The paper examines two related subjects: First, the strictly class character of Greek public debt restructuring, according to its design and consequences, which determined its failure to reduce the level of the debt. The importance of this discussion is highlighted by recent considerations about a new haircut or a new rescue loan to Greek government. The contradicting plans make clear that sooner or later there will be a new round of crisis with negative implications to Greek working class and people.
Second, five concrete arguments at favor of the cessation of payments and abolition of Greek public debt. In the following lines it is shown the huge responsibility of European Union to the deterioration of sovereign debt crisis in Greece. More
Financialization and growth models
The concept of financialization is used to refer to the increasing power of financial capital since the 1980s. Although this concept refers to mechanisms as old as capitalism, the neoliberal policies of the last decades have led to unprecedented weight of markets, institutions and financial motives in the world economy.
The process of financialization has significantly influenced the growth patterns in developed economies during recent decades, explaining the fragile rate of investment, high levels of unemployment, external imbalances or increase inequalities in the distribution of income. However, the particular form that has adopted in each country the process of financial deregulation, patterns of trade specialization, credit expansion or wage restraint has resulted in different „varieties of financialisation“. More
Sotiropoulos states quite rightly that the euro is not just a currency, but a mechanism: “It has set up a particular form of symbiosis among different capitalist economies.” (Sotiropoulos 2012, 66) But what is the material nature of this “symbiosis among different capitalist economies”? This key issue had already been raised by John Grahl in 2003. He stressed that globalization and the associated process of European integration was not just a political strategy “but also, and even more, the outcome of a deep change in productive structures, of a new phase in the socialization of production”. (Grahl 2003, 19) More
Paris in autumn 2007: The global economic and financial continues to advance. The members of the Left Group of the European Parliament (GUE/NGL), in Paris for study days on the occasion of French EU-Presidency, are tensely listening to the scenarios one of Sarkozy’s advisors is laying out. What will happen if certain political decisions made by EU and member-state leaders regarding strategies for fighting the global and European financial and economic crisis are made or not made?
That was five years ago. By now there are signs that the “darkest scenarios” outlined then are the most probable ones: the crumbling of the EU or its survival through authoritarian rule, its downsizing and a widening gap between the “centre and the periphery”; a greater amount of “different speeds”, and wider differences among them, is no mere imaginary construct. More
Within the social sciences the concern has been formulated since considerable time, who are the agents effectively taking political decisions in the globalized world and which are the consequences of such decisions – and why this is so. This concern has especially been driving towards research on networks of agency (e.g. Kees van der Pijl) and trans-national class structures (e.g. Leslie Sklair or Wilhelm Carroll). Since the beginning of the global financial crisis, this question is again under an intensive debate, not in the least within the space of the Euro. This should not astonish anybody – it is a reaction to circumstances in which „the markets“, especially the „financial markets“, have been unilaterally “driving” politics and incapacitate the politicians. So in spring 2012, at a public event organized by the German Federal Ministry of Finance,on the financial markets. More
1/ How to explain financialization as a systemic transformation of the capitalist way of production and life?
The increasingly financial nature of capitalism is reflected in the growing importance of financial markets, motives, institutions and elites in the workings of the economy and in national and international centres of power.
This is the end result of a process of financial deregulation, which started in the 1970s, when the Bretton Woods system collapsed, and gathered momentum in the 1980s when all controls on movements of capital were lifted. Deregulation of financial systems and free movement of assets has brought about a new form of financial capital which has gradually achieved a predominant position in the global economy. It may be referred to as global finance. The aim of financial deregulation is to strengthen the position of financial markets – in which global-finance agents enjoy a dominant position – for collecting savings and funding investment. More
According to the latest opinion polls, 86.5% of the Albanians would vote in favor of the EU integration, the largest percentage in the EU integration aspiring countries. Friedrich Engels once put it that the poor, being dispossessed on earth from any kind of property, built in their imagination a realm of prosperity and equality in heaven. The major socio-economical decisions of the Albanian governments in the last 20 years were “advised” from institutions like the IMF, and the EU. Despite the impoverishing socio-economical consequences of the neoliberal agendas of these institutions, the overwhelming majority of the Albanian people support the EU agenda. The concept of ideology as a straitjacket shaping the political consciousness of the society would explain the superficial paradox of the above-mentioned conclusion. More
Housing, growth and crisis in Anglo-America
A considerable amount of literature has been published on the role of housing, particularly in Anglo-America, in facilitating and triggering the recent financial crisis. There is general agreement that housing, via mortgage lending, was the main vehicle for integrating households (or household sector) into a rapidly expanding financial markets. Whether the housing-finance nexus is part of a recognizable Anglo-liberal growth model or compares to other Varieties of Residential Capitalism, it generally understood that housing drove growth and was meant to serve a welfare function. Similarly, it is widely acknowledged that this system was inherently unsustainable because housing cannot simultaneously promote growth and provide welfare, which becomes evident only at the point at which the financial crisis begins. More
1. The crisis arises out of faulty institutional design rather than bad policy mix. The faulty institutional design was embedded in the Maastricht Treaty of 1992, with its restrictions on Government deficits and a ceiling on the Government debt to GDP ratio. Underlying this was a conviction that monetary stability meant low inflation, and that the key to low inflation was low Government borrowing. The fault in the institutional design is the ban on central bank holding of Government bonds. This is inspired by the ruling policy doctrines of the pre-War German Reichsbank, whose President in the 1930s Hjalmar Schacht only avoided conviction at Nuremburg because he had been removed by Hitler from his position at the Reichsbank after protesting at the over-issue of German Treasury bills which the Reichsbank was supposed to discount. More