Published in the German newspaper Handelsblatt, 16.06.2011
By Dimitris Konstantakopoulos
As these words are written, hundreds of thousands, probably millions of simple Greek citizens are in the streets of their country. They remain there in spite of the massive use of chemical gas. The demonstrations are probably the biggest since the collapse of the dictatorship in 1974.
Greeks stay in the streets for very simple reasons. After experiencing one year of “help” from EU, ECB, IMF and their own government, they strongly believe their nation is heading directly to an economic and social catastrophe of epic proportions. They see more and more old people searching for food in dustbins, hospitals and universities bending under the deduction of half of their budgets, more and more shops closed, the state in decomposition, twice as many people committing suicide compared to last year. Greek economy is experiencing its worst recession since the 2nd World War, the morale of the nation is broken. Greek society is entering rapidly a classic Weimar-type situation. Its possibility of repaying its debts has been annihilated, as a result of a program supposedly designed to achieve exactly the goal of repayment!
Nobody seriously doubts the urgency of the reforms needed in Greece or of its deep structural problems. These problems are not the main cause of the present crisis, but they are indeed the factor explaining why Greece was struck first among eurozone countries by the second wave of the financial tsunami begun in 2007-08.
The medicine applied to treat the “Greek problem” was draconian austerity, urgent selling in derisory prices of all state assets, full repayment of the debt, and, last but not least, a kind of “psychological warfare” against Greek people, designed to make them accept the policy imposed, but destroying in the same time the morale of the Nation and the image of the country and provoking a massive flight of capital. As a result, Greek society has now become the first Western European society after the War facing a real crisis of reproduction. And what is now the answer of European and Greek elites to this situation? More of the same policy.
Only Orwell could have named such a program “help for Greece”. It is a program of help to banks having borrowed or borrowing now Greece. Instead of pouring resources into Greek economy in order to help it, more resources are getting out of Greek economy, directed exactly to the financial institutions that are fundamentally responsible for the crisis we are facing. Much the same as happened in 2008-9, but masked now not as “help for banks”, but as “help for Greece”. Rewriting the fundamental laws of capitalism, we proclaimed in 2008, that banks are too big to fail. It seems now, we consider States less big, thus allowed to fail.
Greeks are in the streets because they realize tragically, in increasing numbers, that they are absolutely alone, that no Greek or European institution can be of any help, on the contrary. They feel betrayed by Greek and European elites, especially their Prime Minister, himself following too much the advise of an “army” of American or multinational advisors and by the political reflexes of a government which remind of Maria Antoinette of France. Those elites did not let to the Greek people any other means but the revolt, in order to defend themselves and their country, from the attacks of the world financial system, a real “State behind the States”.
I don’ t want now to discuss the origin of the Greek debt, or try to answer the question “where did the money go?”, because we must not put now oil to the fire of intra-european “wars of words”. But it seems rather very much of a stupidity to attribute the world financial crisis to some Greek public officials who turn late for work!
It is this invisible financial “superstate”, created by four decades of continuous de-taxations, deregularizations, liberalizations, buying of political influence by the financiers and finally the creation of a “brave new world” of CDS and CDO, that is a machine to create money not by producing, but by destroying, financial means of mass destruction, as Warren Buffet once put it. This is not “creative destruction”, it is “destructive destruction”, threatening all Europe with financial Fukushimas.
I live in the center of the storm, a likely Sarajevo of the 21st century. That is a place from which a new, financial this time, not military war may begin and oppose European nations between them, destroying, in the long run, the European welfare state, the integration idea, our democracy and our civilization. So I see with great hope the first elements of rerationalization of the European debate by the Minister of Finance of the leading nation of Europe. But I realize also how timid and ineffective they remain.
Hayek took the place of Marx of financial world, Friedman has been its Lenin, and soon will come its Stalin. Only if we realize the extent of the threat and the urgent need of a very strong and radical shift of paradigm towards Keyns, reregulation, political and social, not financial, Maastrichts, only by putting a biggest challenge to oppose the one addressed to Europe, we can have some reasonable chance of winning. But European politics have long ago excluded such ideas.