Below you may read my message (posted April 29, 2010) to the mailing list of
the NIGD and the subsequent reply by
Matti Kohonen, plus my
reply to Matti Kohonen
Dear NIGD,
after this message, you find a copy of my personal signature to the open
letter, which a group of economists, including Andrew Watt at the European
Trade Union Institute (ETUI), has written to European policymakers, criticising
their collective failure to address the Greek crisis as a European crisis.
As my "Organisational affiliation", I decided to enter "NETWORK INSTITUTE
FOR GLOBAL DEMOCRATIZATION".
I can only hope that you will find my behavior to be appropriate and to
accept it.
The text of the Open Letter from the trade union economists is found
here:
http://www.etui.org/en/Media/Files/Open-letter-to-European-policymakers-The-Greek-crisis-is-a-European-crisis-and-needs-European-solutions
Actually, I am far from enthusiastic about the content of this open letter;
I only find it to be barely acceptable as a statement on the immediate Greek
financial crisis. An ironical comment on this letter would be, that it
represents a tradeunionistic point of view. If there would at this moment exist
a European political force with the necessary power and authority to intervene
positively and constructively in the present situation, it would no doubt start
from the demand that Europe must unilaterally abolish its nuclear weapons.
"Stop there", I can hear some of you object, "and don't mix up things which
must necessarily be kept apart!" My answer is, that the widespread mental habit
of keeping economics and finance apart from politics and military strategy is
based on sheer illusion, and that it shows a lack of intellectual courage,
which is unadmissible on the side of those who make their living from research
on human history and the social reality.
As the tradeunion economists write, the increased exports of Germany,
Austria and the Netherlands has corresponded to a demand expansion in Greece,
Spain, Ireland, and other members of the eurozone. "The problem is symmetrical
and the solution must be as well."
However, "the solution" requires more than a common market and a common
currency. Europe must become a real political union, a democratic federal
state. And this, in turn, requires a basic political consensus concerning, in
particular, the foreign policy and the military strategy. At the center of this
issue are -- since 1945 -- the global weapons systems "of mass
destruction".
What is to be done? One thing is clear: we should only undertake such tasks
which are in our power to carry out. The denuclearisation of Europe certainly
is one such task, because the European nuclear armaments, and the power plants
based on the nuclear fuel cycle, are *solely our responsibility*, something
which, if you excuse the dramatic example, could never be said about the
climate on this earth, or the development of its general temperature.
Therefore, let us raise the demands put forward in the Appeal of Saintes:
"
- # 1. From the Atlantic to the Urals, no nuclear weapon must be stationed or
installed in Europe any longer.
- # 2. Nuclear weapons must not threaten Europe or any other part of the
world.
- # 3. Europe must initiate, pursue in good faith, and bring to a successful
conclusion the process of abolishing nuclear weapons everywhere, as required by
Article VI of the Non-Proliferation Treaty.
- # 4. The Geneva-based Conference on Disarmament must achieve this result by
whatever means are required.
- # 5. The Vienna-based IAEA must cease its promotion of nuclear energy and
devote itself exclusively to monitoring civilian and military nuclear
installations, preventing the diverting of fissile materials towards the
building of new weapons, and aiding in the dismantling of existing weapons and
nuclear plants.
- # 6. The Vienna-based Organisation of the Comprehensive Test Ban Treaty
must become operational.
- # 7. All possible light must be shed on the real causes and consequences of
nuclear catastrophes such as Cheliabynsk and Chernobyl.
- # 8. The 1959 agreement between the IAEA and the WHO, which forces the WHO
to spread disinformation and lies about nuclear matters, must be
abrogated.
- # 9. The EURATOM Treaty must be abrogated and no new nuclear plant must be
built.
- # 10. Europe must become a totally nuclear-free zone, so as to contribute
to total denuclearisation of the planet without waiting for similar action by
other states or continents.
- We call on Europe's citizens, NGOs, states and people to unite and take
action to achieve these objectives in the shortest possible time.
- Saintes, France, 11 May 2008 "
- (http://acdn.france.free.fr/php_petitions/index.php?petition=12)
Who are the European nuclear armaments meant to "deter", if not the peoples
of the global South? During a pause in the preparatory seminar in Dakar last
November, I shortly discussed the issue of European Nuclear Disarmament (END)
with Samir Amin. He agreed vividly to my opinion, that END is very much in the
interest of the peoples of the global South, and should be placed high on the
political agenda. So let's not be fooled by the efforts of the Western
political establishment to focus everybody's attention on the Middle East. As
far as "the nuclear issues" are concerned, Europe should still be our
focus.
All the best,
- Mikael
Open letter to European policymakers: The Greek crisis is a European
crisis and needs European solutions
We urge you to read this open letter (see below).
If you broadly agree with its content, please manifest your support by
sending the following details to: openletter@etui.org
Please copy and paste this table in your email
First Name* MIKAEL
Family name* BÖÖK (BOEOEK)
E-mail* BOOK @ KAAPELI dot FI
Organisational affiliation
NETWORK INSTITUTE FOR GLOBAL DEMOCRATIZATION (NIGD)
Address
EDOEVAEGEN 20, 07750 ISNAES
Country
FINLAND
* Response necessary for us to include you.
To the above letter, Matti Kohonen replied as follows:
Dear Mikael, and NIGDers,
The Greek crisis is a major step in the global financial crisis as it enters
its second year. I fear this the beginning of a second phase of the crisis
where major states may start to have serious fiscal difficulties, as the
stimulus packages are running out and fiscal deficits show some of the
structural weaknesses of the global financial system which caused the Greek
crisis, with rampant Greek corruption as the local link.
However I can't sign this petition, it has 100% wrong analysis on the
crisis, is based on Neo-classical economics, and I don't agree with the 4
preambules of the petition.
" Greece's fiscal catastrophe has four causes. First, there is the past
fiscal weakness of the Greek state, in particular the inability to generate tax
revenues, as a share of GDP, in line with its European neighbours, but also
inexcusable statistical manipulation. Second, Greece's relative competitiveness
has steadily worsened, especially within the euro area, as reflected in a
sustained current account deficit as a result of above-average increases in
unit labour costs and prices and a stronger economic growth dynamic. Third the
economic crisis - which, given the country's conservative banking sector was a
classic external shock - has ravaged public finances, just as in other
countries. And last but not least, fourth, the interest cost burden has
dramatically increased, as genuine concerns about fiscal sustainability
combined with speculation and misinformation to dramatically raise the rate of
interest on new Greek government bonds."
- fiscal weakness of the Greek state is true, it has a tax per GDP of 32%,
and only 8% for direct taxation while e.g. Germany manages to collect 12% in
direct taxation (this explains the main part of the gap). This points to
rampant corporate and self-employed tax evasion, meaning that the crisis in
greece is of their own making in great part.
- since when are NGOs and trade unions asking for a reduction in unit labour
costs, current account deficit may not be good, depending how much foreigners
have your bonds and at what interest rate. Calling for lower labour cost for me
is out of line.
- this is 100% wrong, the Greek banking system is rotten to core, as most
banking systems in Europe that facilitate criminal capital flight to tax
havens, and support offshore banking centres like Cyprus that is also a flag of
convenience with little or no regulation on shipping labour, tax, safety, etc.
The Greek banks have happily opened offshore accounts for Greek millionaires
and billionaires assisting them to pay no tax, there you have the Greek 'tax
gap'. Sure they don't have their own banking crisis based on lending, maybe
this is the 'conservative' side of it, but for me I'd call that 'prudent' which
is a virtue in banking, but 'conservatism' means you assist the wealthy to do
what they want.
- speculation may have a role, but the rating agencies have done right to
downgrade bonds of a government that runs a long-standing fiscal deficit
without any idea of how it's going to be paid, it's a recipe for disaster. The
problem is that they do it so abruptly, and not gradually as the secretive
public finances in Greece, helped with Goldman Sachs have assisted in hiding
the debt mountain, just like Lehman did in the banking world. This is totally
corrupt from the Greek government's side, and they should be the ones
responsible.
Just like the financial crisis in Finland in the early 1990s, Asian
financial crisis in late 1990s, and now esp. the East European countries where
salaries have been cut to bring fiscal balances... it's the ordinary people who
are suffering from this, with unemployment, lower wages, so we should call for
an end to the casino economy that plays on the fortunes of ordinary
citizens.
This petition doesn't address the issues, and I have to say that trade
unions should stop hiring orthodox economists so that we'd get better advocacy
material to work on.
Mikael's petition seems much better on stopping the nukes!
Best,
Matti
My reply to Matti's answer follows here:
Hello Matti and all,
the open letter from the trade union economists addresses one issue, which
you seem to miss completely, namely, that "The Greek crisis is a European
crisis and needs European solutions". Would you agree that "a coordinated
[European] economic policy" is needed? Or do you (and I do not mean only you,
Matti) think that it would be better if the European Union disintegrated and
disappeared altogether?
It also seems to me that you (Matti) misinterpret the economic analysis of
the trade union economists, not taking into account their main argument, which
concerns the economic imbalances within the EMU. They write:
"Due to strong differences in wage setting, Greek nominal unit labour costs
increased by more than 30% since the start of EMU - and the increases in Italy,
Spain, Portugal and Ireland were even higher - whereas in Germany they rose by
just 8%."
The ETUI economists here join the analysis of former German deputy finance
minister, UNCTAD economist Heiner Flassbeck, who is of the opinion that Germany
has for long been outcompeting the PIIGS countries (Portugal, Italy, Ireland,
Greece and Spain) by means of wage dumping. (Read the short article "The Greek
Tragedy and the European Crisis, Made in Germany", by Heiner Flassbeck in the
webzine of Monthly Review 13 March 2010, http://mrzine.monthlyreview.org/2010/flassbeck130310.html
).
As far as I can understand, the ETUI economists are not, as you seem to
suppose, calling for a reduction in the wages of Greek workers and employees.
They write:
"Greece must not be forced into massive demand deflation: having avoided the
mistakes of the Great Depression at European level it makes no sense to repeat
them at national level. On the contrary it is in Europe's vital interests to
resolve the Greek crisis on the basis of rising incomes across the continent
and to put in place the needed machinery to cope with competitive and fiscal
imbalances in the future."
However, my own critique of the ETUI is based on my conviction that many of
the economic and financial problems of the EU and its members are political and
military in nature, starting from "the nuclear issues" (which also have strong
ecological dimensions). Thus it is simply not possible for the EU to formulate
a "coordinated economic policy" until it has settled for an independent foreign
policy and security policy. Independent from the USA, that is. Denuclearization
is not the panacea, it would not bring the solution to all problems,
but it is a keyword, and the condition without which no favourable European
economic, political and cultural solutions will be found.
In the discussion on the present Greek financial crisis, the excessive
military spending of the Greek governments is rarely analyzed more closely. The
ETUI economists do not even mention that 4-6 percent (?) of the Greek budget
has for years been reserved for the military, e.g. for buying fighter jets and
high-tech systems from coporations like Lockheed and Raytheon for thousands of
millions of dollars. All too often, trade union economists avoid taking on the
military-industrial complex, because the complex "creates jobs". For similar
reasons, they keep silent about the necessary denuclearisation.
The weapons of mass destruction (WMD), and the missile defence and space war
systems which have been constructed around the WMD, form the heart of the
military-industrial-academic complex which plays such a big role in our social,
economic and cultural life. That monster has to be killed.
Greetings from Finland,
- Mikael
PS "Greece remains among the top five largest recipient of major
conventional weapons for 2005-2009, but has fallen from third place for 2000-
2004. The transfer of 26 F-16C from the United States and 25 Mirage-2000-9
combat aircraft from France accounted for 38 per cent of the volume of Greek
imports." (SIPRI ). Aucun
rapport avec la crise financière et budgétaire de la Grèce ?
