ReInform is organising an event about housing that will take place on Saturday 24th of March, at 15:00, at LAB111 (Arie Biemondstraat 111, Amsterdam).

You are invited to join our discussion about housing which is not considered a basic human right any more but rather a commodity very difficult to obtain. We will also talk about how our cities and neighbourhoods are now shaped to serve the market trends and not the needs of the society.

Our speakers will be Tonia Katerini (architect and member of Solidarity4All), Bart Stuart (activist and artist) and Menno Grootveld (publisher, writer, translator and journalist) who are both members of the group Fair City Movement, and a member of ReInform. The documentary “Ekümenopolis: City Without Limits” which focuses on the urbanization of Istanbul will be screened as well.

This event is the first of a series that ReInform will organise against the T.I.N.A. dogma (There Is No Alternative): One of the biggest weapons of modern capitalism is to promote the notion that even if things are bad, there is no better alternative, so what is left for us to do is to accept the current situation without protest. The scope of these events is to show how different and seemingly unconnected social issues are directly related to the current financial system and initiate discussions about the way we can fight towards a solution to these issues.

Door Dimitris Pavlopoulos, Arbeidssocioloog VU

(scroll down for English)

Hoe Dijsselbloem de Griekse economie ondermijnt

Op 5 juli, de dag van het referendum in Griekenland, heeft de voorzitter van de Eurogroep en PvdA prominent, Jeroen Dijsselbloem, een brief gestuurd aan de leden van zijn partij. Naar mijn mening bevat de brief van dhr. Dijsselbloem een overvloed van onnauwkeurige argumenten en is het eigenlijk niets anders dan een herhaling van de inaccurate en neoliberaal georiënteerde artikelen van de Nederlandse pers de laatste maanden.

De toetreding van Griekenland tot de Eurozone wordt min of meer gepresenteerd als een truc van corrupte Grieken tegen de eerlijke regeringen van Noord-Europa. Wat dhr. Dijsselbloem vergeet te vermelden is de mate waarmee de economische elite van Noord-Europa heeft geprofiteerd van de toetreding van Griekenland (en andere landen in het Zuiden) tot de Eurozone. Zoals de volgende grafiek laat zien, was het deficit van een aantal landen van de Eurozone (inclusief Griekenland) het surplus van een aantal andere landen (inclusief Nederland).

Defensiebudget en lage rente
Dijsselbloem heeft ook kritiek op het Griekse defensiebudget, waarop volgens de Europgroep veel meer moest worden bezuinigd. Wat betreft dat defensiebudget lijkt het, dat dhr. Dijsselbloem denkt dat mensen geen verstand hebben: Nederland is de vierde grootste leverancier van militair materieel aan Griekenland, met contracten die zelfs in de crisisjaren zijn uitgevoerd (na 2010). Griekenland werd tijdens de crisis door de Troika gedwongen om de contracten voor aankoop van militair materieel te eerbiedigen, zelfs in gevallen waarin het materieel te duur en gebrekkig was (zie de zaak van de aanschaf van defecte onderzeeërs van het Duitse bedrijf HDW).

Het argument dat Griekenland heeft geprofiteerd van lage rente om goedkope leningen te krijgen gaat ook niet op. Deze leningen werden verstrekt door voornamelijk in de noordelijke Europese landen gevestigde private banken, die massaal hebben geprofiteerd van het verstrekken van deze leningen.

Wie profiteerde?
Het is hierom dat we het argument van dhr. Dijsselbloem omdraaien door te vragen: wie profiteerde er echt van de toelating van Griekenland tot de Eurozone? Griekenland voldeed absoluut niet aan de criteria van het Verdrag van Maastricht om toe te treden tot de Eurozone. In werkelijkheid zijn deze criteria erkend als ad hoc neoliberale criteria die niet geschikt zijn om het naar elkaar toe groeien van verschillende economieën te garanderen.

In ieder geval verzekerde de aanwezigheid van Griekenland en andere zwakke economieën in de periferie van de Eurozone zowel de export- als de bankensector van Noord-Europa van een grote markt zonder grenzen. Bovendien garandeerde de crisis in de zuidelijke landen dat de noordelijke landen zoals Duitsland en Nederland door investeerders beschouwd werden als een ‘veilige haven’. Volgens conservatieve schattingen zijn de winsten van Duitsland op de nul-rentetarieven waarvan het land profiteerde voor zijn obligaties en de rente die Griekenland betaalde voor de bilaterale leningen gestegen tot €80 miljard.

Behoed voor erger?
De meest ongelofelijke uitspraak van dhr. Dijsselbloem is dat de reddingspakketten en de bezuinigingsmaatregelen die de afgelopen vijf jaar op Griekenland werden toegepast, het volk heeft behoed voor een grotere ramp. Hier kan veel over worden gezegd. Echter, het beste antwoord komt van iemand van zijn eigen club, Karl Otto Pohl, een voormalig directeur van de Bundesbank: “The bail-out was about protecting German and – above all – French banks from debt write-offs. (…) In this way, one understands that in reality it was about saving the banks and the rich Greeks…” [Spiegel, 18/5/2010].

De realiteit bevestigt de voorgaande uitspraak. De onhoudbaarheid van de Griekse schuld was sinds 2009 bij de EU bekend. De sociaaldemocratische premier G. Papandreou manipuleerde het begrotingstekort tot 15.2% (een juridisch onderzoek naar de kwestie is gaande), zodat Griekenland het grootste tekort in de EU heeft en een verzoek om hulp gerechtvaardigd is. Na twee opeenvolgende reddingspakketen in 2010 en 2012 is de Griekse schuld nauwelijks afgenomen.

Wat wel veranderde, is de samenstelling van de schuldeisers. Concreet: In 2010 bezaten de officiële schuldeisers (regeringen, ECB enz.) minder dan een derde van de Griekse staatsschuld. Tegenwoordig bezitten ze meer dan drie kwart. Conclusie: de Europese banken werden gered van een faillissement! De bewering van dhr. Dijsselbloem “…de jaarlijkse kosten van Griekse rentebetalingen zijn erg laag” maakt duidelijk dat hem kennis ontbreekt over de basisgegevens van de Griekse economie. Alleen al over 2015 bedroegen de kosten voor de rentebetalingen van de staatsschuld 12.3% van het bbp en meer dan 50% van het netto nationaal beschikbaar inkomen.

Tegelijkertijd explodeerden de inkomensongelijkheid en de ongelijkheid van de verdeling van de rijkdom in Griekenland. Van 2009 tot 2012 is de inkomensverhouding tussen het rijkste vijfde deel van de bevolking en het armste vijfde deel gestegen van 5.8 tot 6.6. Van 2011 tot 2013 steeg het aantal individuen met een rijkdom groter dan €30 miljoen van 445 tot 505 en steeg hun totale rijkdom van €50 miljard tot €60 miljard ofwel 32% van het bbp. Dit alles gebeurde onder de neus van de Troika, die elke kleine wet goedkeurde die het parlement aannam.

De Trojka frustreert de belastingplannen
Wij nodigen dhr. Dijsselbloem uit om bewijs aan te dragen dat de Troika van enige Griekse regering in de afgelopen vijf jaar serieus heeft geëist om de allerrijksten belasting op te leggen. Heeft de Troika gedreigd met stoppen van het aanbieden van de tranches van de lening vanwege het falen van de voorgaande regeringen om de ‘Lagarde lijst’ te onderzoeken (de lijst met mogelijke belastingontduikers met spaarrekeningen bij HSBC in Zwitserland)? Heeft de Troika ooit geëist dat de private tv kanalen worden belast, die sinds 1991 opereren zonder een enkele euro belasting te betalen? In de laatste onderhandelingen voor het referendum eiste de Troika (en specifiek het IMF) in plaats daarvan van de Griekse regering, om het plan af te schaffen om een eenmalige nieuwe belasting op te leggen aan bedrijven met een netto winst groter dan €1 miljoen, als een maatregel die groei belemmert! In plaats daarvan eisten ze van de regering om een speciale aanvulling van pensioenen (EKAS) te schrappen, met het gevolg dat mensen met pensioenen van €400 en €500 nieuwe verliezen moeten dragen.

Dhr. Dijsselbloem heeft ook verzaakt om een aantal andere eisen tot ‘hervormingen’ van de Troika te rapporteren. De Troika eiste van de SYRIZA-regering afschaffing van de plannen voor de versterking van de kracht van collectieve arbeidsovereenkomsten en het verhogen van het minimum loon tot een brutobegrag van €751 per maand. Dhr. Dijsselbloem en zijn collega’s eisten van de Griekse regering afschaffing van het plan van €200 miljoen (dat is wat dhr. Dijsselbloem ‘een hoop geld’ noemt…), om voedselbonnen en gratis electriciteit te verstrekken aan families die in de diepste armoede leven. Ze eisten ook de afschaffing van de bescherming van arme huiseigenaren tegen uitzettingen vanwege schulden. Dit zijn de structurele hervormingen die dhr. Dijsselbloem eist van de Grieken!

De EU, ECB en het IMF vertegenwoordigen niet de Europeanen
Dijsselbloem en co in de EU, de ECB en het IMF vertegenwoordigen niet de Europeanen. Zij vertegenwoordigen het belang van de financiële markten en de economische elites. Voor hen is het ultieme doel een linkse regering (zelfs met een zeer gematigd links programma) enige kans op succes te ontnemen. Zij willen laten zien dat neoliberalisme en bezuinigingen de enige weg zijn voor Europa; niet alleen voor Griekenland, maar ook voor Nederland, zoals de praktijk van de huidige regering laat zien. Dat is waarom dhr. Dijsselbloem bot intervenieerde in het proces van het referendum en dat is waarom hij in zijn brief duidelijk aangeeft dat hij zou willen dat andere politici ingrijpen in Griekenland.

Het Griekse volk nam een duidelijke beslissing in het referendum; het bezuinigingsbeleid zou moeten ophouden. Ze gaven ook een duidelijk antwoord op de chantage van Dijsselbloem en co: het volk zelf zal beslissen over de toekomst van Griekenland en niet de bureaucraten en lobbyisten van Brussel of de bankiers van Frankfurt. Nu zijn de progressieven overal in Europa aan de beurt om hierover een positie in te nemen.

Het is de hoogste tijd dat dhr. Dijsselbloem aftreedt als voorzitter van de Eurogroep. Hij heeft laten zien dat hij de democratie niet respecteert en dat hij het recht van het volk om over de eigen toekomst te beslissen negeert. Het is van belang dat zelfs de PvdA leden dit verzoek onderschrijven en een standpunt in nemen voor het recht van het Griekse volk om los te breken van de dodelijke spiraal van bezuinigingen. Het standpunt van dhr. Dijsselbloem en de manier waarop hij de ‘Griekse kwestie’ heeft behandeld maakt duidelijk dat hij niets te maken heeft met sociaaldemocratische principes.

Lees hier de brief van Jeroen Dijsselbloem aan de PvdA-leden

Source of the article:http://www.joop.nl/opinies/detail/artikel/33002_dijsselbloem_treed_af_als_voorzitter_van_de_eurogroep/

The article was originally written in English and it has been translated into Dutch by Maaike van Kregten.

Dijsselbloem, resign from Eurogroup presidency!

By Dimitris Pavlopoulos

Dimitris Pavlopoulos works as an assistant professor in Sociology at the VU University in Amsterdam.

On July 5^th, the day of the referendum in Greece,  the president of the Eurogroup and prominent member of the Dutch Labour Party, Jeroen Dijsselbloem addressed a letter to the member of his party. In our opinion, the letter of Dijsselbloem contains a plethora of inaccurate arguments and is actually nothing else than a repetition of the inaccurate and neoliberal-oriented articles of the Dutch press the last months.

The accession of Greece to the Eurozone is presented more or less as trick of corrupted Greek people against the honest governments of northern Europe. What Dijsselbloem fails to mention is the extent to which the economic elite of northern Europe has profited from the accession of Greece (and other countries of the South) to the Eurozone. As shown also in the following graph, the deficit of some countries of the Eurozone (including Greece) was the surplus of some others (including the Netherlands). As for the defence budget, it seems that Mr Dijsselbloem takes people for idiots: the Netherlands is the 4^th largest supplier of military equipment to Greece with contracts being executed even within the years of crisis (after 2010). Greece was forced by the Troika to honour the contracts for buying military equipment within the crisis even in cases where the equipment was overpriced and faulty (see the case of the purchase of faulty submarines from the German company HDW).

The argument that Greece profited from the low interest rates to increase credit is also void. These loans were provided by private banks established mainly in northern European countries that profited massively by providing these loans.

Therefore, we reverse the argument of Mr Dijsselbloem by asking: who profited really from the accession of Greece to the Eurozone? Greece definitely did not fulfil the criteria of the Maastricht treaty for accessing the Eurozone. Actually, these criteria themselves have been recognized as ad hoc neoliberal criteria that are not able to ensure the conversion of different economies. In any case, the presence of Greece and other weak economies of the periphery in the Eurozone ensured that a large market without borders is available for the export business and the banking sector of northern Europe. Moreover, the crisis in the countries of the south ensured that countries of the north such as Germany and the Netherlands were considered as ‘save havens’ for investors. Conservative estimates raise the gains of Germany from the zero interest rates it enjoyed for its bonds and the interest paid by Greece for the bilateral loans to €80 billion.

The most incredible claim of Mr Dijsselbloem is that the rescue packages and the austerity policies that were imposed to Greece the last 5 years saved the people from a greater disaster. A lot can be argued against this. However the best answer comes from a person of his own club, Karl Otto Pohl, a former director of the Bundesbank: ‘The bail-out was about protecting German and -above all- French banks from debt write-offs.‘… ‘In this way, one understands that in reality it was about saving the banks and the rich Greeks…‘ (Spiegel, 18/5/2010).

Reality confirms the aforementioned statement. The unsustainability of the Greek debt was known to the EU since 2009. The social-democrat Greek PM G. Papandreou manipulated the budget deficit to 15.2% (a judicial investigation of the issue is underway) so that Greece has the largest deficit in the EU and a rescue request is justified. After 2 successive bail-outs in 2010 and 2012, the absolute level of the Greek debt remained hardly decreased. However, the holders of the debt changed dramatically. In 2010, the official creditors (governments, ECB etc.) held less than 1/3 of the Greek sovereign debt. Today, they hold more than ¾. Conclusion: the banks were rescued from bankruptcy! The argument of Mr Dijsselbloem that “…the yearly costs of servicing the Greek debts are very low” shows that he lacks knowledge of the basic figures of the Greek economy. Only for 2015, the costs of servicing the sovereign debt amount to 12.3% of GDP and more than 50% of the Net National Disposable Income.

At the same time, income and wealth inequality exploded in Greece. From 2009 to 2012, the income ratio between the richest fifth of the population and the poorest rose from 5.8 to 6.6. From 2011 until 2013, the number of individuals with wealth higher than €30 million rose from 445 to 505 and their total wealth rose from €50 billion to €60 billion or else 32% of GDP. All this was happening under the nose of the Troika that was approving every little law passed by the Parliament.

We invite Mr Dijsselbloem to provide evidence proving that the Troika demanded seriously from any Greek government of the last 5 years to tax the very rich. Did the Troika threaten to stop providing the loan tranches because of the failure of the previous governments to investigate the “Lagarde list” (cc. list of possible tax evaders with deposits in HSBC in Switzerland)? Did the Troika ever demand the taxation of private TV channels that have been operating since 1991 without having paid a single euro in taxes? Instead, in the last negotiations before the referendum, the Troika (and specifically the IMF) demanded from the Greek government to abolish its plan for imposing a one-off new tax to companies with net profit larger than €1 million, claiming that it is a measure of hampering growth! On the contrary, they demanded from the government to cut a special assistance benefit for pensioners (EKAS) that would cause pensioners with an income of a €400 and €500 per month to suffer new losses.

Mr Dijsselbloem fails also to report some other demands of the Troika for ‘reforms’. The Troika demanded from the SYRIZA-government to abolish its plans for giving power to collective bargaining and increasing the minimum wage to a gross amount of €751 per month. Mr Dijsselbloem and his colleagues demanded from the Greek government to abolish its €200 million plan (that’s what Mr Dijsselbloem calls ‘a lot of money’…) for providing food stamps and free electricity to families living in absolute poverty. They also demanded the abolition of the protection of poor home-owners from evictions due to debts. These are the structural reforms that Mr Dijsselbloem demands from the Greek people!

Dijsselbloem and co in the EU, the ECB and the IMF do not represent the people of Europe. They represent vested interest of the financial markets and the top economic elites. For them, the ultimate aim is depriving a left government (even with a very moderate left program) of any chance of success. They want to show that neoliberalism and austerity is the only way for Europe; not only for Greece but also for the Netherlands, as the practice of the current Dutch government shows. That’s why Mr Dijsselbloem intervened so bluntly in the process of the referendum and that’s why in his letter, he clearly states that he would like other politicians to step in in Greece.

The Greek people took a clear decision in the referendum: austerity policies should end. They also gave a clear answer to the blackmail of Dijsselbloem and co: the people themselves will decide for the future of Greece and not the bureaucrats and lobbyists of Brussels or the bankers of Frankfurt. It is now progressive people’s turn throughout Europe to take a position on it.

We call Mr Dijsselbloem to resign immediately from the presidency of the Eurogroup. He has shown that he disregards democracy and that he ignores their right to decide on their own future. We call the members of the Dutch Labour Party to endorse this request and take a position on the right of the Greek people to break free from the deadly spiral of austerity. The position of mr Dijsselbloem and the way he handled the ‘Greek issue’ shows that he has nothing to do with any social-democratic principles.

Read here the letter of Dijsselbloem to the members of the Dutch Labor Party, on July 5th

The Truth Committee on Public Debt (Debt Truth Committee) was established on April 4, 2015, by a decision of the President of the Hellenic Parliament, Ms Zoe Konstantopoulou, who confided the Scientific Coordination of its work to Dr. Eric Toussaint and the cooperation of the Committee with the European Parliament and other Parliaments and international organizations to MEP Ms Sofia Sakorafa.

Members of the Committee have convened in public and closed sessions, to produce this preliminary report, under the supervision of the scientific coordinator and with the cooperation and input of other members of the Committee, as well as experts and contributors.

This is the link to the report in English: http://cadtm.org/IMG/pdf/Report.pdf

Below follows  the Executive Summary of the report from the Debt Truth Committee in Dutch. It is translated into Dutch by the Transnational Institute in Amsterdam:

Samenvatting van het verslag van de Waarheidscommissie Schuld

17 juni door de Waarheidscommissie Schuld

In juni 2015 staat Griekenland op een kruispunt. Het land moet óf kiezen voor het voortzetten van de mislukte macro-economische aanpassingsprogramma’s opgelegd door zijn schuldeisers, of voor echte verandering om de ketenen van de schuld te verbreken. Vijf jaar nadat de economische aanpassingsprogramma’s in gang zijn gezet, zit het land nog altijd muurvast in een diepe economische, sociale en ecologische crisis. De zwarte doos van de schuld blijft hermetisch gesloten en tot nu toe heeft geen enkele bevoegde instantie, Grieks dan wel internationaal, gepoogd om de waarheid aan het licht te brengen over hoe en waarom Griekenland is onderworpen aan het regime van de Trojka. De schuld, omwille waarvan niets en niemand is ontzien, blijft de regel door middel waarvan neoliberale aanpassing wordt opgelegd, en de diepste en langste recessie ooit in Europa in vredestijd ervaren.

Er is een dwingende noodzaak en een maatschappelijke verantwoordelijkheid om actie te ondernemen op een waaier aan juridische, sociale en economische kwesties die nodig gericht moeten worden aangepakt. Om hieraan tegemoet te komen, heeft het Griekse parlement in april de Waarheidscommissie inzake de Staatsschuld ingesteld, met een mandaat om een onderzoek in te stellen naar het ontstaan en de toename van de staatsschuld, de manier waarop en de redenen waarom schulden zijn aangegaan, en de impact die de randvoorwaarden verbonden aan de leningen hebben gehad op de economie en de bevolking. De Waarheidscommissie is gemachtigd om de bewustwording te bevorderen rond zaken gerelateerd aan de Griekse schuld, zowel op nationaal als internationaal niveau, en argumenten aan te dragen voor kwijtschelding van de schuld en manieren waarop dit zou kunnen.

Het onderzoek van de Commissie zoals gepresenteerd in dit voorlopige rapport belicht het feit dat het hele aanpassingsprogramma waaraan Griekenland is onderworpen een politiek georiënteerd programma is en blijft. De technische exercitie rond macro-economische variabelen en schuldprojecties – cijfers die rechtstreeks raken aan het leven en de bestaansmogelijkheden van mensen -, heeft het mogelijk gemaakt dat discussies over de schuld zich zuiver op het technische niveau konden blijven afspelen en dan vooral rond het verhaal dat de maatregelen die werden opgelegd Griekenland beter zouden toerusten op het terugbetalen van de schuld. De feiten zoals gepresenteerd in dit rapport zetten grote vraagtekens bij dat betoog.

Al het bewijs dat we in dit rapport aandragen, laat zien dat Griekenland niet alleen niet in staat is tot het terugbetalen van deze schuld, maar die schuld ook niet zou moeten terugbetalen, om de simpele reden dat de schuld die voortkomt uit de regelingen van de Trojka een directe inbreuk vormt op de fundamentele mensenrechten van de inwoners van Griekenland. Op die gronden zijn wij tot de conclusie gekomen dat Griekenland deze schuld niet zou moeten terugbetalen: deze is onrechtmatig, onwettig en schandelijk.

Het is de Commissie ook duidelijk geworden dat de onhoudbaarheid van de Griekse staatsschuld de internationale crediteuren, de Griekse autoriteiten en de commerciële media van meet af aan al duidelijk was. Toch verzetten de Griekse autoriteiten zich, tezamen met enkele andere EU-regeringen, in 2010 tegen de herstructurering van de staatsschuld teneinde financiële instellingen te beschermen. De commerciële media verhulden de waarheid richting de publieke opinie door de zaken zo af te schilderen als zou deze bailout in het voordeel zijn van Griekenland, en tegelijkertijd een discours op te tuigen bedoeld om de bevolking neer te zetten alsof zij gewoon hun verdiende loon kregen voor hun wangedrag.

De steunfondsen waarin de programma’s van 2010 en 2012 voorzagen zijn extern beheerd middels complexe structuren, die elke fiscale autonomie onmogelijk maakten. De aanwending van de steunfondsen wordt volledig gedicteerd door de crediteuren, waarbij in het oog springt dat minder dan 10% van deze fondsen zijn ingezet voor lopende uitgaven van de overheid.

Dit voorlopige verslag schetst de belangrijkste problemen en aandachtsgebieden m.b.t. de staatsschuld, en vestigt de aandacht op belangrijke schendingen van de wet m.b.t. het aangaan van de schuld; het brengt ook de juridische grondslag in kaart op grond waarvan unilaterale opschorting van de schuldaflossingen zou kunnen worden gebaseerd. De bevindingen worden gepresenteerd in negen hoofdstukken, die als volgt zijn gestructureerd:

Hoofdstuk 1, Schuld voor de Trojka, analyseert de aanwas van de Griekse staatsschuld sinds de jaren 1980. Het concludeert dat de toename van de schuld niet te wijten was aan excessieve overheidsuitgaven, die in feite achterbleven bij de publieke uitgaven in andere landen van de Eurozone, maar veeleer veroorzaakt werd door uitkering van extreem hoge rentepercentages aan crediteuren, buitensporige en ongerechtvaardigde defensie-uitgaven, een verlies aan belastinginkomsten als gevolg van onrechtmatige kapitaalvlucht, herkapitalisatie van private banken door de overheid, en de interne onevenwichtigheden die ontstonden door onvolkomenheden in de structuur van de Monetaire Unie zelf.

De invoering van de euro leidde tot een drastische toename van private schulden in Griekenland, waaraan zowel grote Europese particuliere banken als de Griekse banken werden blootgesteld. Een aanzwellende bankencrisis droeg bij aan de Griekse staatsschuldencrisis. De regering van George Papandreou hielp in 2009 om de elementen van een bankencrisis te presenteren als een staatsschuldencrisis door het overheidstekort en de staatsschuld te benadrukken en te vergroten.

Hoofdstuk 2, Ontwikkeling van de Griekse staatsschuld in de periode 2010-2015, concludeert dat het eerste pakket leningen van 2010 primair gericht was op het redden van de Griekse en andere Europese particuliere banken, en de banken in staat te stellen hun belang in Griekse staatsobligaties omlaag te brengen.

Hoofdstuk 3, Griekse staatsschuld uitgesplitst naar crediteuren in 2015, beschrijft het controversiële karakter van de huidige Griekse schuld middels een uiteenzetting van de basiskenmerken van de leningen, die aan een nadere analyse worden onderworpen in hoofdstuk 8.

Hoofdstuk 4, Schuldenmechanisme in Griekenland beschrijft de mechanismen die in het leven zijn geroepen door de overeenkomsten die sinds mei 2010 zijn geïmplementeerd. Die hebben een aanzienlijke hoeveelheid nieuwe schulden aan bilaterale crediteuren en het Europese Financiële Stabiliteitsfonds (EFSF) gecreëerd, terwijl ze tegelijkertijd zorgden voor oneigenlijke kosten die de crisis verder hielpen versterken. Deze mechanismen laten zien hoe het merendeel van de geleende fondsen rechtstreeks is overgeheveld naar financiële instellingen. In plaats van dat zij ten goede zijn gekomen aan Griekenland, hebben zij het proces van privatisering helpen versnellen middels het gebruik van financiële instrumenten.

Hoofdstuk 5, Voorwaarden in strijd met houdbaarheid, laat zien hoe de crediteuren verstrekkende voorwaarden koppelden aan hun kredietovereenkomsten, die rechtstreeks leidden tot de economische uitzichtloosheid en onhoudbaarheid van de schuld. Deze voorwaarden, waaraan de crediteuren nog altijd vasthouden, hebben niet alleen bijgedragen tot een lager BBP en tot meer lenen door de staat, wat weer gezorgd heeft voor een hogere schuldquote, wat de schuld van Griekenland nog onhoudbaarder heeft gemaakt, maar hebben eveneens gezorgd voor dramatische veranderingen in de samenleving en een humanitaire crisis veroorzaakt. De Griekse staatsschuld moet inmiddels als volledig onhoudbaar worden beschouwd.

Hoofdstuk 6, Impact van de “bailout-programma’s” op mensenrechten concludeert dat de maatregelen die onder de “bailout-programma’s” zijn doorgevoerd, rechtstreeks hebben aangegrepen op de leefomstandigheden van de bevolking en hebben gezorgd voor schendingen van mensenrechten die Griekenland en zijn partners onder zowel het nationale als het regionale en het internationale recht gehouden zijn te respecteren, te beschermen en te bevorderen. De drastische aanpassingen opgelegd aan de Griekse economie en maatschappij als geheel hebben gezorgd voor een snelle verslechtering van de levensstandaard en zijn onverenigbaar met sociale rechtvaardigheid, sociale cohesie, democratie en mensenrechten.

Hoofdstuk 7, Juridische kwesties inzake het MoU en de kredietovereenkomsten betoogt dat er sprake is van schending van de mensenrechtenverplichtingen zowel door Griekenland zelf als door zijn geldschieters, d.w.z. de geldverstrekkende landen uit de Eurozone, de Europese Commissie, de Europese Centrale Bank en het Internationaal Monetair Fonds, die deze maatregelen aan Griekenland hebben opgelegd. Al deze actoren zijn in gebreke gebleven als het gaat om het in kaart brengen van de mensenrechtenschendingen als gevolg van het beleid dat zij Griekenland dwongen te voeren. Zij schonden ook rechtstreeks de Griekse grondwet door Griekenland de facto te beroven van het gros van zijn soevereine rechten. De overeenkomsten bevatten oneigenlijke clausules, die Griekenland feitelijk dwingen tot het opgeven van belangrijke aspecten van zijn soevereiniteit. Dat komt letterlijk tot uitdrukking in de keuze voor het Engelse recht als het toepasselijk recht voor deze overeenkomsten, hetgeen het mogelijk maakte om de Griekse grondwet en internationale verplichtingen op het gebied van de mensenrechten te omzeilen.

Strijdigheid met mensenrechten en gewoonterechtelijke verplichtingen, diverse aanwijzingen dat contractpartijen te kwader trouw hebben gehandeld, die samen met het onredelijke karakter van de overeenkomsten, deze overeenkomsten ongeldig maken.

Hoofdstuk 8, Beoordeling van de schulden uit oogpunt van onrechtmatigheid, schandelijkheid, onwettigheid en onhoudbaarheid geeft een evaluatie van de Griekse staatsschuld op basis van de definities inzake onrechtmatige, schandelijke, onwettige en onhoudbare schulden zoals vastgesteld door de Commissie.

Hoofdstuk 8 concludeert dat de Griekse staatsschuld zoals die op 15 juni bestond onhoudbaar is, omdat Griekenland momenteel niet in staat is om aan zijn aflossingsverplichtingen te voldoen zonder zijn vermogen om tegemoet te komen aan basale mensenrechtenverplichtingen ernstig geweld aan te doen. Bovendien verschaft het rapport inzake elke crediteur bewijzen van illustratieve gevallen van onrechtmatige, onwettige en schandelijke schulden.

De schuld aan het IMF moet onwettig worden geacht, omdat de toezegging ervan in strijd was met de statuten van het IMF zelf, en omdat de eraan gekoppelde voorwaarden in strijd waren met de Griekse grondwet, het internationaal gewoonterecht en verdragen waarin Griekenland partij is. Hij is tevens onrechtmatig, omdat de voorwaarden ook beleidsvoorschriften omvatten die inbreuk maakten op mensenrechtenverplichtingen. Tot slot is hij schandelijk omdat het IMF wist dat de opgelegde maatregelen ondemocratisch en ineffectief waren, en zouden leiden tot ernstige schendingen van sociaaleconomische rechten.

Source of the documents: http://cadtm.org/Preliminary-Report-of-the-Truth

Our report, Fool’s Gold , reveals that tax avoidance by Canadian mining company Eldorado Gold, which uses mailbox companies in the Netherlands, has led to tax losses of at least €1.7 million for Greece in the past two years. There are also serious environmental and human right concerns related to the company’s operations.

Eldorado Gold avoids tax

Eldorado Gold uses Dutch mailbox companies to avoid paying taxes while having no material operations in the Netherlands. Fool’s Gold has found that Eldorado Gold has a loan-financing structure that shifts interest payments from Greek subsidiary Hellas Gold SA, via Dutch mailbox companies to a Barbados entity where this income remains untaxed. If this financing structure persists, future profits from the project and related income tax can be expected to be substantially reduced, especially if practised in combination with other tax avoidance techniques widely used by extractive sector firms.

“The European Union and the Netherlands have double standards. On the one hand they impose harsh austerity measures which have devastating social and economic impacts in Greece; on the other hand they actively facilitate tax avoidance which costs the Greek state millions of euros,” says SOMO researcher Katrin McGauran.

Widespread tax avoidance through Dutch mailbox companies

Fool’s Gold shows that the case of Eldorado Gold is not an isolated one – rather, the Netherlands and Luxembourg are widely used tax conduit countries for foreign companies investing in Greece. The report shows that a staggering 80 per cent of direct investments from the Netherlands to Greece are routed through mailbox companies – an underreported issue in discussions on the causes of Greece’s budget deficit.

SOMO researcher Indra Römgens: “Tax abuse by large corporations operating in Greece and the facilitating role that EU law and Member States’ fiscal regimes play therein should be closely scrutinised by the new European Parliament’s special committee on tax rulings.”

Livelihoods threatened

Fool’s Gold reviews scientific evidence on the expected environmental destruction resulting from Eldorado Gold’s open-pit gold mining plans, corresponding to the size of 250 football fields. Mining is set to destroy local primeval forests in Halkidiki and the local community fears the mines will endanger lives through pollution. Aside from health concerns, this will destroy local jobs that depend on tourism, small-scale farming, forestry and fishing. Protests by the local community against the mine have been brutally repressed by police and criminalised by the Greek state. Amnesty International has repeatedly raised concerns about police misconduct and called on the Greek state to investigate. While the former government supported the company’s mining plans, the new government has promised to review its contract with Eldorado Gold.

“In its review of the mining contract the Greek government should conduct a cost-benefit analysis that scrutinises the company’s aggressive tax planning structure for legality, and quantifies not only expected future tax revenues and job creation, but also environmental, social and job losses expected to arise from the operations,” adds Katrin. “These damning findings should lead to the Dutch government ending its fiscal support for Eldorado Gold and radically reforming its tax system.”

Source:http://www.thepressproject.net/article/75130/Crisis-ridden-Greece-hit-by-tax-avoidance-through-the-Netherlands

Is the state making a comeback? It can certainly look like it. Old-fashioned interstate conflicts are roiling the China Sea and Russia’s western borders. Inter-governmental meetings such as the last Apec conference and the Group of 20 leading economies in Sydney took on an unwonted urgency. More positively, it is old-fashioned diplomacy that is making the running on issues from Iran’s nuclear programme to global warming.

Yet the dominant view since the early 1990s has been that globalisation meant the transformation of the world through non-state actors. The end of the cold war ushered in an almost Marxist expectation that the state would wither away – overshadowed by free flows of money and goods, undermined by non-state actors of which terrorist groups were only the most obvious. It was an expectation shared right across the political spectrum.

On the left, critics of market globalisation anticipated the rise of people power. Non-governmental organisations would supersede the supposedly worn out institutions of the nation state and create new, more vibrant forms of political activity. Technology would bring better solutions to old problems, bypassing stagnant state institutions.

The neoliberal right hailed the rise of global finance, the dismantling of capital controls and the deregulation of banking, not least because all of these weakened national governments’ capacity to control markets. In manufacturing and services, enormous new powers accrued to corporations able to take advantage of differing tax regimes and wage levels across the world.

Yet these hopes underestimated the sheer staying power – indeed the legitimacy – of the state and its institutions, and the extreme difficulty of creating new ones from scratch. NGOs remain on the sidelines: international organisations are vehicles for clusters and coalitions of national states to act in concert where they can. To that extent they are essentially derivative, reflecting the wishes of their most powerful members. The idea that they could be freed from the clutches of national governments was a pipe dream.

And the neoliberal infatuation with unfettered markets has not fared much better. The era of globalisation was always one of instability and in Mexico, east Asia, and Russia, the costs of crisis were evident to those who cared throughout the 1990s. But it was only a decade later, when the failure of Lehman Brothers and its aftermath robbed Americans and Europeans of their faith in capitalism, that perceptions started to change where it counted.

Since then, power has shifted back towards the state on multiple fronts. It was, after all, taxpayers who bailed the banks out. It fell to central banks, in conjunction with finance ministries, to superintend the exit from crisis. Since 2010, the increasing inequality that has accompanied the recovery has fuelled an underlying swell of electoral anger not only against the banks but also against the light tax burdens enjoyed by many global corporations. The change in sentiment threatens further trade liberalisation and has propelled calls for the international harmonisation of corporation taxes up the political agenda. At the same time, Vladimir Putin’s muscle-flexing illustrates the continued indispensability of states in settling matters of war and peace.

In reality, the state has been with us the whole time. Its fiscal imprint has hardly changed in decades: US government receipts, for instance, are much the same percentage of output today as in 1960. In the UK, public spending has fluctuated within a fairly narrow band throughout the same period. What happened over the past two or three decades was less a withering away of the state than a recalibration of official priorities. Abdicating strategic planning internally, the state become an arbiter of regulatory regimes. Externally, it transformed defence budgets, transferring resources from men to machines.

The financial crisis has accelerated some of these trends and started to reverse others. States – or the politicians who lead them – are still reluctant to do what would have been done in the 1940s. They remain strikingly reluctant to impose tougher penalties on banks or to identify unemployment as a priority. But what is perhaps important is what the crisis has done globally: by discrediting the more mythical idealisations of the market, it has encouraged the restoration of state power as a goal in itself. This programme is easily harnessed by authoritarian leaders in the name of national sovereignty and democracy. Hungary and Russia exemplify the trend. We have heard a lot, this past 20 years, about the decline of the state. We will not be hearing much more.

The writer is professor of history at Columbia and author of ‘Governing the World: The History of an Idea’

Source of the article: http://www.ft.com/intl/cms/s/0/61915746-756e-11e4-a1a9-00144feabdc0.html#axzz3NfPo7PJZ

Source of the featured image: http://growwisegrowmoney.com/2014/07/21/financial-crisis-will-nation-people-survive/

“Home care workers in Rotterdam who will lose their jobs in 2014 will be partly replaced by benefit recipients. The municipality will oblige those on benefits to do volunteer work”, De Volkskrant newspaper wrote towards the end of 2013. “This is substitution pure and simple”, according to Wim van der Hoorn, a union leader of the FNV labour union. “The municipality tries to patch up the holes in its budget by using the free labour of benefit claimants to get work done that previously was paid work. In this way employment is lost”. But the PvdA (Social Democratic party) elderman Marco Florijn tries to keep up appearances and “wishes to underline that the absolute precondition is that no regular jobs are lost”. His political associate Jan Hamming, mayor of Heusden and chairman of the advisory committee “Work and Income” of the association of Dutch municipalities VNG, is a lot more honest on this issue. He admits that the use of benefit claimants can threaten existing jobs. “There is a financial side to this story. We are confronted with substantial budget cuts. That also impacts on the work in municipalities: it does not get done. So it is only logical that we are also considering putting people who are on benefits to work.” Rotterdam is not a unique case for that matter: thousands, possibly tens of thousands and who knows in future hundreds of thousands of benefit claimants are being forced to do unpaid labour.

Sticky fingers

The question is who profits from forced labour and job substitution, and what the amounts are that we are talking about. It is difficult for us to get this information. The implementation is far from transparent. Many municipalities have already introduced forced labour but they all have their own approach, often through structures that differ only slightly. In some instances the benefit claimants have to do forced labour in municipal reintegration centres and sheltered workplaces, in other places they have to work in home care or with ‘volunteer’ organisations, and other municipalities put them to work in commercial reintegration agencies, temp agencies and commercial businesses.

Obviously any commercial business will only want to be involved in such projects if these are financially attractive. In principle forced labourers are cheaper than regular employees because they do not receive wages and have no entitlements regarding better (and thus more expensive) working conditions. But it is usually unclear how much money is involved, and where exactly it disappears into the deep pockets along the way in the outplacement chain. In most cases it will be financially attractive for the municipalities to force benefit claimants into compulsory unpaid labour. After all, their benefits are being paid by the national government, although in practice quite a few municipalities have already been obliged to pay a share of these costs. With or without municipal deficit: all extra income from forced labour is probably welcome. The downside is that an entire system of repression has to be set up to continuously monitor the forced labourers, and this is costly: the minimum that is necessary would be the monitoring infrastructure plus the wages for the guards and ‘coordinators’. But this in a way is employment and can probably be paid out of the so-called ‘employment budget’ which is part of the social benefits budget that the municipalities receive from the government. In addition there have to be employees who bring in customers and orders, and this should not be too difficult with the obviously low labour cost that can be guaranteed through forced labour. Companies and municipalities try to sell forced labour with all sorts of explanations about ‘social return’, ‘gaining experience’, and ‘giving people guidance and support’, as they do for low paid and unpaid internships and other types of worktraining programmes. Usually it is just empty words but not always: sometimes they really do invest some time into explaining the work to people and training them. And in some cases new workers do indeed produce less in the beginning than their experienced colleagues. In short there would have to be an in depth national research with full cooperation from civil servants, businesses, unions and economists to get to the bottom of who really benefits from forced labour and to what extent.

Substitution

The question is: how useful would such research be for the bottom-up activists, for the workers themselves? And what do we mean by ‘substitution’, how would we describe it? If we look at it from the bottom up it is really very simple: any form of labour that is paid less than the minimum wage or the collective labour agreement wage for adults, in whatever way and with whatever excuse possible, in fact means that regular paid jobs are being replaced. This applies to forced labour in the same way it applies to unpaid internships, worktraining programmes, youth minimum wage jobs, and so on. After all the existing work is turned into a lower paid or even unpaid job.

For alderman Florijn ‘substitution’ probably only applies when a regular paid job is replaced one-on-one by ‘voluntary work’. From the position of the forced labourer however it does not matter at all whether or not the work was a decently paid job earlier on. The issue is that work that is done by a forced labourer cannot be done by a regular paid worker any more. To put it bluntly: every forced labourer is made to substitute the paid job that he or she could have had without forced labour. And this also goes for work that has never, or not for years, been paid work. The fact is that this work obviously needs to be done, otherwise no one would be forced to do it, or be recruited for it, and no internships would be established to do it. The authorities and bosses would simply have to pay to get this work done if forced labour and all sorts of vague internship constructions had not been created. In that case the labourers would have had their wages and rights. Basically there is only one exception to this rule and this is the work that was simply made up to keep benefit claimants busy, to discipline them and bully them out of the benefits scheme. You know the type of work: one man digs a hole and the other one fills it up again. Or the type of forced labour where the benefit claimants just have to show up at the workplace but there is nothing to be done except hang around and wait. This is not substitution of course, but out of principle even in those cases people ought to be properly paid for this. Let alone the fact that benefit claimants are being humiliated by this, and that for that reason alone forced labour should be abolished immediately.

But there is more to substitution than this. Forced labour and obligatory ‘volunteer work’ are not only substituting regular paid jobs, but also important unpaid work such as for example first-line care by family or others, political activism, and also a lot of real volunteer work that the government does not approve of. This means that the existing volunteer economy is losing its autonomy and gets to be more and more controlled by municipalities. In this way forced labour harms community and volunteer work, and other activities outside of the capitalist logic that make life worthwhile for many people.

Profit and loss

When we start looking at the financial question from bottom-up things actually become quite simple. The extra revenues that this substitution generates for bosses and municipalities equals exactly the amount that all forced labourers, interns and work experience placements together lose compared to when they would receive a regular (collective labour agreement or adult) minimum wage. This is the amount that the working class as a whole is being deprived of, on top of the added value they produce and that is always appropriated by the capitalist class anyway. These calculations can also easily be made for individual cases: how much money does a benefit claimant who works, receive less compared to when he or she would be paid a regular wage. And if we would add these sums for the by now estimated tens of thousands of forced labourers we quickly end up with huge amounts. In Leiden the forced labourers officially have to work 26 hours a week, and as a result the minimum wage for the hours worked would be exactly the same as their benefits. This would be a financial-technical way to prevent substitution, but in practice most forced labourers work far more than 26 hours. In addition the forced labour placements continue to substitute regular jobs with regular labour rights.

If you look at it from the bottom up it is a false argument used by employers and municipalities, that forced labourers, interns and youth work placements have to learn the work and produce less so should get paid less. Not only is their production not always lower, in some cases it is even higher. The point is that this growing group of underpaid or not paid labourers have to pay for their housing, food, clothing and insurances just like anyone else. It is not about productivity as it is with old-fashioned piece rate, but about the time that workers give to their bosses. The workers can only make use of their time once, and this is a problem when due to these forms of underpayment more and more people working during all the working hours they have only receive an income that is not even a living wage. The issue should be a decent living wage for everyone.

Eric Krebbers

Source of Article: http://www.doorbraak.eu/job-substitution/

Source of Featured Image: http://simplepimple.com/2012/08/are-internships-a-form-of-modern-slavery/

As a condition for the Troika’s financial assistance, Greece has been forced to implement a set of drastic austerity measures, including the privatization of several state-owned companies. The public water utilities of Athens and Thessaloniki are among the targets. Both are profitable companies, which no one there wishes to see pass into private hands. But the Greek government and its creditors seem bent on imposing policy whose economic merits and democratic legitimacy seem rather dubious. A French company is especially active among the candidates for privatizing water in Athens and Thessaloniki: Suez Environnement.

Right2Water, the European Citizen Initiative (ECI) aiming to promote ‘right to water’ and resist privatization, announced last November that they had collected enough signatures (1.9 million in the whole EU) to force the European institutions to take up the case. It was the first time that this new participative process, first introduced by the Treaty of Lisbon, was successfully carried out [1]. A public hearing was held in the European Parliament in February with stakeholders, and the Commission released its official response on March 19th. Although it has balked at taking any legislative action (as proposed in the ECI), it was forced to admit, grudgingly, that water is a “public good” and that local governments are ultimately responsible for providing this service. This response was judged much too weak by the organizations behind the ECI, [2] which slammed the Commission for its lack of democratic accountability.

Even as hundreds of thousands of European citizens openly rejected the privatization of water, it was nevertheless gaining momentum in many countries because of the sovereign debt crisis. In Spain, Portugal, and Italy, despite strong opposition from citizens and local politicians themselves, water privatization has come back on the agenda. [3] According to the unions and activists who oppose water privatization, even as European officials ostensibly claimed neutrality as to the issue of public vs. private water management, they took advantage of the financial crisis in order to promote privatization as a solution to the budget troubles that European states and municipalities were facing.

In Greece, the privatization of the water utilities of the two main Greek cities, Athens (EYDAP) and Thessaloniki (EYATH), was imposed as part of the ‘shock therapy’ deemed necessary to solve the country’s financial woes. The Troika, which is supposed to represent the European Commission, the European Central Bank and the International Monetary Fund, operates without transparency or accountability. It has imposed a series of drastic conditions upon Greece. The international financial assistance, which is due to be paid in installments, is predicated upon these conditions, which include a reduction in the number of civil servants and the privatization of countless public assets and companies. Overall, these austerity measures have triggered a dramatic decrease in standard of living for Greeks as well as issues of access to basic services, especially healthcare. According to critics, represented in Thessaloniki by the SOSte to NERO coalition, water privatization will mean a further regression: commercial interests (Greek as well as foreign) will benefit at the expense of Greek citizens and, ultimately, of democracy.

The Euro-crisis, a boon for Suez Environnement?

As for Suez Environnement, its executives openly celebrated the “opportunities” created up by the sovereign debt crisis in Southern Europe. Through its Spanish subsidiary Agbar, the French group has looked to extend its water and sanitation contracts in Barcelona and Catalonia, running into legal troubles. These hegemonic ambitions have brought about a conflict (unresolved to this day) between Agbar and the Generalitat of Catalonia, which ruled in favor of another consortium. Suez Environnement has also strengthened its ties to Acea, an Italian company in charge of water and electricity in Rome and involved in water and sanitation services in several cities in Latium and Tuscany. [4] Its goal? To progressively build a “third pillar” for the group in Italy, along its traditional French and Spanish markets. And too bad if, when consulted through referendum, Italians and Spaniards are massively opposed to water privatization.

In Greece, Suez has expressed interest in taking over the water services of Athens and Thessaloniki. [5] Both acquisitions seem all the more advantageous to the French group given that the Greek stock market crashed during the crisis. EYDAP and EYATH can therefore be bought for a small price relative to their actual financial health. The privatization process seems to be further along in Thessaloniki, even though privatization faces numerous political and regulatory obstacles in both cities. Recently still, the Greek government was saying that the transfer of EYATH from public to private hands could be finalised by March 2014, which seems unlikely.

After the initial tendering process, early 2013, there are two consortia still in the running to buy the Thessaloniki water utility from the Greek government. One is led by Suez Environnement, the other by Mekorot, the Israeli water company. Suez is considered by many to be the favorite to win the contract, because it already owns 5% of EYATH shares and seems better connected. It is looking to buy 51% of shares in EYATH and take over the firm’s management, in association with the Greek construction firm EllAktor, controlled by George Bobolas (whose group also owns several Greek media outlets).

So far, negotiations over the terms of sale of EYDAP and EYATH have taken place outside of public scrutiny, between the Greek government (through TAIPED, its special agency in charge of privatization), the Troika, and potential investors. This lack of transparency is explained in part by the fact that TAIPED, to which the Greek governement has transferred all its shares and given full power to privatize, is no longer legally accountable to the Greek Parliament. At first, the privatization of the two water companies was supposed to be partial, but a vote in Parliament in late 2012 authorized the Greek state to sell all its stakes in EYDAP and EYATH. Crazy rumors have since flown around concerning the projected financial arrangements and the excessively favorable conditions that could be given to investors. Going by the current market valuation of EYATH, the amount of the transaction should hover around €110 million (for 51% of shares).

Local and international resistance

The possibility of the privatization of water services in Thessaloniki, decided by the Greek government under pressure from Europe, has raised strong opposition in the city. The SOSte to NERO coalition, initiated by unions, has organized the local campaigns and has succeeded in attracting international support to its cause. Several local mayors have expressed the desire to buy the 51% share in the company intended for investors themselves. A group of citizens and unions has even tried to subvert the process by participating in the tender as ‘Initiative 136’. Initiative 136 calls for the transformation of EYATH into a cooperative owned by its ‘customers’: the citizens of Thessaloniki. Each citizen would have bought a non-transferrable share in the company for €136 per household. A call to international ‘ethical investors’ and social finance organizations was envisaged in order to help the citizens takeover the company. This ‘citizen buyout’ was also to trigger a more democratic and participatory management of the water service. Unfortunately, this original and heretical (by today’s neoliberal standards) proposition was not accepted by TAIPED, which did not deign justify Initiative 136’s exclusion form the process. [6]

Opponents to water privatization, united at national level under the banner of the Save Greek Water coalition, have denounced the support that French president Francois Hollande has voiced for Greek water privatization. This support is based on the fact that such deals could benefit French businesses, in particular Suez Environnement. In July 2013, dozens of organizations, unions, international social movements, and some fifty Members of the European Parliament called on the two consortia to withdraw their bids: ‘We hope that businesses today do not base their business model on opportunism, and that they do not try to venture into places where they are clearly not welcome. There is an alternative to your bids, which are condemned by the workers at EYATH, the inhabitants of Thessaloniki, the municipalities, and by us. That is to keep the water public and maintain the same high quality of service in distribution.’

In spite of this, neither Suez nor Mekorot withdrew their bid. In response to our questions, Suez says that it “seems essential to us that our intervention be desired,” but hides behind the Greek state: “We think that the decisions of the Greek state are not made without consulting local authorities.” On January 15, 2014, TAIPED presented its official commercial proposition for the takeover of EYATH. The employees went on strike for the day, and the mayors of the local communities attended the event to voice their opposition. But it seems that in Greece, unfortunately, the voices of elected officials and citizens are drowned out by those of international creditors and business interests.

Having seen that official political channels do not give them any leverage in the decision making process, opponents have decided to organize a popular referendum on water privatization in Thessaloniki. This was inspired by similar votes in Italy, Spain, and Germany. The referendum will take place on May 18, at the same time as local elections. Under pressure from their constituents, several local mayors (including Thessaloniki’s) have announced their intention to support the referendum, and unions have circulated a call for support at European level, soliciting financial contributions, as well as volunteers and observers to come help with the referendum. In Greece, as in most of Europe, people are overwhelmingly opposed to water privatization. A survey taken a few months ago in Thessaloniki reported that 76% of respondents had an unfavorable opinion of water privatization. Even if the referendum has no official weight, the organizers hope that a large turnout will be enough to dissuade Suez and Mekorot from following through with their plans. Suez Environnement has declined to answer our question whether it would withdraw its bid in case the referendum showed an overwhelming majority against privatization.

Opponents of privatization are also pinning their hopes on the Greek Council of State, which is expected to issue a decision on the legality of the EYATH and EYDAP privatization process. Greek unions have initiated this legal procedure, arguing that the creation of TAIPED, which is unaccountable to the Greek Parliament, is unconstitutional, as is the transfer to this body of public shares in companies in charge of basic services. The publication of its decision by the Council of State has been awaited for several weeks. [7]

Mekorot has declared that it is waiting for the Council of State’s decision before confirming its offer to buy EYATH. While several local sources had indicated to us that Suez, for its part, has not hesitated to place an official bid despite everything that was happening, the company denies this in its responses to our questions. In general, it seems that the Israeli firm has chosen to keep a low profile, in stark contrast to the activism of Suez. But despite the low profile in Thessaloniki and despite being a relative newcomer on the international water privatization scene, Mekorot has been harshly criticized by human rights activists for its policies in the Occupied Territories and its discriminatory treatment of Palestinians. [8]

Suez’s Charm Offensive

To make its offer more tempting, the French firm seems not to have skimped on promises. It announced in January, 2014, through Diane d’Arras, its Deputy director for Europe, no fewer than 250 million Euros investments over five years and the creation of between 2,000 and 4,000 jobs. [9] Intriguing numbers in light of the fact that EYATH’s net annual profits are ‘only’ about 18 million euros. Critics highlight the fact that in order to make good on even a small fraction of such promises, all while paying dividends to the parent company and its shareholders, a steep increase in the price of water would be required. At a press conference where attendees were hand-picked, Diane d’Arras asked herself aloud if the current water rates in Thessaloniki were sufficient to maintain the viability of water services. But, according to unions, the rates have already tripled since 2001.

Diane d’Arras also tried to allay local concerns by stressing the need for better environment management, in particular for treating wastewater before dumping it into Thermaikos Bay, and reducing water losses. The French company also tried to reassure people that water rates would still be set by an ‘independent authority’. Critics countered (at a distance) that numerous past examples of water privatization, notably in Argentina, have shown that such authorities, created in haste, rarely have the power and the skills to effectively control a more powerful private provider. [10] Anti-privatization activists have also pointed out the following irony: Suez Environnement is a heavily indebted business, which has had trouble turning a profit for years (because of the progressive loss of market shares and profitability of private water companies in France); and yet, it is seeking to acquire EYATH, which has been in good financial health for some time.

Privatization: does it even make economic sense?

First announced in 2009, the privatization of the water services of Thessaloniki and Athens has dragged on. This delay is an illustration of more general problems with the privatization program imposed on Greece. The logic behind the Troika’s conditions is indeed highly questionable. Under the guise of helping the Greek state ‘trim the fat’, the Troika is forcing the government to sell off its most economically viable companies; these are obviously the only ones that are attractive to investors. The Troika’s privatization program, despite leading to the sale of many assets already (ports, land, mines, etc.) and angering Greek public opinion, has run into hurdles when it comes to the bigger “prizes”.

The two largest state companies to be sold were the gas company DEPA and the national lottery, OPAP. The sale of the former was suspended following the withdrawal of the leading potential buyer, the Russian firm Gazprom, which was apparently not offered favorable enough terms. The second sale went through, but has left in its wake a series of scandals and court cases involving civil servants and representatives of TAIPED. [11] During the summer of 2013, the director of TAIPED, Stelios Stavrides, was forced to resign when it came out that he had used the private jet of the businessman to whom the OPAP was sold. Greece has also sold its gas network to the state-owned gas company of Azerbaidjan and seems to be getting ready to sell its electrical grid as well. Other assets or companies due to be privatised – airports, metallurgy or arm producers – are still in limbo.

Beyond the most publicized cases of Greek ‘treasures’ being sold to foreign interests, the Greek business world is often among the first to benefit from privatization. In the case of water, both bidding consortia are closely tied to politically well-connected Greek businesses. Mekorot presented its bid together with Terna, an energy, construction, and public works company and with businessman George Apostolopoulos. Suez’s partner, EllAktor, a media and construction group, is also involved in a controversial gold mining joint venture with a Canadian company, in the north of the country, with the blessing of the government.

In the case of EYATH and EYDAP, opponents are again denouncing the very favorable financial terms offered to potential bidders, just as in previous cases. TAIPED’s 61% stake in EYDAP could be sold for €350 million, which compares well to a net annual profit of €62 million out of a €353 million turnover in 2012, €43 million cash reserves, €881 million equity, and €1.2 billion owed to the company by the Greek government and various agencies and businesses. The ratio between the sale price of EYATH and its financial results are similar: about €110 million for a 51% stake, whereas the business posted a net income of €18 million in 2013, a turnover of €77 million, with €33 million cash reserves, and €135 million equity. [12]

But that may not be the worst of it. In January 2014, the Greek daily Eleftherotpia/Enet revealed that a project worth more than €100 million to renovate the water and sewage network of Thessaloniki was in the works. This is to take place before the system is handed over to the private buyer, which is really a gift to the latter. 75% of this project would be financed by the EU Cohesion Fund, and 25% by the Greek state. All in all, this works out to almost the price of the company itself! The Thessaloniki prosecutor ordered an investigation and demanded access to the draft of the contract prepared by TAIPED. This was denied him, as it was earlier denied to parliament members concerned about the terms of privatization. [13]

Commercial model

EYATH and EYDAP were transformed into commercial, public-listed companies in 2001, with the Greek state as the majority shareholder. [14] According to critics, this change brought with it the imposition of a commercial logic and of methods straight from the book of private sector management: on the one hand, staff and investments saw dramatic cuts; on the other hand, the shareholders – the Greek government and municipalities – were receiving substantial cash dividends. Suez Environnement took advantage of the situation and got its foot in the door by acquiring 5% of the shares in EYATH. The French group is also currently operating a biological water treatment unit in Thessaloniki, also as a joint venture with EllAktor.

According to unions, following its corporatisation, the staff of EYATH was cut from 700 to 235 people. This was effectuated by not replacing those workers who retired. The company now apparently has only eleven plumbers for a 2,300 kilometers network. Most of the work is done by sub-contractors, often for a higher price. The quality of service and the condition of the system have progressively gotten worse, despite the hike in water rates. This is no doubt what explains the profits posted by EYATH over the years; this also explains the interest of companies such as Suez.

Olivier Petitjean

This article was originally published in French. Translation: Egor Lazebnik

Source: http://www.tni.org/article/forced-privatizations-greece

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Photo : Ghirigori Baumann CC

REAL WORLD ECONOMICS Friday, 16 MAY 2014, 20.30 to 22.30 hours Plantage Doklaan 8-12 in Amsterdam

From 19.00 hours onwards, there will be great vegan food cooked by the ‘Kollektief Rampenplan’ and books for sale from Boekhandel Rooie Rat

After almost seven years of global economic crisis, the crisis’ disruptive impact continues to aggravate, particularly in Southern Europe where unemployment rates, most notably among the young, have reached unprecedented levels, while real wages continue to decline and poverty is reaching perverse heights. The prospects continue to remain gloomy and the perma-austerity imposed by the EU only seems to exacerbate the crisis further. German Chancellor Merkel’s recent suggestions for a ‘Competitiveness Pact’ demands that the entire Eurozone has to step up reforms efforts “in areas of lacking competitiveness” – EU-speak for internal devaluation through wage repression and further labour market reforms.

During this Real World Economics evening, we will reveal the authoritarian guise of the EU’s responses to the crisis. While the ‘wealthy few’ are blessed with tax reductions and bailouts, the ‘working many’ have to bear the costs for the sake of competitiveness. The assault on democracy and the coercive nature in which crisis packages are imposed very much resemble a shock doctrine. Decision-making is insulated from institutions of political democracy, while ever more discretionary powers are transferred to non-accountable executive or jurisdictional bodies, such as the European Commission or the European Court of Justice. At the same time, the constitutional right of expressive protests is increasingly denied and surveillance and police violence vis-a-vis protesters intensified. How can the EU’s onslaught on democratic rights be resisted?

We will start out with brief (5 minute) presentations by a range of renowned international critical political economists, followed by a plenary discussion with the audience. Invited guest speakers are: Bob Jesssop (Lancaster University, UK), Monica Clua Llosada (Pompeu Fabra, Spain), Eva Hartmann (Copenhagen Business School), Magnus Ryner (Kings College London, UK), Lukas Oberndorfer (University of Vienna, Austria), Ian Bruff (University of Manchester, UK), Thomas Sablowski (Rosa Luxemburg Stiftung, Berlin), Alan Cafruny (Hamilton College, USA).

This Real World Economics event forms part of the Europe-wide decentralized days of action and resistance called ‘Solidarity Beyond Borders – Building Democracy From Below!’ in the week of 15 to 25 May 2014 (go tohttp://mayofsolidarity.org).

The evening is supported by an alliance of organisations and groups in the Netherlands: De Valreep, Kritische Studenten Utrecht (KSU), International Institute for Research and Education (IIRE), Transnational Institute (TNI), XminY, REINFORM, De Rooie Rat, Blockupy Netherlands, Bond Precaire Woonvormen, Ander Europa, Grenzeloos, Globalinfo.nl, Stichting Onderzoek Multinationale Ondernemingen (SOMO), Kollektiv Rampenplan, Kritische Studenten Amsterdam (KSA).

For more information: http://globalinfo.nl

Language: English No entry fees!