[Peace-discuss] European Banks vs. Greek Labour - Michael Hudson | The Real News Network

Wed Mar 4 00:05:55 EST 2015

European Banks vs. Greek Labour  Sharmini Peries interviews Michael Hudson
| The Real News Network

Uploaded on Feb 23, 2015

Michael Hudson says Finance Minister of Greece, Yanis Varoufakis is
proposing austerity on the banking class to balance the budget not the
working class

  _____  

Transcript

Source:
<http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Item
id=74&jumival=13280> The Real News Network

The four-month extension secured by the Greek finance minister, Yanis
Varoufakis, on Friday came with the condition that Greece provide a list of
measures to quell the concerns of its international lenders, especially the
German banks represented by the finance ministers in Brussels, who feared
that Athens might bail on the promises to cut spending and implement
austerity measures. So, on Sunday, Athens provided that list.

Now joining us to discuss the tabled plan is Michael Hudson. He is a
distinguished research professor of economics at the University of
Missouri-Kansas City. His upcoming book is titled Killing the Host: How
Financial Parasites and Debt Bondage Destroyed the Global Economy.

Thank you so much for joining us, Michael.

MICHAEL HUDSON, ECONOMICS PROF., UNIV. MISSOURI, KANSAS CITY: Thank you.

PERIES: So, Michael, these international banks represented by the finance
ministers now in Brussels, when they were in crisis and we the public
treasury bailed them out, they had no problem with that. Why are they now
refusing to assist Greece at a time of need when in fact some politicians
and even the troika is being more receptive to what Greece is saying?

HUDSON: Because whats at issue really is a class war. Its not so much
Germany versus Greece, as the papers say. Its really the war of the banks
against labor. And its a continuation of Thatcherism and neoliberalism.

The problem isnt simply that the troika wants Greece to balance the budget;
it wanted Greece to balance the budget by lowering wages and by imposing
austerity on the labor force. But instead, the terms in which Varoufakis has
suggested balancing the budget are to impose austerity on the financial
class, on the tycoons, on the tax dodgers. And he said, okay, instead of
lowering pensions to the workers, instead of shrinking the domestic market,
instead of pursuing a self-defeating austerity, were going to raise two and
a half billion from the powerful Greek tycoons. Were going to collect the
back taxes that they have. Were going to crack down on illegal smuggling of
oil and the other networks and on the real estate owners that have been
avoiding taxes, because the Greek upper classes have become notorious for
tax dodging.

Well, this has infuriated the banks, because it turns out the finance
ministers of Europe are not all in favor of balancing the budget if it has
to be balanced by taxing the rich, because the banks know that whatever
taxes the rich are able to avoid ends up being paid to the banks. So now the
gloves are off and the class war is sort of back. Originally, Varoufakis
thought he was negotiating with the troika, that is, with the IMF, the
European Central Bank, and the Euro Council. But instead they said, no, no,
youre negotiating with the finance ministers. And the finance ministers in
Europe are very much like Tim Geithner in the United States. Theyre
lobbyists for the big banks. And the finance minister said, how can we screw
up this and make sure that we treat Greece as an object lesson, pretty much
like America treated Cuba in 1960?

PERIES: Hold on, hold on for one second, Michael. Lets explain that,
because Yanis Varoufakis, the finance minister of Greece, is very
well-briefed and very well-positioned to negotiate all of this. Now, why did
he think he was negotiating with the troika when in fact he was negotiating
with [crosstalk]

HUDSON: Because officially thats who hes negotiating with. He went and he
took them at their word. And then he found outand yesterday, Jamie
Galbraith, who went with him to Europe, published in Fortune a description
saying, wait a minute, the finance ministers are fighting with the troika.
The troika dont have their story straight. The troika and the finance
ministers are all fighting among themselves over what exactly is to be done.
And to really throw a monkey wrench in, the German finance minister,
Schäuble, said, wait a minute, weve got to bring in the Spanish government
and the Portuguese government and the Finnish government, and theyve got to
agree.

Well, all of a sudden the position of Spain, for instance, is, wait a
minute, were in power, were a Thatcherite neoliberal party. If Greece ends
up not going along with austerity and saving its workers, then Podemos Party
in Greece, in Spain, is going to win the next election and well be out of
power. We have to make sure that Varoufakis and the SYRIZA Party is a
failure, so that we ourselves can tell the working class, you see what
happened to Greece? It got smashed, and were going to smash you if you try
to do what they do; if you try to tax the rich, if you try to take over the
banks and prevent the kleptocracy, theres going to be a disaster.

So, obviously, Greece and Portugal want to impose austerity onSpain and
Portugal want to impose austerity on Greece. And even Ireland now has chimed
in and said, my God, what have we done? We have imposed austerity for a
decade in order to bail out the banks. Even the IMF has criticized us for
going along with Europe and bailing out the banks and imposing austerity. If
SYRIZA wins in avoiding austerity in Greece, then all of our sacrifice of
our population, all of the poverty that weve imposed, all of the
Thatcherism that weve imposed has been needless, and we didnt have to do
it.

So theres a whole demonstration effect, which is why theyre treating
Greece almost as a symbol forthe class war as a symbol for labor saying,
wait a minute, we dont have to impose austerity, we can collect taxes from
the tax dodgers.

Remember a few years ago when Europe said, Greece owes 50 billion euros in
foreign debt? Well, it turned out that the central bank had given to the
Greek parties a list called the Lagarde list (for Christine Lagarde, head of
the IMF) of all of the tax dodgers, Greek tax dodgers who had Swiss bank
accounts. Well, the Swiss bank accounts that the tax dodgers had ended up to
about 50 billion euros. So Greece could pay off the debt that its borrowed
simply by moving against the tax dodgers.

But, of course, this would be at the expense of the Swiss banks and the
other banks. So in effect the banks would be paying themselves. And they
dont want to pay themselves. They want to squeeze it out of labor and let
the tax dodgers and the Greek tycoons succeed in stealing the money from the
government. So, in effect, the troikanot the troika, the finance ministers,
really, are backing the tax dodgers and the crooks in Greece that SYRIZA is
trying to move against, whereas the IMF is actually, for once, taking a
softer position towards the whole thing. And even President Obama has chimed
in by apparently calling German Prime Minister Merkel and saying, look, you
cant just push austerity beyond the point, because youre going to push
them out of the euro, and youll push them out of the euro on SYRIZAs
terms, where SYRIZA can then turn to the Greek population and say, wait a
minute, we did what we promised here. We stopped the austerity. We didnt
withdraw from the euro; we were driven out as part of the class war.

PERIES: Michael, earlier you were also making an analogy between whats
going on in Greece and what happened to Cuba [crosstalk]

HUDSON: Cuba under Castro had an alternative social system. He wanted to
spread the wealth around (it was a Marxist system) in his way. He wanted to
get rid of really the crooks around Batista who were running the country,
the rich who didnt pay taxes, and he wanted to have a social revolution
there. So the American government said, wait a minute, if Cuba succeeds,
then theyre going to be a revolution all throughout Latin America. Latin
Americans can realize, wait a minute, we can take over the American sugar
companies there, we can take over the American banana companies there, we
can make the rich pay the taxes and the corporations pay the taxes and the
exporters pay the taxes, not simply the labor. We can unionize labor, we can
educate it, and if Cuba can educate labor, that would be a disaster for the
neoliberal plan, because if labors educated and has a program, then itll
realize that there is an alternative to Thatcherism.

Well, this is the problem that Varoufakis wrote about in an article earlier
this month in The Guardian on how he came out of the Marxist movement. He
said, the whole problem that were facing in Greece is that if we withdraw
from the euro, if were forced out, theres going to be an economic trauma,
and the left wing throughout Europe, as in America, doesnt really have an
economic program. It has a political program, but not really an economic
program. And the only alternative to SYRIZA with an economic program are the
New Dawn movement and the neo-Nazis. And what Varoufakis is worried about is
hes not only contending with the European finance ministers on one front,
but hes contending on the Greek front with the right-wing parties that are
the nationalist parties, like Marie Le Pen in France, the parties that are
saying, yes, we have an alternative: withdraw from the euro. But its not
the kind of withdrawal and alternative that the left wing would have,
because there really isnt much of a left wing in Greece, apart from the
small SYRIZA party, certainly not Papandreous socialist party, and
certainly not the socialist parties nominally socialist party in Spain,
which is a Thatcherite party, and its certainly not the British Labour
Party, which has gone the way of Tony Blair.

So the problem is that Varoufakis has about four months to educate the Greek
public in the fact that, yes, there is alternative, heres what it is. The
alternative to neoliberalism doesnt have to be right-wing nationalism.
There is a socialist alternative, and were trying to work out as many
arrangements we can, so if were driven out of the euro and if the banks go
under, we have a fallback plan. He cant come right out and say this is the
plan right now, because it has to be made very clear that its the finance
ministers of Germany, Spain, Portugal, Ireland, and Finland that are driving
Greece out, not the IMF, not the European Central Bank, and not even
centrist governments.

PERIES: Michael, thank you so much for joining us on The Real News Network
today, and well be following this story at The Real News. So do join us
very soon again.

HUDSON: Its always good to be here. Thank you.

PERIES: Thank you very much for joining us on The Real News Network.

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