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Old 17-06-11, 09:44 AM
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Default In Greece, we see democracy in action

In Greece, we see democracy in action

The public debates of the outraged in Athens are the closest we have come to democratic practice in recent European history


When Stéphane Hessel wrote in Time for Outrage! that indignation with injustice should turn to "a peaceful insurrection" perhaps he did not expect that the movement of indignados in Spain and aganaktismenoi (outraged) in Greece would take his advice to heart so soon and so spectacularly.

The Greek resistance to the catastrophic economic measures was expected. Throughout modern history the Greeks have resisted foreign occupation and domestic dictatorship with determination and sacrifice. The measures imposed by the IMF, EU and European Central Bank with the full accord, if not invitation, of the Greek government, have led to 11 one-day general strikes, numerous regional strikes and imaginative acts of resistance. Domestic and foreign media avidly reported the confrontations between youths and the riot police that followed major demonstrations and left a thick cloud of teargas hanging over Athens. Led by the parties of the left and some unions, these protests outshone the anti-austerity demonstrations in the rest of Europe. But the relentless scare campaign by establishment media, experts and elite intellectuals spread fear and guilt to the majority of the population and soon succeeded in limiting resistance.

Three weeks ago, things changed. A motley multitude of indignant men and women of all ideologies, ages, occupations, including the many unemployed, began occupying Syntagma – the central square of Athens opposite parliament; the area around White Tower in Thessaloniki; and public spaces in other major cities. The daily occupations and rallies, sometimes involving more than 100,000 people, have been peaceful, with the police observing from a distance. Calling themselves the "outraged", the people have attacked the unjust pauperising of working Greeks, the loss of sovereignty that has turned the country into a neocolonial fiefdom of bankers, and the destruction of democracy. Their common demand is that the corrupt political elites who have ruled the country for some 30 years and brought it to the edge of collapse should go. Political parties and banners are discouraged.

Thousands of people come together daily in Syntagma to discuss the next steps. The parallels with the classical Athenian agora, which met a few hundred metres away, are striking. Aspiring speakers are given a number and called to the platform if that number is drawn, a reminder that many office-holders in classical Athens were selected by lots. The speakers stick to strict two-minute slots to allow as many as possible to contribute. The assembly is efficiently run without the usual heckling of public speaking. The topics range from organisational matters to new types of resistance and international solidarity, to alternatives to the catastrophically unjust measures. No issue is beyond proposal and disputation. In well-organised weekly debates, invited economists, lawyers and political philosophers present alternatives for tackling the crisis.

This is democracy in action. The views of the unemployed and the university professor are given equal time, discussed with equal vigour and put to the vote for adoption. The outraged have reclaimed the square from commercial activities and transformed it into a real space of public interaction. The usual late-evening TV viewing time has instead become a time for being with others and discussing the common good. If democracy is the power of the "demos", in other words the rule of those who have no particular qualification for ruling, whether of wealth, power or knowledge, this is the closest we have come to democratic practice in recent European history.

Syntagma's highly articulate debates have discredited the banal mantra that most issues of public policy are too technical for ordinary people and must be left to experts. The realisation that the demos has more collective nous than any leader, a constitutive belief of the classical agora, is now returning to Athens. The outraged have shown that parliamentary democracy must be supplemented with its more direct version. It is a timely reminder as the belief in political representation is coming under pressure throughout Europe.

The Pasok government's response has been embarrassingly muted so far. Establishment propagandists blame the protests and the limited violence that followed on the divided left. This tactic cannot work with the outraged, who come from all parties and none. A determined campaign has been agreed to stop parliament voting in the new measures that President George Papandreou agreed with the bankers and Germany's Chancellor Merkel, which would extend and expand the current recession and rising unemployment until at least 2015 – a cure much worse than the disease. The reaction to these measures will be the high point of the confrontation between "insiders" and outraged, now entering its endgame. Today, the Syntagma multitude is joining forces with the unions in a general strike and the encircling of parliament.

Syntagma is now closer to Cairo's Tahrir Square than to Madrid's Puerta del Sol. The experience of standing daily and confronting the parliament opposite has changed the politics of Greece for good and made the elites worried for the first time. In Greek, the word stasis means an upright posture as well as revolt or insurrection. The square was named after 19th-century demonstrations, which demanded a constitution (syntagma) from the king. This is what the outraged repeat today: they are standing upright, demanding a new political arrangement to free them from neoliberal domination and political corruption.

In Greece, we see democracy in action | Costas Douzinas | Comment is free | guardian.co.uk
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Old 17-06-11, 09:55 AM
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Originally Posted by contracycle View Post
Throughout modern history the Greeks have resisted foreign occupation and domestic dictatorship with determination and sacrifice.
Too bad that they didn't display the same moral fortitude when it came to:
- lying to get into the EU.
- lying to be able to borrow their way to modern living standard.
- paying taxes.

Arguably, others were stupid enough to lend to the pieces of shit and should suffer in some measure but, in Europe, if you default on a loan (mortgage etc), unless it's asset-backed and specifically ringfenced, your liabilities are unlimited.

Thus, since the Greeks defaulted on the equivalent of a general mortgage, we ought to have the right to sell the totality of the country assets and lands to get back what we can.
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Old 17-06-11, 10:00 AM
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Originally Posted by Gilles de Rais View Post
Thus, since the Greeks defaulted on the equivalent of a general mortgage, we ought to have the right to sell the totality of the country assets and lands to get back what we can.
Why should you?
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Old 17-06-11, 10:08 AM
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They signed on the dotted line to borrow. This isn't some kind of debt servitude. No one forced them to borrow. Indeed, they deliberately lied in order to be able to borrow more easily. They did so because they wanted to catch up with western, modern standards of living.

Fine. Nothing wrong with that. Except that borrowing is a contract with obligations and privileges for both parties.

One of the privilege of the lender is that, in bankruptcy, he can re-possess the assets of the defaulting lender and try and recover his money.

What's why.
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Old 17-06-11, 10:23 AM
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Not everywhere, and not all the time. Even Texas bankruptcy law, last I read, prevents the seizure of productive assets that would further impoverish the debtor. Punitive debt regimes of the sort you describe are economically harmful and often restricted, which is why we have laws against loan sharking and similar.

So no, there is no abstract right to reduce a state to penury no matter how ill advised their decisions may have been, and you'd be shooting yourself in the foot if you did so, because all you'd end up with is a population wholly dependent on further assistance.
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Old 17-06-11, 10:34 AM
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The limits on loan sharking are for different reasons. What you describe is more akin to saying that either their loans were ringfenced (one way of protecting the debtor from limitless recourse) or that they aren't really bankrupt and can make it back. At which point it would indeed make no sense to push them too hard.

My views are that they are truly bankrupt and this isn't just some kind of liquidity crisis. It's for the debt owners to decide whether their interests are best served by a re-scheduling of debt (a default event, by the way) or by trying to realise all of the debtors assets in a fire sale.

Any which way, the Greeks aren't well placed to protest - They brought that mess unto themselves. The Germans and French were stupid to lend and were stupid to let them in the EU but the contracts were signed and we should have the right to exercise our recourse rights.

Final note - The US is funny in the sense that mortgages over there are mostly non-recourse, afaik. Hence the strong incentive for home owners to stop paying as soon as their house is in negative equity territory. That is not the case in Europe.
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Old 17-06-11, 10:44 AM
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Originally Posted by Gilles de Rais View Post
The limits on loan sharking are for different reasons.
Not really. They have the same basis.

Quote:
What you describe is more akin to saying that either their loans were ringfenced (one way of protecting the debtor from limitless recourse) or that they aren't really bankrupt and can make it back. At which point it would indeed make no sense to push them too hard.
Nope. Bankruptcy for example can happen to a company that still owns sizable capital assets. Exactly the same principle underlies the stablishment of limited liability companies - excessively punitive debt recovery is economically harmful. And history shows that this has repeatedly been the case, with harsh methods resulting in economic collapse and civil unrest.

So no, you don't have the "right" to take evetything ifd that would do more harm than good, and when you are talking about the assets of an entire country that is indisputably the case.

Quote:
Final note - The US is funny in the sense that mortgages over there are mostly non-recourse, afaik. Hence the strong incentive for home owners to stop paying as soon as their house is in negative equity territory. That is not the case in Europe.
And the reason for that is precisely the point I've made above - punitive debt recovery is damaging in the long run.
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Old 17-06-11, 11:23 AM
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Originally Posted by contracycle View Post
Not really. They have the same basis.
I think the basis against loan sharking is that no one can legally pay back those interest rates and, furthermore, no one with any smart would willingly enter into a loan with interest rates above 20-25% so to do so either mean you were coerced or are too stupid to be left making your own financial decision (or that you are working on an illegal scam that will make it possible to pay back such charges and we don't want to encourage these either)...

Quote:
Nope. Bankruptcy for example can happen to a company that still owns sizable capital assets.
Well, exactly. That's Greece. They are bankrupt but have some assets. Let's get these sold and get back our money.

Quote:
So no, you don't have the "right" to take evetything if that would do more harm than good, and when you are talking about the assets of an entire country that is indisputably the case.
Well, it should be a question of what agreements were written into the bonds in case of default. I am sure there are some guidelines, at the very least.

Quote:
And the reason for that is precisely the point I've made above - punitive debt recovery is damaging in the long run.
And Europe operates under a different principle - One that responsibilise the borrower and thus help limitate things like subprime mortgage bubbles...
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Old 17-06-11, 03:16 PM
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Originally Posted by Gilles de Rais View Post
I think the basis against loan sharking is that no one can legally pay back those interest rates and, furthermore, no one with any smart would willingly enter into a loan with interest rates above 20-25% so to do so either mean you were coerced or are too stupid to be left making your own financial decision (or that you are working on an illegal scam that will make it possible to pay back such charges and we don't want to encourage these either)...
None of which we would be concerned about if we didn't recognise the harmful effects that debt repayment can have.

Quote:
Well, exactly. That's Greece. They are bankrupt but have some assets. Let's get these sold and get back our money.
Except that will cost us more in the long run.

Quote:
Well, it should be a question of what agreements were written into the bonds in case of default. I am sure there are some guidelines, at the very least.
That's a purely legalistic point.

Quote:
And Europe operates under a different principle - One that responsibilise the borrower and thus help limitate things like subprime mortgage bubbles...
America is more enlightened in this regard, and the last statement is clealry untrue, seeing as it was the mortgage lenders who were actively pushing irresponsible loans, assisting in the falisification of data etc. The opposite should have been the case, because they should have known they were taking most of the risk. It didn't happen for reasons that have all been well established - the conviction among lenders that the economy was now immune to upset and that nothing could go wrong.
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