Greeks Won’t Pay, No Matter What
from The Daily Bell
Originally posted February 28, 2011
“I won’t pay” movement spreads across Greece … They blockade highway toll booths to give drivers free passage. They cover subway ticket machines with plastic bags so commuters can’t pay. Even doctors are joining in, preventing patients from paying fees at state hospitals. Some call it civil disobedience. Others call it a freeloading spirit. Either way, Greece’s “I Won’t Pay” movement has sparked heated debate in a nation reeling from a debt crisis that’s forced the government to take drastic austerity measures – including higher taxes, wage and pension cuts, and price spikes in public services. – MSNBC.com
Dominant Social Theme:
Everything’s cool. Let the Greeks have “their moment.”
It has long been our contention – stated many times – that the tribes of Europe would not take kindly to the austerity measures that have been imposed on Europe, especially the PIGS – Europe’s Southern countries. We’ve made the argument that the tribes of Europe are ancient and are the descendants of the hordes that swept over Rome. These citizens of Europe actually belong to specific clans and ethnic groups and so long as the EU promised prosperity, they were glad to participate. Now, however, there is not very much that is positive about belonging to the EU, and the unrest in our view is growing.
Strangely, not much of it is being reported, or not in a regular fashion. Mainstream Western media has moved on to cover the revolutions in the Middle East and Africa and left Europe behind for the moment. It is of course a kind of dominant social theme: Europe has taken some blows but is on the mend; austerity takes some getting used to, but the citizens of Europe will deal with it for the greater good.
We’re not so sure. The Anglo-American power elite has driven the Western world to ruin with its central banking scheme; it may believe that between food-scarcity and job-scarcity, Europeans will now be less apt to resist increased militarism abroad and increased global centralization. But we have always believed in the era of the Internet that such manipulations are increasingly transparent and apt to be less tolerated. In tracking the news – as meme-hunters do – we see increased evidence that pushback is occurring on several fronts.
There were of course the British student riots that received a great deal of attention before winter truly settled in. But in Greece, protests continue and are spreading without much mainstream news coverage. Irish voters just threw out their government over EU austerity deal and Iceland – not an EU member to be sure – resisted pressure to bail out its banks and is evidently doing better economically than Ireland. In this article, we’ll examine these trends further.
The Greek I Won’t Pay movement has not received much mainstream attention, but it is spreading in Greece nonetheless. (See article exerpt above.) Protestors are often clad in vests with the words “total disobedience” stitched to the back and chant: “We won’t pay for their crisis!” MSNBC also reports that doctors at state hospitals are blockading the pay counters so that patients will not pay the required €5 for their visits.
Critics, on the other hand, are lashing out at the behavior. The MSNBC article quotes columnist Dionysis Gousetis of Kathimerini: “The course from initial lawlessness to final wanton irresponsibility is like a spreading cancer … Now, with the crisis as an alibi … the freeloaders don’t hide. They appear publicly and proudly and act like heroes of civil disobedience. Something like Rosa Parks or Mahatma Gandhi.”
Prime Minister George Papandreou is reported to have said the following in a Parliamentary address: “You think that lawlessness is something revolutionary, which helps the Greek people … It is the lawlessness which we have in our country that the Greek people are paying for today.” Papandreou has been the guiding force behind Greece’s austerity reorganization, which has included the use of loans from the EU and a good deal of public spending reduction. Perhaps the most high profile part of the austerity plan has been the aggressive tax collection that the administration has embarked upon. Some estimates peg tax evasion as costing the country up to US$30 billion.
Various laws have been passed to give the government more power to collect taxes. Greece has, for instance, made cash transactions greater than 1500 euros illegal, to ensure there are paper trails for various transactions. Government agents have been taking high altitude photographs of Greek houses to determine how many swimming pools are going untaxed. A crack government tax team has been created and empowered to do what is necessary to ensure that Greeks comply with tax law.
With all this effort however, has come little success, one year on. In fact, the Greek government has seen so little increased revenue that it has now set up an amnesty program that allows taxpayers to settle arrears with 55 cents on the euro. This, too, has enraged critics who believe the amnesty program contradicts the law-and-order message that the Greek government ought to be sending.
Let us leave Greece for a moment – for Ireland. Recent elections tossed out Ireland’s Fianna Fail party, and resoundingly, with Fianna Fail losing some two-thirds of its parliamentary seats … an austerity protest vote. The victor, Enda Kenny of the Fine Gael party ran on a platform to amend the Irish bailout and the stiff austerity measures it imposed. On the same day that he declared victory, Kenny announced that he’d already been in touch with EU leaders about renegotiating the terms of the 85-billion-euro ($115-billion) EU-IMF bailout.
The hotly fought contest included comparisons to Iceland, a similarly small country in fraught circumstances, but one that has resisted pressure to “bail out” its loss-making banks after the crash of 2008. Ireland, the US and other countries reliquified their banks; Iceland put them in receivership and let the creditors – not the taxpayers – take the losses. At the time, the krona plunged by 58 percent, inflation shot up and GDP fell sharply. The results sank the government and the Prime Minister resigned.
But this year, the economy is projected to grow by some three percent and the country’s reorganized banks are thriving. Employment is up as well. No less a personage than Nobel laureate Joseph Stiglitz approves: “Ireland’s done all the wrong things, on the other hand,” he’s quoted as saying in a recent New Zealand Herald article on the subject. “That’s probably the worst model.” Ireland, in fact, has propped up its ailing banks with some €46 billion so far, and no end in sight.
Iceland still has to deal with repaying debts to Britain and the Netherlands left over from the financial crisis. The country will hold a second referendum on repayment of some $5 billion owed to Britain and the Netherlands from savers who lost money in Icesave accounts when Icelandic bank Landsbanki collapsed.
There is of course a sentiment in the Libertarian community that austerity is good for Southern Europe because these governments have been profligate for too long. This is not an entirely correct perspective in our view. The EU basically bribed Southern European elites to join the union by issuing funds that were supposed to correct economic imbalances. But these funds merely found their way into the pockets of the top politicos and businesspeople in these countries.
Western central banks also inflated generously in the 2000s, and one has to wonder how the EU managed to conduct so much of its house-cleaning just before the collapse. It’s almost as if the Eurocrats knew what was going to happen and tidied up the union as much as possible before it did. The middle classes were “promoted” into the EU before the collapse, but now middle-class tax dollars are flowing into bank coffers as the Southern PIGS struggle to pay back enormous loans that again benefited a few at the expense of many. Austerity is just one more elite manipulation, neither inevitable nor fair.
We would argue that in the era of the Internet, too many within Europe’s fractious tribes understand only too well what has taken place. We shall see what the Spring holds. In the meantime, there is the German referendum on the constitutionality of the bailout. There are plots and subplots within what seems to be a continued EU unraveling; but the most important one – not being covered by the media currently – is the continued and growing dissatisfaction with status quo. The ramifications, economic and otherwise, are most significant.
Written by aurick
03/03/2011 at 10:58 am
Tagged with British student riots, debt, depression, dominant social theme, economic collapse, economic crisis, European Central Bank, Fianna Fail, Greek sovereign collapse, I won't pay, Iceland, Ireland, Landsbanki, sovereign default