How Cyprus can call the EU's bluff.

As you are probably aware Cyprus is now in the middle of negotiations with EU leaders over a 17 billion euro bailout needed to save the country from bankruptcy. The original plan which involved the taxing of bank deposits at up to 10% has proved unworkable and has been voted down by the Cypriot parliament. However, there is another plan that would allow Nicosia to secure a loan and not have to implement painful spending cuts (and risk becoming the new Greece/Spain/Portugal) nor impose a bank levy that would annoy foreign depositors, especially the Russians.

When Cyprus achieved independence from Great Britain in 1960 large swathes of the island were handed over to the British armed forces to be used as bases in the strategically important eastern Mediterranean. The Sovereign Bases Area are still important given their proximity to Middle Eastern hot spots and the fact they lie so close to vital shipping routes through which so much of the world's oil comes via the Suez Canal.

So here is the deal. The Cypriot parliament turns down present Eurogroup proposals and instead announces that a) they are considering re-negotiating The Sovereign  Base Area deal with a view to inviting other nations to tender bids for a long term lease or b) they say that they will allow other nations to build naval facilities on the country's territory, thus giving them a similar deal . The cost in either case to be approximately the same as the money being used by EU to blackmail (the Cypriot PM's words, not mine) Nicosia into agreement.

Now this is where things get really interesting. Given the poor shape the Assad regime is in, Russia must be wondering if its naval base in Syria will survive a regime change and therefore an alternative offer would be welcome. That it comes from a country with such close ties with USA and UK makes the idea an even more delicious irony, given NATO's encroachment on countries close to the Russian border has been so unrelenting. The fact that huge volumes of natural gas may be flowing through this part of the world soon also adds to the attraction.

Even the suggestion of such an offer to the Russians will set alarm bells ringing in London, Washington and possibly Paris and combined these countries will be able to bring a huge amount of pressure to bear in Brussels and Berlin. Does the EU really want to change the balance of power in such a sensitive region for a paltry 7 billion euros? Given the geo-political ramifications and the fact that the European nations have already pumped 1.7 trillion euros into propping up the continent's ailing banking system, a few billion more may be considered a price worth paying.

In either case, Cyprus comes out on top, it doesn't have to tax depositors, large or small, it's banking sector comes out of hiding this week intact (more or less) and it gets the money it needs to avoid bankruptcy. 

Supporters of Greek trade unionists charged with assaulting German official await verdict

Supporters of Greek trade unionists charged with assaulting German official await verdict, a photo by Teacher Dude's BBQ on Flickr.

German CDU MP, Hans Joachim Fuchtel caused uproar during a visit to Greece when he claimed that 1000 Germans could of the work of 3000 Greeks. The remarks sparked off fierce protests by Greek trade unionists already angered by the latest round of public sector job cuts.

During a joint German - Greek conference local government tempers flared and a German official was briefly attacked by angry public sector employees. The police arrested three in connection with the assault but all three were found not guilty yesterday.

A Neo-Modest Proposal

A neo-Modest Proposal, a photo by Teacher Dude's BBQ on Flickr.

A MODEST PROPOSAL

For preventing the debts of poor people in the Kingdom of the Greeks,from being a burden on

 The German Peoples or their Creditors and for making them beneficial to the publick.

It is a melancholy object to those, who walk through the Capital of The Greeks, or travel in the country, when they see the streets, the roads and cabbin-doors crowded with the families of those who have taken their own lives, followed by three, four, or six kith and kin, all in black, and imploring every passenger for justice. These descendants of Pericles and Aristotle instead of being able to work for their honest livelihood, are forced to employ all their time in stroling to beg sustenance for their helpless offspring who, as they grow up, either turn to Godless anarchism for want of work, or leave their dear native country, to work in the Factories in the lands of the North, or sell themselves to dens of inequity.

But my intention is very far from being confined to provide only for the Greeks: it is of a much greater extent, and shall take in the whole number of those of the race of the Germans who at a certain age, become prone with the passage of time to the corrupting effects of Nature's hand upon our weak flesh.

As to my own part, having turned my thoughts for many years, upon this important subject, and maturely weighed the several schemes of our Economists, I have always found them grossly mistaken in their computation. It is true, a man who has take his own life is: at most has not the value of above a few hundred euros, which the family of the Departed may not even receive, I propose to provide for them in such a manner, as, instead of being a charge upon their creditors, or the parish, or wanting food and raiment for the rest of their lives, they shall, on the contrary, contribute to the Reduction of the Nation's Debt, and partly to the cloathing of many thousands.



I shall now therefore humbly propose my own thoughts, which I hope will not be liable to the least objection.I have been assured by a very knowing Doctor of my acquaintance in London, that a healthy Greek well nursed, is, a most suitable nourishing and wholesome Donor of humane organs, whether heart, liver, kidney, or pancreas; and I make no doubt that it will equally be of service in a male or a female.


Supposing that one thousand families in the state of the Germans, would be constant customers for fresh organs, besides others who might have need of them on other occasions, particularly after misfortunes upon the King's road, I compute that Athens would take off annually about one thousand carcasses; and the rest of the kingdom (where probably they will be sold somewhat cheaper) the remaining two thousand.

But, as to my self, having been wearied out for many years with offering vain, idle, visionary thoughts, and at length utterly despairing of success, I fortunately fell upon this proposal, which, as it is wholly new, so it hath something solid and real, of no expence and little trouble, full in our own power, and whereby we can incur no danger in disobliging Europe. For this kind of commodity will not bear exportation, and flesh being of too tender a consistence, to admit a long continuance in ice, although perhaps I could name other countries, which would be glad to use up the whole nations supply of Internal Organs without a second thought.



After all, I am not so violently bent upon my own opinion, as to reject any offer, proposed by wise men, which shall be found equally innocent, cheap, easy, and effectual. But before something of that kind shall be advanced in contradiction to my scheme, and offering a better, I desire the author or authors will be pleased maturely to consider these points.

As things now stand, how Greeks will be able to find food and raiment for a an countless multitude of useless mouths of backs. And secondly, There being a round ten million of creatures in humane figure throughout this kingdom, whose whole subsistence put into a common stock, would leave them in debt billions of euros, adding those who are beggars by profession, to the bulk of farmers, publick servents and labourers, with their wives and children, who are beggars in effect;

I desire those politicians who dislike my overture, and may perhaps be so bold to attempt an answer, that they will first ask the families of these Damned Souls, whether they would not at this day think it a great happiness to have their Departed ones sold for their organs, in the manner I prescribe, and thereby have avoided such a perpetual scene of misfortunes, as The Greeks have since gone through, by the oppression of bankers, the impossibility of paying debts without money or trade, the want of common sustenance, with neither house nor cloaths to cover them from the inclemencies of the weather, and the most inevitable prospect of intailing the like, or greater miseries, upon their breed for ever.

I profess, in the sincerity of my heart, that I have not the least personal interest in endeavouring to promote this necessary work, having no other motive than the publick good of both the Greek and the German Races, by advancing this trade, providing for the infirm, relieving the poor, and giving some pleasure to those God has seen fit to make Rich through banking and other noble trades. I, like the Continental Body Poliltick have no organs worth the name, by which I can propose to get a single penny; being of advanced years, and my body past saving.

Apologies in advance to fans of Jonathan Swift's original.

Inspired by the these two stories;

The German government wants to use the introduction of new digitalized health insurance cards to encourage organ donation.

and

Wave of Suicides Shocks Greece

Is the European experiment grinding to halt?

Earlier this morning I got a call from a friend, saying that she'd found a job but I was at a loss whether to congratulate her or not, as she will not only leave her country but also her two young children as well. For the next nine months my friend will be teaching English at a private school in the Gulf States. In doing so she'll be following a path trailed by many other friends and acquaintances over the last few years.

Her children will remain here to be looked after by grandparents for the duration, a story reminiscent of the sacrifices that many Greeks were obliged to make in the 60's and 70's as guest workers who went north to find jobs in the booming economies of Europe and especially in German factories then powering the country's export led economic miracle.

As with so many other Greeks six years of recession has forced my friend to consider working abroad as the only alternative to a slow slide into poverty at home so repeating a story that has been told and re-told so often here over the last 100 years. However, this latest generation is both luckier and unluckier than their parents and forebears.

On the one hand many emigrating Greeks are highly educated and have university level qualifications and language skills that set them apart from previous generations. No longer are they the monolingual, sometimes barely literate villagers who went abroad, able only to obtain dead end jobs that post war northern Europeans were all to happy to spurn in favour of better paid, higher status ones in the service sector.

Yet young educated Greeks are sallying forth into a very different world, one in which jobs, even badly paid, low status ones are becoming more and more difficult to find. While some will find work that fully utilises their knowledge and skills many will find that a foreigner in a declining economy, not matter how well educated will always be at a disadvantage.

In addition the gap between earnings in the North and South of Europe has shrunk to a remarkable degree since the 1960's, with those in countries such as Germany often remaining static whilst those in the South have risen along with rising living standards.Gone are the days when an unskilled factory hand could earn a wage that would have been the envy of those back at home. So, the question that goes through many people's minds is why go through all the social and psychological upheaval of leaving home? Why uproot yourself when factories in east Germany pays just 6E an hour, just a few Euros more than can be earned at home, unless your only criteria is survival?

However, with unemployment at 25% (30% plus, if Greek trade union research is to be believed) and family and social security networks buckling under the strain, then survival rather than having a better standard of living may push Greeks as well as Spaniards, Portuguese and Italians north once again.

But with recession gradually mutating into Depression what reception will this new generation of gasterbiters receive? Even when cheap labour was in demand in the heavy industries of the Ruhr and the Rhine southern European workers were often grudgingly accepted, now that they are coming into competition for jobs in a shrinking economy the potential for ugly confrontation becomes a real possibility .

Given the campaign of virulent anti-Greek feeling that has marked German politics and media coverage of the current debt crisis, the groundwork for growing racist sentiment has been assiduously cultivated. Should the situation in other PIIGS start to resemble that of Greece how long is it before the myths of the lazy Spaniard and work shy Italian once more become part of the cultural and political landscape north of the Alps?

Then, the German far right, like Greece's neo-Nazi Golden Dawn,will happily exploit the opportunities given them by more “respectable” conservative forces. As the economic decline of the European South takes its toll on German export markets and the government will inevitably struggle to balance a commitment to the EU ideal of open borders with growing demands that German jobs and businesses be protected.

Switzerland's military is already drawing up contingency plans in case of a deepening of the social crisis in the Southern EU, UK's prime minister, David Cameron talked of the possibility of closing the country's borders in case of a flood of Greek economic refugees is being considered and France's demand for the re-introduction of internal EU border controls set the tone  showing that the EU's policy of open borders could be reversed in a heartbeat, should national moods change.

How much of this is just right wing political opportunism, designed to win votes with a frightened electorate and how much of it points the way to a more disunited future depends on the depth and duration of the crisis. If the North follows the same pattern as indebted nations such as Greece and Spain then all bets are off as growing divisions may threaten to derail the decades of unification and reconciliation that the EU has wrought.

It's a sad irony of modern history that the years of hard work put in by successive German leaders since end of World War II to prove that Berlin can be trusted to rejoin the European family of nations is being thrown away by a new generation of fiscal hard liners who are willing to put their allegiance to dubious economic dogma ahead of the unity of the continent.

One of the lessons of the 1930's that German chancellor, Angela Merkel and many other EU leaders seem willing to ignore is just how quickly economic disaster changes the political outlook of people who've enjoyed years of financial growth and security. The frenzied growth of the 20's and the sudden loss of prosperity that hit the middle class especially in the Great Depression helped bring the extreme right to power in a remarkably short period of time. 

In just a five years, the percentage of the popular vote captured by the Nazi party grew from 2.6% to 43.9%, a political rise that is being eerily echoed by their modern day counterparts in Greece, who have increased their popular support at an even more spectacular rate, going from just 0.29% to 14% in three years.

In 30's the insistence of the political mainstream to cling to ineffective economic theories even in the face of dismal failure drove disenchanted voters into the arms of fascist parties across Europe and beyond. The, then widespread political belief that ordinary people would endure years of extreme poverty and suffering in the name of an empty promise that it would eventually bring about future growth helped bring down democracies across the world.

Does Europe need to lose tens of millions of lives once more to relearn lessons that ended up being so brutally paid for in the streets of Stalingrad and fields of Normandy?

What's next for Greece?

Greece's latest round of elections has been, paradoxically, its most important in decades and its most low key. In contrast to previous votes, there has been a a conspicuous lack of campaigning on the part of most parties. Few public rallies, little canvassing and even less leafleting. This is, in part due to lack of funds and partly due to the fact that PASOK and New Democracy, the two parties that dominated Greece's political scene for four decades are just a shadow of their former selves, victims of their support for pro-austerity measures over the last three years.

Instead the most likely winner of Sunday's elections will be SYRIZA (Radical Left Coalition) who will most likely see their share of the vote exceed 30%. This is nothing short of a revolution in Greek politics as until recently the party (or rather a coalition of a diverse band of smaller leftist groupings) was seen as a marginal player, rarely polling more than 5%. Similarly, on the right, Independent Greeks, a newly minted right of centre party created by New Democracy defector Panos Kammenos has also risen from nowhere to become a major factor in the domestic political scene. Despite their ideological differences, both have benefited from their unwavering opposition to the austerity packages foisted upon Greece by its EU, ECB and IMF creditors.

However, with the chance of SYRIZA coming first in the polls and therefore winning the extra 50 seats guaranteed by the constitution, the media war against the party both at home and abroad has ratcheted up, with daily stories attacking its leader Alexis Tsipras for putting Greece in mortal danger. For most of last week the mainstream media in Greece, which is with few exception extremely hostile in its reporting of SYRIZA, accused Tsipras of having links with terrorists, using as evidence a Youtube video by former SYRIZA candidate, Ifikratis Amiras calling upon Greeks to take part in an armed struggle. The fact that Amiras no longer has any formal links with the party did not stop the media taking the story through several news cycles. Even eccentric Slovenian philosopher, Slajov Zizek who shared a panel with Tsipras recently in Athens was accused of promoting extremism amongst SYRIZA ranks during a news report by the state run NET TV channel who stopped just short of accusing him outright of being him a terrorist.

On the other hand the fact that leading New Democracy supporter, Panagiotis Psomiadis called the neo-nazi Golden Dawn, " a brother party" and suggested that parties develop closer ties in a radio broadcast in Thrace this week  went unremarked in the media. Nor did the fact that party leader, Antonis Samaras was promoting a deeply divisive anti-immigrant program designed to wean voters from the far right by taking on board many of their policies

Of course, dirty tricks, spin and flagrant misrepresentations of the truth are part and parcel of Greek electioneering which may be one of the reasons that despite this barrage voters remain unconvinced that the world will end on Sunday if SYRIZA comes first. After two years of the media telling them that the sky is about to fall down ,many have either stopped paying attention or welcome an alternative to the slow, painfully drawn out process of social collapse that has gripped the nation.

So what happens next?


Although Greek law forbids the publication of polls in the two weeks leading up to elections the last ones published showed that new Democracy and SYRIZA were neck and necks, with one exception. a GPO poll commissioned by the conservative daily, Kathimerini  which put SYRIZA well ahead at 31.5% and this is what I believe the will get (For an excellent blog post on how many Greek polling companies played fast and loose with last elections predictions see here). My hunch is based on the consistent under - reporting of SYRIZA support (about 6-7%) and the conviction that the currently media onslaught shows that the Greek establishment is fighting to limit damage caused by a SYRIZA victory.

So let's put my money where my mouth is.

Syriza willl get about 30%, New Democracy, 25% and PASOK 10%. I think that the recent attack by Golden Dawn MP on fellow politicians during a live TV show will affect their share but they will still get enough votes to pass the 3% threshold which guarantees them seats in parliament. As for the other parties I believe that their share will stay more of less the same as the previous elections.

However, being the largest party will not automatically mean that SYRIZA will be in a position to form a government, since the Greek Communist party have ruled out any form of coalition that means Tsipras will have to approach either The Democratic Left party who are lukewarm about co-operation or perhaps disgruntled PASOK MPs, which will not play well internally as many are already portraying SYRIZA as a new PASOK in sheep's clothing.

On the other hand, political gossip has it that the remains of the old regime have already accepted that SYRIZA will come first but believe the PASOK, New Democracy and a third party will be able to keep them out of power by forming their own administration in the name of national salvation. How much legitimacy such a move would have and how long such fragile alliance will last is anyone's guess.


Supposing Tsipras does form a government then the real battle will begin and all the ugly scenarios that the international press has so gleefully propagated may turn out to be true. The EU has absolutely no interest in allowing a successful rejection of its economic program and will do everything in its power to force Athens into a compromise. Most likely this will take the form of shutting off all further financial aid which will quickly cause chaos in Greece's weakened economy as wages, pensions and benefits will not be paid. In addition the health system will grind to a halt as hospitals run out of supplies (though that particular problem has been around for over six months).

Without money Greece will also no longer be able to import staples such as oil and that will lead to panic buying, queues and the kind of scenes usually associated with times of war. Faced with this, Athens will either have to knuckle under or, as it seems the Germans are hoping, exit the Euro and re-adopt the drachma.

On the other hand the sight of Berlin and Brussels wrecking havoc with a fellow EU member will have immense ramifications for the image of European Union across the continent and will lead to searching questions about what exactly European unity means. The political costs for Brussels may be far greater than they could possibly imagine in the long run. In the short run the markets may also respond to Greece's economic demise, not as a one-off acts but the taste of things to come as other southern EU countries such as Spain slip deeper and deeper into recession and stop reaching their austerity imposed targets. In such a case the outflow of capital from the Eurozone may prove unstoppable.

With new elections approaching EU's war of words with Greece gets down and dirty

The announcement last week that none of the parties in the Greek government were able to form a government has brought with it a dose of madness that dwarfs even the fervid election campaign rhetoric that proceeded it. If you were to take the statements of much of theforeign and local mainstream media at face value Greece is about to collapse andthat it will take with it much of the Eurozone.. Once again Athens is at the centre of a maelstrom of media speculation that can be seen as a retread of 2011 when the Greek prime minister, GiorgiosPapandreou raised the possibility of Greece holding a referendum on whether it should implement yet more austerity measures . Then the suggestion was met by a vociferous campaign from within Greece, not to mention the pressure exerted by Paris,Brussels and Berlin.

With Papandreou now gone from the political scene, his role as the Eurozone's enemy number one has been taken over by Alexis, Tsipras, the leader of the Radical Left Coalition (SYRIZA), which if the name didn't give you a clue is a group of socialist and communist parties who shot into second place in the May elections campaigning on the promise to defy European Union's demands for yet more austerity measures.

The results has been a surge of interest in Greece and a concerted attempt to paint anti-austerity politicians and parties as extremist and dangerous. The new media narrative being created goes like this; Tsipras and, by extension any political group opposed to the terms set down by Athens's creditors are putting in danger Greece's place in the Eurozone and so inviting economic collapse by forcing it to re-adopt the drachma. Some variations on this theme even go as far as to say that Greece may even by kicked out of the EU, and so face decades of North Korean style isolation.

It is a story that has been carefully cultivated in the local press as well, with daily horror stories coming out in the state run TV stations and their allies in the privately controlled media sector. Pro-austerity parties such as PASOK and New Democracy appear regularly to crank up the fear factor by painting the Radical Left as a bunch of crazed fanatics hell bent on destroying what's left of the economy.

If that wasn't enough this week's non-story about a run on Greek banks was gleefully jumped upon and news organisations were desperately trying to recruit local bloggers/twitter users to feed them stories of people besieging banks to take out their money. Rumours of banks limiting withdraws to just 50 E swirled around the internet. That neither was happening proved to be no impediment to reporters eager to get another scoop.

The fact that this week the EU decided to cut off funding to Greek banks it deemed non-viable did nothing to help the situation , leading some commentators to say that maybe that was their intention after all. An example of yet more attempts to nudge the Greek electorate in the “right”direction.

This week also saw the arrival of EU president, Martin Schulz in Athens, obstensibly to persuade the new Greek government to adhere to its earlier fiscal commitments, however, his public appearances with both the leaders of PASOK and New Democracy made it quite clear that the EU wanted it's say in Greece's next round of elections. A message with he then went to repeat on state run and pro-austerity channels yesterday and today.

If that wasn't enough the suggestion by German chancellor Angela Merkel toGreek president KarolosPpapoulias that Greece hold a referendum on membership of the euro was meets by angry accusations of interference in Greek internal affairs. Raising ugly memories of the two countries troubled past relationship.

Ironically, the suggestion, which the German chancellor's office denied (the office of the Greek president then went on to deny the denial) has helped undermine the position of those parties who are hoping to persuade Greek voters to swallow more job cuts and tax increases scheduled for June.

Whether the fear of expulsion from the Eurozone is working is hard to tell. Some local opinion polls have put New democracy ahead of SYRIZA but then there are otherσ which show wildly differing results. The problem is that no one knows what will happen in June. Gauging public opinion has become much harder when the two main political parties are constantly changing their make up and positions. PASOK has decided, under it determinedly uncharismatical leader, Evangelos Venizelos to distance itself from both scandal ridden past by abolishing much of its present hierarchy.

On the other hand Greece's right has seen a flurry of deals and team changes. With members of the smaller unsuccessful parties jumping ship to sign up with Samaras's right rainbow alliance. Howe much of this will change the results of the elections is hard to say. Many of those retuning to New Democracy such as ex party super star, Dora Bakoyianni, northern populist, Panayiotis Psomiadis (once again the subject of  legal proceedings) and former MPs with the far right LAOS party are hardly the stuff that electoral landslides are made of.

With a party made up of those willing to change political allegiances at the drop of a hat, it is going to difficult to persuade sceptical voters that the right won't result to yet more u-turns and back flips if elected.

Far away from the endless media attention to those in mainstream politics, ordinary Greeks continue to face the everyday grind of surviving in a shrinking economy in which 30-40% are living in poverty, more than half the country's youth (some of the most educated in Europe) are without work and no one knows when things will get better.

Beyond vague promises to renegotiate the terms of Greece's bailout, only SYRIZA has offered something positive to those who have already lost so much. Even if it's the empty gesture of defiance it gives something concrete to those left bitter and disillusioned by the country's more moderate political choices.