sale prices to private international corporations and investment funds.
And it’s not just happening in Greece. Even in countries yet to have received a bailout, pressure is building to privatise state assets. In Italy, a referendum on water privatisation was held in June 2011. Fifty-seven percent of the population turned out, with 97 percent of voters rejecting the proposal outright. It was as decisive a statement of the popular will you’re likely to find; yet it was also, as is so often the case with national referendums in Europe these days, the wrong answer.
Undeterred by the strength of popular opposition, the Troika continued applying pressure on the Italian government to privatise state water companies, but Italy’s geriatric playboy-premier Silvio Berlusconi refused to buckle. Not that it mattered: A year later, after becoming too much of a liability to the European project, Berlusconi was toppled in a lightning-fast Brussels-orchestrated coup d’état. His replacement, Mario Monti, a life-long banker with close ties to the European Commission, Goldman Sachs and the elitist think tank the Trilateral Commission, was, as you’d imagine, somewhat more amenable to the Troika’s desires.
It was a perfect example of Marxist philosopher Slavoj Žižek’s maxim that “when things get serious in today’s world, the ‘experts’ take over.’” In short order Monti received a letter from former and current ECB chairmen Jean Claude Trichet and Mario Draghi insisting on the privatisation of Italy’s water distribution rights. The fact that such a proposal had already been point-blank rejected by the Italian people and was effectively illegal under the Italian constitution mattered not a jot. Since then, attempts have been made – some successful – to privatise water districts in Italy, including in the country’s capital, Rome.
In Spain, meanwhile, the Rajoy government has been more than happy to meet the Troika’s demands to privatise social housing (selling off huge batches to international investment funds and Wall Street banks) and public hospitals (albeit with somewhat less success, thanks in large part to the strength of public opposition). The government has also removed public subsidies of basic utilities, including gas and electricity, resulting in sharp increases in the basic cost of living.
The same story is playing out across Europe’s bailed-out nations. The losers are by and large the poor and middle classes, while the beneficiaries are the same as always: the world’s largest multinational corporations and (yeah, you guessed it) banks.
Protecting the Banks, At All Cost
That the Troika should put the banks first (and for that matter, second, third and fourth…) should hardly come as a surprise. After all, two of the Troika partners – the ECB and IMF – are essentially little more than puffed-up bankster henchmen, while the other, the Commission, is in hock to Brussels-based lobbying groups.
Through its actions of the last 40 years, the IMF has amply shown on which side its bread is buttered. A perfect case in point was the 1994 bailout it led of Mexico in the wake of the Tequila Crisis. As Lawrence Kudlow, then economics editor of the conservative National Review magazine, asserted in sworn testimony to Congress, the ultimate beneficiaries of the bailout were neither the Mexican peso nor the Mexican economy:
It is a bailout of U.S. banks, brokerage firms, pension funds and insurance companies who own short-term Mexican debt, including roughly $16 billion of dollar-denominated tesorobonos and about $2.5 billion of peso-denominated Treasury bills (cetes).
In effect, money lent by the IMF, BIS and US Treasury Department was speedily channeled via the recipient country’s government and struggling banks to the coffers of some of the world’s largest private financial institutions. The money barely touched Mexican soil, yet the debt remains – indeed, thanks to the wonders of compound interest, continues to accumulate – to this day.
This is essentially the financial crisis management model now being applied across almost all Western economies, with the notable exception of Iceland. In Greece, a staggering 300 billion euros worth of unpayable debt has been ploughed into its moribund economy. And just as happened in Mexico, a risible fraction of that money has actually stayed on the ground.
According to a paper published by the main Greek opposition party, SYRIZA, titled “The Greek Rescue Plan: A Humanitarian Crisis,” a staggering 98.4 percent of the bailout funds have been diverted back to Greece’s lenders, rescuing primarily French and German banks. That’s right: a pitiful 1.6 percent of the European Stability Mechanism’s money is actually making it into the real Greek economy. The money moves to richer shores but the debts grow.
What’s more, while workers and pensioners are overtaxed and suffer the consequences of severe spending cuts, the Troika and the government have done pathetically little to tackle the real problem of tax evasion. According to SYRIZA, government authorities found that 6,575 offshore companies owed hundreds of millions of euros in taxes. Guess how many off those companies have actually been called by the authorities to settle their accounts? Thirty-four – that is, 0.5 percent of them!
In sum, the main beneficiaries of Greece’s successive bailouts have been French and German banks, not to mention Greece’s own financial, business and political elite. As for Portugal’s bailout, the main beneficiaries have been Spanish banks, while in the case of Ireland’s “rescue”, UK and German banks have taken home the lion share of the spoils.
All in all, trillions of euros of new debt — debt that multiple generations of Europeans are now on the tab for — have been conjured out of thin air and pumped through national finance ministries. And for one purpose: to save the continent’s biggest banks from the consequences of their own reckless malinvestments. While the people of Europe are told that they cannot afford to pay for even the most basic of public services, including the distribution of water, staggering sums of money are wasted on walking-dead financial institutions.
A New Age of Technocracy
If events proceed as long planned in the backrooms of Brussels, the Troika’s role will be a temporary one, consisting primarily of holding the fort whilst the European Union completes its final stage of metamorphosis, from a trading and currency bloc to a fully-fledged banking, fiscal and political union. By then, a new age of technocracy will be upon us as a newfangled system of top-down, heavily centralised political and economic governance, by, of and for the economic elite, is enshrined into law.
As Barry Ritholtz recently noted on his blog, one of the most disruptive paradigms of our age has been the ruthless supplantation of the individual in the political process by corporate money, legislative influence, campaign contributions, even free speech rights:
The new dynamic has moved past the old Left Right paradigm. We now live in an era defined by increasing Corporate influence and authority over the individual. These two “interest groups” – I can barely suppress snorting derisively over that phrase – have been on a headlong collision course for decades, which came to a head with the financial collapse and bailouts.
While Ritholtz’s argument was made with specific reference to U.S. politics, I believe it has just as much, if not more, bearing on the current European context. After all, European centre-left parties are arguably the strongest cheerleaders of the European project, despite the tremendous harm it is doing to their traditional constituencies. What’s more, the pace of neoliberalisation of the European economy is, if anything, even more ferocious than it is in the U.S.
As the attention of the Troika begins to shift northwards, to France and beyond, as it inevitably will, traditionally divided Europeans from across the political spectrum face a conundrum of existential proportions: do we unite and fight to save what we have, or do we roll over for the corporate steamroller?
With a report just out by Save the Children that 28 percent of European children (in particular those living in countries subject to the Troika’s bail-out regimes) are now at risk of poverty and social exclusion, time is of the utmost essence. If the people of Europe want to safeguard European democracy from the Troika’s whirlwind of “uncreative” destruction, they will have to act soon.
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Call it what it is … fascism … A new study just came out and concluded that the U.S. is clearly an Oligarchy and not a democracy. The same can be said of Europe. Unelected officials, many in office for years, control the Eurozone.
What we are seeing is the oligarchic response to peak oil and water and climate change. The world economy has stagnated and without growth the Ponzi Scheme of banksterism, the backbone of oligarchic control, is doomed.
The entire world is facing de-growth. Rather than a cooperative effort at mitigating energy shortages and climate change the powers that be are consolidating their control and their wealth through economic crises that allow privatization of all public assets.
The destabilization we see around the world is designed to lower energy demand and increase economic crises. As countries face increasing prices on food and fuel that emaciate demand for other products employment soars as does social unrest.
Every country in the world is now becoming more totalitarian to meet these economic and social pressures. The rightward shift to fascism and military dictatorships is well under way. Every continent is effected. The surveillance-police state model incorporated.
The rest of the countries of the EU will be looted just as the “PIGS” to support the banksters and strip public assets for ownership by the oligarchs. The entire world is now headed for dark days ahead. The model will be confrontation and confiscation not conciliation and cooperation.
“Did crude oil production actually peak in 2005?”
“”Wait a minute,” you must be saying. “Haven’t we been hearing from the oil industry and from government and international agencies that worldwide oil production has been increasing in the last several years?” The answer, of course, is yes. But, the deeper question is whether this assertion is actually correct.”
http://www.resilience.org/stories/2014-04-13/did-crude-oil-production-actually-peak-in-2005
Thanks for the peak oil link! Can you also provide a link for the U.S. oligarchy study? I try to explain to family and friends about the plutocratic oligarchy in which we live, but I have great trouble convincing people. Maybe the study to which you refer has some evidence that will help convert a few folks.
http://www.princeton.edu/~mgilens/Gilens%20homepage%20materials/Gilens%20and%20Page/Gilens%20and%20Page%202014-Testing%20Theories%203-7-14.pdf
Thank you!
Schattschneider, E.E. 1960. The Semisovereign People: A Realist’s View of Democracy in America. New York: Holt, Rinehart and Winston.
Schattschneider, E.E. 1935. Politics, Pressures and the Tariff. New York: Prentice-Hall
Several British studies of the same era too. It was called biased pluralism here, then unitarism. Classic area is the shift from industrial relations to human resource management.
What astonishes and baffles in the EU’s behavior is the claim for moral high ground in the world. For a continent that murdered 200 million people in the 20th century alone, faces near bankruptcy now and practices internal occupation, EU treated like a pariah it is.
That’s what you get when such an institution is given the god-damned Nobel peace prize at a time when the austerity madness is fully underway, and European troops have killed people all over the globe for years – moral righteousness.
Sadly a serious case of cronyism. The chairman of the peace price committee is also the head of the European Council…
https://en.wikipedia.org/wiki/Thorbj%C3%B8rn_Jagland
I cannot agree more with the assertions of Quijones, and his analysis; “traditionally divided Europeans from across the political spectrum face a conundrum of existential proportions: do we unite and fight to save what we have, or do we roll over for the corporate steamroller?”
Polls are manipulated to prevent organization against the trend of corporatism, not only in Europe, but in all of Western Society. Where centralization and fascism have been fait accompli in Russia and China since the peasant revolts, and the continent of Africa despoiled during colonization, democracy has taken decidedly longer to reach this point, and the will of the people is no longer a cost effective consideration.
The west will roll over and submit to the will of corporate dictatorship.This was warned about in George Orwell’s 1984, where decisions over life and death will be determined in the boardroom, and not the parliament, by dictatorship, not by a majority. Once control has been gained, we will see whether this new dictator will be benevolent or malevolent. Whether peace ensues, or the global economic system reverberates from one crisis to another. People will bear what is bearable. Constitutions were setup to protect the people from their government. The government has failed in it’s responsibility to protect the people from international monopolies. Surely, there is a forum where these grievances can be addressed, and there is, the court of the Almighty God and Father of Jesus Christ, in which all, rich and poor alike, will give an answer on that day. Praise be to God. Amen.
Dearest Nonanonymous, on the sliver of a chance that your remark, “there is a forum where these grievances can be addressed, and there is, the court of the Almighty God and Father of Jesus Christ, in which all, rich and poor alike, will give an answer on that day,” is not snark, I would beg to take exception.
Some form of faith or spirituality is going to be necessary for most of us to get through the dark days. Unless, of course, we are the ones doing the raping and pillaging. However, to believe firmly that we should endure the sufferings imposed on us because we will be rewarded and our jailers/torturers will be punished in the eternity of an afterlife is simply a reversion to a medieval sop handed out by overlords everywhere. “Yeah, yeah, we’ll suffer the unspeakably awful torments of eternal hellfire. Now back out of our way while we burn your miserable hut and plow under your grain crop. Enjoy your afterlife!”
The threat of eternal damnation has never prevented the greedy, the violent, the ruthless from taking what they want, when they want it. I don’t see why we peasants should delude ourselves with such palliative beliefs. Equal suffering for all. In this life. Period.
Europe has been subject to chronic violence for centuries. We still revere the idiots who caused it. I was taught that we Brits were really a peaceful lot who had secured our own borders since 1066. Even this last bit isn’t true. French supported barons ruled two-thirds of the country after Magna Carta (1215). Things were generally worse in continental Europe. If one looks at real history it’s hard to work out where any semblance of civilisation came from. It almost beggars belief we, as a populace, can allow war – but we always do.
Human beings are more or less the same everywhere despite cultural pretensions. Culture, I suspect is ludicrous everywhere. We have become so anxious to respect culture we have cultural relativism. The guy chopping his private parts after menstrual contact is as lunatic to me as we Western louts waiting for one last big bonfire and calling what we do economics, or bending knee to some ancient god. Soon, even our lager louts will catch up and start chanting ‘groaf, groaf, groaf, give us more groafs’. The rest of our culture is ‘let them eat cake’ and the US military umbrella we all profess to hate, but know we need because we have done so much harm across the world it will come looking for revenge.
We need radical change. Nationalism is stupid, fundamentally encouraging clan pride – this is the stuff that sets people to genocide. Yet our politicians urge it on us and it is impossible to find any of them not trying to buy votes with this crude strategy. Europe needs to provide full employment and the radical plan of doing the right things. I doubt this is much more than getting rid of kleptocracy from the Urals to John O’ Groats and creating a free union of workers. Simples, though I note the more socialist NSDAP members had this idea. Maybe technology has moved on enough to give us transparent accounting and controls on leadership this time.
I agree for the most part, but surely you can see how suppression of nationalism as part of the European project has been an effective tool for neoliberalisation. Hence the rise of right wing populism and nationalism throughout Europe as the “new normal” sets in and people realize that they have been had. Yes, nationalism is stupid and dangerous, but so is the alternative in its current form.
Obviously you live in the UK. I would not be so quick to condemn nation states if I were you.
In EU-Europe nation states are to be quietly phased out in favour of regions: not “Spanish” region vs “Greek” region, but Navarro versus Galicia, Sterea Ellada vs Peleponessos vs Aegean. All in the name of ‘solving’ vexed national questions such as Catalunya, the Basques, Scotland, Macedonia etc. In fact, the old empire solution: divide and rule.
No this is not fantasy. Nor advertised. But it has been on the drawing boards for decades and is definitely on the cards: the EU as a neo-Ottoman empire under the management locally of appointed Beys like Rajoy, Samaras and all the regional equivalents. Please check online at the EU parliamentary party websites for their various plans for regions, regional, etc.
At present the remaining shreds of national sovereignty is all we have left protecting our democratic vote. Please use it well, avoiding ALL the systemic parties, whether EPP, Socialist, ALDE etc.
I don’t disagree your point Tsig – I’m a Scot voting ‘Yes’ (or would be if I was living at home). And as Vet says, the rolling ball of corporate federalism is no good either. I really mean it at the level of bulldung and clan racism.
Complicated :)
I like OlFVet’s : the “suppression of nationalism as part of the European project has been an effective tool for neoliberalisation.”
At present the remaining shreds of national sovereignty is all we have left protecting our democratic vote.
Well said, Tsigantes.
“The fact that such a proposal had already been point-blank rejected by the Italian people and was effectively illegal under the Italian constitution mattered not a jot.” The kleptocrats do what they please, no matter what the people want or the law requires. So far they have tried to preserve the superficial forms and rituals of societies that consciously rejected fascism in the past.
Now the challenge for the kleptocrats is to condition people who are not yet completely servile to accept, with a minimum of bloodshed, the new oligarchic world order. The will to resist on our part is strong, yet the discipline to do so effectively is not yet evident.
It is truly dreadful to be sure but…the fact is that these countries you refer to do have elections and, unlike the US and UK people have choices. Syriza did not win the last election in Greece–why? We need a better explanation than bankers are bad and the Troika is plotting evil things.
It’s hard for me to tell from where I am but I suspect the problem is that the majority are content and, like in the U.S., they really don’t care either about countries on the periphery or the poor in their own countries (Greece, Spain). If they did care they would vote in parties that demanded change.
For the last 2+ generations or so, everyone have been indoctrinated into thinking as short term individuals. This because thinking in terms of collective and long term was the path to the oh so scary communism…
End result is that the propaganda winners are those that offer short, swift and decisive paths back to “normal life”.
SYRIZA lost the 2012 election by less than 1%. In the 3 weeks before the vote there was an unprecedented daily barrage of propaganda from Merkel-Scheuble, Christine Lagarde, ECB and EU commissioners (Barroso, Trichet, van Rompuy) threatening Greece with immediate Grexit if pro-memoranda/Troika parties PASOK/ND were not voted in.
An analysis of the ND votes showed that they won due to a huge proportion of elderly pensioner swing-voters afraid of losing their money.
In case you missed it, IMHO, this is a very symbolic case study;
http://en.wikipedia.org/wiki/Greek_economy_referendum
From my perspective and crude summary…the democratically elected PM, of the cradle of “Democracy”, proposed a referendum (what can be more “Democratic” than a referendum?) to decide on the “conditionalities” of a bailout. Roughly two weeks later, he was out and a former banker was in.
Thanks for sharing the article. As with so many I see here I again find myself wondering how innocent all these innocent victims are? It appears two things have been cleverly orchestrated by our ruling elites: 1) turning us into docile, peace lovers – like the domesticated farm animal(Orwell again!). 2) offering us never before dreamed of convenience, which we have embraced and become dependent upon. Next have new generations grow up with this convenience and know of nothing else. Quite brilliant actually.
The turning of the first trick buys them all the time they could want to reshape society to their liking without fear of violent opposition. As for #2, it’s a wonderful ball and chain none of us will give up unless forced to.
We peace lovers have shown a knack for turning a blind eye to all these wars our elites feel need to be fought. Plus we’ve ignored the social suffering of others as well. Perhaps a third trick was creating such an individualistic and selfish society – though our individualism is no longer needed and currently under assault. Forget violent opposition, we’ve shown a lack of moral courage to oppose such things peacefully.
Really, at this point, it is all about economic collapse. So long as our elites can provide us with our convenience and gradually reduce living standards then they can continue virtually unopposed until their work is done(if the work of such people is ever done?). But if it all falls apart then they may find out we’re not a bunch of domesticated farm animals after all. However I imagine they can mange that chaos as well and direct it to target others besides themselves. They do have all the money and power to influence such things. Meanwhile we’ve shown we are more than willing to be manipulated.
I’m afraid there are no good choices for us now. We’ve been apathetic way too long. I feel for people with children and grandchildren as they have really screwed up and will some day realize it. Of course in Canada we have a Reform Party that calls itself Conservative(reform = conservative?) and half the population, including many with children and grandchildren, vote for it. Innocent victims? Really?
+1000. My feelings exactly.
PaulW, half of Canadians did NOT vote for the conservatives. The way our system works, actually about 60% voted for the two other parties. It is unfortunate that about 40% of the popular vote can give a party a majority. Harper has a plan and part of it is to take all the facts and all the fact-finders out of the loop starting with abolishing the mandatory long-form census and proceeding on to any officials that create facts such as scientists, election officials, and watchdogs. He has succeeded so far in replacing a fact-based government with an ideological one that is based solely on Harper’s ideas that are unimpeded by truth and factual information.
One Minister creates a “Fair Elections Act” which according to him is “perfect” when what it actually does is put more money into the campaigning process, disenfranchises those voters that traditionally do not vote conservative (aboriginals and the elderly), and takes away the powers of the Elections Officer and his advisors. Harper uses tricks and illegalities to do what he wants to do and we are screwed if the Unfair Elections Act is passed as it is written.
Correct! I realized after my math was flawed. Harper’s Reform “call me Conservative” Party might have got 40% of the vote. But 1/3 of eligible voters refused to vote so it’s only 4/10ths of 67%. I leave the final calculations to the smart readers.
The simultaneous shrinkage of private jobs and public entitlements will drastically reduce cash flow for an enormous part of the worlds population. That fact coupled with privatization of basic utilities and medical care increasing in cost dramatically will allow the Murder by Neglect of billions of people. in 80 years the world population could shrink by more than 3 billion and in the US by 150 million alone. Greece will be the test case on the speed of the game plan.
The only way out is smaller governing units to make the politicians (actors) less prone to selling out due to governance restrictions and a direct democracy form of government like Switzerland. Iceland had those advantages and honest politicians at the right time. Time is running out for so many people.
There was lots of talk about the docile body and govern-mentality in the 80s. The term ‘idiot’ arose in Greece to describe those with no interest in politics. Yet the topic and practice is so dull and rotten why would we want to pay attention to it? We’d be better with a benign technology making sure our ends met.
One technique in war is to make the enemy feel so helpless they just give up, often dying where they lie with no attempt at resistance. With all the talk of thrusting entrepreneurs and great leadership they have us feeling powerless. If I dislike nationalism, I’m not much concerned with national borders; rather the use of the stuff on global markets they stiff us with as we vote. The sky will fall if we vote radical. We get a choice between two or three devils we do know. The paradox seems to be that we need to do something across nations, yet the prevailing technology of this is in corporatist hands.
Given the uncreative destruction thing here, we should ponder on the clown Austrian form. You turf, say, 100,000 soldiers out of a job. These guys and gals are then snapped up by the thrusters and shapers of industry and are soon piling more stuff into the economy and able to buy more now they ain’t poorly paid soldiers. GDP groaf! Groaf, groaf, groaf! Burn the planet.
Was this ever true? We have a thing called the Vagrancy Act 1828 in the UK. This was designed to repress wandering bands of – er – ex-soldiers from the Napoleonic wars. Waterloo was in 1815. In the UK now we have a lot of ex-servicemen in gaol and living rough.
How did we get employment across Europe following WW2? Did the private sector cavalry clear the ground? How was demand created? How did the USSR survive at all, given it had borne 90% of the German Armed Services? What happened in burned down Japan? MITI never sounded very private sector to me. China rises as an ostensibly communist regime. Forget all this, let’s listen to some platitudes so simple any clown could come up with them.
The motivational component of what’s going on is truly appalling. Starve them into work. Maybe they intend to starve us to death – this has long been a tactic of the rich. Perhaps they know what global warming really is and intend a cull of docile carbon footprints?
What are we missing here? I think its our biology. We are an animal species in denial of our animal. We can point to the rich and their lackeys as parasites, but this is not enough. Much of what is dark goes on in us. What happens to those of us who get the chance to lead or do priestly stuff like HE lecturing? The animal rises because we haven’t bothered to find out what we are. Austrian economics is animal.
This is the problem at least in Europe. Europeans want all the stability of the Euro (really the replacement of the Deutschemark) but keep their old style corrupt crony govt which employe a large part of the population to do nothing but sit on their arse. Well the only way this works is if the markets are open for the country to borrow. I did not see any movement to go after the prior leaders of Greece, Spain, Portugal and such for all of the plundering performed. No marches to bring these people to justice and clawback what was paid to them. No movement to get rid of the large number of govt workers doing nothing. No the movement is we need someone to give us free money. Well it does not work that way.
The US has creeping socialism so we are rapidly approaching the same situation as France. No one wants to go back to living with one tv and car. No one wants to start making their own clothes or working on harvest all of which was still occurring in the 60’s. Nope they want to sit and look at their iphone and get paid for it.