Tag Archive | Greece

How Greece Became a Guinea Pig for a Cashless and Controlled Society*

How Greece Became a Guinea Pig for a Cashless and Controlled Society*

As Greece moves closer to becoming a cashless society, it is clear that the country’s attitude towards cash is reckless and dangerous. The supposed convenience of switching to a cash-free system comes with a great deal of risk, including needless overreach by the state.

By Michael Nevradakis

A man makes a transaction at an automated teller machine (ATM) of a Piraeus Bank branch in Athens, Greece. (AP/Yorgos Karahalis)

 

Day by day, we’re moving towards a brave new world where every transaction is tracked, every purchase is recorded, the habits and preferences of everyone noted and analyzed. What I am describing is the “cashless society,” where plastic and electronic money are king, while banknotes and coins are abolished.

“Progress” is, after all, deemed to be a great thing. In a recent discussion, I observed on an online message board regarding gentrification in my former neighborhood of residence in Queens, New York, the closure of yet another longtime local business was met by one user with a virtual shrug: “Who needs stores when you have Amazon?”

This last quote is, of course, indicative of the brick-and-mortar store, at least in its familiar form. In December 2016, Amazon launched a checkout-free convenience store in Seattle—largely free of employees, but also free of cash transactions, as purchases are automatically charged to one’s Amazon account. “Progress” is therefore cast as the abolition of currency, and the elimination of even more jobs, all in the name of technological progress and the “convenience” of saving a few minutes of waiting at the checkout counter.

Still insist on being old-fashioned and stuck behind the times, preferring to visit brick-and-mortar stores and paying in cash? You may very well be a terrorist! Pay for your coffee or your visit to an internet cafe with cash? Potential terrorist, according to the FBI. Indeed, insisting on paying with cash is, according to the United States Department of Homeland Security, “suspicious and weird.”

The European Union, ever a force for positive change and progress, also seems to agree. The non-elected European Commission’s “Inception Impact Assessment” warns that the anonymity of cash transactions facilitates “money laundering” and “terrorist financing activities.” This point of view is shared by such economists as the thoroughly discredited proponent of austerity Kenneth Rogoff, Lawrence Summer (a famed de-regulator, as well as eulogizer of the “godfather” of austerity Milton Friedman), and supposed anti-austerity crusader Joseph Stiglitz, who told fawning participants at the World Economic Forum in Davos earlier this year that the United States should do away with all currency.

Logically, of course, the next step is to punish law-abiding citizens for the actions of a very small criminal population and for the failures of law enforcement to curb such activities. The E.U. plans to accomplish this through the exploration of upper limits on cash payments, while it has already taken the step of abolishing the 500-euro banknote.

The International Monetary Fund (IMF), which day after day is busy “saving” economically suffering countries such as Greece, also happens to agree with this brave new worldview. In a working paper titled “The Macroeconomics of De-Cashing,” which the IMF claims does not necessarily represent its official views, the fund nevertheless provides a blueprint with which governments around the world could begin to phase out cash. This process would commence with “initial and largely uncontested steps” (such as the phasing out of large-denomination bills or the placement of upper limits on cash transactions). This process would then be furthered largely by the private sector, providing cashless payment options for people’s “convenience,” rather than risk popular objections to policy-led decashing. The IMF, which certainly has a sterling track record of sticking up for the poor and vulnerable in society, comforts us by saying that these policies should be implemented in ways that would augment “economic and social benefits.”

The IMF’s Greek experiment in austerity

These suggestions, which of course the IMF does not necessarily officially agree with, have already begun to be implemented to a significant extent in the IMF debt colony known officially as Greece, where the IMF has been implementing “socially fair and just” austerity policies since 2010, which have resulted, during this period, in a GDP decline of over 25%, unemployment levels exceeding 28%, repeated cuts to what are now poverty-level salaries and pensions, and a “brain drain” of over 500,000 people—largely young and university-educated—migrating out of Greece.

Protesters against new austerity measures hold a placard depicting Labour Minister George Katrougalos as the movie character Edward Scissorhands during a protest outside Zappeion Hall in Athens, Friday, Sept. 16, 2016. The placard reads in Greek”Katrougalos Scissorhands”.

Indeed, it could be said that Greece is being used as a guinea pig not just for a grand neoliberal experiment in both austerity, but de-cashing as well. The examples are many, and they have found fertile ground in a country whose populace remains shell-shocked by eight years of economic depression. A new law that came into effect on January 1 incentivizes going cashless by setting a minimum threshold of spending at least 10% of one’s income via credit, debit, or prepaid card in order to attain a somewhat higher tax-free threshold.

Beginning July 27, dozens of categories of businesses in Greece will be required to install aptly-acronymized “POS” (point-of-sale) card readers and to accept payments by card. Businesses are also required to post a notice, typically by the entrance or point of sale, stating whether card payments are accepted or not. Another new piece of legislation, in effect as of June 1, requires salaries to be paid via direct electronic transfers to bank accounts. Furthermore, cash transactions of over 500 euros have been outlawed.

In Greece, where in the eyes of the state citizens are guilty even if proven innocent, capital controls have been implemented preventing ATM cash withdrawals of over 840 euros every two weeks. These capital controls, in varying forms, have been in place for two years with no end in sight, choking small businesses that are already suffering.

Citizens have, at various times, been asked to collect every last receipt of their expenditures, in order to prove their income and expenses—otherwise, tax evasion is assumed, just as ownership of a car (even if purchased a decade or two ago) or an apartment (even if inherited) is considered proof of wealth and a “hidden income” that is not being declared. The “heroic” former Finance Minister Yanis Varoufakis had previously proposed a cap of cash transactions at 50 or 70 euros on Greek islands that are popular tourist destinations, while also putting forth an asinine plan to hire tourists to work as “tax snitches,” reporting businesses that “evade taxes” by not providing receipts even for the smallest transactions.

All of these measures, of course, are for the Greeks’ own good and are in the best interest of the country and its economy, combating supposedly rampant “tax evasion” (while letting the biggest tax evaders off the hook), fighting the “black market” (over selling cheese pies without issuing a receipt, apparently), and of course, nipping “terrorism” in the bud.

As with the previous discussion I observed about Amazon being a satisfactory replacement for the endangered brick-and-mortar business, one learns a lot from observing everyday conversations amongst ordinary citizens. A recent conversation I personally overheard while paying a bill at a public utility revealed just how successful the initial and largely uncontested steps enacted in Greece have been.

In the line ahead of me, an elderly man announced that he was paying his water bill by debit card, “in order to build towards the tax-free threshold.” When it was suggested to him that the true purpose of encouraging cashless payments was to track every transaction, even for a stick of gum, and to transfer all money into the banking system, he and one other elderly gentleman threw a fit, claiming “there is no other way to combat tax evasion.”

The irony that they were paying by card to avoid taxation themselves was lost on them—as is the fact that the otherwise fiscally responsible Germany, whose government never misses an opportunity to lecture the “spendthrift” and “irresponsible” Greeks, has the largest black market in Europe (exceeding 100 billion euros annually), ranks first in Europe in financial fraud, is the eighth-largest tax haven worldwide, and one of the top tax-evading countries in Europe.

Also lost on these otherwise elderly gentlemen was a fact not included in the official propaganda campaign: Germans happen to love their cash, as evidenced by the fierce opposition that met a government plan to outlaw cash payments of 5,000 euros or more. In addition, about 80% of transactions in Germany are still conducted in cash. The German tabloid Bild went as far as to publish an op-ed titled “Hands off our cash” in response to the proposed measure.

Global powers jumping on cashless bandwagon

Nevertheless, a host of other countries across Europe and worldwide have shunned Germany’s example, instead siding with the IMF and Stiglitz. India, one of the most cash-reliant countries on earth, recently eliminated 86 percent of its currency practically overnight, with the claimed goal, of course, of targeting terrorism and the “black market.” The real objective of this secretly planned measure, however, was to starve the economy of cash and to drive citizens to electronic payments by default.

Indians stand in line to deposit discontinued notes in a bank in Jammu and Kashmir, India,, Dec. 30, 2016. India yanked most of its currency bills from circulation without warning on Nov. 8, delivering a jolt to the country’s high-performing economy and leaving countless citizens scrambling for cash. (AP/Channi Anand)

 

Iceland, a country that stands as an admirable example of standing up to the IMF-global banking cartel in terms of its response to the country’s financial meltdown of 2008, nevertheless has long embraced cashlessness. Practically all transactions, even the most minute, are conducted electronically, while “progressive” tourists extol the benefits of not being inconvenienced by the many seconds it would take to withdraw funds from an ATM or exchange currency upon arrival. Oddly enough, Iceland was already largely cashless prior to its financial collapse in 2008—proving that this move towards “progress” did nothing to prevent an economic meltdown or to stop its perpetrators: the very same banks being entrusted with nearly all of the money supply.

Other examples of cashlessness abound in Europe. Cash transactions in Sweden represent just 3% of the national economy, and most banks no longer hold banknotes. Similarly, many Norwegian banks no longer issue cash, while the country’s largest bank, DNB, has called upon the public to cease using cash. Denmark has announced a goal of eliminating banknotes by 2030. Belgium has introduced a 3,000-euro limit on cash transactions and 93% of transactions are cashless. In France, the respective percentage is 92%, and cash transactions have been limited to 1,000 euros, just as in Spain. Outside of Europe, cash is being eliminated even in countries such as Somalia and Kenya, while South Korea—itself no stranger to IMF intervention in its economy—has, similarly to Greece, implemented preferential tax policies for consumers who make payments using cards.

Aside from policy changes, practical everyday examples also exist in abundance. Just try to purchase an airline ticket with cash, for instance. It remains possible—but is also said to raise red flags. In many cases, renting an automobile or booking a hotel room with cash is simply not possible. The aforementioned Department of Homeland Security manual considers any payment with cash to be “suspicious behaviour”—as one clearly has something to hide if they do not wish to be tracked via electronic payment methods. Ownership of gold makes the list of suspicious activities as well.

Just as the irony of Germany being a largely cash-based society while pushing cashless policies in its Greek protectorate is lost on many Greeks, what is lost on seemingly almost everyone is this: something that is new doesn’t necessarily represent progress, nor does something different. Something that is seemingly easier, or more convenient, is not necessarily progress either. But for many, “technological progress,” just like “scientific innovation” in all its forms and without exception, has attained an aura of infallibility, revered with religious-like fervour.

People queue in front of a bank for an ATM as a man lies on the ground begging for change, in Athens. (AP/Thanassis Stavrakis)

 

Combating purported tax evasion is also treated with a religious-like fervour, even while ordinary citizens—such as the two aforementioned gentlemen in Greece—typically seek to minimize their outlays to the tax offices. Moreover, while such measures essentially enact a collective punishment regardless of guilt or innocence, corporations and oligarchs who utilize tax loopholes and offshore havens go unpunished and are wholly unaffected by a switch to a cashless economy in the supposed battle against tax evasion.

This is evident, for instance, in the case of “LuxLeaks,” which revealed the names of dozens of corporations benefiting from favorable tax rulings and tax avoidance schemes in Luxembourg, one of the original founding members of the E.U. European Commission President Jean-Claude Juncker, formerly the prime minister of Luxembourg, has faced repeated accusations of impeding E.U. investigations into corporate tax avoidance scandals during his 18-year term as prime minister. Juncker has defended Luxembourg’s tax arrangements as legal.

At the same time, Juncker has shown no qualms in criticizing Apple’s tax avoidance deal in Ireland as “illegal,” while having been accused himself of helping large multinationals such as Amazon and Pepsi avoid taxes. Moreover, he has openly claimed that Greece’s Ottoman roots are responsible for modern-day tax evasion in the country. He has not hesitated to unabashedly intervene in Greek electoral contests, calling on Greeks to avoid the “wrong outcome” in the January 2015 elections (where the supposedly anti-austerity SYRIZA, which has since proven to be boldly pro-austerity, were elected).

He also urged the Greek electorate to vote “yes” (in favour of more E.U,-proposed austerity) in the July 2015 referendum—where the overwhelming result in favour of “no” was itself overturned by SYRIZA within a matter of days. In the European Union today, if there’s something that can be counted on, it’s the blatant hypocrisy of its leaders. Nevertheless, proving that old habits of collaborationism die hard in Greece, the rector of the law school of the state-owned Aristotle University in Thessaloniki awarded Juncker with an honorary doctorate for his contribution to European political and legal values.

Cashless policies bode poorly for the future

Where does all this lead though? What does a cashless economy actually mean and why are global elites pushing so fervently for it? Consider the following: in a cashless economy without coins or banknotes, every transaction is tracked. Buying and spending habits are monitored, and it is not unheard of for credit card companies to cancel an individual’s credit or to lower their credit rating based on real or perceived risks ranging from shopping at discount stores to purchasing alcoholic beverages. Indeed, this is understood to be common practice. Other players are entering the game too: in late May, Google announced plans to track credit and debit card transactions.

Claudia Lombana, PayPal’s shopping specialist, stamps a guest’s passport as he visits the travel section of PayPal’s Cashless Utopia in New York (Victoria Will/AP)

 

More to the point though, a cashless economy doesn’t just mean that financial institutions, large corporations, or the state itself can monitor all transactions that are occurring. It also means that the entirety of the money supply—itself now existing only in “virtual” form—will belong to the banking system. Not one cent will exist outside of the banking system, as physical currency will simply not be in circulation. The banking system—and others—will be aware not just of every transaction, but will be in possession of all of our society’s money supply, and will even have the ability to receive a percentage of every transaction that is taking place.

So what happens if your spending habits or your choice of travel destinations raises “red flags”?

What happens if you run into hard times economically and miss a few payments?

What happens if you are deemed to be a political dissident or liability – perhaps an “enemy of the state”?

Freezing a bank account or confiscating funds from accounts can take place almost instantaneously. Users of eBay and PayPal, for instance, are quite aware of the ease with which PayPal can confiscate funds from a user’s account based simply on a claim filed against that individual.

Simply forgetting one’s password to an online account can set off an aggravating flurry of calls in order to prove that your money is your own—and that’s without considering the risks of phishing and of online databases being compromised. Many responsible credit card holders found that their credit cards were suddenly canceled in the aftermath of the “Great Recession” simply due to perceived risk. And if you happen to be an individual deemed to be “dangerous,” you can be effectively and easily frozen out of the economy.

Those thinking that the “cashless revolution” will also herald the return of old-style bartering and other communal economic schemes might also wish to reconsider that line of thinking. In the United States, for instance, bartering transactions are considered taxable by the Internal Revenue Service. As more and more economic activity of all sorts takes place online, the tax collector will have an easier time detecting such activity. Thinking of teaching your child to be responsible with finances? That too will have a cost, as even lemonade stands have been targeted for “operating without a permit.” It’s not far-fetched to imagine that particularly overzealous government authorities could also target such activity for “tax evasion.”

In Greece, while oligarchs get to shift their money to offshore tax havens without repercussion and former Finance Minister Gikas Hardouvelis has been acquitted for failure to submit a declaration of assets, where major television and radio stations operate with impunity without a valid license while no new players can enter the marketplace and where ordinary households and small businesses are literally being taxed to death, police in August 2016 arrested a father of three with an unemployed spouse for selling donuts without a license and fined him 5,000 euros. In another incident, an elderly man selling roasted chestnuts in Thessaloniki was surrounded by 15 police officers and arrested for operating without a license.

Amidst this blatant hypocrisy, governments and financial institutions love electronic money for another reason, aside from the sheer control that it affords them. Studies, including one conducted by the American Psychological Association, have shown that paying with plastic (or, by extension, other non-physical forms of payment) encourage greater spending, as the psychological sensation of a loss when making a payment is disconnected from the actual act of purchasing or conducting a transaction.

But ultimately, the elephant in the room is whether the banking system even should be entrusted with the entirety of the monetary supply. The past decade has seen the financial collapse of 2008, the crumbling of financial institutions such as Lehman Brothers in the United States and a continent-wide banking crisis in Europe, which was the true objective behind the “bailouts” of countries such as Greece—saving European and American banks exposed to “toxic” bonds from these nations. Italy’s banking system is currently teetering on dangerous ground, while the Greek banking system, already recapitalized three times since the onset of the country’s economic crisis, may need yet another taxpayer-funded recapitalization. Even the virtual elimination of cash in Iceland did not prevent the country’s banking meltdown in 2008.

Should we entrust the entirety of the money supply to these institutions?

What happens if the banking system experiences another systemic failure?

Who do you trust more: yourself or institutions that have proven to be wholly irresponsible and unaccountable in their actions? The answer to that question should help guide the debate as to whether society should go cashless.

Source*

Related Topics:

Greece Bans Cash*

IMF to Greece: Sorry We’ll Destroy You*

In the Move towards a Cashless Society India’s GDP Growth Slumps*

India’s Cashless Villages not Really There Yet, But the Nightmare Has Begun*

E.U. Desperate to Raises Taxes Starts Cashless Society Project November 2017*

Ban Cash to Help Central Banks stinks of Total Control – NWO’s Cashless Society*

You Pay more while Banks Profiteer in a Cashless Society…that’s the Convenience*

Hackers Use Dridex Malware To Steal Millions From U.K. Bank Accounts*

Hackers Steal $1bn from Banks*

Congress Want to make it Illegal to Hold cash, Bitcoin, or Other Assets outside of a Bank*

Cashless Society: Use Credit Cards at Your Peril*

Sweden: Money Laundering and Emptying your Account Easier in Cashless Society*

$45 Million Stolen from Banks Worldwide Shows How Easy It is in a Cashless Society*

Hurricane Sandy Challenges a Cashless Society!

Greek Authorities to Launch Mass Confiscation of Safe Deposit Boxes, Securities, Homes in Tax-Evasion Crackdown*

Greek Authorities to Launch Mass Confiscation of Safe Deposit Boxes, Securities, Homes in Tax-Evasion Crackdown*

By Tyler Durden

Last week, the Greek parliament once again approved more austerity to unlock withheld Greek bailout funds in Brussels: a symbolic move, which has little impact without any actual follow through, like for example, actually imposing austerity. And while Greeks have been very good in the former (i.e. promises), they have been severely lacking in the latter (i.e. delivery).

That may be changing. According to Kathimerini, Greek Finance Ministry inspectors are about to start seeking out the owners of all local undeclared properties, while the law will be amended to allow for financial products and the content of safe deposit boxes to be confiscated electronically. The plan for the identification of taxpayers who have “forgotten” to declare their properties to the tax authorities is expected to be ready by year-end, according to the timetable of the Independent Authority for Public Revenue.

What follows then will be a wholesale confiscation by the government of any asset whose source, origins and funding cannot be explained.

The Greek tax authorities will receive support from the Land Register to that end, as by end-September IAPR inspectors are set to obtain access to the company’s database to draw details on properties. Any taxpayers identified as having skipped the declaration of their assets to the tax authorities will be asked to comply and declare them, along with paying the tax and fines dictated by law. Should taxpayers fail to do so, the asset will be “sequestered.”

Kathimerini also notes that the IAPR is also waiting for Parliament to pass regulations permitting the mass confiscation of safe deposit box contents and financial assets such as securities.

To date the process has been conducted in handwriting and is therefore particularly slow in locating the assets of taxpayers who have either concealed incomes or have major debts to the state. It is about to get much more streamlined: once the necessary regulations are in place for the operation of an automatic system to collect debts, the tax authorities will be able to issue online confiscation notices and immediately get their hands on the contents of safe deposit boxes, confiscating cash, precious stones, jewelry and so on. They will also be able to confiscate shares and other securities.

This year the tax authorities will focus their efforts on confiscations as they try to reduce the huge pile of expired debts to the state. In this context the Independent Authority for Public Revenue will auction 27 properties belonging to state debtors by the end of next month, with the aim of collecting 2.7 billion euros by the end of the year from old debts and another 690 million euros of new debts from major debtors.

We will share the details of the auctions with readers as some notable bargains may emerge in the coming months.

Source*

Related Topics:

Greeks Paid €7bn More in Taxes in 2016, as Middle-Classes Vanish and Poverty Increases*

IMF to Greece: Sorry We’ll Destroy You*

There is a new U.S. “Marshall Plan” for Greece*

What Will Unfold as Greece Hires a Rothschild as Debt Advisor*

Greece Bans Cash*

Greece is now a Colony of the E.U.*

Europe’s Vindictive Privatization Plan for Greece*

How German and French Banks Helped Bankrupt Greece*

IMF to Greece: Sorry We’ll Destroy You*

IMF to Greece: Sorry We’ll Destroy You*

By Michael Hudson

Sharmini Peries: The European Commission announced on May 2, that an agreement on Greek pension and income tax reforms would pave the way for further discussions on debt release for Greece. The European Commission described this as good news for Greece. The Greek government described the situation in similar terms. However, little attention has been given as to how the wider Greek population are experiencing the consequences of the policies of the Troika. On May Day thousands of Greeks marked International Workers Day with anti-austerity protests. One of the protester’s a 32-year-old lawyer perhaps summed the mood, the best when he said …

“The current Greek government, like all the ones before it, have implemented measures that has only one goal, the crushing of the workers, the working class and everyone who works themselves to the bone. We are fighting for the survival of the poorest who need help the most.”

To discuss the most recent negotiations underway between Greece and the TROIKA, which is a European Central Bank, the E.U. and the IMF, here’s Michael Hudson. Michael is a distinguished research professor of Economics at the University of Missouri, Kansas City. He is the author of many books including, “Killing the Host: How Financial Parasites and Debt Bondage the Global Economy” and most recently “J is for Junk Economics: A Survivor’s Guide to Economic Vocabulary in the Age of Deception”….Michael, let’s start with what’s being negotiated at the moment.

Michael Hudson: I wouldn’t call it a negotiation. Greece is simply being dictated to. There is no negotiation at all. It’s been told that its economy has shrunk so far by 20%, but has to shrink another 5% making it even worse than the depression. Its wages have fallen and must be cut by another 10%. Its pensions have to be cut back. Probably 5 to 10% of its population of working age will have to immigrate.

The intention is to cut the domestic tax revenues (not raise them), because labour won’t be paying taxes and businesses are going out of business. So we have to assume that the deliberate intention is to lower the government’s revenues by so much that Greece will have to sell off even more of its public domain to foreign creditors. Basically it’s a smash and grab exercise, and the role of Tsipras is not to represent the Greeks because the Troika have said,

“The election doesn’t matter. It doesn’t matter what the people vote for. Either you do what we say or we will smash your banking system.”

Tsipras’s job is to say, “Yes I will do whatever you want. I want to stay in power rather than falling in election.”

Sharmini Peries: Right. Michael you dedicated almost three chapters in your book “Killing the Host” to how the IMF economists actually knew that Greece will not be able to pay back its foreign debt, but yet it went ahead and made these huge loans to Greece. It’s starting to sound like the mortgage fraud scandal where banks were lending people money to buy houses when they knew they couldn’t pay it back. Is it similar?

Michael Hudson: The basic principle is indeed the same. If a creditor makes a loan to a country or a home buyer knowing that there’s no way in which the person can pay, who should bear the responsibility for this? Should the bad lender or irresponsible bondholder have to pay, or should the Greek people have to pay?

IMF economists said that Greece can’t pay, and under the IMF rules it is not allowed to make loans to countries that have no chance of repaying in the foreseeable future. The then-head of the IMF, Dominique Strauss-Kahn, introduced a new rule – the “systemic problem” rule. It said that if Greece doesn’t repay, this will cause problems for the economic system – defined as the international bankers, bondholder’s and European Union budget – then the IMF can make the loan.

This poses a question on international law. If the problem is systemic, not Greek, and if it’s the system that’s being rescued, why should Greek workers have to dismantle their economy? Why should Greece, a sovereign nation, have to dismantle its economy in order to rescue a banking system that is guaranteed to continue to cause more and more austerity, guaranteed to turn the Eurozone into a dead zone? Why should Greece be blamed for the bad mal-structured European rules? That’s the moral principle that’s at stake in all this.

Sharmini Peries: Michael, The New York Times has recently published an article titled, “IMF torn over whether to bail out Greece again.” It essentially describes the IMF as being sympathetic towards Greece in spite of the fact, as you say, they knew that Greece could not pay back this money when it first lent it the money with the Troika. Right now, the IMF sounds rational and thoughtful about the Greek people. Is this the case?

Michael Hudson: Well, Yanis Varoufakis, the finance minister under Syriza, said that every time he talked to the IMF’s Christine Lagarde and others two years ago, they were sympathetic. They said, “I am terribly sorry we have to destroy your economy. I feel your pain, but we are indeed going to destroy your economy. There is nothing we can do about it. We are only following orders.” The orders were coming from Wall Street, from the Eurozone and from investors who bought or guaranteed Greek bonds.

Being sympathetic, feeling their pain doesn’t really mean anything if the IMF says, “Oh, we know it is a disaster. We are going to screw you anyway, because that’s our job. We are the IMF, after all. Our job is to impose austerity. Our job is to shrink economies, not help them grow. Our constituency is the bondholders and banks.”

Somebody’s going to suffer. Should it the wealthy billionaires and the bankers, or should it be the Greek workers? Well, the Greek workers are not the IMF’s constituency. It says: “We feel your pain, but we’d rather you suffer than our constituency.”

So what you read is simply the usual New York Times hypocrisy, pretending that the IMF really is feeling bad about what it’s doing. If its economists felt bad, they would have done what the IMF European staff did a few years ago after the first loan: They resigned in protest. They would write about it and go public and say, “This system is corrupt. The IMF is working for the bankers against the interest of its member countries.” If they don’t do that, they are not really sympathetic at all. They are just hypocritical.

Sharmini Peries: Right. I know that the European Commission is holding up Greece as an example in order to discourage other member nations in the periphery of Europe so that they won’t default on their loans. Explain to me why Greece is being held up as an example.

Michael Hudson: It’s being made an example for the same reason the United States went into Libya and bombed Syria: It’s to show that we can destroy you if you don’t do what we say. If Spain or Italy or Portugal seeks not to pay its debts, it will meet the same fate. Its banking system will be destroyed, and its currency system will be destroyed.

The basic principle at work is that finance is the new form of warfare. You can now destroy a country’s economy not merely by invading it. You don’t even have to bomb it, as you’ve done in the Near East. All you have to do is withdraw all credit to the banking system, isolate it economically from making payments to foreign countries so that you essentially put sanctions on it. You’ll treat Greece like they’ve treated Iran or other countries.

“We have life and death power over you.”

The demonstration effect is not only to stop Greece, but to stop countries from doing what Marine Le Pen is trying to do in France: withdraw from the Eurozone.

The class war is back in business – the class war of finance against labour, imposing austerity and shrinking living standards, lowering wages and cutting back social spending. It’s demonstrating who’s the winner in this economic warfare that’s taking place.

Sharmini Peries: Then why is the Greek population still supportive of Syriza in spite of all of this? I mean, literally not only have they, as a population, been cut to no social safety net, no social security, yet the Syriza government keeps getting supported, elected in referendums, and they seem to be able to maintain power in spite of these austerity measures. Why is that happening?

Michael Hudson: Well, that’s the great tragedy. They initially supported Syriza because it promised not to surrender in this economic war. They said they would fight back. The plan was not pay the debts even if this led Europe to force Greece out of the European Union.

In order to do this, however, what Yanis Varoufakis and his advisors such as James Galbraith wanted to do was say, “If we are going not to pay the debt, we are going to be expelled from the Euro Zone. We have to have our own currency. We have to have our own banking system.” But it takes almost a year to put in place your own physical currency, your own means of reprogramming the ATM machines so that people can use it, and reprogramming the banking system.

You also need a contingency plan for when the European Union wrecks the Greek banks, which basically have been the tool of the oligarchy in Greece. The government is going to have to take over these banks and socialize them, and use them for public purposes. Unfortunately, Tsipras never gave Varoufakis and his staff the go ahead. In effect, he ended up double crossing them after the referendum two years ago that said not to surrender. That lead to Varoufakis resigning from the government.

Tsipras decided that he wanted to be reelected, and turned out to be just a politician, realizing that in order to he had to represent the invader and act as a client politician. His clientele is now the European Union, the IMF and the bondholders, not the Greeks. What that means is that if there is an election in Greece, people are not going to vote for him again. He knows that. He is trying to prevent an election. But later this month the Greek parliament is going to have to vote on whether or not to shrink the economy further and cut pensions even more.

If there are defections from Tsipras’s Syriza party, there will be an election and he will be voted out of office. I won’t say out of power, because he has no power except to surrender to the Troika. But he’d be out of office. There will probably have to be a new party created if there’s going to be hope of withstanding the threats that the European Union is making to destroy Greece’s economy if it doesn’t succumb to the austerity program and step up its privatization and sell off even more assets to the bondholders.

Sharmini Peries: Finally, Michael, why did the Greek government remove the option of Grexit from the table in order to move forward?

Michael Hudson: In order to accept the Eurozone. You’re using its currency, but Greece needs to have its own currency. The reason it agreed to stay in was that it had made no preparation for withdrawing. Imagine if you are a state in the United States and you want to withdraw: you have to have your own currency. You have to have your own banking system. You have to have your own constitution. There was no attempt to put real thought behind what their political program was.

They were not prepared and still have not taken steps to prepare for what they are doing. They haven’t made any attempt to justify non-payment of the debt under International Law: the law of odious debt, or give a reason why they are not paying.

The Greek government has not said that no country should be obliged to disregard its democratic voting, dismantle its public sector and give up its sovereignty to bondholders. No country should be obliged to pay foreign creditors if the price of that is shrinking and self destruction of that economy.

They haven’t translated this political program of not paying into what this means in practice to cede sovereignty to the Brussels bureaucracy, meaning the European Central Bank on behalf of its bondholders.

Note: Wikipedia defines Odious Debt: “In international law, odious debt, also known as illegitimate debt, is a legal doctrine that holds that the national debt incurred by a regime for purposes that do not serve the best interests of the nation, should not be enforceable.”

Source*

Related Topics:

Financial Power Struggle, ISIS and IMF Chief Charged for Corruption*

IMF Chiefs: Prostitution, Kickbacks and Money Laundering*

The Real Purpose of the IMF*

There is a new U.S. “Marshall Plan” for Greece*

What Will Unfold as Greece Hires a Rothschild as Debt Advisor*

In Greece Shock for Cancer Patients: “Life expectancy” Needed for Prescription Medication*

Greece Bans Cash*

Greece’s Former President of Parliament on Why Syriza Party Broke Its Pledge to the People*

Greece is now a Colony of the E.U.*

Europe’s Vindictive Privatization Plan for Greece*

How German and French Banks Helped Bankrupt Greece*

Greeks Paid €7bn More in Taxes in 2016, as Middle-Classes Vanish and Poverty Increases*

Greeks Paid €7bn More in Taxes in 2016, as Middle-Classes Vanish and Poverty Increases*

Two out of ten Greeks paid 80% of the total income taxes last year. At the same time poverty increases: more than 340,000 households declared zero income for the tax year 2015. Data released on Thursday by the Independent Authority for Public Revenue (AADE) shows the stifling tax burden and the disproportionate allocation against the social groups that were once the middle-classes.

The data revealed that 70% of the paid taxes came from employees and pensioners who cannot hide their incomes.

  • €59.4 billion came from taxing incomes of employees and pensioners
  • €6.052 billion came from rent income
  • €4.676 billion came from business activity
  • €3.77 billions came from interests, shares etc
  • €1.25 billion came from agricultural activities

According to the data:

17.6% of the households, about one million taxpayers with annual income 20,000 euros paid 77.13% of the total taxes.

At the same time, income declarations of taxpayers with zero income increase by 34.000.

One out of ten households had not even one euro income in the tax year 2015 (tax declaration in 2016).

Five out of then households declared an annual income below 1,000 euros.

Three in ten households had an annual income of 12,000 euros.

Taxpayers with annual income 20,000-30,000 euros paid a total of 1.4 billion euros

513,509 taxpayers with annual income of 30,000 euros or over paid the lion’s share of taxes due to the state’s inability to contain tax evasion, restructure the public sector and make the necessary reforms.

Each time public finances go off course, it is taxpayers with monthly revenues of more than 2,500 euros who are forced to plug the gaps. On average, these people pay in excess of 9,200 euros in taxes per year.

In total, about 6,194,000 taxpayers declared 2015 incomes of 75.1 billion euros to the tax authorities last year. This increased to taxable revenues of 82.1 billion euros following the incorporation of assets used for the determination of undeclared incomes (known as “tekmiria”/deemed income), and the income tax due amounted to 8 billion euros.

The data illustrate that declared incomes fluctuate from year to year according to the state of the Greek economy: For example, incomes expanded when the economy stabilized in 2014, while they shrank the year after that because of the uncertainty and tough austerity measures that followed.

Declared incomes in the last five years have been as follows:

  • 89.1 billion euros in 2011
  • 80.1 billion euros in 2012
  • 71.2 billion euros in 2013
  • 76.01 billion euros in 2014
  • 75.2 billion euros in 2015.

From all this, we can conclude that Greek taxpayers’ incomes crumbled by about 17.9 billion euros in the first two years after the start of the bailout program. In particular Greek salary workers have lost taxable declared revenues of approximately 5 billion euros in the period from 2011 to 2015, while the biggest losses have been sustained by taxpayers in Attica.

For the tax year 2016 (income declaration in 2017) taxpayers will pay more because of the tax basis from 9,636 last year to 8,636 annual income. Unmarried taxpayer with monthly income 700 euros will pay 200 euros more in taxes when compared to previous years.

Should Greece fail to reach the targets in 2018, another broadening of the tax basis lies ahead. From 8,636 euros currently it will fall down to 5,636. The current tax rate for employees and pensioners is 22%.

PS Taxing the poor is the perfect recipe of IMF’s neo-liberal policies.

Source*

Related Topics:

There is a new U.S. “Marshall Plan” for Greece*

What Will Unfold as Greece Hires a Rothschild as Debt Advisor*

In Greece Shock for Cancer Patients: “Life expectancy” Needed for Prescription Medication*

Greece Bans Cash*

E.U. Throws Greece and Refugees to the Sharks*

Greece is now a Colony of the E.U.*

Europe’s Vindictive Privatization Plan for Greece*

How German and French Banks Helped Bankrupt Greece*

Americans aren’t Filling their Taxes this Year says IRS*

E.U. Desperate to Raises Taxes Starts Cashless Society Project November 2017*

E.U. Passed Tax ID Numbers for Everyone*

A Call for National Tax Disobedience*

E.U., Israel Agree to Develop Eastern Mediterranean Gas Pipeline*

E.U., Israel Agree to Develop Eastern Mediterranean Gas Pipeline*

By Tsvetana Paraskova

Three Mediterranean E.U. countries and Israel agreed on Monday to continue pursuing the development of a gas pipeline project that could link gasfields offshore Israel to Cyprus, Greece, and Italy, and potentially help the E.U. to diversify supplies away from Russia.

The energy ministers of Cyprus, Israel, Italy and Greece agreed to initiate discussions on an intergovernmental accordance on the EastMed Pipeline, Greece’s Minister of Energy, Commerce, Industry and Tourism, Georgios Lakkotrypis tweeted on Monday after meeting with his counterparts in Israel.

The pipeline could be completed in 2025, but the parties will try to speed up the project, Israeli Energy Minister Yuval Steinitz said after the meeting, as quoted by Reuters.

“This is going to be the longest and deepest subsea gas pipeline in the world. It’s a very ambitious project,” The Jerusalem Post quoted Steinitz as saying.

European Commissioner for Climate Action and Energy, Miguel Arias Cañete, who attended the ministerial summit, said in a statement:

“In the next decades, gas flows from the eastern Mediterranean region will play a vital role in the energy security of the European Union. The Commission strongly supports the construction of the necessary energy infrastructure and developing a competitive and liquid gas market in the region.”

IGI Poseidon, the company that has completed the feasibility study, sees a final investment decision on the project by 2020, chief executive Elio Ruggeri told Reuters.

According to Ruggeri, the pipeline would cost $5.3 billion (5 billion euro) to reach the Greek gas system, and $6.4 billion (6 billion euro) to reach the Italian system.

IGI Poseidon—a 50/50 joint venture between Greece’s DEPA and Italy’s Edison SpA¬—said on Monday that it welcomed the support to the EastMed Pipeline Project given by Italian Energy Minister Carlo Calenda and Israeli Minister Steinitz and “confirms its endeavour to advance Project’s development activities in accordance with the existing European framework for expediting Project of Common Interest.”

Source*

Related Topics:

The Israeli Invasion and Gaza’s Offshore Gas Fields*

Behind the False Flag: Israel’s After Gaza’s Natural Gas*

Norway Aiding Israeli Fuel Extraction on the Golan Heights Under Fire*

The Oil-Gas War Over Syria*

Greek Forces to Train in Israel as Syriza-Led Government Deepens Alliance*

There is a new U.S. “Marshall Plan” for Greece*

No Gas from Russia to Europe

The Secret Oil War Has Begun*

 

There is a new U.S. “Marshall Plan” for Greece*

There is a new U.S. “Marshall Plan” for Greece*

The trip to Washington was short and effective. Greek Defense Minister Panos Kammenos cannot hide his enthusiasm about the Trump administration. He was in the White House and heard President Donald Trump saying “I love Greeks! Oh, I love the Greeks!” He had thorough talks with his counterpart Defense Secretary Jim Mattis about security issues and upgrading the   …. of the debt-ridden Greece. Now the Greek defense minister sees even a new Marshall Plan heading towards Greece. Not in form of the famous Marshall Plan after the WWII, with food packages falling from the sky. The new Marshall plan will be in form of ‘economic aid’ – In 21st-century terms: in form of investment.

In an interview to private ANT1 TV Tuesday morning, Kammenos said there is a new U.S. Marshall Plan for Greece.

“A Greek-American fund is interested in Ethniki Insurance, there is a great interest for the purchase and creation of touristic facilities,” Kammenos said.

Ethniki Asfalistiki, the Hellenic National Insurance, owned by the Greek National Bank, is due to be sold, the tender opens today.

Without specifically mentioning any American interest in the energy sector, Kammenos stressed Greece is becoming an energy hub. He reckoned that the pipeline that will transport natural gas from Israel and Cyprus through Crete and Peloponnse to Europe is in design, as so is the large storage facility in Alexandroupolis that will store  gas from the already existing pipelines.

“With the energy issues Greece enters the heart of the world,” Kammenos said reminding of the oil and natural gas resources in the Aegean Sea.

“New energy paths are opening and Greece is in their centre,” Kammenos stressed adding that Greece is in good geostrategic position “as the country  strengthens its cooperation with the U.S., Israel, Egypt and Cyprus.

At the same time, there seems to be another sector open for the new Marshall Plan: defense. Modernization and upgrading of the existing arsenal debt-ridden Greece has no money to spend for.
Panos Kammenos is reportedly very optimistic about this issue. Target is not only the modernization of the naval base in Souda Bay on the island of Crete. Defense Secretary Mattis made a special mention to it.

Upgrade is also needed for the Greek F-16 fighter jets as well as for the maritime surveillance aircraft P-3 Orion.

“The process of modernization of at least 90 F-16 fighter jets has already started,” defense issues website militaire.gr noted on Monday and added there has been intention to consider Greece as one of the customers for the F-35 ‘club’.

After Turkey announced its interest on F-35, the purchasing of F-35 became a challenge for Greece, a challenge it cannot afford.

The website notes that for ten years Greece has not done much in upgrading and modernization stressing that “expensive weapon systems were purchased but were left without technical support. Upgrading that should have been done already in 2008 was out of question.” All these problems require quick solutions.

The Marshall Plan (officially the European Recovery Program, ERP) was an American initiative to aid Western Europe, in which the United States gave over $12 billion (approximately $120 billion in current dollar value as of June 2016) in economic support to help rebuild Western European economies after the end of World War II.

Under the Marshall Plan Greece received $700,000,000 between 1948 and 1952.

However, the Marshall Plan was not ‘aid’ without ‘exchange’.

“The goals of the United States were to rebuild war-devastated regions, remove trade barriers, modernize industry, make Europe prosperous once more, and prevent the spread of communism. The Marshall Plan required a lessening of interstate barriers, a dropping of many regulations, and encouraged an increase in productivity, labour union membership, as well as the adoption of modern business procedures.”

The issue of a new Marshall Plan was raised in 2012 and 2013 by U.S. economist Joseph Stieglitz and U.S. President Barack Obama, when it became clear that Greece cannot deal with its debt.

I suppose the idea was abandoned when the Americans realized that Greece was a member of a common currency union, the eurozone, and that Germany would raise serious objections to the plans. Berlin wanted to be the great reformer and exploiter of Greece.

Source*

Related Topics:

What Will Unfold as Greece Hires a Rothschild as Debt Advisor*

E.U. Throws Greece and Refugees to the Sharks*

Greece is now a Colony of the E.U.*

Europe’s Vindictive Privatization Plan for Greece*

How German and French Banks Helped Bankrupt Greece*

Germany, where’s the Reparation for Greece?*

From New York to Greece ‘We Can’t Breathe’*

Student Collapses in School after Going without Food for 3 Days*

Student Collapses in School after Going without Food for 3 Days*

Volunteers help Crete feed the hungry of Greece

In crisis-hit Greece, some people suffer silently. In the empty four walls of their homes, isolated from the society, the poverty victims feel the pain of the unprecedented humanitarian crisis. Their plight is revealed the moment things have reached bottom. The drama of a family was exposed when one of the children fainted in school right in front of the school director.

The 17-year-old girl collapsed right in front of the school director in one of the high schools in Patras, Peloponnese, on Wednesday morning. The school personnel found out that she had not eaten anything in the last three days.

Local media report that the family has two more children aged 10 and 14, the mother is unemployed and the father had left them long ago.

The school director called on local organizations and citizens to make food donations for the family in need.

Local non-governmental organization ΦΩΤΕΙΝΟ ΑΣΤΕΡΙ  (Shining Star) published the poverty incident on its Facebook page making public two phone numbers for anyone who would like to help the family.

  • mobile: 6981044800
  • landline: 2611122497

On the website of the humanitarian organization that helps children in need up to 16 years old, there is also a Donations page with an IBAN.

Poverty is widespread and such phenomena are not rare.

Such phenomena that pupils and students collapse due to starvation occur often since the economic crisis erupted, aid workers told media.

“Due to her age, the girl was ashamed to say she fainted because she was starving for three days,” F.A. officials said noting that there have been dozens of malnourished students in the broader area.” Younger children speak more easily about their problem,” secretary Nikolakopoulou said.

She reckoned of another incident where the organization was called to help five families whose children were in a local kindergarten.
There are 420 families the organization helps and some travel from the mainland to Patras in order to get food and clothing.

Among the worst cases is a family where both parents are hit by cancer and are unable to financially  sustain their minor children.

Another case was a family consisting of  a father and a minor child in kindergarten age, who had no home and were living in a car.

“The kindergarten informed us about this two-member family,” F.A. president Christos Spiliotopoulos said adding “luckily enough, within 15 days a company that offered the father a job was found.”

Some schools had an aid program distributing free breakfast or snack to students. But the demand is much bigger than aid organizations can cover. Poverty is here in Greece and affects more than 33% of the society.

Source*

Related Topics:

What Will Unfold as Greece Hires a Rothschild as Debt Advisor*

In Greece Shock for Cancer Patients: “Life expectancy” Needed for Prescription Medication*

Greece Bans Cash*

Greece is now a Colony of the E.U.*

Europe’s Vindictive Privatization Plan for Greece*

Greece Prepares for Humanitarian Aid for Greeks*

From New York to Greece ‘We Can’t Breathe’*

Greece: Thousands Queue Up for Food as New President is Sworn In!