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11 Μαΐ 2013

A modern Greek tragedy

Living with the ill functioning euro and the extreme monetary policies of the casino after capitalism

Theodore Katsanevas[1]

The abduction of Europe

Zeus, the king of the ancient Greek Gods, enamored the beautiful Europa and decided to seduce  her. He transformed himself into a white bull and mixed in with her father's herds. While Europa and her helpers were gathering flowers, she saw the bull, caressed his flanks, and eventually got onto his back. Zeus took that opportunity and ran to the sea and swam with her on his back, to the island of Crete. He then revealed his true identity, and Europa became the first queen of Crete. Yet, today Europa lives in grief, in pain, in a state of decadence of her ancient beauty and glory. And this cannot be tolerated.

The Modern Greek Tragedy

Greece entered the Euro currency in January 2001. This was supposed to protect and develop our economy. Yet, the opposite occurred. For many years before, living with our historical currency the drachma, we have never experienced a similar catastrophe like today. We may indeed speak for a modern Greek tragedy. It is true that, part of the blame is due to the viciousness of our political system. But the same political system, more or less, existed also in the past during the drachma years.

Greece is now entering its fourth consecutive year of deep recession. Since 2008, the  country’ s  GNP has dropped about 28-30% and this extreme downward trend continuous with no light in the end of the tunnel. Hundreds and/or thousand of enterprises close. Main trade streets of Athens and of other towns, look like cemeteries of shops. Official total unemployment has risen to 28% and about 50% for the young. In a country of about 11 million people, every day more than 1.400 people lose their jobs and about 3-5 commit suicide. Poverty is wide spreading.  The suffering is visible everywhere. A lot of desperate people fly away searching for a job abroad. There is a massive immigration exodus And a massive influx of illegal immigrants, mainly of Muslims, that alters the country’s labor and ethnic basis. Greece, after 3.000 years of existence, may not exist in the next 50 years.

It is ironic that, all this should happen in the shadow of the Acropolis, the cornerstone of the greatest ancient civilization. The birthplace of Europe is tortured by the E. U ., which has moved away from its own ideals of convergence and solidarity between nations.The country that invented democracy, philosophy, mathematics, the arts, the search for knowledge, the spirit and the beauty pays the price of the most idiotic and irrational economic experiment in modern history. That of the euro zone, an abnormal common currency without the existence of any central political and economic umbrella.

Cyprus on her knees

Let us take a look at what happened in Cyprus recently. As the latest report of the Schiller Institute ascertainsthe draft legislation at the European Parliament is proof that the Cyprus bank robbery was not a last-minute invention by the German government, but rather a well-planned operation concocted by the EU Commission”.

Jacques Cheminade[2] states that, “the euro zone supports the banking oligarchy. The euro was created by monetarist central bankers, the likes of Robert Mundell,  It was doomed to fail. Cyprus should leave. It is not going to be a bed of roses, but as Greece knows, to stay inside means to be tortured from outside. As for Europe, it has to be rebuilt as an association of sovereign nations with common development projects, a Europeof the peoples and the fatherlands

South Cyprus was one of the most affluent European nations before its entrance to the euro zone in January 2008. A few years after, the suffering island is down to its knees. The north of Cyprus occupied by the Turks, contrary to all United Nations decisions, was and still is, according to the economic indexes, far poorer than its southern brother. Being out of the euro zone, now, north Cyprus stands well on its feet. How can  a poor territorial   identity may surpass the depression so easily, but a much more developed country cannot?  Cyprusis alleged for being a laundry of black money. This is true to a certain extent, especially before its entrance to the euro zone. But it stands as joke to direct such allegations to Cyprus only, when about half of the total international economic transactions are directed to off-shore and/or tax paradises all over the world.

According to the OECD, the following forty five states do not follow internationally accepted tax standards : Ireland, Costa-Rika, Liberia, Cyprus, Lichtenstein, Vanuatu, Luxembourg, Uruguay, Panama, Singapore, Finland, Hong-Kong, Seychelles, Samos, Belize, Bahamas, Nauru, Gibraltar, Gerstein island, Bermudez, British Virgin Islands, Mauricio, Cayman islands, Nevis island, Niue, etc. The well informed “Forbes” magazine, reports as tax-paradises, amongst others, the USA State of Dialoguer, Luxembourg, Switzerland,  the City of London, Ireland, , Belgium, Hong Kong, Bermudez, the Cayman Islands, Lichtenstein, Monaco and Adores, the last three of which are known to have close links to Germany, France and Spain accordingly.

The bosses of the international casino capitalism could extinguish in one night those dirty tax heavens, the land of banking malpractices, the launderette of black money. But they do not want to. Except in cases such asCyprus, which has been a thorn in their back for various reasons, one of those supposed to be their alleged connection to Russian black money. It appears that, “those who have the power order the music and set the rules”. In the case of the euro zone, the power lies with those who possess the key of the money box. They are those who print, manage and manipulate the euro.

The euro zone ill functioning and the casino capitalism are to blame  

In one of our studies at the University of Piraeus, we looked at main economic indexes, the GNP, the balance of payments, public deficits, inflation and unemployment, in an attempt to explore the development course of countries within and outside the euro zone. We found that, the  economies of the peripheral  countries, Greece, Italy, Portugal, Spain, Ireland the GIPSI, kept on well before joining the euro in 1999-2002, but drop downwards something a little later. The same is more or less true for other euro zone countries and especially for Slovenia,SlovakiaEstoniaBelgium. Only  GermanyFranceAustriaFinlandHolland, appear to doing well in general terms. Countries outside the euro zone such as BritainDenmarkSwedenCzech Republic, and Bulgaria,HungaryPolandRomania, maintain a steady upward growth trend, with partial decline with the advent of the crisis of 2009.[3] Countries outside the EU like NorwaySerbiaTurkey survived the crisis, and now develop at a normal and/or fast pace. As does RussiaChinaIndiaBrazilArgentina, even Ethiopia and Ghana, and many others all over the developing world.

So, today, four years latter, the majority of the developed and developing world, have gotten back on their feet after the economic crisis of 2008, with major or minor injuries. Only GreeceItalyPortugalSpainIreland,Cyprus, the peripheral countries within the euro zone, resample boats in turmoil.

A basic question arises. What is the real cause of such a paradox?  I will be happy to hear various proposals. But, strong statistical evidence points only to one strong explanation.  This is mainly so because of  “the  ill functioning euro zone, combined with the malpractices of the extreme monetarist policies of the casino after - capitalism, the existence of internationally protected tax paradises and uncontrolled capital flows, the unification of trade and investment banks, the underestimation of the real productive economy and of humanitarian values in favour of the market ideals”.  As proven by professor Steve Keen[4], by the end of the 1980, at an international level, the financial sector surpassed the non financial sector and after that period it rises at a very faster speed. ( see table). The “bubble economy” overthrows the real economy. And this results to the widening of income differences and to frightening world economic crises.