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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.


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”


“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].