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Greek Privatization Proceeds for Anti-Poverty Policies? Probably Not, But We’ll See

With negotiations between Greece and the troika over how to resolve the latest austerity-impasse still ongoing [1], a rather intriguing potential source of both conflict and compromise emerged between the Syriza-led Greek government trying to find a way out Greece’s austerity-trap and a “troika” [2] that would strongly prefer Greece stays in the austerity-trap: Greece is offering to continue with the privatization of state assets that the troika demands but it would rather use the proceeds to set up a fund dedicated to tackling Greece’s humanitarian crises instead of immediately paying back Greece’s creditors. And while the troika has yet to formally rule out Greece’s proposal, European Commission president Jean-Claude Juncker made a fascinatingly uncharacteristic offer last week to let the 2 billion euros in unspent EU “development funds” in order to “support efforts to create growth and social cohesion in Greece” [3]. Considering virtually all past attitudes by the troika regarding Greece’s “growth and social cohesion”, it was an oddly generous offer…except for the fact that the proceeds from the privatizations are projected to be potentially worth a lot more. So maybe it wasn’t so generous.

Still, it’s a fascinating proposal by the Greek government that puts the troika in a rather unusual position because when it comes to the troika:
Privatization = “Can’t get enough [4]“.
Helping poor people = “Fine, as long as it doesn’t cost much, but they need to learn their lesson so maybe it’s not so good. And not if you’re too poor [5]
Paying back creditors = “The most positive force in the universe [6]

So by making this “privatization for humanitarian aid” proposal Greece appears to have done the seemingly impossible: Greece may have forced the troika to reconsider something and compromise in a way that’s actually helpful. Just a bit, which is still amazing.

That said, it’s still all quite ominous [7] since the troika is still crazy [8].

—————————–

Well this should be interesting to watch: With the troika demanding more “reforms” from Greece during the latest round of troika-led negotiations over how much abuse and social degradation should take place as part of the Greek “bailout” [9] and with the ECB restricting emergency access to credit lines for Greece’s banks [10], it’s pretty clear that the troika is intent on making it very clear [11] to the Greeks that the screws can only get tighter.

Except now we get reports of German Chancellor Angela Merkel indicating “flexibility” for Greece as the Greek government scrambles to put together a set of “reforms” that meet its troika creditor demands. In addition, on Friday EU Commission President Jean-Claude Juncker made a rather surprising offer to the Greeks: the EU has a spare 2 billion euros lying around…and maybe it could use that money to help alleviate Greece’s humanitarian crisis. Given the troika’s past attitudes towards Greece’s humanitarian crises [12] this was some uncharacteristically benevolent behavior [13]:

Merkel sets strict terms for Greek aid, Juncker flags EU cash

By Renee Maltezou and Alastair Macdonald

BRUSSELS Fri Mar 20, 2015 3:42pm EDT

(Reuters) – European Union leaders welcomed a pledge on Friday from Greece to meet creditors’ demands for a broad package of economic reform proposals within days to unlock the cash Athens needs to avoid stumbling out of the euro zone.

After overnight crisis talks on the sidelines of an EU summit in Brussels, new Greek Prime Minister Alexis Tsipras and German Chancellor Angela Merkel, the bloc’s main paymaster, offered somewhat divergent understandings of how much Athens must do and how quickly. But EU officials insisted there was a broad agreement to act now on an accord struck a month ago.

Merkel said Greece, which faces a cash crunch within weeks, would receive fresh funds only once its creditors approve the comprehensive list of reforms Tsipras promised to present soon.

But she signaled some flexibility on what reforms Tsipras would have to make — crucially giving his leftist-led coalition the chance to offer alternative savings strategies that will help it persuade its voters it is breaking with what Tsipras calls the failed austerity policies of his defeated predecessor.

And European Commission President Jean-Claude Juncker offered Tsipras a sweetener by saying 2 billion euros from the European Union’s modest collective budget were available to ease the humanitarian impact of five years of spending cuts.

Tsipras said he would fully respect a deal struck with euro zone finance ministers on Feb. 20 that extended an EU bailout deal until June. But he insisted that a condition in that pact requiring Athens to pass a final review of its efforts to bring its debts under control before receiving funds did not apply.

After two months of mounting frustration on both sides, marked by public squabbling, Tsipras held three hours of talks with the leaders of Germany, France and the main EU institutions to try to break an impasse that risks depriving Athens of the euros it needs to function fully within the currency area.

A joint statement by the EU institutions spoke of a “spirit of mutual trust”. But it remained uncertain Tsipras and Merkel were talking about the same reforms, and how far Greece would have to start implementing them before it receives any new cash.

DIVERGENT TAKES

The risk of a continued standoff, exactly a month after Greece secured a last-gasp four-month extension of an EU/IMF bailout, was highlighted by comments from Merkel and Tsipras.

“The agreement of Feb. 20 is still valid in its entirety. Every paragraph of the agreement counts,” Merkel told German journalists who questioned whether she was now offering cash for promises that many of her supporters have stopped believing in.

Tsipras appeared to differ. “It is clear that Greece is not obliged to implement recessionary measures,” he said. “Greece will submit its own structural reforms which it will implement.”

Merkel insisted only the completion of approved measures — in a final review by creditor institutions — would satisfy lenders including the Euro Group of euro zone finance ministers.

“The Greek government has the possibility of replacing individual reforms outstanding from Dec. 10 with other reforms, if these … have the same effect. The institutions and then the Euro Group must decide whether they do have the same effect,” she said, noting Ireland had made such changes with EU backing.

Tsipras, however, insisted that while his government would fully respect a deal struck with the euro zone on Feb. 20 it would not have to complete a final bailout review process begun by the last government to secure more aid: “We all have the same reading of the Feb. 20 accord… There is no such thing as a fifth review,” he told a news conference after the summit.

EU officials, keen to play up the prospects the talks had raised of preventing “Grexit”, or an inadvertent “Grexident” that pushed Greece out of the euro, said differences were merely ones of emphasis for audiences in their respective countries.

Sources aware of how the three hours of talks overnight had gone said Tsipras, aged 40 and only two months into his first ever government job, had quickly appeared to accept that he was facing a united front from creditors and would have no choice but to meet their impatient demands for cost-cutting measures.

“He has seen … that he cannot divide the Europeans,” one senior EU official said. “He can only work with them, not play them off against each other. He has also seen that there is goodwill if he sticks to his word and actually delivers.”

Another EU official said Tsipras, who will visit Merkel in Berlin on Monday after weeks of increasingly rancorous relations between ministers in their two cabinets, had indicated he could offer a full package of reforms within a week or 10 days.

Nonetheless, with some German leaders saying they might prefer Greece out of the euro zone, and Tsipras trying to satisfy a coalition of radicals unused to power, senior EU officials do not rule out a further collapse of the process.

Crucial for the Greek leader, EU officials believe, is being able to present his package as a break with his conservative predecessor — even if many of the measures are broadly similar.

Aha, well, as we can see, the offers of “flexibility” from Angela Merkel were actually very charactistic of the troika’s general attitude [14] thus far:

Merkel insisted only the completion of approved measures — in a final review by creditor institutions — would satisfy lenders including the Euro Group of euro zone finance ministers.

“The Greek government has the possibility of replacing individual reforms outstanding from Dec. 10 with other reforms, if these … have the same effect. The institutions and then the Euro Group must decide whether they do have the same effect,” she said, noting Ireland had made such changes with EU backing.

How flexible! Greece is free to come up with its own reforms, as long as they have the same effect as the existing reforms. And what’s been the effect of those reforms thus far? A humanitarian crisis!

Still, that offer of two 2 billion euros was a nice change of pace. Normally it’s just assumed in the new EU that the only way to escape a humanitarian crisis is to somehow “reform” your way to riches via crisis-inducing austerity. So you have to wonder what prompted that change of attitude?

Reformed Cannibalism
Well, there is one possible motive for the EU’s 2 billion euro “humanitarian crisis” surprise, and it appeared just this week:

Greece already has a number of reforms to the troika’s “reforms” in mind (yes, reform reforms) and it’s already started implementing some of them. And they are exactly the kind of reform the troika is primed to hate. It’s a reform that centers around prioritizing Greece’s humanitarian crisis over paying back the troika that started the crisis in the first place [15]:

Greece says to use asset sales for social welfare, not to cut debt

ATHENS Tue Mar 17, 2015 7:27am EDT

(Reuters) – Greece will shortly present a law to turn its privatisation agency into a wealth fund that will use proceeds to finance social welfare policies instead of reducing its public debt, the deputy finance minister said.

The move could further strain relations between Prime Minister Alexis Tsipras’ new left-wing government and Greece’s international creditors, who want Athens to use the revenues to cut its huge debtload.

“There will be a new Sovereign Wealth fund … and the revenue will be used to fund the government’s social policies and to support the social security system,” said Deputy Finance Minister Nadia Valavani.

Valavani told a parliamentary committee she would present legislation in the coming weeks to merge the privatisation agency (HRADF) with the country’s state property company, ETAD, to set up the new body.

The leftist government is opposed to some key asset sales but has been forced to moderate somewhat its stance as it negotiates with its European partners over a new aid package.

Privatizations for humanitarian crises? Yeah, it’s kind of hard to see how the troika is going to be enthusiastic about that idea. Using the proceeds from creditor-mandated state assets sales for social social welfare policies instead of paying back Greece’s creditors isn’t exactly the creditor’s paradise [16] Europe’s elites have been working to hard to build. Helping the poor is an “Old Europe” thing. The new troika-led Europe is all about helping the creditors even if it means planned poverty for the masses. That’s the new normal

So was Juncker’s 2 billion euro offer a sort of indirect response to the Greek government’s proposal? That’s unclear. Alexis Tsipras declared that any spending on Greece’s humanitarian crisis wouldn’t impact the Greek budget back in February [17], but that might still imply changing the “bailout” repayment schedule to the troika. And there hasn’t really been an official troika response to the idea so far. Although there probably will be a response fairly soon since Greece’s parliament just turned that idea into law [18]:

Greek parliament approves law to coax more tax payments

ATHENS, March 21 Fri Mar 20, 2015 6:56pm EDT

(Reuters) – Greece’s parliament on Saturday approved a bill that offers hefty cuts in fines and long repayment plans to citizens owing billions of euros in overdue taxes in a bid to boost depleted state coffers.

Shut out from debt markets and with remaining international bailout aid on hold, Athens risks running out of cash in the coming weeks and is scrambling to secure ways to finance itself and meet payment obligations.

The legislation, dubbed “regulations to kick-start the economy,” is part of the new left-wing government’s first batch of reforms.

It follows an anti-poverty law voted on earlier in the week, the first legislation the new government passed since coming to power in January. More bills are in the pipeline in hopes international creditors will release fresh aid after a loan review that needs to be wrapped up by April.

Greece is due to receive 7.2 billion euros in remaining European Union/International Monetary Fund bailout funds if it delivers on its reforms.

Under the new legislation, Greece’s privatisation agency will be turned into a wealth fund and will use proceeds to finance social welfare policies instead of paying down public debt.

Given that “more bills are in the pipeline in hopes international creditors will release fresh aid after a loan review that needs to be wrapped up by April,” the content of those upcoming bills is no doubt on the troika’s mind, as are the implications of showing any leniency to the rabble [19].

No one wants to be a ‘troikan’ protectorate. Especially ‘troikan’ protectorates
So some sort of response from the troika over this latest privatization agency move seems likely. Maybe Juncker’s offer was such a response or maybe not. But one thing is clear: When an outside force [20] demands that your country sell off strategic assets to pay back that outside force the rabble tends to get restless [21]:

Greek government ‘radically opposed’ to some privatizations as reforms talks underway
Associated Press March 11, 2015 | 10:40 a.m. EDT

By ELENA BECATOROS, Associated Press

ATHENS, Greece (AP) — Greece’s new government is “radically opposed” to the privatization of certain businesses, particularly in the energy and infrastructure sectors, a senior cabinet minister said Wednesday as reforms talks with creditors were due to begin.

Selling state-owned enterprises is one of the actions Greece has been asked to take to raise funds and reduce debt in exchange for rescue loans from the eurozone and International Monetary Fund.

Talks between Greece and its creditors began on a technical level in Brussels on Wednesday to cement a series of reforms Athens must implement in order to get the remaining bailout funds released and avoid bankruptcy.

“We are radically opposed to the privatization, particularly of the strategic sectors and businesses of our economy, and primarily in the sector of infrastructure and energy,” said Panagiotis Lafazanis, the energy and environment minister and a government hardliner, at a conference in Athens.

Lafazanis added that “honestly, I haven’t understood why for some schools of thought, privatizations have become synonymous with reforms.”

He argued that what he called the “neoliberal deregulation in the energy market, which occurred particularly during the recent (bailout) years with the insistence of the (European) Commission and the troika” had prolonged and exacerbated Greece’s financial crisis and energy poverty in the country.

“Troika” refers to the Commission, International Monetary Fund and European Central Bank, who together oversee the 240 billion euro rescue loans Greece began receiving in 2010.

The word “troika” got a bad name in Greece after mid-level officials from those institutions would visit Greece to carry out debt inspections. The new government has refused to deal with those officials, saying they are not welcome in Greece. On Wednesday, it said the team of lower-level technical experts with whom Greek officials would be negotiating on reforms would now be known as the ‘Brussels Group.’

Lafazanis has frequently repeated his opposition to privatizations. Last month, he said the privatization of the country’s power grid and power utility, DEH, would be halted as final binding bids had not yet been submitted.

In his speech Wednesday, Lafazanis said his country wanted diverse energy sources but would not be dependent on “any large power and of any coalition of countries.”

“Greece is too small a country to remain a type of dependent ‘troikan’ economic protectorate … with the status of an energy banana republic.”

As Greece’s energy and environment minister points out:

Greece is too small a country to remain a type of dependent ‘troikan’ economic protectorate … with the status of an energy banana republic.

And that’s certainly true, although it would also apply to large ‘troikan’ economic protectorates. Generally speaking, being a ‘troikan’ economic protectorate sucks regardless of size

Still, being a small ‘troikan’ economic protectorate is certainly a lot worse than being a smaller one. As the saying [22] goes, “If you owe the bank $100 that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.” And while a ‘Grexit’ certainly carries the risk of a financial or political ‘contagion’, it’s also the case that a ‘Grexit’ might be manageable for the rest of the EU [23] in the sense that the financial costs would mostly hit national budgets and not private banks since most of Greece’s debt at this point is owed to the IMF, ECB, and EU governments [24] (although private banks would still be weakened [25]). If Greece was the size of, say, France, the manageability of a ‘Grexit’ wouldn’t even be in question. A ‘Francexit’ would be a complete and immediate disaster for all parties involved and no one would even be pondering the manageability of the event.

That’s part of what makes the contemporary Greek tragedy so gripping: At this point, tiny Greece is the only European country that has really put up a significant resistance to the Berlin-run troika-regime. The only one.

So given Greece’s overall ‘troikan’ situation the nations has to resist somehow and change the situation, but it can’t really resist alone. At least not very effectively. And before the great collective Greek beat down by the entire EU it was the rest of Southern Europe (plus Ireland) that was (and still largely is [19]) basically in the same ‘troikan’ position of powerlessness in the face of of the EU’s new Ordoliberal ‘golden rule [26]‘ paradigm. So when you see the rest of Europe fall into line with the “Lazy Greeks, let’s kick them out” meme (which is the dominant attitude across the EU today), that’s basically a manifestation of the acceptance of “dependent ‘troikan’ economic protectorate” status by the rest of EU periphery. It’s really quite shocking and sad.

Still, at least there’s one government left in Europe that isn’t casually accepting its ‘troikan’ protectorate status. Whether or not the resistance ends up being successful or largely symbolic remains to be seen, but given the mass capitulation across Europe to far-right dogma in recent years, any attempt to pull Europe back from the abyss of society-destroying economics is a lot better than nothing [27]:

Greece appoints new management at privatisation agency

ATHENS, March 17
Mon Mar 16, 2015 7:07pm EDT

(Reuters) – Greece appointed early on Tuesday new management at the country’s privatisation agency (HRADF), which is expected to play a key role in implementing the leftist government’s plans to limit further state asset sell-offs.

Asterios Pitsiorlas, a businessman involved in the tourism sector, will become chairman of the agency while Antonis Leoussis, former chief executive at Greece’s fourth biggest lender Alpha Bank’s real estate arm, will be chief executive.

Pitsiorlas and Leoussis will replace Emmanuel Kondylis and Paschalis Bouchoris, appointed to the helm of the agency in July by the former conservative government.

During a parliamentary committee which ran over into the early hours of Tuesday, Valavani said she would present legislation to create a new body to manage state assets, reiterating a previous suggestion that the HRADF would eventually be replaced.

Syriza has long opposed sell-offs undertaken by the previous conservative-led government but has been forced to somewhat moderate its stance as Greece negotiates with its European partners over a new aid package.

Greek representatives started talks with official international creditors in Brussels last week in a bid to agree on a set of reforms and unlock much-needed funds.

Privatisations had been meant to raise billions for Greece’s depleted state coffers under its 240-billion-euro bailout with the European Union and the International Monetary Fund since 2010.

Proceeds have been disappointing so far, amounting to about 3 billion euros, a fraction of an initially targeted 22 billion euros.

Note that Greece replaced the head of the state privatization agency just days before Juncker’s “humanitarian assistance” offer. Could that have prompted Juncker’s humanitarian aid offer?

Also note how:

Privatisations had been meant to raise billions for Greece’s depleted state coffers under its 240-billion-euro bailout with the European Union and the International Monetary Fund since 2010.

Proceeds have been disappointing so far, amounting to about 3 billion euros, a fraction of an initially targeted 22 billion euros.

Yep, The whole privatization idea has basically been a bust so far anyways.

But with a large fraction of the troika’s desired privatizations yet to be done, there’s still quite a bit of potential privatizations still on the chopping block. So the troika may not take Greece’s “privatizations for the public good” proposals very lightly despite the lackluster privatization scheme thus far.

Still, on the surface the Greek government’s reformed privatization plans may not seem like something that should piss the troika off too much. After all, the empirical evidence that privatizations help alleviate fiscal crises isn’t really there [28].

So if the proceeds get spent on social welfare instead of paying back creditors quite as quickly and it keeps the rabble from totally rebelling, who cares as long as Greece basically stays under the thumb of the troika?

When is 2 billion euros for humanitarian aid not generous? When it’s in place of 4 billion euros for humanitarian aid. And maybe a lot more
Given that Juncker just made the 2 billion euro “humanitarian aid” offer day, one might be tempted to assume that this privatization proposal isn’t any different than just having Greece spending the privatizations proceeds on humanitarian aid instead of paying back its troika creditors. The numbers might not be quite the same, but still, if Greece pays back the troika through privatizations and recieves 2 billion in humanitarian aid, is that really all that different from Greece obtaining that humanitarian aid itself through privatizations and instead of paying back the troika entirely?

Well, the troika might care, in part because the 2 billion euros the European Commission offered to Greece for humanitarian aid is half the amount the troika is expecting privatizations to bring in this year alone [8]:

Hard for Greece to avoid privatization, pension reform: EU officials

By Jan Strupczewski

BRUSSELS Mon Mar 23, 2015 1:27pm EDT

(Reuters) – Greece can choose its own reforms to unblock the flow of loans from international creditors and stave off bankruptcy, but it will have a hard time avoiding privatizations and a pension reform because of their budget impact, European officials said.

A new left-wing government and euro zone creditors agreed last week that Athens would present within days a list of its own reforms that must achieve similar fiscal results to the measures agreed by the previous conservative-led cabinet.

“The last government did not complete the ‘prior actions’ necessary for the final disbursement. Nothing has changed, the prior actions are the same. But the measures can be changed if they do not jeopardize debt sustainability,” one euro zone official said.

Which reforms to choose is politically sensitive because the Syriza party of Prime Minister Alexis Tsipras won a general election in January on a platform of ending the policies of its predecessors, including budget austerity and measures it regards as recessionary.

If the creditors agree the substitute plans will achieve an impact equivalent to the previously agreed measures, Greece would get more loans from the euro zone and the International Monetary Fund, averting bankruptcy and a possible euro exit.

The starting point for talks with the IMF, the European Central Bank and the European Commission — “the institutions” — is a long list agreed to by Tsipras’ predecessors.

“They need to persuade the institutions that some of the measures should not be undertaken – to be either dropped, or supplemented by others,” one senior euro zone official said.

Privatization is likely to be one of the major hurdles, officials said, because it was due to contribute 4 billion euros to the budget this year alone. The Tsipras government does not want to sell state assets, although it has agreed in principle not to stop sales that had been initiated already.

A reform of the pension system is another sticking point, where the EU is concerned about early retirement privileges and the need to link benefits to the size of contributions.

Once Athens agrees on the list with its creditors and starts implementing the changes, more loans could start flowing gradually.

“This is where there can be flexibility, they can do it step by step and get step by step money,” the senior official said.

Yes, the troika clearly isn’t keen on allowing Greece to waive the privatizations, with privatizations from this year alone expected to contribute 4 billion euros to Greece’s budget, a significant amount when you consider that only 3 billion euros has been raised by all the privatizations up to now.

Also now that the 4 billion euros the troika is expecting the privatizations to contribute to Greece’s coffers is also double the 2 billion euros that Jean-Claude Juncker pledged for Greece’s “humanitarian aid”? Double. Could that have been part of the motivation before the 2 billion euro offer? After all, if the troika can convince Greece to waive its “privatizations for humanitarian needs” plan and just take the 2 billion euros of aid instead, that potentially gets the troika 2 billion in extra proceeds this year since so much of what goes into Greece’s coffers goes right back out and into the troika’s coffers.

So, in that context, the EU’s 2 billion euro humanitarian aid offer is perhaps less a belatedly generous offer of 2 billion euros to the suffering Greece and more an attempt to spending 2 billion in humanitarian aid to prevent 4 billion euros from getting spent humanely. At least that seems like a possible explanation for the EU Commissions unusual behavior. And that’s just 4 billion euros projected to be raised this this year…recall that the original plan was for 22 billion euros to be raised through privatizations.

What’s the value of a really bad idea? More that 2 billion euros?
But it may not simply be about saving billions of euros for the troika. Look at it this way: At this point, it’s abundantly clear that intertwined economies of the EU, and especially in the eurozone, are acting as both the glue that holds Europe together and the cudgel that keeps member nations in line. And strict adherence to “the rules” and balancing ledgers and trade imbalances is clearly intended to be a top priority in order to allow the money-glue-cudgel to work its magic (“magic” being defined as getting the rabble to do what they’re told without fully realizing they’re being told what to do). Mammon and technocrats [29] (and Berlin [30]) run Europe now. Democracy is sort of old school [31].

That’s all one of the reasons why rolling back of social and economic programs that protect the vulnerable and make life better for everyone makes so much sense for Europe’s elites: The 20th century welfare state that middle classes around the world have come to rely on is also one of the greatest political tools for empowering the rabble ever created. Non-economically desperate people are political empowered people, and you can’t have a money-glue-cudgel if the rabble is politically empowered. And few things can more effective politically disempower a society than rolling back economic safeguards so much that no one has the time or financial security to truly. Pro-poverty policies are a no-brainer for the troika.

But it’s not just about disempowering the masses and taking away their socioeconomic protections. If you want to transition to a stable form of vassal state-technocracy [32] you also need to fill people’s heads with the kind of garbage ideas that prevent them from ever presenting any meaningful form of resistance. And if you look at the ideas and justifications behind what the troika has been doing it’s pretty clear that hammering horrible economic ideas into the heads of Europe’s masses is a top priority.

And it’s that drive to teach the kinds of lessons that can be exploited over and over As part of the process of explaining why Europe is intentionally [33] imploding [34] its societies and aggressively dismantling the social safety-net. Ideas like:

“High debt is the primary root of evil”

have been coupled with ideas like:

“Just keep cutting expenses and paying back that debt and you will become free and strong”

Those two core concepts are now dominating not just EU policy-making but the hearts and minds of the European public. But the absolutely crucials complementary ideas like:

“Avoiding usury is a good idea”

and:

“If a nation simultaneously cuts back on spending it’s going to have a recession or worse. And if many nations simultaneously do this you might have a depression [35]

were intentionally unpersoned [36]!

Even worse, ideas like:

“Poverty is a destructive force that should not be tolerated”

is not only not present in the pan-European discourse but that anti-poverty idea would derail the entire troika agenda.

As a result of this mix of bad ideas (and omitted good ideas), the overriding meme that’s come to dominate the EU’s reasoning during this crisis is something like:

“High debt is bad. Poverty is ok. Therefore, inducing poverty as a means of alleviating bad debt is not only fine but our only option since all of the other (Keynesian) options involve temporarily taking on more debt

Bad ideas like that must reign supreme if the new creditor’s paradise [16] is going to be sustained. The rabble needs to truly believe ideas like:

The whole of Europe can prosper if only they all become export powerhouses with massive trade surpluses just like Germany. That won’t screw up the world economy or anything. Nope.

Totally crazy ideas like that have become the politically correct official truisms for much of Europe.

But just imagine if 4 billion euros got spent on helping Greece’s neediest instead of going right back into the troika’s coffers? And just imagine if that 4 billion euros worked wonders in lives across Greece and everyone got to compare those wonders to a bunch of numbers on the troika’s ledgers. That probably wouldn’t be a troika-friendly comparison in many minds (on the other hand… [37]). So if the troika lets Greece spend its privatization proceeds on humanitarian aid instead of paying back its creditors, and that aid is seen actually helping people (just imagine 4 billion euros in actual social welfare spending [38]), the seemingly endless drive towards creating a new EU ‘creditor’s paradise [16]‘ suddenly hits a speed bump. People might actually start asking themselves what the hell they’re doing to themselves.

A creditor’s paradise is a private paradise
So with Greece’s negotiations with the troika yet to be concluded, keep an eye on the privatization component of the negotiations because that new “social welfare sovereign wealth fund” proposal may not amount to very much in terms of the size of the fund relative to the needs of Greece’s society, but the very ideas behind it are antithetical to the pro-market-supremacy/Ordoliberal foundations that the new Europe is supposed to be based on. Humanitarian aid to your people comes after you’ve developed a strong export sector in the new EU. Especially the eurozone.

The new, permanently right-wing Europe needs a populace that thinks kitchen table economics makes for good nation-state economics because that’s a populace that could can be crushed over and over. What’s that? There’s a temporary fiscal crisis? Let’s slash public spending on useful social programs and deregulate business! Once business explodes we can bring back the useful programs. An economically confused, easily manipulated populace that is perpetually navigating a socioeconomic landscape it can’t possibly understand because that landscape doesn’t make any sense and the public discourse about it is a bunch of nonsense intended to keep the rabble confused and oblivious.

THAT’s the dream! That perfect, special dream where elites use garbage socioeconomic paradigms to somehow “prove” to the rubes that it’s really in their best interests to we give up on this whole “empowerment and non-poverty for the masses” thing and instead divide and conquer themselves and let the big boys run things unchecked again. A return to the historic norm [39]. It’s a classic [40].

But it’s a dream so beautiful that something like a privatization fund intended for social programs would just spoil everything. Ok, not everything, but it would certainly go against Europe’s new unofficial right-wing neoliberal ideology.

Why? Because a privation fund for social programs isn’t part of the troika’s plan and the long-term plan for Europe is obviously to have a collection of ‘troikan’ protectorates that dutifully follow whatever plan Europe’s elites hand them, regardless of the consequences to their people. In other words, humanitarian aid from privatization proceeds isn’t just an attempt to alleviate a humanitarian crisis. It’s an act of defiance, albeit moderate defiance since the Greek government would prefer to not do any privatizations at all. And while there are certainly instances when member states in a union can defy a federal power in unjustifiable ways that warrant federal action (this of John F. Kennedy’s showdown with Governor Wallace [41]), in Greece’s case we’re talking about an act of defiance that’s necessary to alleviate a humanitarian crisis directly caused by the actions of those ruling international institutions that are being defied. And you can’t have that elite ‘creditor’s paradise [16]‘ dream if governments are allowed to engage in acts of defiance even when they’re trying save their own people. That’s just not going to work.

All in all, we’re in a very strange place in the ever-evolving new EU. It’s true that you have to have some sort of sharing of sovereignty for the EU to work and that’s significantly more true for the eurozone. And if member states are able just ignore past agreements that’s not going to work at all. But at the same time, you can’t just have a “rules”-based union that is completely divorced from reality, especially when those rules prioritize national finances and other macroeconomic metrics over basic human needs. This tension should sounds familiar at this point since it’s very similar to the tension between creditor and debtor member states that EU leaders and elites have been usuriously misunderstanding for years now.

And while that tension between the need for adherence to the rules and the need for sane, humane rules has always existed, what makes this situation so strange for Europe is that large swathes of the content seems to have collectively forgotten that if you expect people to follow your rules those rules need to be sane rules in the first place. This should be obvious, but it apparently isn’t. And, sadly, the only reason the EU is trying to resolve this tension at all is because a lone government has decided to point out that tension by openly challenging [42] the inhumane rules and calling a bloody spade a bloody spade. Just one.

So we can expect to find out the troika’s official response to Greece’s ‘privatization for humanitarian aid’ proposal soon enough. But given everything we’ve seen so far, we can really expect it to be a reasonable or humane response. Privatizations are part of the elite vision for Europe and that vision will not be F***ed with, regardless of circumstance. If you’re going to build a ‘creditor’s paradise [16]‘, blind adherence to the rules [43] is the first rule [44].