Did you know that on the same day that Greece – home of the first openly gay city, Sparta – was forced to humiliate itself again at the feet of the EU’s creditor nations, the isolated island of Pitcairn became the smallest nation to legalise same-sex marriage, despite having only 48 inhabitants and no gay couples?
While reading about Pitcairn, the expression attributed to Captain Bligh of the stricken HMS Bounty, against whom the mutineers revolted, came to mind.
While flogging sailors for small misdemeanours, he is said to have declared: “The beatings will continue until morale improves.”
When we see the torture of Greece by its creditors, I see that the EU has taken the same approach with one of its own family. The economic beatings of Greece will continue until its political morale improves. Have you ever seen anything so stupid?
The Greek crisis has gone on for the past five or six years now. It is a brilliant example of Einstein’s observation that the definition of insanity is repeating the same thing over and over again and expecting different results.
Yesterday, Greece promised to raise a fresh €8bn in taxes from the rich in order to satisfy the EU creditors. The cycle has been more or less the same, year in year out. Every year, the Greek government cuts spending and raises taxes. This is followed by the economy collapsing, and so tax revenues fall and this means more austerity is demanded – and the process is repeated.
All the while, the economy shrinks. It is 25pc smaller than it was in 2009 and wages are down by 35pc. As activity and wages fall, so too does demand.
The EU response is to repeat the beatings.
Every time, the EU imposes a creditors’ levy in the form of higher taxes. The people of Greece, knowing that the taxes won’t go to paying for Greek education or health but will line the pockets of rich creditors, try to find ways to avoid paying the creditors’ levy.
So what does the EU do? It imposes more taxes on a problem that was in part due to the inability of the government to raise taxes on the rich in the first place. What do you think will happen now? Do you think the Greeks will give in, and say ‘take our money’? Of course they won’t. The rule of the world is the higher the personal tax, the higher the tax evasion. Did we not learn that in our tax amnesties of the 1980s and 1990s?
The Greeks will just find different ways of getting their money out of the country because they know that the money isn’t being raised for Greece, but for Germany. What would you do if you had the ability?
So this latest EU solution will fail spectacularly and we will be back at square one. What then? Repeat the beatings until Greek morale improves?
Not only does the EU creditors’ approach show no grasp of economics or human nature, but in the past few months we have seen ridiculous double standards from Germany, the main driver of this nonsense.
Germany is falling over itself to usher in debt forgiveness and a debt amnesty for Ukraine – an illegitimate government, which is the product of an illegal, EU-financed coup d’état. Why is this? Why is the left-wing Greek government a pariah and a quasi-nationalist Kiev administration a darling?
It is because it is in the national interest of Germany, Poland and the other former communist states to keep Russia isolated. Is it in our interest? I don’t think so.
Yet we are the main cheerleaders for Germany’s hardline in Greece and double standards in Ukraine; why is this?
Do we not know our history? As the only neutral country in the Eurozone, should we not be reminding everyone of Europe’s economic history? After all, what does neutrality mean if not an ability to think for yourself?
Greece needs debt forgiveness as much as Ukraine. Should we not remind Germany that after its troops murdered millions of Europeans, Germany was the greatest European beneficiary of debt forgiveness?
Should we not point out that at the 1953 London Debt Agreement, half of Germany’s external debts, including their interest payments, were wiped out at the behest of a practically bankrupt Britain – which paid all its debts to the Americans – debts Britain incurred to help America defeat Nazi Germany?
Have the Germans forgotten that America insisted Germany’s remaining debt payments could be spread out over a term of three decades or that, as a result, in the 1950s Germany’s debts were 20pc of GDP when many of the countries it occupied struggled with debts of about 200pc of GDP?
Can’t someone understand that the Greeks are only asking for fair treatment? Why can’t it get the same terms as West Germany, whose debt repayments were limited in any one year to 3pc of West Germany’s export revenues?
The double standard, both in terms of Germany’s treatment of Ukrainian debts and in terms of its own history, is shocking.
The reason Ukraine gets favourable treatment is that gas and oil which fuel Germany’s factories flow through Ukraine. It’s that simple.
But in order to dress up its own selfish interests as policy, Germany needs some eejit to do its bidding.
And guess who that is? Guess who the chief baiter of the Greeks is? Yes, you guessed, Ireland!
So Michael Noonan, according to the reports, has led the charge against Greece in the past 48 hours.
He’s the one gleefully counting the lashes as Europe adopts the Captain Bligh dictum to Greece, insisting that the “beatings will stop when morale improves”.
What do you think happened next?
Yes, you got it; the mutiny on the Bounty.
Great article – love the ingenious analogy. The Pitcairn Islands always fascinated me – read loads of books about them although not always pleasant (sexual abuse scandals). Nevertheless I plan to visit there one day.
David,
But if Germany/EU is keeping Russia isolated which must hurt them, why doesn’t Russia retaliate by backing Greece financially thus aiding Greece’s exit and kicking-off a break-up of the Euro which would really souring the Krauts?
Excellent article. David hits the nail on the head. Another economist that I hold in high regard, Aussie Steve Keen also has very prescient ideas in respect of Greece. It is no longer about economics. It is about power, and wealth now. And the Greeks don’t have wealth, therefore they are no entitled to any power. Which explains why for the Greeks it was logical to move hard left. The Ukraine moved hard right, and they get favourable treatment. Call it the Aliende-Pin0chet spectrum of political interventionism. Aliende gets no support. Pinochet gets full support. Well, we are seeing the… Read more »
More on the EU:
https://brianmlucey.wordpress.com/2015/06/25/schrodingers-member/#more-5110
David, you say “Britain paid all its debts to the Americans – debts Britain incurred to help America defeat Nazi Germany”. Not true. Britain incurred no debts to America during the War. It received everything free of charge through a US “Lend-Lease” law signed by FDR on 11 March 1941 to “sell, transfer title to, exchange, lease, lend, or otherwise dispose of, to any such government [whose defense the President deems vital to the defense of the United States] any defense article.” Britain was charged for nothing it received during the War. The debts you refer to were the result… Read more »
David
Ukraine is a highly sought after partner for Europe because of its technology – Greece has little to offer other than a holiday destination.
Ukraine is home to the Antonov Aircraft Manufacturer – http://www.antonov.com/- and it’s also a major arms exporter. It is home to Chernobyl, so it’s not a just some backwater state with a gas pipe running through it – there’s lots of potential there for Europe.
Ukraine has moved to the right. It is run for the benefit for corrupt oligarchs. The real problem here is that the population of the Western world cannot be given any insights into to toxicity of the current regime in Kiev. Because if that happened, then people would hold serious reservations about those in power in Brussels and Washington. We are in the era of the richest 0.1% holding enormous power over the public discourse. This is a logical progression of where Western society has been going for decades. The rich fund supportive political opinion formers. Ideology does not matter,… Read more »
Anyone who thinks the Americans were being generous and kind-hearted in bailing both the Germans and British out after the Second World War is being incredibly naive. The Americans don’t do anything unless it’s in their own interest (nor does any other nation). This was all part of their long-term strategy to install the dollar as the world’s reserve currency and has been well documented in excellent books by the topical Yanis Varoufakis (The Global Minotaur) and Michael Hudson (Super Imperialism), among many others. Also, a minor point David – I would suggest that you perceive Ireland and Michael Noonan… Read more »
David is right – Noonan is the eejet that Schauble needs to admonish the Greeks for have the balls to state the obvious. Maybe the Greeks might go searching for Noonan’s electoral promises in that famous 2002 “Dutch Auction” General election, where Noonan establishes his credentials as an eejet ? It would be just punishment for his embarrassing, cringeworthy behaviour in recent days. And the Irish would laugh – though presumably the government would go completely “ape”. Next up – The Economist Magazine will have Noonan on the front cover as some sort of genius, (as a reward for his… Read more »
It is physically sickening to witness the disgusting behaviour of Noonan and Kenny in the matter of Greece. The problem with Ireland is that it is a spineless economy run by spineless people for a spineless civil service full to the brim with eejits in positions beyond their competence. I wish someone would do us a favour and muzzle the two spineless feckless idiots Kenny and Noonan and God forgive me for saying this ‘if they cannot be shut up then someone ought to put a bullet in their heads and save all from having to listen to their nonsense.… Read more »
No doubt there’s some sound law why this isn’t possible… but…I had the idea that if Greece were to put a 1 or 2 or even 5% tax on a variety of financial transactions, bond sales and purchases etc. and also a tax on movement of capital into and out of its institutions, could it raise lots of revenue from the financial transactions? Could it put a tax on the Troika’s loan to itself and get them to pay that tax assuming the Troika will be pumping capital into its Banks shortly perhaps? Well maybe that already happens? Is that… Read more »
Great article, especially the point about helping the Russophobic neo-fascist freaks into power in Kiev. Nearly all the blame for the upheaval in Ukraine goes to the US/EU and their proxies. I mean can you imagine how the Yanks would react if Putin financed the overthrow of the Mexican govt and put a puppet regime in place that made bellicose statements against Washington?
I’ve said it before and I’ll keep on saying it the EU is a busted flush and it has been since it’s instigation. Everything was fine when the EU was the EEC. Since the changes that were made at the behest of those clowns in Brussels that changed the EEC to the EU we’ve had nothing but trouble. Am I right or am I right? Barrosso, Von Rumpoy and all the rest of the clowns have made a complete and utter ‘pigs mickey’ of things. As for our own two clowns Kenny and Noonan what more could you expect of… Read more »
Hi all,
Just an observation. The discourse in the responses including the article uses misnomers such as Germany, Greece, Ireland. This is incorrect.
It should be using the following;
Bankers, politicians, taxpayers, the population etc.
For example;
The greek population is been bled dry at the behest of european bankers using european politicians as stooges.
Remember patriotism is the last bastion of a scumbag. The people who call the shots DON’T CARE about populations or Countries.
Michael.
Noonan doesn’t want the Greeks to get debt forgiveness because it shows the Irish Government’s decision to pay every creditor as flawed. That’s what Ireland should have obtained.
Ireland hasn’t balanced its books. It is still borrowing money to pay it’s bills. Will Greece support Ireland when our turn comes to need debt forgiveness?
It’s all about looking good and staying in power for Noonan, Merkel, and the rest of the political elite.
Excellent article, David! I have to say I did actually laugh out loud when I read this: “After all, what does neutrality mean if not an ability to think for yourself?” Ireland? Think for itself? HA! The Irish powers that be (what are left of them) are so busy being good little Europeans and impressing the Germans et al. they have lost what little integrity they ever had. As for Ireland being neutral – another joke! So now we have the Germans wielding the power and the Irish (to my great shame) cheering them on. Not much of a community… Read more »
I take it that Greece has defaulted on the IMF end-of-June deadline.
The time now is Fri 16.20 and the finance ministers are still in ‘critical talks’, even if they pull a deal out of their magic hat it still has to be ratified by the Greek Parliament and the other EU parliaments by close of Tuesday.
“Against the background of great politics we play the role of German Shepherds” From “The Unbearable Absurdity of Reconciliation” by Rafal Ziemkiewicz David McWilliams writes that Germany, Poland and other ex-communist try to isolate Russia because it is in their interest and that this is not in Ireland’s national interest. Secondly, he claims that most oil and gas flow to Germany through Ukraine and this is the real reason for Germany’s support of Ukraine. Thirdly, he claims that the current Ukrainian government is illegitimate. It is hard to claim that corrupted Polish government created by former Prime Minister Donald Tusk,… Read more »
An excellent article David and illuminating for those perhaps, not in the know. As a WW2 baby Mr. Noonan should re-examine his European history. The illegal invasion of Poland by Germany on September 1st, 1939 lead to the death of 60 –>65 million people and many multiples of that injured. What damages cost do you put on that one Michael? Greece is coming very close to a GO –> NO GO decision. If the terms offered are fair and just, they may stay in. However, they may exit for the simple reason that they have been treated in an unfair… Read more »
In as much as banks have become “to big to fail” and been bailed out by taxpayers no overwhelmed with unpayable national debts, governments and their countries are also to big to fail and so must be supported at all costs. By whom one may ask? The same taxpayer of course. Countries borrow and bail out banks until the national debt is overwhelming the economies. Now the counties themselves may be said to be too big to fail. Debt is not so simple as all countries are owed by all other countries and the failure of one to pay will… Read more »
http://www.nytimes.com/interactive/2010/05/02/weekinreview/02marsh.html?_r=0
Web of debt shows that France is Greece’s largest creditor by a margin.
Great article David. One point that has me a bit puzzled. What business is it of Europe if the Greeks decide to go down the socialist road and attempt to meet their financial committments by taxing their few remaining rich people. No no no the neoliberal way is the only way the creditors will be satisfied. Cuts to pensions, welfare and services are essential. Today I heard our own Enda Kenny poopooing the proposed Greek tax hikes. What a laugh. Mind your own business Enda. I guess the big clue is the notion that no matter what they do the… Read more »
Great Article! Noonan and Kenny are idiots…cringe….
Fine article Dave. It’s a pity 5 years down the line we’re still reading the same headline – probably the most recycled journo headline in recent times.
Important also to keep in mind the rich the insider class in Greece are responsible for the crisis the Greek people now face and indeed now being used by those very same vested interests to bail out the German/French/British creditors responsible for providing the rich elites of Greece the funds in the first place now owed back. Once again the Euro project cover to pillage, plunder and loot the real wealth out of people’s pockets and drive a wedge between a ruling class and everyone else who are called upon to hold-up a system which is steampunked to function as… Read more »
Prisoner refuses to cooperate. Prisoner steadfast in face of heavy pressure. The beatings will continue until the prisoner acquiesces.
http://globaleconomicanalysis.blogspot.ca/2015/06/creditors-issue-take-it-or-leave-it.html
9 to 1 odds that there is no Grexit. This week at least!! Posted on Lemetropolecafe.com World economic news: 06:33 Macro Summary: Eurozone Greece: Greek PM Tsipras’ meeting with institutions ends without agreement: MNI cited sources, who said that Greek Tsipras’ meeting with the EU, IMF and ECB ended without an agreement. The source confirmed that the main sticking point to reaching a deal was prior actions that the IMF wanted. The source pointed out that the reports of “a take it or leave it” offer were not true and it was possible that another Eurogroup meeting could take place… Read more »
http://dailyreckoning.com/there-will-be-no-grexit/
It’s interesting to see our government’s hard stance on Greece.
I suspect that it’s gambling that Greece will get a write-down and not to be seen as cheerleaders will strengthen their hand when they look for a similar deal.
The German and French Taxpayers are on the hook for 160 Billion – a reasonable write-down would be the best option as opposed to a wipe-out if Greece exits.
It’s Theatre !
[…] Inc.? (Bloomberg) • Europe: Writing Off Democracy As Merely Decorative (Habermas) • The Beatings Will Continue Until Morale Improves (Irish Independent) • Bureaucrazies Versus Democracy (Steve Keen) • The Courage Of Achilles, The Cunning Of […]
https://www.goldmoney.com/research/analysis/managing-trade-deficits?utm_source=GoldMoney+E-News+Subscribers&utm_campaign=d98ed41569-GoldMoney_E_News_Sterling_buys6_26_2015&utm_medium=email&utm_term=0_31fa11b07e-d98ed41569-317875037
Greece going to the Drachma will not save the sinking ship but it will allow Greece to recover her sovereignty. Then get the government must get out of the manipulation of currency and allow people to go to work and to make their own decisions.
I fear that time is running out. Debtocracy in EU Peripheral States: For the first time in Greece a documentary produced by the audience. “Debtocracy” seeks the causes of the debt crisis and proposes solutions, hidden by the government and the dominant media. https://www.youtube.com/watch?v=qKpxPo-lInk The result of EU neoliberal policies reduces citizens to be indentured slaves to the banking system and powerful companies agreed by the Political Party class.. The Greek slaves and their vassal state are in revolt – the ogre of a Frankenstein Spartacus has been created. We may appear free, but we and the peripheral EU states… Read more »
[…] growth in the economy to continue indefinitely, with all of the proceeds of growth then to be given away. This isn’t how Germany’s ‘Wirtschaftswunder’ in the 1950s was achieved. Germany was […]
Noonan disgusts me too. It’s like two messers at the back of the class and one turns on the other when the teacher catches them messing.
Is there anyway to shut up Noonan?