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Tag: ECB

Portugal: All Quiet on the Western front?

Cape-Adamastor-Portuguese-fleet
by RICARDO NORONHA*, euronomade 

Taking the blue pill

Far removed at the western tip of Europe, like the cousin one occasionally hears about, the ‘P’ that starts the ‘PIGS’ has been the subject of a thorough marketing operation that displaced its position in the European imaginary, from being ‘the next to follow Greece’ to becoming the success story of adjustment under the Troika and the ‘good student’ of austerity policies in the Eurozone. In spite of more recent warnings by the IMF, according to which the meagre economic recovery of the last year stands on shaky ground and can be offset at the slightest rise in oil prices or interest rates in the international markets, Portugal is frequently incensed by the German government and Eurocrats of all sorts as ‘the case that went well in Southern Europe’. A slight increase in exports (including revenues from a tourism boom in Lisbon and Porto), a precarious (and fading) trade balance equilibrium achieved through massive cuts in public spending and wages, extra revenues from a privatization plan that brought in investment from State-owned Chinese companies and Angola’s plutocratic elites (real estate purchases also increased significantly after several licensing rules were ‘simplified’ and special visas were conceded to big investors), are usually referred as proof that expansionary austerity is possible and that the failure of the policies prescribed by Troika in Greece is due to endogenous causes, beyond the reach of the European Central Bank, the European Commission and the International Monetary Fund. Simplifications such as these are bound to find traction in the international media, just as happened around the time the Memorandum was signed, in 2011, when the Portuguese, like the Greeks, were portrayed as ‘lazy big spenders’ that would soon be joined by the rest of the Southern European countries.

The fairy tale of Portugal as a ‘success story’ – even if we ignore the massive social cost it implied, with poverty affecting over 20% of the population (reports of hungry children passing out at school became frequent) and unemployment reaching a historical high of 17% (in spite of successive attempts by the Government to disguise the numbers with all sorts of publicly funded internship programs), resulting in mass emigration of over five hundred thousand people (the precise number is difficult to determine, but it is reasonable to admit that it was equivalent to 5% of the population) – is based on a persistent attempt to forget that none of the targets included in the memorandum (namely reduction of the State deficit and State spending) were achieved and that the fundamental change occurred when the European Central Bank started buying Portuguese public debt without limitation, thus bringing interest rates down and ending the relentless attack carried out by financial investors against the Southern European countries’ sovereign debt since 2010. Massive changes in labour laws, extraordinary taxes imposed on retired people and wage workers, along with blind cuts across the public sector (mostly in the national health service and the public education service, while the police budget was raised) were undertaken without any visible impact on the country’s competitiveness, economic recovery or fiscal discipline, but the European Commission, the European Central Bank and the Eurogroup, who have been persistently harsh in their judgements of Greece and its need for further ‘adjustment’, have been more than happy to select whatever data best suited their political agenda, so as to invent ‘diligent student’ of austerity.

The political nature of this marketing operation is ever clearer if we recall its chronology: it was the quick electoral breakthrough by SYRIZA in Greece and PODEMOS in Spain, both underlining the immense failure of the politics of internal devaluation, that created the need for a success case to keep alive the narrative upon which austerity in the South is served to the public opinion and voters in the North of Europe. The particularly servile posture of the Portuguese government helped make this operation successful, in a deal that suited both sides, since its internal unpopularity and political isolation (just a year and a half ago it was under a barrage of criticism from even neoliberal hardliners, and no minister could risk walking the streets unless surrounded by a wall of police) could only be compensated through an equally deceiving narrative for domestic consumption, portraying its actions as a ‘painful but necessary remedy’ that would show positive results in the medium-term, just as both the European institutions and the ‘markets’ were starting to notice. By some sort of coincidence, this medium-term coincides with both the Portuguese electoral calendar (general elections for parliament will be held next October) and the Spanish one (late December), while unexpected (?) Greek elections made confrontation within the Eurogroup a major focus of international attention.

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A Discussion of Syriza’s Referendum in the Current Crisis

Supporters of Alexis Tsipras, leader of Greece's Syriza left-wing main opposition party attend his pre-election speech at Omonia Square in Athens Thursday, Jan. 22, 2015. Prime Minister Antonis Samaras' New Democracy party has failed so far to overcome a gap in opinion polls with the anti-bailout Syriza party ahead of the Jan. 25 general election. (AP Photo/Lefteris Pitarakis)

Where has Syriza taken Greece? Which are the forces at play in the restructuring of the Greek economy? And what are the conditions of its radical critique? What follows is a discussion of Cognord’s text “Changing of the Guards”, including TH’s critical remarks on that text, Cognord’s reply to these remarks and Ady Amatia’s comments on the questions raised in this discussion. TH and Ady Adamantia are members of Sic collective.

For full debate, see SicJournal.org

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Blockucry

EZB, Frankfurt, 18.3.15image image image image

Is it Possible to Win the War After Losing All the Battles?

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by Cognord – Feb 5, 2015

Prehistory of a Success

The announcement of national elections in Greece, roughly two years before the coalition government of New Democracy and Pasok completed their term, immediately sparked a renewed interest in this southern and economically peripheral European country. The relative silence that preceded this novel attention for the last two years was, at least in media terms, understandable. If Greece enjoyed an earlier moment of fame, it was primarily due to the unprecedented austerity measures imposed by the troika—the European Commission, European Central Bank (E.C.B.), and International Monetary Fund (I.M.F.)—in exchange for new loans, designed to “assist” the Greek state after it officially announced, in April 2010, that it was unable to repay its existing, “non-viable” sovereign debt (120 percent of G.D.P. at the time). The reactions to the implementation of the austerity program were also pivotal in bringing Greece into the spotlight: general strikes, violent demonstrations, and the movement of the squares ensured, between 2010 and 2012, that the future of Greece’s “fiscal consolidation program” (to borrow the official economic jargon) was seriously threatened. Along with the memorandum imposed by the troika, what came under attack was the legitimacy of the political system,1 generating wild speculation about the future of Greece’s membership in the Eurozone, as well as the unpredictable consequences this could have for the E.U., not to mention the global economy.

However, the movement which tried to halt the austerity program failed. The reasons are varied, and it is not within the scope of this article to explain them in detail. Suffice it to say that, as in every other social movement, this failure should be traced to both the violent determination of the government(s) to proceed with austerity at all costs (for which the ruling factions have paid a price) and the inability of the movement to transform itself from a defensive mobilization to protect existing conditions into an offensive attack on the conditions that created the crisis.

Nonetheless, the attention that Greece received was justifiable. Without exaggeration, one could argue that many of the political strategies of resistance which the international left has only read about in books were tried and tested in Greece in the years after the crisis: general strikes with massive participation, bringing economic activities to a halt; militant and violent demonstrations with constantly growing numbers of participation; neighborhood assemblies that sought to act as minuscule formations of self-organization, attempting to deal with immediate issues caused by the crisis; one of the most militant squares movements, which managed to call for two successful general strikes; a climate of continuous antagonism that gradually but steadily involved more and more people.

It is, however, no exaggeration to say that none of these inspiring moments managed to counteract the effects of the crisis and its management by the state. However exhilarating, promising, and tense these outbreaks were for those of us who participated in them, it has become imperative to understand their failure to achieve even a small (however reformist) victory.

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