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Greek elections

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Greek elections take place on May 6th.
On tonights Newsnight Paul Mason said that the equivalent Labour and Tories are polling a combined vote of 36%, while the communists, eurocommunists, trots and greens combined vote is 37%.
Could get very interesting...

Is there any sign of a left coalition though?
 
Try reading PapaG's posts on the Greece thread n it's pretty hard to hold up too much hope of that!

Interesting times though...
 
If there's any sign of a genuinely left govt. being elected in Greece, the colonels will step in, either overtly or behind the scenes. . .
 
http://www.telegraph.co.uk/news/wor...-new-crisis-as-snap-Greek-elections-loom.html
“Our historical responsibility is to pave the way for an alternative policy in Europe, turning a Eurozone country from a neoliberal experiment to a model of social protection and growth,” he wrote in his party’s Avgi newspaper on Sunday.

Germany has warned Greece that any attempts to reverse eurozone austerity measures after elections will not be tolerated, putting the country on a collision course with the EU and the ECB,
 
http://www.ft.com/cms/s/0/2da5e654-9012-11e4-8f09-00144feabdc0.html#axzz3NT7vQrgN

The charm offensive launched by Greece’s leftwing Syriza party to persuade foreign investors that it would not wreck the country’s economy and finances were it to win power suffered a notable hiccup last month.
After attending a meeting with Syriza economists in London, a hedge fund analyst wrote that their plans for the country were “total chaos” and warned of a run on bank deposits if the party came to power.

As that possibility draws near, with Syriza leading the polls and a snap election set for January 25, the more surprising factor may be the party’s success at dispelling at least some investors’ worst fears.
Alexis Tsipras, Syriza leader, has abandoned his pledge to “tear up” the bailout agreement with international creditors and is instead emphasising more moderate steps to address the debt load as well as his deep commitment to the euro.
Krishna Guha, of Evercore ISI, warned that, at a minimum, investors faced “a four-week period of elevated uncertainty in which eurozone risk assets will struggle to perform.”
But, Mr Guha added: “We believe that Tsipras will prove more pragmatic than past Syriza rhetoric suggests. He has opened back-channels to Berlin, Paris and Frankfurt, and has every incentive to try to negotiate relatively cosmetic changes to Greece’s programme and ride the early-stage Greek recovery rather than derail it.”
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Yes, it will be interesting to see what happens if Syriza wins the elections on 25 January. What will they be able to do? One of their advisors is the Marx-scholar John Milios who has written extensively about Marx's theory of how capitalism works. According to this report:
He is the first to concede the programme is radical. “I am a Marxist,” he says. “The majority [in Syriza] are.”
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The programme he later mentions is radical in certain respects but can't really be described as Marxist or even socialist:
Milios rolls off the party’s priorities one by one. It would make concerted efforts to help those hardest hit by the crisis - free electricity for Greeks who have had supplies cut off, food stamps distributed in schools, healthcare for those who need it, rents covered for the homeless, the restoration of the minimum wage to pre-crisis levels of €750 a month and a moratorium on private debt repayments to banks above 30% of disposable income
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In another report he is quoted as saying:
"We are going to boost growth and combat the humanitarian disaster." Syriza's recipe for boosting growth is through a fiscal stimulus, targeted at lower incomes in order to boost their spending power (...) Milios also said Syriza won't attempt to bring incomes back to pre-crisis levels, but will begin by helping the neediest.
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A Syriza government might be able to mitigate a bit the "humanitarian disaster" in Greece but I doubt it will be able to boost growth by increasing people's spending power. That might even make things worse.
 
why this country was ever let into the Euro :facepalm:

Even as a 21 year old in 1999, I looked on in bafflement at Greek participation in the Euro. :rolleyes:
 
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Counterfire deals with any' leftist' dismissals of Syriza's alleged ' “reformism” and “left Keynesianism", + slightly bafflingly says they (/we) need to support them like we wld have supported Red Clydeside TU officials in 2015 , ie :

" “We will support the officials just so long as they rightly represent the workers, but we will act independently immediately they misrepresent them.” As for trade union officials, so for a Syriza government."

Not sure how useful it is to compare directly accountable workplace representatives from times past with a fairly diverse coalition of leftwing parliamentary politicians ( as they will be ) , but :

http://www.counterfire.org/articles...-syriza-close-to-office-elites-close-to-panic
 
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Jean-Luc said:
Why? Are you saying that they should have kept their old currencies? Would it have made any difference either way?
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Yes, that's exactly what I am saying. Without the possibility of devaluing against other currencies, Greece was destined to suffer a prolonged depression after 2008. This is a lesson the world learnt from the Great Depression but seems to have forgotten since. During the 30's it was the tying of currencies to the value of gold that prevented economies from recovering, for Greece today it is even worse in that they don't even have a currency to control.

Either the Greeks devalue against other countries to make Greek goods cheaper for the rest of the world, or they continue with their current policy, which is to devalue internally by cutting wages and destroying the social safety net. Unfortunately it has done the latter as it has no other choice whilst inside the Euro.


Great%20slump%20revisited.png
 
cynicaleconomy said:
Yes, that's exactly what I am saying. Without the possibility of devaluing against other currencies, Greece was destined to suffer a prolonged depression after 2008. This is a lesson the world learnt from the Great Depression but seems to have forgotten since. During the 30's it was the tying of currencies to the value of gold that prevented economies from recovering, for Greece today it is even worse in that they don't even have a currency to control.

Either the Greeks devalue against other countries to make Greek goods cheaper for the rest of the world, or they continue with their current policy, which is to devalue internally by cutting wages and destroying the social safety net. Unfortunately it has done the latter as it has no other choice whilst inside the Euro.
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Devaluation would also make imports into Greece from other countries more expensive, so increasing the cost of living and making everyday people in Greece pay that way. But you've only said why Greece should not have joined the euro not why all the other countries which have joined (19 now since Lithuania joined a couple of days ago) should not have. Are you sure that that's what happened in the 1930s? I thought one of the other factors was "beggar-my-neighbour" policies such as tariffs wars and competitive devaluations played a part too. I don't think that would have worked this time either.
 
Jean-Luc said:
Devaluation would also make imports into Greece from other countries more expensive, so increasing the cost of living and making everyday people in Greece pay that way. But you've only said why Greece should not have joined the euro not why all the other countries which have joined (19 now since Lithuania joined a couple of days ago) should not have. Are you sure that that's what happened in the 1930s? I thought one of the other factors was "beggar-my-neighbour" policies such as tariffs wars and competitive devaluations played a part too. I don't think that would have worked this time either.
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The downside of having to pay more for imported goods would be far outweighed by the benefits of higher rates of employment. It's better to have a diminished real income than no income at all. To be fair, It's true that Greece has been plagued by irresponsible financial administration, but the present set of policies are just rubbing shit into the wound. Currency unions can work over small areas that are relatively homogeneous in their level of economic development, or larger areas that have common fiscal polices and political administrations, but the EU does not provide that for Greece.

You are right about beggar-thy-neighbour being a risk in a freely-floating exchange-rate regime, but devaluations don't have to occur in that manner. If we had a system of adjustable pegs with managed devaluations by international agreement then this might help. Not saying I have all the answers, but what we have at the moment in regards to Greek policy is cruel beyond compare, completely unnecessary, and politically dangerous. Golden Dawn haven't gone away. If Syriza get into power and stick by their current policy of remaining in the Euro, they will be completely discredited and that opens up the door for reactionary forces on the far right. You can only push a country so far before fascism emerges in full force. This isn't just about economics; it's the potential for political push-back that is most terrifying.
 
Jean-Luc said:
A Syriza government might be able to mitigate a bit the "humanitarian disaster" in Greece but I doubt it will be able to boost growth by increasing people's spending power. That might even make things worse.
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I don't understand how you came to this conclusion: surely if there's more spending going on then that's more money circulating in the economy, and the 'multiplier effect' kicks in and the economy grows. Simple stuff, I thought?
 
But it's not that simple as capitalism is a system driven by profits not by meeting people's needs, not even those they can pay for. It's all very well talking about giving people more money to spend, but where's it going to come from? Since the government produces nothing it can only get money to give to people by (a) taxation (b) borrowing or (c) printing it. Taxing the rich to give to the poor and the less rich won't increase the total amount of spending power in the economy but will merely redistribute it but, if it's at the expense of profits, it will reduce capitalism's incentive to produce and so risk provoking an economic downturn. Borrowing might work but all the commentators are saying that the very existence of a Syriza government will increase the cost of borrowing and so interest charges. Printing more money will cause inflation which would undermine any possible economic benefits from devaluation. Basically, given capitalism, it's a lose-lose situation.

I think the leaders of Syriza know this as their economic programme promises only to mitigate the humanitarian crisis by measures to make things less hard for those hit hardest by it and to try to increase spending by cancelling or extending the repayment period of debts. That's pretty modest. They might be able to mitigate a bit the humanitarian crisis but I doubt that they'll be able to artifically stimulate growth. Basically, like any government of capitalism under current world economic circumstances, they are going to have to manage austerity, even if they might be able to do it little less inhumanely. The cruel fact is that there is no way-out under the production-for-profit system that is capitalism.
 
This is the TINA argument we have been hearing from the right for decades now. It simply isn't true that nothing can be done. It's also not true that the government produces nothing. Without government spending there would be nothing to tax. Government issues the money, and the necessity to pay the government taxes denominated in that money causes it to circulate. When governments decide not to spend, they end up cutting off their own source of revenue.

Think about it this way, there are only 3 sources from which GDP can come - the private sector (which by law uses government issued money), the government, or money from abroad when a country exports its goods and services. The private sector will not pull Greece out of the crisis because it is too heavily indebted and lacks anyone willing to take the risk in such fucked-up times, it can't increase its exports because its currency is way overvalued (or rather they don't have a currency to devalue), and that just leaves the government who is forced to make cuts by the ECB. The government need to spend their way out of this. It's the only solution.

Sound economic policy (rightly) used to dictate that you save in the good times and borrow to the hilt in the bad times to balance out the economic cycle. Greek economic policy has been precisely the opposite of this - overspending in the lead up to 2008, and imposing crushing austerity during the downturn. It's arse over tit.
 
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And on the issue of printing money, Greece has been in deflation for 2 years now. If anything they need to be turning on the printing press to overcome that problem. If you are worried about debt, be it private sector or public sector (it's actually only the private sector you should worry about) then the worst situation to be in is one of deflation as it just makes the debt burden higher. And this is the thing - by imposing cuts they create deflation, and the deflation makes the debt harder to pay. Even on its own terms, austerity is failing.
 
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cynicaleconomy said:
This is the TINA argument we have been hearing from the right for decades now. It simply isn't true that nothing can be done. It's also not true that the government produces nothing.
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In a sense TINA is true but as TINAUC -- There Is No Alternative Under Capitalism. Capitalism is a profit-driven system and any government action that undermines and threatens profits and profit-making will bring about a slow-down in economic activity. Governments as such produce nothing (of course if they own a productive industry they do but that's something different). Their spending, even on services like education and health-care, produces nothing and has to come, one way or the other, from the productive sector of the economy (including any part of it that might be government-owned, the distinction is not between "private sector" and "government" but between "productive sector" and "government as such").

cynicaleconomy said:
Without government spending there would be nothing to tax.
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I'm afraid you'll have to explain this in more detail as seems very counter-intuitive. I suggest the opposite is true: that without productive activity there would be nothing to tax and so no government spending apart, that is, from whatever money it printed. That would cause inflation which would amount to a transfer of wealth from the productive sector to the government by stealth as it were.
cynicaleconomy said:
The government need to spend their way out of this. It's the only solution.
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No, it's not a solution. Whenever it's been tried it has not worked. Here's James Callaghan's view speaking at the Labour Party Conference in 1976 after the then Labour government had tried to spend its way out of the 1973/4 economic crisis:
We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists, and in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step.
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The Socialist Party/Communist Party government under Mitterrand in France tried to spending its way out of a crisis in 1981 but within a couple of years and after three devaluations was forced to do a U-turn and impose austerity (called "rigueur").

Then there's the experience of successive Japanese governments ...

The fact is TINAUC is true.
 
Jean-Luc said:
In a sense TINA is true but as TINAUC -- There Is No Alternative Under Capitalism. Capitalism is a profit-driven system and any government action that undermines and threatens profits and profit-making will bring about a slow-down in economic activity. Governments as such produce nothing (of course if they own a productive industry they do but that's something different). Their spending, even on services like education and health-care, produces nothing and has to come, one way or the other, from the productive sector of the economy (including any part of it that might be government-owned, the distinction is not between "private sector" and "government" but between "productive sector" and "government as such").
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Once again, this simply isn't true. How on earth can you say that the NHS does not produce anything, or that education doesn't? What exactly is your definition of 'production' in this situation? Both of these sectors produce far more value for society than any other sector I can think of. Without them much of the private sector wouldn't even be possible.

I'm afraid you'll have to explain this in more detail as seems very counter-intuitive. I suggest the opposite is true: that without productive activity there would be nothing to tax and so no government spending apart, that is, from whatever money it printed. That would cause inflation which would amount to a transfer of wealth from the productive sector to the government by stealth as it were.
Click to expand...

The point I'm getting at is that the state and market are not two, independent entities in a host-parasite relationship. The relationship between them is one of symbiosis. The market only came into existence because of heavy state intervention in the form of the acts of enclosure, etc; it continues to exist in its current form because the state issues the currency that oils its cogs, amongst other things. The private sector is incapable of sustaining itself without government 'intervention'. I use inverted commas because its not really intervention - state and market are one and the same. Public sector spending is private sector income and vice versa.

No, it's not a solution. Whenever it's been tried it has not worked. Here's James Callaghan's view speaking at the Labour Party Conference in 1976 after the then Labour government had tried to spend its way out of the 1973/4 economic crisis:

The Socialist Party/Communist Party government under Mitterrand in France tried to spending its way out of a crisis in 1981 but within a couple of years and after three devaluations was forced to do a U-turn and impose austerity (called "rigueur").
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The situation of the late 70s is in no way comparable to what is happening now. The problem then was one of a supply-side shock, i.e. the oil crises of the early 70s that triggered a wage-price spiral. Extra injections of money into the system in that era of course exacerbated that inflation because it increased spending power in a period when productive capacity had been decimated by the increase in price of oil. The situation we face to today is one of vast underutilisation of resources and, as such deflationary pressures. The problem we now face is practically the reverse of the 70s, and the solution is likewise drastically different.

Then there's the experience of successive Japanese governments ...
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Japan have been in and out of deflation for 20 years now. Which is exactly what awaits Europe. Once again, the opposite of the problems of the 70s.
 
Jean-Luc said:
And here's a video putting the opposite (and more accurate) view.
Click to expand...

I'm glad you posted that as I quite like Kliman, but what he is responding to here is a very specific tendency within Marxist thought, i.e. the under-consumptionism of people like David Harvey, that attributes the current mess to a distribution of spending power skewed away from working people. This isn't what I'm talking about at all. I'm talking very specifically about the choice of European governments to react to the bursting of a private debt bubble by cutting back on government spending - i.e. to remove demand from the economy in the middle of a demand shock.
 
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