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Emet m'Tsiyon

Friday, June 12, 2015

More European Greed, Failure & Hypocrisy: The Greek Case

We are all familiar with the moral pretensions and pretenses of Europe, particularly the European Union which embodies Europe's flaws quintessentially. They seem to know what is right for everybody else in the world, especially for Israel and the Jews. Just listen to us and you will have peace, they tell us. Why we should listen to them is beyond me, since I am old enough to remember that the Nazi Holocaust was perpetrated not just by Germans and Austro-Germans but was aided by most of Europe (by Arabs too but we're not talking about Arabs). Think of Quisling Norway and Vichy France and so on and so forth. Europe's world championship in hypocrisy is solid and unchallenged, as this Irish example bearing on Israel demonstrates. But even more striking is how the European Union  treats some of its own who appear to belong to a lesser class of Europeans.

The EU has never threatened Turkey with any sort of boycott for its occupation of northern Cyprus, whereas Cyprus, predominantly Greek ethnically, is a member of the EU itself. But there is obviously a lot of business to be done with Turkey or maybe the Greek Cypriots are just Europeans Grade B. Their brothers and sisters in Greece, also an EU member and a NATO member, suffer from counterproductive Eurozone schemes for settling their debt crisis. The Eurozone, a subsidiary comprising most EU members, imposed on Greece a terribly dysfunctional austerity plan that guarantees to keep most Greeks in poverty and does not encourage growth.

Anyhow Philippe Legrain in Foreign Policy updates some of the things that I and many professional economists have been saying for years [although I am not a professional economist, some big flaws in the "remedy" for Greece have been much too obvious]. Whatever the flaws in the economic plans to "help" Greece, their proposals for the Middle East  would work just as badly or worse if Israel adopted their plans to "help bring peace" to the Middle East. Here is Legrain:

Why Greece Should Reject the Latest Offer From Its Creditors

Why Greece Should Reject the Latest Offer From Its Creditors
Reform — Greece sorely needs it. Cash — the government is running desperately short of it. So it is time for Prime Minister Alexis Tsipras to do what’s best for Greece and accept its creditors’ reform demands in exchange for much-needed cash. That is how the Greek situation is usually framed. It is utterly misleading.
Imagine you’re in prison for not being able to pay your debts. (You’re right, it’s almost unthinkable — civilized societies no longer lock up bankrupt individuals. But bear with me.) After five years of misery, you lead a rebellion, take control of the prison, and demand your release. The jailers respond by cutting off your water supply. Should you back down and return to your cell, perhaps negotiating for slightly less unpleasant conditions, in order to obtain a little liquidity? Or should you keep fighting to be free? That, in essence, is what the standoff between an insolvent Greece and its eurozone creditors is really about.
For months, Greece has had “only days” to agree a deal with its creditors before it runs out of cash. Eventually that will be true. But even if Tsipras accepted the creditors’ demands, Greece would still have “only days” before it ran out of cash. The 7.2 billion euros on offer right now wouldn’t even cover the Greek government’s debt repayments until the end of August. And for a measly two months of liquidity, Tsipras is expected to surrender his democratic mandate: break his election promises, agree to yet more tax increases and spending cuts that would depress Greece’s economy further, and relinquish his demands for debt relief.
Then the wrangling would start again. Because so long as Greece remains in its debtors’ prison, it will be dependent on its jailers for liquidity and therefore expected to comply with whatever additional conditions they impose. Tsipras should not submit to this debt bondage.
Nine of every 10 euros that eurozone governments and the International Monetary Fund (IMF) have lent to the Greek government since 2010 have gone torepay its unbearable debts, which should instead have been restructured back then. But from now on, every last cent of additional funding would go to pay back debt. The Greek government now has a small primary surplus: It doesn’t need to borrow, except to service its debts of 175 percent of GDP.
Yet in exchange for additional liquidity, Greece’s creditors are demanding a return to the failed austerity policies of the past five years, which have shrunkthe economy by 21 percent and thrown one in four people — and one in two youth — out of work. The hypothesis that austerity can cure insolvency has been tested to destruction. Another dose of it would be perverse.
As Martin Sandbu of the Financial Times points out, further austerity isn’t even in the creditors’ interests. They are demanding a fiscal tightening of 1.7 percent of GDP in the second half of this year alone. Since raising taxes and cutting spending would depress the economy — shrinking tax revenues and inflating social spending, thereby unwinding some of the budget tightening — a fiscal squeeze twice as big would be required to achieve the creditors’ target, if the past five years are anything to go by. According to Sandbu, that would crunch the economy by 5 percent, perversely raising the ratio of debt to GDP by some 9 percentage points. To achieve a primary surplus of 3.5 percent of GDP by 2018, as the creditors are demanding, would require a fiscal squeeze of 8.3 percent of GDP, depressing the economy by 12.5 percent and increasing the ratio of debt to GDP by around 22.5 percentage points. Far from bringing Greece’s debts down to more sustainable levels, further austerity would cause them to soar.
Why would eurozone authorities be so cruel and foolish? Because they don’t really care about the welfare of ordinary Greeks. They aren’t even that bothered about whether the Greek government pays back the money they forced European taxpayers to lend to it, ostensibly out of solidarity, but actually to bail out French and German banks and investors. German Chancellor Angela Merkel and other eurozone policymakers just don’t want to admit that they made a terrible mistake in 2010 and have lied about it since. So they want to be seen as standing up for eurozone taxpayers’ interests, and they want Greeks to put up and shut up until Merkel and her minions are comfortably in retirement, and it is someone else’s problem.
Further austerity isn’t the only consequence of leaving Greeks languishing in their debtors’ prison. Contrary to claims that Greece shells out scarcely any interest, it pays an average interest rate of 2.5 percent on its debts, according to Joakim Tiberg of UBS, a Swiss bank — 4.5 percent of GDP in total. With prices falling by 2.1 percent over the past year, the inflation-adjusted interest rate is 4.7 percent. Worse, the debt overhang creates crippling uncertainty about how the crisis might be resolved — including whether Greece might be forced out of the euro — stunting consumption, investment, and growth. Having creditors breathing down your neck to raise taxes is a further deterrent to investment. And the debt overhang also causes deflation, making the burden even more unbearable.
The creditors’ insistence on reform is also disingenuous. Greece has been run by the institutions known as the Troika — the European Commission, the European Central Bank, and the IMF — since May 2010. They have had every opportunity to insist on the reforms they are now demanding. Yet they kept on funding Greece because all they cared about was the fiscal targets (and wage cuts to boost “competitiveness”). The sudden focus on reform is primarily about forcing Tsipras to break the promises that got him elected in January.
Let me be clear: Greece urgently needs reform. Its economy is underdeveloped, hidebound, and dominated by oligarchic families who monopolize markets and suborn politics. Its public administration is corrupt and inefficient. Its legal system is dysfunctional, its tax system full of holes. Tsipras may or may not be willing to reform Greece. But ultimately, it ought to be up to Greeks whether and how they do so.
Indeed, the main sticking points between Athens and its creditors aren’t really reforms, they’re fiscal measures. While improving the collection and administration of value-added tax (VAT) is desirable, the creditors are also demanding a tax hike of 1 percent of GDP. That is wrong-headed, since it would hit the country’s main export sector, tourism, which accounts for 18 percent of GDP.
Pension reform is also necessary as Greeks live longer and fewer workers have to support more retirees. But the country’s social safety net is so threadbare that a single-slashed pension is often supporting a whole family of jobless people. So, while encouraging healthy people to continue working is desirable, pension cuts are not.
Some argue that Tsipras should sign up to what the creditors want, take the cash to pay off the looming bond payments to the IMF and the ECB, make a show of reform, and then press again for debt relief. But the notion that the creditors would then be more flexible is fanciful. In 2012, eurozone governments promised Greece debt relief once it achieved a primary surplus, but they still haven’t delivered it. The Greek government has now put forward sensible plans for restructuring its debts. Unless its creditors are willing to start negotiating meaningful debt relief, Tsipras should reject any deal on offer.
Merkel ought to be as magnanimous with Greece as the United States was with post-Nazi Germany, when Washington forgave half of the West German government’s debts in 1953 [this is not what was most important about the Marshall Plan money: None of it went back to the United States. All of it stayed in Germany-- Eliyahu m'Tsiyon]. But if eurozone authorities won’t be reasonable, unilateral default — and even euro exit — is preferable to debt bondage. 
[emphases are mine, likewise I supplied the link in the sentence above "Merkel ought to be as magnanimous. . . ."- Eliyahu

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Wednesday, June 03, 2015

Qatar denies that any workers have died working on sites for the 2022 soccer World Cup

Of course, we would expect a government accused in a situation like this to deny or minimize the loss of life that it may be  responsible for. Here Qatar engages in a brazen lie. The Guardian has followed this story and we have previously used the Guardian's material at Emet m'Tsiyon. What is interesting and what the Guardian still conceals or works to disconnect from other facts, from the wider context of Qatar, is Qatar's role as the leading funder of Hamas, the ones who made it possible for Hamas to shoot thousands of missiles at Israeli civilian locations last summer. Also missing is the efforts of US secretary of state John Kerry to force Israel to use Qatar's "mediation" to end the war with Hamas, whereas Qatar was clearly a major or the major ally of Hamas along with Iran and Turkey. In other words, the US as a great power or superpower or imperialist power worked to favor Hamas over Israel. When the Guardian talks about Qatar's oppression of foreign workers, it does not make a connection with Hamas or the USA. If you find something to the contrary, a Guardian webpage that I am not familiar with, let me know and post it here as a comment. [Guardian June 3, 2015 at 6:59 British time].

Qatar: 'Not a single worker's life has been lost'

The state-run Qatar News Agency has published a denial by the Government Communication Office of claims surrounding the deaths of migrant workers working on World Cup sites. (Read the Guardian’s investigation into these deaths here and here.)
The Qatari rebuttal tackles a blog published by the Washington Post, which said 1,200 migrant workers are estimated to have died during the construction of World Cup sites, and a further 4,000 could die by 2022:
This is completely untrue. In fact, after almost five million work-hours on World Cup construction sites, not a single worker’s life has been lost. Not one
Qatar has more than a million migrant workers. The Global Burden of Disease study, published in the Lancet in 2012, states that more than 400 deaths might be expected annually from cardiovascular disease alone among Qatar’s migrant population, even had they remained in their home countries.
It is unfortunate that any worker should die overseas, but it is wrong to distort statistics to suggest, as the Post’s article did, that all deaths in such a large population are the result of workplace conditions.
The Post’s article was accompanied by a dramatic graphic, which purports to compare the imagined fatalities in Qatar with the number of lives lost in the construction of other international sports venues, including the London Olympics, where just one worker was reported to have died.
A more accurate comparison according to the Post’s analysis would have also suggested that every migrant worker in the United Kingdom who died between 2005 and 2012 – whatever the job and whatever the cause of death – was killed in the construction of the 2012 London Olympics. [Guardian June 3, 2015 at 6:59 British time]
 - - - - - - - - -
How Hamas leaders got rich, with the help of Qatar and others [Globes 24 July 2014].
Hamas is led by very rich people [Egyptian TV]
Qatar funds the so-called "Free Gaza Movement"
Qatar and other super-rich Arab powers help finance American "higher education."

Business Insider comments on the numbers of dead workers [here]

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