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Greece and its European Economic Straight Jacket

We’ve experienced some agitated weeks in Europe, with Greece as the center of attention. After the outright No win in the referendum there have been a few surprises, such as the resignation of Greece’s “rock star” finance minister and the recently announced new deal which entails more austerity.

What do these events mean? What is going on inside the Greek society? What seems to be the next destination for the country that gave birth to democracy?

Alejandro Zegada contacted Korina Gougouli, who is in direct contact with Greek reality and lives the day-to-day difficulties.

With analytical clarity and artistic sensibility, Gougouli shares with us her perception on her country, her government and the European role, which she says is an “economic straight jacket”.

Alejandro Zegada: In spite of a huge media campaign favoring the “yes” vote, Greeks have voted against more austerity. However, these are crucial days where the creditors are hardening their positions. Do you think the people may back up and accept the creditors austerity demands?

Korina Gougouli (KG):  To start with, it is important to note that the answers I will be giving you cater to my perception of the matter, to the extent of the present moment; which at this time, is in a constant state of flux and subject to change.

That said it is true, and at this point very apparent, that all of the privately owned channels in Greece have been delivering anti-Syriza propaganda since the beginning, before its electoral win on January 25th, 2015. This is the case because the TV channel owners are at the same time the country’s ship-owners; they control energy, public Projects, newspapers, soccer teams, radio stations, etc.

In other words, the owners of Greek TV channels are the people who are at the core of the country’s corrupt, interwoven, socio-political and economic system; they do not pay for the occupancy of these frequencies and in turn do not file tax reports. The Syriza government exercises rhetoric that communicates it is determined to put an end to this set-up. This is the reason for the media’s rabid antithesis to ΟΧΙ.

On the other hand, it would be imprecise to say that the OXI win is a manifestation of a de-facto radicalization of the masses. So far, the OXI win validates that in spite of the relentless, murky propaganda and the “closed banks”, the public did not fall prey. The referendum voters managed to resist the raw interventions posed by the decision-making circles of the E.U.

They used the democratic moment granted to them, to take a position in a bid to defend their human dignity. I am silently hoping the people keep together. It is in fragile circumstances such as these where people needn’t allow socio-economic differences to make them fearful and get in the way of exercising solidarity. It is time to abolish fear.

The night the referendum results were announced, a minister from the neoliberal party, which previously governed the country, was asked to explain the vast voting difference. His answer was that, “the ΟΧΙ camp voters had a great leader, the YES camp had nothing.”

On that note, it is important to stress that with the abolition of fear the moment is also a calling to abolish our dependency on parties and leaders. It is time for people to try and tackle this complex situation in solidarity with circumstances the current party is trying to battle but most importantly in solidarity with each other.

AZ: The NO victory was certainly historic, but in more practical terms, things haven’t changed for people yet. Banks are still closed, there are still limits to withdrawals, etc. The Troika seemed to be waiting for Greece’s proposal just to reject it again and force the country’s exit from the Euro, but agreements have been reached in favor of austerity. What do you think is going on in the Greeks’ minds during these crucial days?

KG: By the looks of it, banks will continue to be closed and the bank withdrawal limit will most probably be maintained for a while, as well as the freeze on making online transactions and sending money abroad. Yes, as of the latest news not only does it seem Troika will be rejecting the countries’ proposal; the next austerity package is a program with tough measures similar to those we were rejecting in the referendum vote.

This further validates the subjugated position the European powers that be are battling to keep the country at. What the Euro group is directing truly is a performance of power relations, and the country they are exploiting in order to demonstrate this is Greece.

It should be noted that the referendum (according to the Syriza government) was not a vote on whether or not Greece should stay in the euro. The ultimate function of the referendum result was for Syriza to apply the case in the negotiating arena of the EU in a bid to reach an agreement, at which the austerity measures would affect the wealthy rather than the unemployed, middle and working classes, and that there be a future prospect for the restructuring of debt reformation i.e. haircut and/or a debt extension.

I am not sure if they are trying to force the country to exit the Euro or if they wish to drive the entire county to an absolute state of despair so as to formally, absolutely and politely, occupy and control the entire country and its governmental system. I don’t know what to say these days, I think everyone in the country is puzzled, uneasy and numb about what to think and what to expect.

No one can know what is about to happen. I fear those that are absolute about the situation.
What seems evident to me is that the Syriza government and most importantly Tsipras has knelled to the European leaders and is now deep in the process clothing himself and the country tighter into the European economic straight jacket.

AZ:  Renowned sociologist James Petras predicted that Tsipras would accept a new austerity deal to pave way to a new rescue. Do you think this is a victory or a defeat for Syriza? How do you think the No voters will react with the deal of keeping Greece in the Euro, but with austerity?

KG:  A big portion of the program which Syriza had tried to shape, contained a loan of about 55 billion euro from now until 2018, which would serve covering the loan agreements made towards the ECB, IMF, EC (European Central Bank, International Monitory Fund, European Commission). At this point, there is no doubt that this program package includes austerity measures.

The difference is, as the Greek President stated at the European Parliament, that the heavy weight of these measures would affect the wealthier class. There is no doubt that austerity will continue to impinge on the nations’ working class. At the moment, as I am following the parliamentary hearing, the government is clear when it says that this program entails austerity measures.

This is something which characterizes the current government, namely Tsipras, who up to this point seems to keep a position in which he’s tried his best to be as transparent as possible; till now, it seems he has not lied. The agreement package was passed with a heavy heart and with not even the mildest hunch of having reached any sort of a victory.

As I have already said, the people’s mandate, with their NO vote in the referendum, was for Syriza not to take Greece out of the Eurozone. The proposal also seems to contain a package for the re-capitalization of the Banks as well as a division for investments. Here I have to note that within the ruling party i.e. Syriza there is a strong leftist opposition that states it supports Greece’s exit from the European Union and its return back to the drachma.

I personally would not disagree with this position if it meant there truly was a drafted plan for the day after, which would primarily assist the part of the country’s population that has suffered the effects of the crisis more than any of the other fractions.

I believe the government’s proposal can be characterized as a defeat…and maybe a defeat where inside it hides a small stitch of a victory in the sense that, despite all of the problems that will continue to befall upon the country’s people, the moment unravels the possible prospect for structural reformation within Greek society, i.e. rationalizing the tax system, the pension system and most importantly, as I already said, the debt re-structuring.

If the government manages to actually tackle these and other crucial issues, I think that the reaction of the NO vote supporters may end up being a little bit less intense. Lastly, note that an analogous proposal was submitted to the Troika two weeks ago where by Syriza advised taxing the country’s wealthy as well as its ship owners– Troika rejected it. 

AZ: What do you think about the new finance minister? What does Varoufakis’ resignation mean to you, what it can entail? Do you think he is still working or will keep working with the Greek government?

KG:. The new finance minister belongs to the same school of thought as Varoufakis. Their common denominator is that they are not politicians and within the parliament they do not act like your usual politician. They are known economists and university professors who hold a rich academic training background and are active in writing.

Varoufakis especially, with his book Global Minotaur, which refers to the crisis following the Lehman Brothers phenomenon. Both economists position themselves on the left. Varoufakis is a bon viveur, he would show up at the assembly meetings with his motor bike, without body guards, a phenomenon that provoked the ‘well-to-do’ white collars.

Varoufakis was and is the main supporter of the belief that Greece cannot be a debt colony. He also upholds the belief that a country’s economy cannot advance when it feeds back on its debt; this conviction disturbed the German minister of economy Wolfgang Schauble as well as the president of the Euro Group Jeroen Daiselbum who insisted on Varoufakis’ resignation.

In my opinion Varoufakis is an integral and timeless kind of character. The following day of the referendum, he submitted his resignation to the president in a very friendly environment. He continues to stand by the government and assists Tsakalotos (the current finance minister). On some nights we’ve seen him out in Athenian bars where he goes for a beer, and as it was proven last night by his absence at the parliamentary hearing, he did not vote for the implementation of the austerity measures. His resignation is something that made it easier for him to do this.

AZ: How are things going with the Audit to the Greek Debt? A couple of weeks ago the Audit Committee made a preliminary assessment and said the debt was illegitimate, illegal, and that Greece should not pay. Is Tsipras going to use the Audit card in these negotiations? Are the people aware of the Audit? What is their position about it? 

GK: It is beyond a doubt that the board of the Audit Committee for examining the legitimacy of public debt came up with the first batch of findings. The most vital person in the Audit Committee, who is in charge of coordinating its assemblage, is the dynamic chairwoman of the Greek parliament Mrs. Zoi Konstantopoulou. The Audit to the Greek Debt Committee is comprised of scientists and researchers from all over the world.

For now, Tsipras is unable to play this card because the committee is said to complete its work in the upcoming 6 months. From the first findings it is however evident that the debt is onerous, disgraceful and illegal. I am confident that, if the Europeans do not over through the government, the committee’s inference will be the event, which will yet again, mobilize the people and if this happens, I believe that this time the circumstance, will not allow anyone to back down.

AZ: Many economists say that any real hint of Grexit will unleash bank panic and devastating financial crisis. However, Paul Krugman thinks Greece has already and is already suffering all of this without exiting the Euro, and has already paid most of the costs related to exiting the Euro, and asks “if costs of Grexit are already paid, why not exit the Euro and collect the benefits from exiting?” What do you think about this? What is the feeling among the Greeks?

KG: That is true. ‘German Europe’ and ‘northern Germany’ are seeking to position Greece in the economic zone of the powerless, either within or outside of the Eurozone; this includes other northern European countries, Balkan countries, and former existing socialist countries.

Without delving into details, the working conditions in China have changed greatly; as a result, the multiethnic costs whose headquarters are based there have been altered. It is certain that subsequent to the Chinese ‘bubble’ the quest for new and controlled labor markets, which are easier to access and that have cheaper employment costs, is the main goal ‘German Europe’ is trying to achieve.

Mr. Krugman is absolutely correct. The Greek people have suffered and have paid great expenses for their accession into the Eurozone and the murderous profiteering that has been imposed onto them by the lenders. You should be aware that for years the Greek governments (and unfortunately this current government as well) consider the euro a taboo.

Unfortunately, the current government never prepared itself for an alternative scenario. I mean that a disorderly exit out of the Eurozone right now would (by my understanding of the situation) be radically detrimental.

That said, I think we need to dispose of the taboo that we have to stay in the euro and I think the Greek government and Greek society should start preparing itself in a calm and orderly fashion for the country’s exit out of the euro and a return to the Greek drachma. Also, please let it be stressed for action to occur, theory is essential, as is the opposite; however, action comes with the cost of pain; theory does not.

AZ: One of the architects of the Euro, the belgian economist Bernard Lietaer, said that Greece could have 2 currencies: the euro and a new national currency such as the Drachma, just like Switzerland and United Kingdom, who are part of Europe but with their own currencies. What do Greek citizens think about this option? Especially considering that this would not only allow monetary flexibility to pay salaries and such, but especially would open a door to accessing money from the BRICS bank, allowing Greece to take a step towards de-linking from its dependence from Europe.

KG: It is possible that this may happen; but I wouldn’t make the comparison to Great Britain or Switzerland because we are talking about two countries whose geopolitical placement is in the very core of the capitalist system and a country like Greece, whose geographic placement is in the border of the Eurozone where the capitalist integration never was absolute, and where there never did exist a national bourgeoisie in the traditional sense of the term.

Greece’s economy has always been a subsidiary, intermediary economy with the country’s commerce, shipping and primary sector as its spinal chord.

Throughout the last fifty years, the middle working class had been the core body of Greece’s economy and the country’s ‘main industry’ was tourism. These two elements, for clear reasons, lead the country to a direct and/or indirect dependence to the forceful currents of western capitalism. Following the country’s integration into the European Union, Greece no longer produces anything, everything is imported.

In the political realm, I believe that Greece’s plutocracy, and its conservative governments that expressed it, always had a slave like glance to the west. Mainly following the Second World War and the four-year civil war that ensued, which found the leftist movement crushed, destroyed and unable to partake in strengthening itself.

This is the reason I say (with a heavy heart) that it would be difficult even now, with the leftist government in power, for the country to realize its autonomy. I hope however that some steps can be put into action. To conclude, we either remain in the euro or in due time we will return back to the national currency, there are no in-between solutions.

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