Finishing Greece Off




From top: The Acropilis, Athens; Julien Mercille

The vultures are circling.

The looting of Greece has begun.

Everything must go.

Dr Julien Mercille writes:

The new agreement of 12th July between Greece and European authorities robs Greece of its sovereignty and confines it to a neo-colonial status, i.e., a protectorate of the troika.

The agreement requires Greece: to repeal all progressive legislation it had passed since coming to power six months ago; to seek approval from the troika before enacting important pieces of legislation; to commit to automated austerity by introducing “quasi-automatic spending cuts” in case primary surplus targets are not met; to expedite foreclosures, evictions and liquidation of businesses and homes that cannot repay their debts; and to ensure that collective bargaining is weakened or not allowed.

But perhaps the most humiliating clause is that Greece is required to privatise a mind-boggling €50 billion of public assets. These will be sold off to private investors, many of which will be foreigners.

In short, the vultures are coming, and they’re hungry.

The funds raised will be used to pay back debt and recapitalise banks, and there’s also a mention that some of the proceeds will be used for investment in Greece, but it remains to be seen how much monies will end up fulfilling that purpose.

The deal has been described as “a desperate yard sale of whatever Greece can find”. One adviser to the Greek government summarised it thus: “It’s basically saying sell the memory of your ancestors, sell your history”.

In particular, the agreement states explicitly that the electricity transmission network operator (ADMIE) must be privatised, likely to be sold off to overseas interests.

The body that will manage the privatisation process will be located in Greece, but in practice, it will be controlled by the troika.

This is not the first time European authorities attempt to drive through such a deal. In 2011, Athens had also agreed with the troika to raise €50bn in privatisation proceeds, but didn’t achieve this—it only privatised €3.2bn of assets, falling well short of the target.

Therefore, in practice, it is unlikely that the €50bn mark will be reached this time, but it is still very revealing of European authorities’ intentions.

It seems unlikely that archeological treasures like the Acropolis will go, due to the furore it would provoke. However, two German politicians recently suggested that even that should be included in the fire sale, so who knows. Less important ruins, however, could well be sold.

In order to understand how rapacious the deal is, one can look at what exactly could be included in it.

A good place to start is the website of the privatisation agency set up in 2011 to handle the previous €50bn privatisation program. It’s called the Hellenic Republic Asset Development Fund (HRADF) and its fascinating website  lists just about everything Greece can sell, with pictures, maps, and descriptions.

It is a real flea market where one can find monuments, beaches, airports, ports, postal services, utilities, and so on. And the site is in English: after all, global investors have to understand what they’re going to buy.

Here is a sample. Prices are not displayed but I include descriptions of the assets from the website.

1. Beaches
The property has the potential to be developed into a large scale integrated tourism, leisure, residential project around the existing golf course on a well established vacation destination such as Rhodes.

2. Castles
Castello Bibelli is a property of significant historical and cultural value. The main building “CASTELLO” of 1.968 m2 built area, is of neo-Gothic style, made from stone with tile roofs and its distinctive feature are the two turrets and patio. The property also includes other four auxiliary buildings, with a total built area of 457 m2. Built at the beginning of the century by Italian Admiral Bibelli, in a wooded hillside, within an area of 77 acres.

3. Thermal Springs
Greece is endowed with natural mineral springs and geothermal waters which form an integral part of the country’s national wealth. Their therapeutic properties are well recognized since ancient times, offering treatment opportunities for various ailments in a natural way (hydrotherapy).

4. Stadiums
The Peace and Friendship Stadium is a characteristic example of the last 20 years of the 20th century architectural style and a worldwide well-known building, having hosted multiple international and national sporting and cultural events.

5. Ports
The Greek state portfolio contains 12 ports, including the ports of Piraeus, Thessaloniki, Volos, Rafina, Igoumenitsa, Patras, Alexandroupoli, Iraklio, Elefsina, Lavrio, Corfu and Kavala.

6. Athens water supply and sewerage company
The Athens Water Supply and Sewerage Company has the exclusive right to offer water and sewerage services in the Greater Attica Area. The term of this right, as well as its renewal, is regulated by a a 20-year Agreement.

7. Olympic assets
This includes the Schinia Rowing Center, Markopoulo Equestrian Centre and Galatsi Olympic Center.

In short, the message is clear: start shopping quickly—or you risk losing the prize. Conversely, progressives must organise resistance without any delay, or Greece will be looted.

Julien Mercille is a member of the Irish Greek Solidarity Committee. His new book, Deepening Neoliberalism, Austerity, and Crisis: Europe’s Treasure Ireland (Palgrave) is out this week. Follow him on twitter: @JulienMercille

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77 thoughts on “Finishing Greece Off

  1. ahjayzis

    Within twenty-four hours of receiving the 7bn emergency loan this weekend, Greece transferred 6.8bn back to the ECB and IMF.

    1. Odis

      More amusing was the U turn by George Osbourne, (British Finance Minister) who had declared that there was no way British money would be used to finance the 7 billion “emergency loan”. Money down a black hole etc.

      He came back with a great deal, and has lost all his anti European skepticism. Seemingly, he has collateral backed by Greek Treasury Bonds held by the ECB.

      Anyone know what that’s about?

  2. JT

    “This is not the first time European authorities attempt to drive through such a deal. In 2011, Athens had also agreed with the troika to raise €50bn in privatisation proceeds, but didn’t achieve this—it only privatised €3.2bn of assets, falling well short of the target”

    ….and thankfully for the Greeks, too high a risk attached to Greek asset, so investors didn’t invest.

  3. JT

    Lack of transparency, lack of financing, strong unions will deter any investor… Amen to that, the world does not need another Shangri-La .

  4. collynomial

    The agreement requires Greece: to repeal all progressive legislation it had passed since coming to power six months ago

    A typo or deliberate attempt to suggest that Greece has only had sovereignty since Syrzia came to power?

    You decide.

    1. jon

      it’s a typo unless you think mercille meant to write that greece came to power in greece six months ago.

  5. fluffybiscuits

    Come on down to Greece town,where the prices are only famous…

    Its extremely had to disagree with the facts that this was a carve up for big business and now the Troika know that, whether you support austerity in Greece or not this is pure asset stripping and taking the proverbial clothes off their back…

      1. Clampers Outside!

        Controlling ones own water is going to be a huge asset/benefit in the future and is why countries are being pushed into its privatisation.

        It’ll be bigger business than oil in the future, and we need to protect it. I’m surprised you needed to ask, in fairness.

        1. dereviled

          “Enron. The Smartest Guy in the Room”
          What happens to vital resources in a “free” market.
          Lots of other countries manage metering, Poland for instance has seperate meters for drinking and washing water.

  6. Winston Smith

    The castle, that of significant historical and cultural value, was a luxury hotel from 1957 to 1982. Before that it was the home of an Italian Admiral and was built at the turn of the last century.

  7. miko

    It’s incredible that despite so much evidence that the ideology of Julien Mercille and his fellow travelers that he continues to make the argument that Greece needs more Syriza not less. Even poster child and oil rich Venezuela is dealing with regular looting of supermarkets It’s extraordinary that the blame is always on outside actors, Germany, the US, everything but the utter incompetence and criminality of the ideology that Julien promotes which is basically “spend other peoples money and castigate them if they don’t give you more” a bit like an aggressive junkie on the Liffey boardwalk.

    Clearing away the deliberate distortions it’s quite clear that Greece has to sell off assets to pay for the debt incurred by the Greek people paying for an extravagant lifestyle not supported by, you know, productivity (and I said productivity not that canard about Greeks “working more”. Sitting around scratching yourself for 50 hours a week does not a productive worker make you). That the other taxpayers of Europe such as Finland, who have handed over 10% of their annual Government Budget to support Greece, should just indefinitely subsidize the Greeks as they experiment with kleptocratic “Socialism”.

    Secondly the bonus is that by selling off assets like ports etc they can be efficiently used instead of playthings of the state. It prevents the likes of Syriza giving away jobs for the boys and running down the organisations which they have been doing like every other Greek Government since they started.

    My opinion is that Greece didn’t have it’s Sovereignty taken away from it’s citizens. It’s that they lost the right to sovereignty when they ran their country like a student union. Ireland lost a bit of it’s sovereignty too and we should remember it as exactly that – our failing as an electorate let that happen and we should never let it happen again. This stab in the back mythology allows for a lazy narrative that blames all our failings on outside entities “bankers”, “Germans” and none on ourselves who knowingly voted in that crook Bertie three times in a row.

    1. fluffybiscuits

      More Syrzia will give safety in numbers. When you have numerous countries making you stare down the barrel of a gun and telling you do what we say or we will pull the trigger and make your brains mush there is not much that can be done. That eloquent analogy (which is about as eloquent as GAA, not very eloquent at all) takes into account the children and poor who are the real victims here in this crash. A child did not tax dodge, those on the poverty line did what they had to do to survive. At the real crux of this is the disproportionate burden placed on those on the peripheral of society, something your statement either ignores (more through your own ignorance) or you just did not know. The sale of assets is not to keep the Greek government coffers up, it’s a fire sale of assets to wealth corporations who will swoop down like vultures over a rotting carcass. Syrzia would not dare give jobs to the boys considering how profile they are now in the public eye and such a move would be tantamount to electoral suicide. Greece voted to tell the Troika to stuff their debts right up their holes where they belong. Sovereignty is something that belongs to the people of a country.

        1. classter

          ‘That eloquent analogy (which is about as eloquent as GAA, not very eloquent at all) takes into account the children and poor who are the real victims here in this crash’

          Possibly the least eloquent statement I have ever read on Broadsheet.

      1. miko

        So basically you believe the Greek people are like Children? Wow! Just Wow! So much for sovereignty when your own supporters regard you as children.
        Tell me, how much money should the Irish Taxpayer take from our own resources to fund Greece ad infinitum to make yourself feel good about yourself? How many hospitals should we close, Social Workers laid off to support this vision of solidarity of yours? And bearing in mind there is over 80 BILLION in outstanding taxes to be collected in Greece.

        1. fluffybiscuits

          How long did it take for your moral compass to get smashed? We give money to resources where it could be better spent helping other worthy causes. We could cut Irish language spending, the arts, the GAA, tax companies a bit more , financial transaction tax etc. This is what it comes down to at the end of the day for a lot of people, these are our resources and we own them, no one else is getting them

          1. classter

            I personally am much happier funding the Irish language, the arts than I am helping pay for a stupid Olympic Games in Athens in 2004.

            Likely it would be a good idea for the Greeks to be given further debt relief (and for us to contribute to this) but let’s not pretend that it is deserved or earned or that those who don’t agree have a ‘smashed’ moral compass.

            There are many other countries, within the EU & without, who could be given investment and might do a better job with it than Greece will.

  8. ollie

    The Troika is only interested in overthrowing the Greek government and replacing ti with a good old right wing bunch of compliant lackeys, like FIne Gael.

  9. Owen C

    Here’s a question for everyone here (Julien included): lets say the Troika left tomorrow and said they would have nothing more to do with Greece. It’s “sovereignty” (i suspect Julien does not understand the meaning of this within the context and rules of a common currency area, but i digress) would be restored and Greece would be free to do what it wants. Although potentially running a primary surplus (not this year thanks to the Syriza government, but lets assume, optimistically, that it can do so next year), Greece would still need funding for investment into the economy, into the banks to recapitalize them etc. So it would need to borrow this money from someone. Would anyone here, from a commercial perspective, lend this money to Greece without a very large risk premium attached, or lend to them at all? (Cos remember, the EU funding for Greece has no risk premium attached). Does anyone here think Syriza has either the political will or ability to enact the reforms necessary to stabilise the long term trajectory of the Greek economy without some outside pressure or influence?

    1. ahjayzis

      The direct consequence of the ‘help’ they’ve been receiving for the last five years has made them completely unlendable too.

      The IMF technically shouldn’t be lending to them at all any more – they know and have said clearly that their debt is unsustainable and were Greece in Latin America or Africa they’d enforce a writedown and restructure before any more aid.

      All Greece wants is the treatment it would recieve were it not in the eurozone – because conversely being in the eurozone puts you under this Germanic orthodoxy that debt is a moral issue and even though it’s impossible, you die before you admit you have no prospect of paying it back.

      1. Owen C

        1. No, the fact that they systemically lied about their debt and deficits, and refused to pay taxes at a societal level, is what made them originally unlendable to. This is why Greece needed a bailout in the first place. The decision then was to either give them large scale debt relief (which they got) or massive, biblical style debt relief (which they did not get). EU/IMF went with the former, but its debatable how much better a situation Greece would be in right now even if they got the latter (the Greek economy is still deeply structurally flawed)
        2. “were Greece in Latin America or Africa they’d enforce a writedown and restructure before any more aid…All Greece wants is the treatment it would recieve were it not in the eurozone”

        Ok, here’s the deal. And Julien should be good at this too, cos he’s a geography professor – Greece IS in the Eurozone and has signed up to an accompanying set of rules and treaties etc. It is not supposed to be a banana republic in LatAm or Africa, it is supposed to be a modern, wealthy (by whatever metric u want) and successful first world country/economy. And, by virtue of being in the Euro, it has a solid and dependable currency with which to conduct trade and retain wealth. Hence why most of its middle class and pensioners do not wish to leave the Eurozone. So saying that “Greece wants is the treatment it would receive were it not in the Eurozone” is basically like saying “Greece wants all the benefits it is not entitled to, but at the same time get to retain all the benefits of the Euro”. Sorry, but this is the choice Greece is faced with.

        1. Brian Hession

          So, we just keep beating them till their legs are smashed and they are crippled? Hmmm, I’m coming around to this idea. Please tell me more.

  10. Mr. T.

    The whole purpose of austerity is extortion by merchant banking. It lures nations into high debt after giving them cheap money. Then nations are forced to take more loans (which are NOT bailouts) to pay off their original debts. These new loans (VIA quasi-governmental organizations) are then conditional on a raft of measures which are nothing to do with paying back the loan and all about making those economies more open and more accessible to international corporations who want to squeeze out all local competition and repeal laws which keep manners on business. They also force governments to privatize assets against the wishes of the citizens. And guess who finances the privatization of all these national assets? The very same banks who loaned money to the countries in the first place.

    Anyone in finance and merchant banking knows this but thanks to their bought off friends in the media (RTE, Irish Independent, Examiner, Irish Times and international equivalents) most people are fed the line that debts must be honoured and it’s all our fault for letting the old credit card go above it’s limit a few times too many.

    We’re being robbed and our governments are being extorted.

    The Troika are no better than a local money lending thug who keeps putting the interest up and threatens violence against the borrower when they can’t pay.

    1. Rob_G

      “It lures nations into high debt after giving them cheap money. Then nations are forced to take more loans (which are NOT bailouts) to pay off their original debts. ”

      – if the countries are able to service their debts as normal, none of this stuff happens

  11. pixel_pimp

    This is rape of a nation – expect to see rioting, murder, looting and breakdown in civil governance – a space that will be colonised by extreme political elements.
    The humiliation of Greece, designed to teach a lesson of obedience to “Europe” is dressed up as “assistance”. At a time when a good parent should guide and help a wayward child this is nothing more than nightly abuse – the screaming will be heard across the continent. ‘Pour encourager les autres’

  12. 15 cents

    i always wondered why the Brits didn’t want to join the EU .. and it’s probably coz they’re a lot smarter than our lads. the EU is like a giant mafia style protection racket.

  13. Earthworm Jim

    why does this Mercille chap have his own blog on broadsheet?
    can we at least have something to balance it off?

      1. classter

        I suspect a lot of Broadsheet’s readers are disillusioned with most of the mainstream media outlets – all of which are fond of the sort of agenda-driven, evidence-free arguments that Merceille is so fond of.

        Doubtless they are correct sometimes, as no doubt is Merceille, but the y aren;t reliable or trustworthy.

        When Merceille was originally being posted here, he received a lot of support because he appeared to be balance & rigorous. Under a little bit of pressure, it has become very obvious that his ‘analysis’ follows his opinion and not vice versa. Fine, he is an activist, not an impartial academic. He would be a more effective activist if he even appeared to come from a more balanced, impartial place.

        1. Joe the Lion

          Please explain more about how all the many successful activists you know are balanced and impartial classter

  14. oui

    Mercille doesn’t believe in balance , just in truth telling and the Sinn Fein agenda. A stench of contradictions but nonetheless entertaining.

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