Adonis Diaries

Posts Tagged ‘liquidity

Dismantled and fed to profit-hungry corporations? Case of Greece

Greece is heading towards its third “bailout” (Fourth bailout after parliament voted for it).

This third bailout of €86 billion is on the table, which will be packaged up by international lenders with a bundle of austerity and sent off to Greece, only to return to those same lenders in the very near future.

We all know the spiralling debt cannot and will not be repaid.

We all know the austerity to which it is tied will make Greece’s depression worse. Yet it continues. (Nothing will do unless liquidity for internal Greek market is made available)

Nick Dearden, Wednesday 12 August 2015

If we look deeper, however, we find that Europe is not led by the terminally confused. By taking those leaders at their word, we’re missing what’s really going on in Europe.

In a nutshell, Greece is up for sale, and its workers, farmers and small businesses will have to be cleared out of the way.

Under the eye-watering privatisation programme, Greece is expected to hand over its €50 billion of its “valuable state assets” to an independent body under the control of the European institutions, who will proceed to sell them off.  (In order to ward off China from buying everything of value?)

Airports, seaports, energy systems, land and property – everything must go. Sell your assets, their contrived argument goes, and you’ll be able to repay your debt.

But even in the narrow terms of the debate, selling off profitable or potentially profitable assets leaves a country less able to repay its debts.

Unsurprisingly the most profitable assets are going under the hammer first. The country’s national lottery has already been bought up. Airports serving Greece’s holiday islands look likely to be sold on long-term lease to a German airport operator.

The port of Pireus looks likely to be sold to a Chinese shipping company. Meanwhile, 490,000 square meters of Corfu beachfront have been snapped up by a US private equity fund. It has a 99-year lease for the bargain price of €23million.

According to reporters, the privatisation fund is examining another 40 uninhabited islands as well as a massive project on Rhodes which includes an obligatory golf course.

Side-by-side with the privatisation is a very broad programme of deregulation which declares war on workers, farmers and small businesses.

Greece’s many laws that protect small business such as pharmacies, bakeries, and bookshops from competition with supermarkets and big businesses are to be swept away.

These reforms are so specific that the EU is writing laws on bread measurements and milk expiry dates.

Incredibly, Greece is even being told to make its Sunday opening laws more liberal than Germany’s. Truly a free market experiment is being put into place.

On labour, pensions are to suffer rapid cuts, minimum wages are to be reduced and collective bargaining is to be severely curtailed while it is to become easier to sack staff.

All of this is far more extreme that many of Greece’s “creditor” countries have implemented themselves. Changes to tax includes a massive hike to that most regressive of taxes VAT, on a wide range of products.

Of course, reforms in some areas of Greece’s economy might be a good idea, and indeed Syriza came to power promising to make serious reforms in, for instance, taxation and pensions. But what is being imposed by the lending institutions is not a series of sensible “reforms”, but the establishment and micromanagement of radical ‘free market’ economics.

The privatisation and deregulation bonanza opens vast new swathes of Greek society to areas where big business has never been able to set foot before.

The hope is that this will generate big profits to keep big business growing, as well as providing an extreme model of what might be possible throughout Europe.

Although what’s even more distasteful than the hypocrisy of European leaders forcing policies onto Greece that they themselves have not dared to argue for in their own countries, is the cynicism of those same leaders imposing policies that will benefit their own country’s corporations.

The intensity of the restructuring programme currently being agreed for Greece should dispel any lingering notion that this is a well intentioned but misguided attempt to deal with a debt crisis.

It is a cynical attempt to set up a corporate paradise in the Mediterranean, and must be resisted at all costs.

Andrew Bossone shared this link

“selling off profitable or potentially profitable assets leaves a country less able to repay its debts.”

Greece is heading towards its third “bailout”. This time €86 billion is on the table, which will be packaged up by international lenders with a bundle of austerity and…
independent.co.uk

Is the Greek Crisis Over? Why this overwhelming silence in the news media?

The Greek crisis was not that confusing from the start: European politicians needed this normal crisis to take a world dimension.

1. The Greeks wants to remain in the Euro Zone and benefit from all the facilities extended by this vast market, especially the financial ease of borrowing and be able to travel without visas everywhere. Turkey was better positioned than Greece to join the Euro Zone, but for imaginary cultural affiliation to Europe, the European leaders forced Greece within the membership.

2. The Greeks refuse the stringent constraints imposed on them after the 2008 financial crisis.

3. The steady austere programs imposed on them to reform their institutions has taken its toll and its economy is unable to restart due to lack of Liquidity.

Remember Benjamin Franklin explanation of how the American colonies managed to expand their economy? It was because the colonies still had the right to issue money as their internal market expanded.

How to reach a satisfactory deal with Greece, a win-win deal that unburden the shoulders of most EU members?

1. Greece needs liquidity for its internal market to function and expand. The monopolistic right to print Euro is in the hand of Germany who is generating $5 billion just by printing new Euros. And Germany is not about to relinquish this manna and power status.

2. Short of printing rights of currency for the internal market, Central Europe Bank should consider issuing Euro B, earmarked for the internal usage of each member State.

3. Euro B will not be used for any export of goods or services. Only the main (Euro A) currency will be handled for export outside the Euro Zone and among the member States.

4. A special institution will study and analyse the necessary set of criteria that should trigger the issuing of Euro B for each internal market. When the internal market expand, more liquidity is injected. When the internal market shrinks, Euro B will be extracted from the market to keep inflation in check.

5. The Euro B will give each member State the implicit sense of autonomy and provide more incentive Not to transfer the blame to other States for their economic failure.

6. The internal liquidity problems will be the best Indicator to pre-empt future financial difficulties

The implicit enduring political colonial mind-set of the major power player in this Union says:

  1. We have been for centuries the first colonial powers before the current superpower existed
  2. We have been the first Capitalist nations that amassed wealth before the current capitalist nation existed
  3. We are the first to comprehend that pre-emptive wars to maintain economic supremacy is the main strategy for powerful nations
  4. We are Not about to bow to lesser economic States in the Union to dictate to us the world strategy via local democratic means such as Referendum
  5. 5. The lesser States have got to grasp the requirement to bow down to the higher developed States.

Unless the economic Liquidity problems are separated from higher political positions, Greece and other Union members are in deep trouble for many years to come.

Mind you that the Union decided on the single currency because they forecasted the financial crisis of 2008 and had no other alternative but to wait for the USA to announce the financial catastrophe.

The Euro was the best strategy to face the incoming distabilizing conditions.

Liquidity is meant for the Internal market. Competitiveness is for External market?

Should the level of “Life-Style” be the same among the competitive and the challenged productive states within a Union?

This is not a fair condition to impose on States that managed to sacrifice and work hard for better life conditions.

States in financial crisis must have ready lists of 4 categories of enterprises:

1. The public institutions that are critical in the smooth transmission of liquidity to the various economic sectors

2. The mixed State/Private entities that have locations in many regions of the State and employ many citizens

3. The nationwide private companies

4. The medium and small productive companies that serve their local provinces

It is well know that medium and small productive companies constitute 70% of State production that cater for the internal market needs.

Any shortage in liquidity in these small private companies  and employment hit the roof and the citizens experience shortages in most commodities.

Giving priority to the local economies in the distribution (infusion) of liquidity is the first step in preventing mass unemployment.

There are public economic sectors that cater to the general public needs, such as energy, water and transportation… and the stabilization of these functional sectors in matter of maintenance is another urgent priority.

Before the internal market is reinvigorated and underway, it is of no use planning for the export sections to external markets in order to get the influx of “hard currencies”

Stability and security are the basis for a shift toward State development.

Having the autonomy to print money in period of liquidity shortage is the key for stabilizing the internal market.

The disadvantage resides in the society structure that favor the oligarchy and wealth disparity that eliminate the benefit of printing more money.

The crisis in Greece, Ireland, Portugal, Spain and Italy have demonstrated that it is a priority that a State has to reform its public service institutions to discard redundant and politically influenced service appointments.

Without a drastic realization that the political structure should be reformed, and for actually feel the pain associated with uneven equal rights to jobs and opportunities in the institutions, all the remaining reforms will be within the “patching” process.

The crisis in Greece was deep rooted because it lacked the two preconditions: Lousy political structure and not having the right to print money.

Ireland, Portugal, Spain and Italy had political structures that could remedy to the “unfairly” political conditions and to reform the system within the single Euro currency.

The EU has learned the lesson:

1. First, the State that asks to join the union zone must demonstrate that it is serious to undertake political reforms and the structure be designed to react in timely manners to situations of political reforms.

Many States have been included based on historical and ideological “myths” that didn’t match their current unstable realities.

The EU dominant responsibility is to gradually transform the States who applied to join the union into politically viable structure.

The States in waiting must acknowledge that it takes time to achieve stable and valid political structure.

How a poor and unstable State can become competitive in the external market? This is an impossible condition to withhold liquidity infusion that is meant to support local companies.

The “productively challenged States” in the Euro zone should not expect the same level of life-style as the most competitive among them.

And equal rights in life-style is not an equitable and sustainable demand on State basis.

 

Capitalism redefines Time; (Mar. 21, 2010)

            The dividing line between present and future is invisible for the capitalist spirit: the past is passive and inefficacious to revert to and the future is mobile and evolving.  I saw an old American movie a couple days ago: a customer is checking a Cadillac and asks the salesman: “Is it this year model?” and the dealer to reply: “This is next year model you are sitting in”

            Capitalism captured the western cultural guiding rod in the last century: Time was no longer the enemy to mankind and time should be considered as the main dependent variable when studying nature, life, evolution, and development while space, temperature, climate, and the multitude of other independent factors were meant to explaining time. Time (and what correspond to time such as speed, rate, and turnover) is a directive God, the one notion that essentially defines all the other phenomena in the universe. Time and timeline are the measuring guideline to all human activities: work, distances, history, space, production, marketing, investment, liquidity, and budget. All other societies had to keep up with capitalism rhythm of what became the standard terminology and behavioral routines.

            Power is no longer essentially related to borders, raw materials, dimensions of a nation, or even larger armies.  Power is rate of return, turnover rate, and quickness in planning and starting production; power is quickness in distribution and consumption, quickness in gathering information and timely intelligence, quickness in analyzing and interpreting data, and quickness in relaying and disseminating information and intelligence.  Power is how Time is tamed and used as the most potent ally and tool.  Power is how to discover the best method to control and manage Time.

            Oil, as a raw material, is no longer an intrinsic power; the value of oil is how quickly deposits are located, excavated, drilled, produced, refined, distributed, and consumed. Geopolitics, as a political power status, has changed its laws into chrono-politics for the flow of signals, dissemination of intelligence, and turnover of fundamental research into applied sciences.

            Multinationals that represent the spirit of capitalism have tamed the most potent power tool: Time.  Multinationals have set the rules of the game on how to compute, evaluate, account, and transform liquidity into ready investment; on how to change the concept of interest to periods of computing it; on how profit is defined as turnover rate of products and services.  Multinationals have set the rules of how to do business, how to think business, and how to dominate with other people’s money and raw materials.

            You cannot fight and win an enemy who adopted and tamed Time as its ultimate potent God while your arsenal is still limited to inert space and your notion of time is reversed toward the dead past, a past that is incorrectly read and synthesized.

            It does not mean that capitalism cannot be defeated the way it is practiced as rules of the game but in the first phase you need to get trained to capitalism efficacious arsenal and then insert other dimensions to reform and transform the current ideology of capitalism. The new civilization capable to counter the enemy has to work toward a more viable quality of life such as earth sustainable ethics, eco-ethics, quality time to knowing yourself, quality time to listen intently to your communicator, quality time to focus on reading books relevant to man emotional development, and respect of the ancestors. 

            Most important to countering the enemy is learning to reserve peaceful time to reading the past without the need to superimpose your current obsessions and difficulties in order to interpret the past correctly and not tend to finding mythical solutions in the past that do not correspond to current realities:  the fainting fits in reviewing the past is one of the magical behaviors because we mostly fail to read correctly our traditions and history. In order to endeavor reading the past we first must feel comfortable and well rooted in our present. It is important to read the past as a hobby in hours of distractions; otherwise, we end up projecting our current problems on ancient texts  which distort proper focus on the initial content and context of the texts.  I am reminded of a saying by Teddy Goldsmith (1928-2009): “We can destroy Earth without violating a single law: it is illegal to protect nature!”

Note: I extracted this notion from the French book of Fatema Mernissi “The political Harem”.  Mernissi relied on the Moroccan author Mohammad Jaberi’s “We and our heritage” who criticized Moslem societies and imputed to the Western civilization the potent usage of time as its directive for modernization.  I thought to redirect the topic to a more specific ideological/economics concept that is more adequate to describing the trend in the last century since Western nations were very much attached to nationalism and still are in many instances.


adonis49

adonis49

adonis49

October 2020
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