LOOTING GREECE A New Financial Imperialism Emerges
Jack Rasmus
ISBN 978-0986085345 $24.95 2016 312 pp.
EBOOK: ISBN 978-0-9860853-5-2 $19.00
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SYNOPSIS
Looting Greece examines how and why the Syriza party, which took
power in January 2015 promising to end eliminate debt, end austerity,
and return Greece to economic growth, ended up agreeing to a deal
much worse than its political predecessors in 2010 and 2012.
Greece’s debt crisis is primarily non-Greek in origin, and largely the
consequence of the creation of the Euro and its monetary system. It is
also non-governmental in origin, as Greek private debt was transferred
into public debt after the crash of 2008-09 and the series of Troika debt
restructuring deals that followed.
In the new 2015 debt deal, pensions are reduced even more than
before, retirement ages raised, temporary pension restorations of early
2015 for the poorest rolled back, workers’ right to strike and
collectively bargain further limited, mass layoffs now made legally
possible, more government workers and teachers may be laid off and
have their wages cut, taxes are raised on households, farmers and
small businesses across the board, and social safety nets further
shredded.
To additionally pay for the $98 billion in new loans from the Troika―
more than $85 billion of which will go to pay previous debts to the
Troika and European bankers―sales of Greek public assets are
expedited and the list of projects to be ‘privatized’ even further
expanded.
How the Euro Troika bureaucrats effectively subdued and conquered
Greece economically, in the process destroying its democracy, is
traced in a series of articles written from February through August 2015
as the Troika and Syriza negotiated over debt and austerity. Why the
Troika set out to destroy Syriza and how Syriza ended up destroying
itself are discussed, as well as how the respective strategies and
tactics of both parties resulted in a final agreement in August 2015,
which was not only worse in austerity terms compared to previous
deals, but established new arrangements for ensuring debt repayment
that are unique to recent debt deal restructuring.
Placing the Greek events of 2015 in broader historical perspective, the
book argues a radical new neoliberal initiative in Europe has emerged:
in the 2015 debt deal the Troika will now directly manage Greece’s
economy―running its banks, writing Greece’s budget, vetting and
replacing government ministers, exercising veto rights over Greece’s
parliament and Executive agencies, dictating its taxes, and implanting
‘Troika Commissars’ to watch over and approve day to day decisions
of Greek government at all levels.
Looting Greece explains how a new kind of financial imperialism is
emerging in Greece, Europe’s periphery, and soon elsewhere.
TABLE OF CONTENTS
Chapter One
THE MEANING OF THE GREEK DEBT CRISIS / 11
Syriza’s Poorly Bet Hand / 14
The Troika’s Stacked Deck / 17
Greek Debt Crises and ‘Weak Form’ Euro-Neoliberalism / 21
Generic Neoliberalism / 23
Eurozone Neoliberalism / 28
The Greek Debt Crisis and Euro Social Democracy / 34
The Emerging New Debt-based Imperialism / 36
Chapter Two
THE GERMAN ORIGINS OF GREEK DEBT / 45
The Lisbon Strategy and ‘Internal Devaluation’ / 47
Germany’s Lisbon Strategy Implementation / 49
Germany’s Bundesbank Dominates the ECB / 51
Greek Debt as Private Bank-Investor Debt / 55
The Myth of Greek Wages as Cause of Debt / 56
From Private to Government Debt / 57
The German Origins of the Greek Debt / 61
Chapter Three
PASOK AND THE DEBT CRISIS OF 2010 / 66
2009: PASOK’s Strategic Error / 66
PASOK’s Voluntary Austeriy Program / 68
Bond Vigilantes Escalate the Debt / 72
The 2010 Debt Agreement / 74
Who Was Really Bailed Out? / 75
Chapter Four
THE SECOND GREEK DEBT CRISIS OF 2012 / 79
A Brief Recapitulation / 79
Some Defining Characteristics of the 2012 Debt Crisis / 82
2011: Interim Preceding the Second Debt Crisis / 84
The 2012 Debt Crisis and the Three-Way Negotiating
Farce / 87
The ‘German Hypothesis’ / 90
The Second Debt Restructuring Deal of 2012 / 92
Chapter Five
COLLAPSE OF NEW DEMOCRACY & RISE OF SYRIZA / 103
New Democracy Pleads to Renegotiate / 104
The Bond Buyback Boondoggle of December 2012 / 107
Who Benefits? / 109
Muddling Through: 2013-2014 / 112
Syriza Comes of Age / 113
The Eurozone Stagnates Once Again / 114
Chapter Six
SYRIZA TAKES THE OFFENSIVE / 120
The Troika’s $2.8 Trillion Grexit Firewall / 121
Troika Strategy to Defeat Syriza at the Polls / 123
Syriza’s Electoral Offensive / 126
Chapter Seven
THE TROIKA COUNTER-ATTACK / 136
The Debt-Swap Proposal and Euro Tour / 139
The February 20 Interim Agreement / 146
The Lessons of Bargaining: February-March 2015 / 154
Chapter Eight
FROM CONFRONTATION TO CAPITULATION / 158
Troika Economics: 1932 Déjà vu / 161
Varoufakis Marginalized / 163
Brexit Before Grexit? / 165
The Troika’s ‘Final and Best’ Offer—June 2015 / 167
Greece’s Interim ‘Final’ Offer / 172
The Road to Referendum / 176
Referendum and Fallout / 182
Chapter Nine
SYRIZA TAMED / 188
Greece as an Emerging ‘Economic Protectorate’/ 190
Party Restructuring as a Precondition for Economic Restructuring / 191
The Third Debt Deal of August 2015 / 193
The Parliamentary Election of September 20, 2015 / 197
General Strikes and Grexit / 198
Feints, Rear-Guard Actions, & Longer-Term Agreement / 200
The IMF’s Secret Concerns in Negotiations / 202
The IMF-EC/Germany Split / 204
Debt Restructuring by Another Name? / 207
Observations on the Third Debt Agreement of 2015-18 / 209
Chapter Ten
WHY THE TROIKA PREVAILED: INTERPRETATIONS AND ANALYSES / 216
An Overview of Greek Economy 2015-2016 / 216
The Greek Debt Crisis as a Banking Crisis / 217
The Big Picture / 220
Eurozone Structure and the Greek Crisis / 223
Syriza’s Fundamental Error / 228
Syriza’s Objectives / 231
Could a Grexit Have Succeeded / 233
Syriza Strategies / 235
Troika Strategies / 241
Tactics—Troika vs. Syriza / 247
The Individual Factor in Syriza’s Defeat / 251
Organization and Public Consciousness Factors / 253
Is a Fourth Greek Debt Crisis Inevitable? / 257
Conclusion
A NEW FINANCIAL IMPERIALISM EMERGES / 264
The Many Meanings of Imperialism / 264
Colonies, Protectorates, and Dependencies / 266
Gerece as an Economic Protectorate / 269
Wealth Extraction as an Imperialist Objective / 271
‘Reflective’ Theories of Imperialism / 273
Alternatives to Hilferding-Lenin / 278
Greece as a Case Example of Financial Imperialism / 284
Private Sector Interest Transfer / 287
State to State Debt and Interest Aggregation and Transfer / 289
Financial Imperialism from Privatization of Public Assets / 297
Foreign Investor Speculation on Greek Financial Asset Price Volatility / 299
INDEX
Dr. Jack Rasmus is the author of several books on the USA
and global economy, including Systemic Fragility in the Global
Economy, 2015; Obama’s Economy, 2012, and An Alternative
Program for Economic Recovery, 2012. He hosts the weekly
New York radio show, Alternative Visions, on the Progressive
Radio network; is shadow Federal Reserve Bank chair of the
‘Green Shadow Cabinet’ and economic advisor to the USA
Green Party’s presidential candidate, Jill Stein. He writes bi-
weekly for Latin America’s teleSUR TV, for Z magazine,
Counterpunch and other print & electronic publications. Dr.
Rasmus studied economics at Berkeley, took his
doctorate in the University of Toronto (1977), and worked
for many years as a union organizer and labour contract
negotiator. He currently teaches economics and politics at St.
Marys College in California
GREECE vs. EUROPEAN BANKERS
FROM REVIEWS OF EARLIER WORK
Systemic Fragility in the Global Economy
CHINESE EDITION FORTHCOMING FROM HUAXIA PUBLISHING
"Systemic Fragility in the Global Economy offers a penetrating analysis of
economic stagnation in advanced economies by providing a sustained and
systemic focus on the role of finance, an analysis that probes further than
mainstream economic analysis. Rasmus has made a signal contribution to
contemporary economics and provided a vitally important X-ray of the political
economy of stagnation.."
Jan Nederveen Pieterse, Journal of Post Keynesian Economics, 2017
"Systemic Fragility in the Global Economy (2015) is the fourth in a series that
Rasmus has produced within this broad intellectual and activist project. Each
work not only provides a theoretically-informed, empirically-grounded
diagnosis but also offers a wide-ranging set of policy recommendations
aimed at progressive movements... The case studies of the USA, Europe,
Japan and China are excellent, typically contrarian, and highly teachable.
Many important and provocative arguments and points are made in
passing in these studies and they are strengthened by the more sustained
theoretical analyses that follow. A major contribution is the analysis of
the complexity of shadow banking, an ill-defined term of art in most of
the literature."
Capital & Class, Vol. 40, No. 2, June 2016
Interview with Peninsula Peace and
Justice Center
• Reveals clearly who calls the shots in the Eurozone—the hardliners, not the remnants and political residue of what was once European social democracy
• Follows the negotiations in their excruciating detail as the Troika tightens the screws from 2009 to the present
• Shows how Europe’s financial elite enriches itself on Greek debt, privatizations and financial manipulations, turning Greece into an Economic Protectorate
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REVIEWS
"In this brilliant book, Rasmus shows that the EU is a finely honed device for looting its poorest members of their wealth and their democracy." PAUL CRAIG ROBERTS
"in writing such an analytically clear, historical account of the European and Greek debt crises, Jack Rasmus also has made a valuable contribution... Rasmus does a good job of showing that this trade deficit was caused neither by higher wages to the Greek working class nor by escalation in Greek consumer spending. Rather the debt was driven up by European Union and ECB policy, in the interest of European capital... Looting Greece is a thoughtful post-mortem on the experiment of Syriza as a government of the left in Greece. Bittersweet, but worthy of the experience." Aaron Amaral, New Politics
"an analytically clear, historical account of the European and Greek debt crises. It emphasizes the centre and periphery relations between the North and South of Europe in the European Monetary Union (EMU) institutional framework, which reminds us of the interwar gold standard regime. It is an interesting contribution." Bob Jessop, Capital & Class
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