Thursday, July 16, 2015

The Big Lie: "Extend & Pretend" Debt in Greece & Iranian "Terrorism"

Syriza accomplished its U-turn on austerity last night in Parliament with modest defections. Only 32 of its 149 MPs voted against it. The total vote was 229 out of 300 for austerity. As Yves Smith comments in "Greek Parliament Passes Bailout Legislation":
[Y]ou can see members of Syriza, whose name translates as “Radical Left Coalition,” taking up neoliberal memes. This is a reflection of the success in organizing the economic and political order along neoliberal lines over the past 35 years.
Eventually there will be a price for Tsipras to pay. Defections will mount within his party as last night's protests continue and the government has to actually implement the pension reforms and VAT increases. But for the time being, since Tsipras managed to limit loses within Syriza to the Left Platform, Greece will muddle along and pass the remainder of the Eurogroup austerity diktats next week. Nonetheless, according to Suzanne Daley and James Kanter in "Greece, Its Back to the Wall, Adopts Austerity Steps," a unity government is likely in Greece's future:
Whether Mr. Tsipras will have to fashion a new coalition is unclear. Some party members suggested that with no one calling for a vote of confidence or a new election, he might be able to hang on. 
Other analysts said that he would no doubt eventually have to form a new unity government with other parties.
In the meantime, there is no indication that the European Central Bank is going to raise the liquidity cap on Greek banks, currently at 89 billion euros, until Greece makes bond payments owed the ECB. So says Jack Ewing this morning in "E.C.B. Weighs Whether to Throw Greek Banks a Lifeline":
Most analysts do not expect the central bank to provide more emergency loans to Greek banks, which the lenders need in order to reopen, at least until Monday. The European Central Bank will wait to see if the Greek government makes a payment of 4.25 billion euros, or about $4.7 billion, on bonds held by the central bank. No payment would mean no increase in emergency loans.
Separately, Greece’s eurozone creditors are weighing whether to give the country enough temporary financing to cover the payment to the central bank, as well as another that is due in August. The creditors could agree on a bridge loan on Friday as they continue negotiations on the latest bailout accord for Athens.
Absent liquidity from the ECB, Greek banks will continue to hemorrhage, even with capital controls in place. Yves Smith rails against the ECB maintaining its liquidity cap in "ECB Expected to Continue to Strangle Banks, Not Provide More ELA Funding Today, Despite Greek Parliament Passing Austerity Legislation":
If this comes to pass (the ECB is to make its decision later today), the refusal is utterly insane and horrifically destructive. Even if Greece were to get an ELA increase, it would take time for banks to begin restoring services. The economy will continue to decay at an ever-accelerating rate and the damage will become more and more permanent as businesses fail, which means workers will lose jobs and income.
The apparent rationale is that the ECB is not willing to take any more credit risk and wants its July 20 bond payment in hand first.
This is the madness the Eurozone has produced. National governments are held responsible for the performance of their economies when they do not control interest rates (and therefore are subject to overheating or unduly low growth via “one rate for all” not necessarily fitting them) and have tight deficit limits, which means they do much in the way of fiscal stimulus. And Greece is in deflation. Its widely-touted spot of growth in 2014 was the result of prices falling even faster than the rate of contraction in nominal GDP! That’s not a sign of improvement, that’s a disaster in progress. 
Yes, the insanity of the Greek debt crisis, now that a third bailout is in the works, is so obvious that the IMF, previously a active collaborator in perpetuating the "extend and pretend" big lie, is calling it out, which makes the politics of passing the new bailout through the various member-state parliaments tricky because hardliner austerian nations led by Germany categorically rule out any debt relief.

So the bottom line here is that with the ECB keeping the spigot shut and a split within the troika over the insanity of a small country like Greece, teetering on the brink of economic collapse, on the hook for what will be, after a third bailout package, nearly 400 billion euros in debt.

The big lie to match the "extend and pretend" big lie in Greece is one tossed about non-stop in Tom Friedman's interview with Obama after the P5+1 agreement on Iran's nuclear program was announced, and that is the one about Iran being a prime sponsor of terrorism in the Middle East. This claim is never substantiated, not a single case is mentioned. Hezbollah is tossed out. But Hezbollah is, among other things, a legitimate political party with representatives in Lebanon's parliament and cabinet. And some incendiary statements of former Iranian president Mahmoud Ahmadinejad are sprinkled on top to spice things up. But the Iranian people lost confidence in him and Ahmadinejad's candidate to replace him as president lost to the moderate Hassan Rouhani.

Basically ISIS and Al Qaeda go largely unmentioned in the interview. After watching the 47-minute lecture by Obama one could not be blamed for thinking that Iran might be behind jihadi terrorist groups. Of course, as everyone who follows the mainstream daily news should know by now, it is Saudi Arabia and its fellow despots in the GCC that support the takfiri jihadists.

"WikiLeaks Cables Show a Saudi Obsession With Iran" by Ben Hubbard and Mayy El Sheikh properly places the horse before the cart where it should be. It is the Kingdom of Saudi Arabia that is the "troublemaker" in the Middle East and beyond through its funding of Wahhabi fundamentalist arch-conservative Islam:
BEIRUT, Lebanon — For decades, Saudi Arabia has poured billions of its oil dollars into sympathetic Islamic organizations around the world, quietly practicing checkbook diplomacy to advance its agenda. 
But a trove of thousands of Saudi documents recently released by WikiLeaks reveals in surprising detail how the government’s goal in recent years was not just to spread its strict version of Sunni Islam — though that was a priority — but also to undermine its primary adversary: Shiite Iran. 
The documents from Saudi Arabia’s Foreign Ministry illustrate a near obsession with Iran, with diplomats in Africa, Asia and Europe monitoring Iranian activities in minute detail and top government agencies plotting moves to limit the spread of Shiite Islam.
The scope of this global oil-funded operation helps explain the kingdom’s alarm at the deal reached on Tuesday between world powers and Iran over its nuclear program. Saudi leaders worry that relief from sanctions will give Iran more money to strengthen its militant proxies. But the documents reveal a depth of competition that is far more comprehensive, with deep roots in the religious ideologies that underpin the two nations.
The documents indicate an extensive apparatus inside the Saudi government dedicated to missionary activity that brings in officials from the Foreign, Interior and Islamic Affairs Ministries; the intelligence service and the office of the king.
Recent initiatives have included putting foreign preachers on the Saudi payroll; building mosques, schools and study centers; and undermining foreign officials and news media deemed threatening to the kingdom’s agenda.
At times, the king got involved, ordering an Iranian television station off the air or granting $1 million to an Islamic association in India.
“We are talking about thousands and thousands of activist organizations and preachers who are in the Saudi sphere of influence because they are directly or indirectly funded by them,” said Usama Hasan, a senior researcher in Islamic studies at the Quilliam Foundation in London. “It has been a huge factor, and the Saudi influence is undeniable.”
While the documents do not show any Saudi support for militant activity, critics argue that the kingdom’s campaign against Shiites — and its promotion of a strict form of Islam — has eroded pluralism in the Muslim world and added to the tensions fueling conflicts in Iraq, Syria, Yemen and elsewhere.
Why do the Saudis always get a free pass from American officials? Because the U.S. government is a "pay-to-play" system that the Saudis (along with Israelis) have learned to wire over the decades. As long as the United States covers for the monarchs of the Gulf and blames their bad actions on Iran, there will be war in the region. That is why the deal on Iran's nuclear program is a helpful first step, but it in no way alters the underlying dynamic fueling war and instability in the Middle East.

No comments:

Post a Comment