STAFF NEWS & ANALYSIS
EU Yard Sale: Location Greece – Everything Goes!
By Staff News & Analysis - July 04, 2011

Greek sovereignty to be massively limited: Juncker … Greece faces severe restrictions on its sovereignty and must privatize state assets on a scale similar to the sell off of East German firms in the 1990s after communism fell, Eurogroup chairman Jean-Claude Juncker (left) said. – Reuters

Dominant Social Theme: Greece must be crushed so that it can rise again. The European Union alone is that bright, shining light on the hill that will illuminate truth and lead the way to rescue.

Free-Market Analysis: We can see from the above article excerpt in Reuters that the Eurocrats are wasting no time in stating what they intend to do to Greece. Jean-Claude Juncker, Prime Minister of Luxembourg and President of the Eurogroup, has gone out of his way to make an extraordinarily blunt statement. Greece is to be dealt with like East Germany. Its bloated public sector is to be liberated; its tax system weaponized; its public efficiencies modernized.

What Juncker doesn't say is that the approach taken towards Greece is one typical of the International Monetary Fund (IMF). What he DOES say is, nonetheless, remarkable. It is a dominant social theme of sorts. "Greece" has requested help and the "European Union" has responded.

We notice as usual that the state itself is being treated as a person. Of course, one wishes to speak in a unitary fashion about a political entity because it is easier to attribute sentiments to an inanimate metaphorical concept. Who knows what "Greece" wants? Juncker can animate "Greece" as he chooses. Here's some more from the Reuters article:

In an interview published after euro zone finance ministers in the Eurogroup approved a further 12 billion euro ($17.43 billion) installment of Greece's bailout, Juncker said he was optimistic that measures agreed with Athens would help to resolve the country's problems.

"The sovereignty of Greece will be massively limited," he told Germany's Focus magazine in the interview released on Sunday, adding that teams of experts from around the euro zone would be heading to Greece. "For the forthcoming wave of privatizations they will need, for example, a solution based on a model of Germany's 'Treuhand agency'," Juncker added, referring to the privatization agency that sold off 14,000 East German firms between 1990 and 1994.

The Greek parliament voted on Thursday to set up a privatization agency under austerity plans agreed with the European Union and IMF, which have provoked violent protests on the streets of Athens. Greeks are acutely sensitive to any infringement of their sovereignty or suggestions of foreign "commissars" getting involved in running the country. "One cannot be allowed to insult the Greeks. But one has to help them. They have said they are ready to accept expertise from the euro zone," Juncker said.

Every part of the above statement is seemingly part of a carefully prepared promotion. Most telling is the phrase, "They are ready to accept expertise from the euro zone." Up to 80 percent of the Greek populace does not wish for help from such a zone, according to surveys. The Parliament itself was deeply divided and voted for the current Greek bailout packaged by a slim margin.

Now it comes clear why Eurozone leaders were so emphatic that the Greek Parliamentary opposition must make common cause with socialists: The promotion rolled out following the vote is that the Greeks have "requested" the various austerity measures yet to come. It is harder to promote this theme when the request is in the form of only a handful votes, as it is.

Nonetheless, the promotion will continue. Such is a feature of dominant social themes. Like the living dead, they advance even when wounded. Bereft even of whole limbs they lurch forward nonetheless. Doubtless, we shall hear over the coming days, weeks and months that "Greece" has "requested" everything about to happen.

And what exactly is that? According to Juncker and others, "Athens" must disgorge some five billion euros in state assets this year alone. If not, it may miss EU/IMF targets and funding to float Greece's debt would be in jeopardy once again.

The Reuter's article makes much of Juncker's reference to Treuhand. "Once the world's biggest holding company, Treuhand was supposed to sell off state property at a profit but closed its books with a huge deficit and a legacy of bitterness among the legions of workers whose jobs it destroyed."

This doesn't bode well for the Greeks, but presumably, it provides a blueprint for Eurocrats who love precedent. As Reuters points out, some four million Germans were employed by Treuhand-owned companies in 1990, but by the time the privatization program had wound down there were only about 1.5 million jobs left.

The gloomy news didn't stop there. "Instead of reaping profits to be distributed to all east Germans, as it was designed to do, it ran up debts of 270 billion marks ($172 billion) in the fire sale of assets." This, then, is what the Greeks have to look forward to. Juncker says it plainly.

Juncker is the fellow who caused a stir recently by estimating that all in Greece could raise some US$100 billion in asset sales. "The current package of measures, which Athens has agreed to, will bring a solution to the Greek question," he said. However, the Greek tax collection system was "not fully functional."

He also said the Greek crisis was the fault of the Greeks. "Between 1999 and 2010 wages rose 106.6 percent even though the economy did not grow at the same pace. The wage policies were completely out of control and not based on (gains in) productivity."

We can see the meme being constructed. It a simple one. The Greeks impetuously spent money they didn't have; and now the "experts" at the EU must move in and take over. Like a Hollywood screenplay, simpler is better. This scenario can be summed up in a single line.

It doesn't matter of course that the scenario is entirely false. The Greeks were enticed by huge amounts of money to join the Eurozone. At every turn, billions were offered and accepted. The Greeks were laved with euros to ensure that their economy was rebalanced and deficits were remedied.

Once the Greeks were part of the EU, banks stepped in again to lend to the government and even to the private sector, based on the credibility of the new, enlarged currency. At no time was the average Greek consulted. The money was offered and deals were made at topmost levels. Elites were enormously enriched. The average Greek was unaware of the damage until the bill came due. And now average Greeks are to pay for it.

It is not only or even mostly about money. It's about control of a more perfect union – European federalism in other words. Greece is merely a vessel into which the ambitions of the EU are poured. In light of Juncker's comments, we can now see why so much pressure was brought to bear on Greek's opposition parties to join forces with the socialists in agreeing to the upcoming Greek "bail out." The idea was to treat the Greek vote as representative of the will of the people.

This is the way EU leaders have operated in the most recent era, using Parliamentary votes whenever possible to substitute for what the larger masses of voters actually want. In fact, where a vote does have to go to referendum, the Eurocrats ordinarily lose. When referendums were held five years ago to approve a new EU constitution, its passage was defeated in several countries, including France.

The constitution was then rewrapped and presented as a Treaty, which conveniently reduced the legal barriers and allowed more Parliamentary votes (as opposed to popular ones). The sticking point was Ireland, where the Treaty required a voters' referendum. The Irish voted nay and the upshot was that the measure was brought to vote again; at which point it was finally approved. Europe had its federalism – further federalism, anyway – and as a result the federalist trend continues.

Here is a speculation: The Greek mess has been blown out of proportion on purpose to generate a precedent for such centralization. Greek's situation is no better or worse than a number of other countries up to and including the US and Britain. Statistics can be massaged any one of a number of ways. Right now it's Greece's turn.

In fact, as we've pointed out in the past, we're continually suspicious of a "market" that undermines Greece but not other countries. We also note how serially these crises occur; one after the other so that the focus is conveniently narrowed. After Greece, and suddenly no doubt, Portugal or Spain may reignite.

We have also suggested that the Eurocrats over-reached. There was to be a crisis – the powers that be made it clear that such a crisis would occur to further European centralization. But we continue to wonder if the crisis is perhaps worse than expected and complicated by the truth-telling power of the Internet.

There is no doubt, thanks to the Internet, that Greeks as whole understand more about what has taken place than they would otherwise. For once, the bankers alone are not being blamed. The system itself, which includes government figures and central bankers, has come under attack. The Internet has limited the ability of the elites to shift the blame wholly to the private sector.

Despite people's understanding, the planned scenario continues. Juncker's statements show us exactly what the Eurocrats have in mind. In order to save the Greeks from themselves, the EU must take over. The question now becomes whether the Greeks will tolerate their metaphorical disemboweling or whether there will be a continued public outcry.

Again, history resolves itself into a confrontation between the Internet and elite memes. The meme coalesces the arguments of the elite; the Internet provides information and organizational support to the Greek people protesting the austerity being inflicted on them. One can see this playing out. It is not a fantasy.

After Thoughts

Like a previous Protestant Reformation long ago, the current Internet Reformation is creating changes that were not previously anticipated. The Eurozone faces complexities that may make outcomes increasingly difficult to predict. Greece, a fulcrum of a civilization, may play a galvanizing role once again.

Posted in STAFF NEWS & ANALYSIS
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