Debt

listadoDebt

1 a 11 de 11

27 de Mar 2013

Austerity Antidote: Occupy Wall Street’s “Strike Debt” and its “Rolling Jubilee”

English

by Steve Horn

Like in Spain, the megaphone is loud within U.S. elite circles to ram through austerity measures.

Photo: Steve Rhodes

The strongest example of this is a corporate-funded front group by the name of “Fix the Debt”, run by hedge fund manager and former U.S. Secretary of the Treasury under Republican President Ronald Reagan, Peter Peterson. It’s staffed by a bipartisan cadre of politically-connected flacks who, to quote the late legendary comedian George Carlin, are “coming for your social security!”, as he exclaimed in his diatribe about the false promise of the “American Dream”.

The corporate-funded “Fix the Debt” maintains willing executioners of its agenda on both sides of the political aisle. President Barack Obama, the bulk of the Congressional members of the Democratic Party of which he is the de facto leader and the Republican Party are holding hands in agreement on cuts of Social Security, Medicare and Medicaid.

The Fight-Back

Under this tough set of circumstances and inspired by the work of anthropologist David Graeber, author of the book Debt: The First 5,000 Years, enter Occupy Wall Street’s offshoot, “Strike Debt”, and its sub-campaign, the “Rolling Jubilee”.

“Debt is a tie that binds the 99%...We want an economy where our debts are to our friends, families, and communities — and not to the 1%,” proclaims “Strike Debt”’s website.

Its grievances are listed in a document titled, “The Debt Resistors’ Operations Manual” and a follow-up for the Manual is on the way, according to campaign spokesperson, Laura Hanna.

Targeting the Corporate Health Care System

Strike Debt’s current efforts hone in on the uniquely corporate-controlled U.S. health care system. The campaign’s main message: health care should be a “given” in society, not something people should be coerced into debt to pay for. This has happened under ObamaCare, empowering the for-profit health care industry.

“The for-profit health care industry benefits a few at the expense of the rest of us.The truth is that insurance giants and investors are reaping the profit while the rest of us spend our lives hoping we don’t get sick,” Hanna told Periódico Diagonal.

Cutting to the Heart of How the System Works

More broadly, “Strike Debt” has taken the form of a “Rolling Jubilee.” The Jubilee, defined as “an event in which all debts are cancelled and all those in bondage are set free” - with origins in Christianity, Judaism, and Islam - currently is targeting health care debt, but is also set to target education debt, housing debt and myriad other forms of coercion by way of debt.

In short, Rolling Jubilee has radical demands, cutting to the heart of functionality of the global finance capital itself and screaming “Enough!” in defiance.

“Rolling Jubilee has opened a space for conversation and education, which is very inspiring.” Astra Taylor, a filmmaker and writer involved in Strike Debt and Rolling Jubilee told Periódico Diagonal. “People are now discussing these facts all over. But awareness is nothing without action. So Strike Debt, and everyone else concerned about these issues, must seize the opportunity Rolling Jubilee creates and transform awareness into aggressive political pressure.”

[This article was published also in Spanish on March 26th, 2013]

21 de Mar 2013

From “Rhineland Capitalism” to the freedom of capital

English

Krisis? Germany at the centre of economic turbulence

The latest German unemployment figures, the lowest in 20 years, prompt us to consider the attributes of an accumulation model that has allowed the country to so far avoid the worst impact of the crisis.

Isidro López, member of Madrid´s Metropolitan Observatory
Translated by Esther Ortiz Vázquez & Juan Martin Rodriguez

Many aspects of the Euro crisis have their roots in deep political changes in the post-unified Germany. The traditional structures of the corporatist capitalism in the Rhineland consisted of both domestic industrial and financial schemes. These schemes, although controlled by the German industrial elite, also incorporated the very-powerful German Fordist unions. However, this establishment no longer exists.

The German industrial capitalists had been trying since the early ´60s to "bypass" the financial-industrial credit networks by seeking finance from the eurodollar markets in London. For these industrial elites, the Fordist social pact allowed them to contain the working class struggle at manageable levels but was also widely seen as an obstacle to maximizing profits.

The key political move was the 2010 Agenda from the Socialdemocracy of Shroder and, look out, the Green Party. Between them they have gone about breaking up these Fordist holdings through fiscal reforms and capital deregulations. The process involves transnational financial institutions pressurising to create "open" financial structures that they are then able to enter, generate profits and exit. These kind of structures diametrically oppose those that connected the network of middle-men and elites with productive territories and economic sectors in a stable and organized manner.

From the destruction of this second type of financial structure come two kinds of interrelated results. On the one hand, a large mass of capital linked to local manufacturing cycles is released, estimated at one billion euros
–approximately the Spanish GDP-, to be invested in financial markets.
Thereby an elite consisting of globalized financial yuppies is born with a social typology which is quite different to the “Rhineland”
capitalist, an industrial captain who takes positions within the
political system. On the other hand, and less well-known, in this very movement, Germany loses control of its more strategic productive hubs while transnational financial capital, American “hedge funds” in particular, take over 50% of the more important DAX companies (the Spanish IBEX counterpart) imposing a strict income discipline; the so-called “shareholder value”. In brief, if you have to fire 40,000 workers to save your dividend you do it. That is to say, during this process Germany loses control of its higher quality assets as well as its ability to rule over its labor-capital relationship.

The gross amount released during this process will end up in two places. Firstly, it is going to be invested en masse in property market bubbles both in Spain and in the USA, especially in subprime-lending, which is the root cause of the huge banking crisis Germany is currently passing through (currently in stand-by mode). And secondly, it goes towards acceleration of the outsourcing process to Eastern countries, taking advantage of investment channels and exploiting the cheap labour created by the brutal shock-therapy policies carried out by the European Union and the IMF in the 90s. From now on, assisted by the traditional State policy support given by the major unions, a savage assault on the German workforce is going to be launched. Germany is the only OECD country where real wages have been going down for seven consecutive years (2000-07) while its customary productivity has plummeted due to, amongst other things, the establishment of longer working days, at the same salary levels (with union consent), without a corresponding increase in technological power. As was to be expected, the result has been the loss of three million from union membership in a decade.

The banking crisis alongside the budding social crisis are two good explanations for the strategic alliance forged between Germany and the financial powers which is designed to politically manage the euro crisis in exchange for the opportunity for Germany to fund itself at a low price in the markets. The aftermath is obvious, postponing the banking adjustment and holding back, through public expenditure, the collapse of the colossal fordist German middle-class.

In conclusion, we are not talking about exonerating Germany of blame for its European policies, whose goal have always been to avoid taking charge of any responsibility related to wealth redistribution at a continental level (a level at which they have sought to control the accumulation of capital), but rather the rebuilding of the chain of command imposed by the financial powers to better combat them.

11 de Dic 2012

To the dark rhythm of the batucada

English

By Belén Gopegui / Translated by Christine Lewis Carroll

There’s a demo at six pm. It looks like rain, you’re cold, you already went to Thursday’s demo and the ones before that. And what if you don’t go? On the screens you see the world continues, different people talk about what they’re doing; they remind you of the demo but they too carry on with their activity because it’s not easy to balance times, places and plans. If you don’t go, others will go for you and on other occasions you will go for them; the children need to be picked up, work needs to be finished, it’s windy. There are too many fronts to cover, too many days out on the street, but instead of thinking “And what if you don’t go?” you ask yourself “What if the others don’t go? What if nobody goes?” Something stronger than sadness hits you just at the thought of it.

The insurrection of the Commune of Paris took place on the 18th of March 1871. “Marx, who in September 1870 had labelled the insurrection as madness, treated it in April 1871, when he witnessed the popular and massive nature of the movement, with the close attention of someone who is participating in the great events that mark the way forward in the historic revolutionary world movement.” These are Lenin’s words in his introduction to Marx´s letters to Kugelmann. Marx writes in one of those letters “the bourgeois rogues of Versailles proposed the alternative to the Parisians: accept the challenge of the fight or surrender without fighting”.

Someone on your screen is requesting rainproof gear for the people camping outside the Bankia headquarters, victims of mortgage debts. They have decided they will not surrender without fighting. You could retweet the message as others will, but some will take umbrellas, rainwear, plastic covers to make a temporary shelter and thermos flasks with soup and coffee.

You are reminded of Brecht writing about a night shelter: “The snow meant for some men falls on the ground. But the world doesn’t change because of that.” However, marching to Parliament or surrounding a means of production or a financial institution to the dark, fearless rhythm of the batucada (not festive this time) is quite different from seeking shelter for the night: if you don’t go, if others don’t go, if we don’t go, the decisive moment when people in movement shorten the era of exploitation is further and further away.

[This article was originally published in Spanish on November 25th, 2012]

03 de Dic 2012

Steps towards considering, participating and rebooting democracy

English

By Ter García and Pablo Elorduy / Translated by Esther Ortiz Vázquez, Susana Macías Pascua & Rob Dyas

Democracy, debt and human rights were the central themes of the Agora 99 meeting in Madrid, which was conceived to unify answers and demands against the shock policy being imposed by the EU. Despite the very ambitious goals, it was understood from the beginning that none of the European movements problems would be solved overnight. “Come down to earth and don’t tense up”, suggested one of the moderators. Calmly but with an intense schedule, due to the urgent situation of the European citizenship, for four days Madrid became the meeting point of more than two hundred activists from different Greek, Slovenian, German, French, British and Italian social movements which came to take part in Agora99.

The meeting took place in May during Frankfurt’s Blockupy workshop. Under the aim of coordinating a common European strategy for demonstrations around debt, social rights and democracy, the work meetings took place at Madrid´s Patio Maravillas (occupied social centre) thanks to technology such as Munble and other electronic chat tools. This threefold approach permeated the twenty meetings, tackling issues ranging from education, housing and health to joint water management, communication, and participative democracy.

“You are not a loan”

What kind of tools do we have to fight the debt model? The central one remains that of default. “This can be either managed from the top, by the debt owners, or from the bottom, democratically”, stated Isidro López, member of the Observatorio Metropolitano during the round table workshops.

Yorgos Mitralias, who forms part of the Greek Citizen Committee against Debt (CADTM), participated in the debt panels where the austerity measures imposed by the Troika on the peripheral Euro countries were analyzed in depth. In this workshop, tax resistance to the debt payment was suggested as a concrete response that might be given by the European citizenship. Moreover, the debt team highlighted the need of being pedagogic, coordinating and unifying the message at an international level so as to confront the blind alley that management of the debt as a shock tool inevitably leads to.

The work carried out by the different debt audit networks, especially in Greece, contrasted with the heterogeneous variety coming from the rights area. Here several movements spent hours sharing both experiences and information, with civil disobedience being the common denominator.

Occupy to stop repossessions

“There is a strong presence in the neighbourhoods in Spain. In Milan the movement is growing quietly, but it is taking shape and, in the last evictions we’ve had, the presence in the neighbourhood was also strong.” says Gonzalo Mosquiera of the Cantiere Social Centre, having just watched a video of a stoppage of a repossession in Madrid. Taking the lead from one of the tools that another housing group tried to put in place, Mosquiera’s collective have created a mobile app that allows users to view a map of notifications of evictions that might be taking place in Milan. He is quick to point out that there the campaign named Occupy Sfitto (Occupy the Empty) is more concentrated on preventing evictions of squats and the opening up of new squats for those without a home in a city that, he points out, has more that 80,000 empty dwellings owned privately and a further 4,500 empty public buildings. They have already forced the council to create a body that assesses each case individually.

“The situation in Germany is very different because we don’t have the same problems with mortgages”, confirms Hanno, a German activist, who also states however that the prevailing environment of fear is exploited by the landlords to increase rents, most notably in Hamburg. “In Berlin a short time ago locals managed for the first time to prevent a family being evicted, following the example of the Stop Desahucios (Stop Evictions) campaign in Spain and next week there is a protest being held for the right to a home”, explains Hanno.

A little later in the recently opened La Morada social centre, one of the Greek activists of Agora99 is speaking in a workshop about self-management and civil disobedience. He describes how, in Athens, the workers of a clinic occupied it in order to maintain the right to healthcare despite the proposed cuts.

Nearly 30 people attended the debate workshop to define and design a list of basic common rights. “In Paris we are working on the minimum wage. I think we need to fight for this on a European level and get it included on a list of European rights”, says Sophie Banasiak of Real Democracy Now Paris and other workers collectives. Sophie announced that on the 1st December there are protests organised based around these social rights and invited the other groups that were present to participate in order to make a Europe-wide mobilisation.

The removal process, that is the demand that the dominating powers resign, began more than a year and a half ago and will continue to be a key part of the European agenda. The commencement of a constituent process was one of the things that most inspired the participants. Roughly one hundred people worked throughout the Saturday afternoon to formalise the proposal, unifying the demands for direct, participative democracy through texts and communal events. Raúl Sánchez, one of the energizers of the axis of democracy, admitted during the morning session that the constituent debate does not have the same intensity in all the PIIGS countries (Portugal, Italy, Ireland, Greece and Spain) in spite of the fact that the “commission dictatorship” of the Troika has attempted to block democracy from Lisbon to Athens.

Saturday evening proposals

During Saturday evening, sheltered from the rain, the three central themes of debt, democracy and rights were being settled so that the proposals could be transferred to the meeting the following Sunday. It wasn’t easy: exhaustion, the difficulty of dealing with some concepts at the same time in Italian, Spanish and English, and the specific urgent matters from each country, weighed down the progress of the three meetings. However, there were several proposals before the proceedings were brought to a close, both regarding agreement on future dates and common approaches that bring forward a new agenda of actions, mainly as regards to communications, which started last 14N.

The meeting on Sunday, which initially was to take place in Puerta del Sol, was in the end held in the EKO community centre. For more than six hours, participants of each working party presented their conclusions and proposals and, although the meeting did not finally produce any definitive decision, several actions have been brought to the table. “Why are dates so important?” wondered Aitor from Barcelona, “we are supposed to establish a horizon to know what we want and how we want it done”. His intervention questioned the emphasis in establishing an overly prescriptive agenda for the movement, which, nevertheless, has declared a few dates, some of them in connection with the pace of the different nodes, and others purely reactive, like the call to “hack” the forthcoming meeting of the Council of Europe in Brussels next March 2013.

“The meeting of the European movements in Madrid has been a qualitative leap”, states Dario Lovaglio from Universidad Nómada (“Small open political laboratory and in process that enables the collective production of new theoretical paradigms”- taken from its web site). “On the one hand, for being an ambitious project: a step forward to reinvent European democracy; on the other, for its inclusive and plural capacity”. To Lovaglio, Agora99 is the first step towards the construction of another European political framework, which feeds on the actual experiences of the participant movements that cope with the crisis. “It is there, where the crisis is lived out everyday, that new ways can be thought up of democratically re-appropriating common property and social, collectively produced wealth, both material and immaterial”, concludes Lovaglio. Working to revert the general state of shock and convene another meeting in the near future is the next step for Agora99, a public and open round table for the 99%.

A device within the network for the spread of information

The urgent need to configure a communications tool to coordinate and communicate to the different European movements (and many others) was suggested during the weekend in Agora99. “It is very complicated to build such a tool, there must be a group of hackers -people who work in participatory processes - who think of how to generate it also through other developed experiences like the ones in Brazil or Bolivia, explained Guillermo from Patio Maravillas (an occupied social centre in Madrid). At present what exists is an email list and a willingness to facilitate a fundamental tool that will help put to work the plans of the meeting towards a new network, which should be set in the coming months.

[This article was originally published in Spanish on November 9th 2012]

17 de Nov 2012

A new bailout fund that works just like the old one

English

By Giuseppe Bottazzi (Milan) / Translated by Esther Ortiz Vázquez

The main EU “anti-crisis weapon” threatens to reproduce the damaging aftermath caused by the Troika in Greece

On October 8th in Luxembourg the media premiere being presented was up to its billing: the European Stability Mechanism (ESM) was named as the “main anti-crisis weapon in the hands of the Union”, as announced with fanfare by the leaders of the continent. However the promised solution to the sovereign debt crisis within Europe has run into its first obstacle: the summit held in Brussels the past 18th and 19th October. There, the Spanish bailout –the ESM’s real guinea pig- was debated at length by the different European Heads of State. While Mario Monti and François Hollande were saying “perhaps” and Angela Merkel “nein”, the mechanism revealed its true nature: it is simply another tool to carry out the same kind of “rescues” already witnessed in Greece, Portugal and Ireland. The next time Madrid saves, once again, its banks, the bill will be charged to the public debt. In these times of neoliberal policies this can only mean more blood, sweat and tears.

What is the ESM?

The ESM is the new bailout fund within the European Union. It replaces the two existing temporary EU funding programmes: the European Financial Stability Facility (EFSF) and the European Financial Stabilization Mechanism (EFSM) that were applied in the intervention on Greece, Portugal and Ireland. Both new and old mechanisms are financial institutions located in Luxembourg. The main difference between them is their capitalisation package and their temporality (the ESM is permanent whilst the older two were always temporary). Whilst the EFSM financed solely through bond issues, the ESM has already collected €80 billion in capital from the State members. Chaired by the German Klaus Regling, this new fund has a €200 billion initial loan capacity which will increase up to €500 billion within the next 18 months. In addition, the combination of both the EFSM and the ESM will mean the total sum at the disposal of the Luxembourg entity will reach €700 billion.

In truth, we are dealing here with really quite irrelevant modifications in the entities to justify the proposed “change of course” pledged by Brussels. In fact, in its inception there was apparently a substantial difference between the ESM and the previous bailout funds inasmuch as when the new body was announced by the European leaders at the end of last June, it seemed to be free of the control of the International Monetary Fund (IMF). The new bailouts taking place in the Eurozone, starting with the Spanish one, -at least this was the promise- were going to be different from Greece’s ordeal. Brussels’ solution at hand was to bypass the IMF’s so-called men in black with their pernicious reputation after decades of intervening all over the world. Unfortunately, the body planned in the drafts bears little comparison to the ESM’s final version and so, in the end, the Troika will be the one in charge along with the European Commission and the ECB.

The “automatic firewall”

The new permanent fund that will manage future national bailouts though aid will be available from March 2013 once the Euro countries have ratified the fiscal pact that forces them to include the “golden rule” –a limit to the yearly structural deficit- within their national legislations just as Spain did in September 2011. Additionally, they will have to sign a memorandum that states they will accept the conditions dictated by the Troika, exactly as Mariano Rajoy’s Government did in June. The outcome is a far cry from what the European leaders had promised. This is especially notable in the case of Mario Monti’s who had insisted on the need for an “automatic firewall” to deal with speculation on peripheral countries’ debt. After so many cuts –this was the reasoning of the Italian PM- the risk premium on bonds kept going through the roof, thus there was a need for a mechanism to manage the buying of sovereign debt to dampen the effects of speculation when a certain differential was reached.

There is however nothing automatic in the ESM; what is more, during the last European meeting, another ray of hope generated by the prospect of a new bailout fund was extinguished by Angela Merkel, the German Chancellor: namely that the recapitalisation needed to save Spanish banks should be pumped directly into the struggling entities without impacting on the public account.

Angela Merkel’s delay until 2014 of the creation of a European Banking Union has ended any hope held by Mariano Rajoy about the retrospective application of the measures in Spain. Berlin’s “nein” means the addition of €40 billion –the whole bailout amount- to the sovereign debt. According to rumours, informal negotiations continue between the different EU institutions to reach a new agreement to split the cost of the banks’ recapitalisation between the ESM and the member states. Everything seems to be back to square one.

Berlin´s “nein” means Spain’s bank bailout has added €40 billion to its sovereign debt As in the nineteenth-century Sicily depicted by Giuseppe Tomasi di Lampedusa in “The Leopard”, in today’s Europe “if we want everything to stay as it is, everything will have to change”. Once again the Governments that are in trouble will be forced back to the negotiating table, always clear in their minds that now it is the so-called Troika which is calling the shots.

The outline of the bad bank

Sareb: A brick warehouse. On 16th November the “bad bank” called Sareb is due to be inaugurated. It is this entity into which the commercial banks will pour their toxic assets, mainly houses. Sareb will have assets totaling some €90 billion.

Millionaire wages. Sareb’s board will be recruited by the executive firm Spencer Stuart and the future CEO is due to earn up to €500,000 a year. According to publico.es, the seven directors will earn an annual €2 million.

[This article was originally published in Spanish on October 31th, 2012]

16 de Nov 2012

The 14N strike again awakens debt Europe

English

DIAGONAL Editorial notes / Translation: Rob Dyas

The European economic commissioner has made assurances that there is no need for Rajoy to make more cuts in 2013, this the same day that five countries within the EU executed their first joint general strike. The activities of the day represented a social response to the politics of austerity imposed upon millions of people in the euro zone. The day was brought to a close with the now familiar police harassment of protesters.

Businesses closed, businesses open or with the shutters just half open, empty or nearly empty, people without shopping bags and groups of ten or fifteen people waiting for the next march to link up with. Organised picnics on every open space. Groups of cyclists, of mothers, fathers and grandparents with shopping carts or with small children. Mercamadrid (food retail market) in complete stoppage, the industrial parks half empty and public transport on minimum service. Telemadrid (regional TV channel) “blacked-out” and public hospitals hung with hundreds of hand made signs against privatisation. Classic pickets mixed in with civil disobedience actions such as spontaneous road blocks. And police, lots of police.

These are the images from the morning of the 14N general strike, that together with a hundred other cities and localities (Barcelona, Valencia, Milan, Lisbon etc.) have shown the other side of Europe, a side that rebels against the payment of debt and the austerity measures. The EU felt obliged to make an appearance, in the form of the European Commission (EC) economic vice-president, Olli Rehn, to assure us that they will not be demanding more adjustment measures than those already presented by the government of Mariano Rajoy in the summer. Rehn also announced the delay until February of the next review of the Spanish deficit reduction.

The appearance of normality that the leaders of Europe have presented during this period of permanent shock from the crisis did not undermine the strikes success. Several hundred thousand people in the protests in Madrid, Barcelona, Seville and Valencia, amongst the more populated cities, – 800,000 in total according to the Interior Minister – attended the evening marches that terminated with police baton charges and a heavy riot police presence in several areas in the peninsula. The unions are in agreement that the attendance in Madrid alone was more than a million and in other cities they bypassed the figures of attendance seen in previous strikes.

In Italy, the scene was set in the morning by the massive demonstrations in Trieste, Milan and Rome. In some cases these ended with confrontations between protesters and police. In Portugal, where the strike was characterised by the high level of stoppages in the transport and industrial sectors, thousands of people surrounded the Congress opposite the San Bento Palace in Lisbon.

According to the UGT (union) estimates, of the 14 million people called to the general strike of he 14N, just five million went in to work. Amongst them are included two million people who were required to attend to comply with the minimum services agreed between the unions and the government in the various strategic sectors (administration, transport, health etc.).

As with the strike on 29th September 2010, the government has opted not to present the estimated figures of stoppages and, have instead chosen to publish details of electricity consumption on the day from the Spanish Electricity Network (along with a note to the press with details of the number of arrests). Considered one of the few reliable indicators of the impact of the strike, it showed that 84.2% of the electricity on a normal day was being used at 11am on the day of the strike. The collective Economists Against the Crisis spent the day explaining and qualifying this figure. Regardless of this, the information in the mass media pointed to a massive stoppage in the industrial sector, in schools and in transport.

The police security measures on the day of the 14N, with 4,500 officers in Madrid alone, was in the event overwhelmed by the variety and diversity of actions that took place across the state. From the classic pickets – confrontations led to 142 arrests before 10pm according to the Interior Ministry – to the lock-ins in hospitals (30 in Madrid, according to the Coordinadora Antiprivatización de la Sanidad – Anti-privatisation in Health Collective), bank offices or university faculties, or the road blocks created by bicycle pickets in cities such as Madrid, Seville or Valencia, or the expropriation of food by a feminist group in Barcelona. The general strike again shifted the matrix of power relations between the 1% and the 99%. In addition we are left with images of police attacks on the press and children and indiscriminate police charges against peaceful demonstrations.

[This article was originally published in Spanish on November 14th 2012]

28 de Sep 2012

25S: Democracy makes its way

English

By Madrilonia / Translated by Lara Hernández

On September 25, tens of thousands of people took the streets disobeying the state of emergency imposed by the Government. This text analyzes the significance of the protest.

Spanish Parliament surrounded by thousands of riot police to prevent the approach demonstrators. / Photo: Diego González.
They said we were going to take part in a coup. They said that behind us there was the far right, they lied in the media again and again, they threatened us, in all possible ways, saying that we would end up in prison, they brought 1400 policemen, and they identified and reported for criminal offence people who just gathered in a public park discussing the action. They tried to create fear as they had never done before… And the result was that tens of thousands of people took the streets disobeying the state of emergency imposed by the government. Today, media all over the world are talking about what happened in Madrid on 25S.

And we know that this is just the beginning.

Mariano Rajoy’s government is weaker than ever. It’s facing a threefold crisis which is getting deeper and deeper. First of all, a hard crisis of legitimacy in relation to citizenship, and not only among the tens of thousands who mobilized on 25S, but also among his own constituency. The government has absolutely no plans beyond insisting on the policy of cuts, always accompanied by a more intense and pointless repressive dynamic. We can easily see the symptoms of this growing lack of legitimacy, in the disproportionate response to the protests yesterday, the clandestine departure of the “honourable members of parliament” or the pathetic statements of most of our politicians. Let’s be clear, a government which is only sustained by the monopoly of violence is a weak government, dying, doomed.

Secondly, there lies a serious crisis of the regional model of State. Trapped between prostration to the troika (EU, ECB, IMF), which turns financial dictates into political impositions, and the dismemberment of the covenants between elites who held the sharing of power that embody the Autonomous Communities, the central government is just a mere scarecrow. It can hardly keep a certain unity of action with regional elites, as now it’s been shown with the “threat” of independence by CIU, who are able to mobilize (in a blatantly neoliberal and oligarchic project) much of the Catalan society. In this case, the weakness is not just that of the government, but that of the institutional arrangement as a whole, which we inherited from the Transition in the seventies, while this is showing us the need to build a new model of political and economic democracy.

Finally, the government has been unable to cope with the Troika and defend, in a much needed alliance with other countries of the periphery, the interests of its own people. In other words, the government has never stopped obeying the orders of the financial powers that constantly require a deepening in the social crisis. Within this framework, the only horizon lies in the imposition of recession and impoverishment on the majority of the population. Here we must remain vigilant, for surely on Friday or Saturday, at the very latest, we will know the cuts and privatizations required by the Troika as counterparts to the new bailout: reduction in unemployment benefits, increase the retirement age, public and common asset sales and new cuts in the rights of public workers. Today the risk premium has soared far above levels these days, in what may well be a reminder of the Troika by suspending the program of bond buying, that the policies imposed by finance are above any “concession” to the demands of the citizenship.

What we have experienced today in the streets of Madrid has been a first proof of the power of collective organization. We are at the beginning of a likely new cycle of demonstrations, which public employees or pensioners are yet to join massively. We must admit that the protest on 25S had a clear generational bias: a younger generation that has no housing, income, employment, hasn’t voted for the current 1978 Constitution, nor concedes any legitimate power to the agreements that have given shape to this model of State. However, it is to be expected that the series of measures that the government will surely approve will encourage many more to Siege the Congress once again. Since this is a political problem, our task remains to bring together the necessary social power to stop a dispossession that affects everyone.

Since this is a political problem, we have to get back to realize the same alliance that we lived in the July Days, where 15M, all kind of people from education and health workers to a crowd that went there with no more adjective that its own name, gathered together to indict the current constitutional system, the prevailing bipartisanship and the obsolete representative bodies. Democracy is something else.

Both in this country and in Europe, this new democracy is yet to be invented. We have finally come to a point where all the so-called Piigs countries find ourselves in pretty similar political, social and economical circumstances and, thus, the time is ripe for an alliance between the populations in these countries in order to reject the hardships imposed on us in the name of financial interests and enforced by an extremely short sighted German government. This way we can, certainly, shape together the future of a continent worthy of living in instead of the self destructive machine we are suffering now. The Madrid government delegation can say there were just 6,000 mobilized people, a ridiculously low figure, can still talk about us putting a coup or compare us with the Tejero coup in 1981, but their reality and ours are walking paths. Networking intelligence has its own ability to self-narrate and requires no mechanisms which “represent” it. This is a good example of the crisis of this form of State, which increasingly looks like a dictatorship. Therefore, we must shout again: we are not spectators, they do not represent us. 25S is finished.

Now the best is coming. The first step, today at 7pm and the next Saturday in Neptuno again, to show them that we go forward.

[This article was originally published in Spanish on September 26th 2012]

17 de Sep 2012

The European Central Bank renews the purchasing of Spanish debt

English

By Isidro López (Madrilonia) / Translated by Sarah Pilar Iacobucci and Juan Martín Rodríguez

The announcement from Mario Draghi, President of the European Central Bank (ECB), about the plans for huge purchases of Spanish (and Italian) bonds has resulted in a rapid fall in the average interest rate that the Spanish Treasury must pay to finance itself. Pending confirmation of the details, the Spanish risk premium declined substantially to just under 400 points. The measure will not however be ‘free of charge’ for Spain.

Contrary to the information being published in the Anglo-Saxon and German media, the reduction of public expenditure has been a key policy in Spain since May of 2010, when the spread between the 10-year Spanish bond and the 10-year German bond exceeded 100 points. On August 3rd of 2012, the Spanish premier Mariano Rajoy confirmed an economic adjustment program of approximately 102 billion euros from 2012 to 2014 based on expenditure cuts and revenue increases. The cuts in the Healthcare and Education sectors, which depend on the regional budgets rather than the central government, are highly controversial given the dramatic consequences of the absence of certain hospital services and the dismissal of schoolteachers.

Meanwhile, the threat of a second bailout remains though the first bailout fund has not been completely paid out. Rajoy said he will decide whether to seek help or not only after the regional election in the Basque Country and Galicia, scheduled for October 21st. The contentious debates he wishes to postpone relate to the potential cuts to pensions and unemployment benefits. After massive protests led by public workers in July, the peoples’ reaction will be tested again on the labour unions’ demonstration on September 15th and the planned mass protest at the Congress of Deputies on September 25th.

The ECB is the key institution in the neoliberalisation project within the European Union (EU). It is worth remembering that this process has always been based around the creation of a transnational authority (the so-called troika: European Commission, European Central Bank and International Monetary Fund) which has imposed a series of economic conditions without any opportunity for democratic debate. Obviously, the social conflict resulting from these tough measures and their democratic illegitimacy takes place in the local arena of every EU nation-state, decreasing the support of the national governments in many cases (Papandreou, Zapatero, Berlusconi, Sarkozy, etc.) but never challenging the economic commands imposed by the troika, with its slogan “there is no alternative”. This dynamic is in fact the result of a fierce political battle that occurred in the early 80’s: the views of the British Thatcherite neoliberal and German ordoliberal alliance were imposed at the very inception of the federalist concept led by Jacques Delors, who was in favour of deepening the Christian Democrats, Social Democrats and corporatist values that shaped the EEC until the 80’s.

The ECB represents the culmination of this process, which itself has developed almost entirely within the construct of the European Monetary System, the euro. The ECB, designed according to the tight monetary dogmas of Milton Friedman’s school of economics, has a mandate for price stability (inflation control) and an emphasis on independence and insulation from political interference, the latter being a euphemism for the European electorate. In other words, it is the perfect institution to manage the European economy since it avoids democratic interference. The main objective before the creation of the ECB was to avoid it becoming a lender of last resort; an authority, linked to the financial crisis, responsible for providing large sums of fresh-printed money to stabilize the falling prices of financial assets.

On the other hand, according to the post-Keynesian economist Hyman Mynsk the central bank has to act as a lender of last resort in order to prevent economic depressions. This view is therefore contradicted by the neoliberal dogma of market self-regulation. In addition, the central bank, ruling as a lender of last resort and consequently absorbing the debt of the financial players by money printing, should be backed by a state (or a productive social entity with a clearly-defined political status) that answers for the debt issued. Specifically, this last point is exactly what Germany is determined to avoid in the construction of the euro-area, which the ECB is reorganizing in the absence of a formally constituted power. The wealthy and not-so-wealthy country members are being shuffled through the back door, leaving the implicit guarantee of intervention in the hands of the German government. The Maastricht treaty and the Euro Stability Plan are the consequences of this approach which, despite being managed by Germany, France and England, has also integrated most of the elites in the continent into a single political project.

However, reality is very stubborn opponent and it seems that after all, old Hyman Mynsky was right. The ECB has acted as a lender of last resort almost exclusively since the beginning of the crisis, though always remarking its temporary nature rather than accepting this status definitely. Specifically, it started purchasing national debt in secondary markets from 2010 until the beginning of 2012. This program, relatively effective in stabilizing the risk premium, might even be successful in keeping the national debt interest rates at the level desired by the ECB, in other words, the rates the people of the EU need. In fact, the dramatic increase of the national-debt interest during the last months coincides with a suspension of debt purchases by the ECB. This being a disciplinary measure to push both Spain and Italy to accept the political requirements of the bailout, which will be arranged over the coming years.

Germany, maintaining its position, is reluctant to accept this policy in order to reinforce its political position. If Germany guarantees the neutralization of the debt by money-printing, the market pressure will cease in Spain, Italy and other targeted countries. Therefore, the political requirements, the privatizations and the budget cuts demanded from the “neutral” European elite would not be necessary. This would be the failure of the neoliberal flagship, which is the creation of the transnational European domain where “economic necessity” rules. The not-so-wealthy member states accept these mandates and contain the resulting social conflicts within their own borders. Besides being the government that supports the neoliberal system in Europe, Germany maintains many economic advantages. For example, it finances itself at a much lower cost than other countries targeted by financial agents, and subsequently avoids the political cost of a social crisis. This is the situation before the renewal of debt purchases by the ECB.

The question then is: what does this have to do with us? The conclusion is that the ECB is the seed of a future European state. This is of course not to say that a European state is a certainty but simply that the ECB is a money issuing entity that, in terms of classical political economy, is the representation of the European productive forces articulated through a social and territorial division of labour that transcends the national borders of every member state. The financial players and their political allies see it as a threat not only for the current model of obtaining profits from the national debt interest but also for the neoliberal regime itself.

Today’s nations, and also the would-be state of the ECB, are just the result of class struggle - those who do not like this term may say social conflicts. If the European leaders (representing the national elites) are risking starting a process that could threaten, or at least call into question, the almost absolute power they have over their territory and population, they do so because they know that social conflict may increase substantially in the near future. The consequences of this increasing struggle, whether the non-payment of debt or a popular open challenge to the political class, might jeopardise their power more profoundly. Thus, the elites’ “desperate” strategy is to sacrifice parts of their constitutional principles at the European level in order to avoid unpredictable effects at the national level. They expect that these measures will remain in the technical sphere, expecting the people not to understand their political significance for a while.

With regards to the financial powers, they try to keep them satisfied by emphasising the provisional nature of the measures and their subordination to the opening up of profitable national assets (privatizations and austerity cuts). At the same time, they raise the spectre of a potential national default when necessary. Naturally, our responsibility is to extend the conflict, pushing to refuse the debt and call into question the political representation. These should be our goals until the ’making-the-best-of-a-bad-job’ EU guarantees the democratic rights that would force Europe to assume its redistributive responsibilities.

[This article was originally published in Spanish on September 7th, 2012]

20 de Jun 2012

Analysis: Must a Debt always be paid?

English

By Daniel Gómez-Olivé i Casas (Observatory of Debt in Globalisation) / Translated by Robert Dyas.

Some would say that a debt must always be paid. Indeed, the payment of debt is also referred to as “honouring” of a debt. It is treated as more it seems than a simple return: it is treated above all as the keeping of ones word. However, in reality, the repayment of a debt (especially when dealing with a sovereign debt) should depend on the origin of that debt, to whom it was lent, under what terms and the potential benefit. It would be unjust to demand repayment from the people when they are burdened with a debt that they certainly did not borrow and/or where they would have no interest in the repayment of that debt. Unjust and maybe illegitimate.

In the case of the Spanish public debt, as with so many other cases (see Greece for example, not to mention any of the poorer countries), it seems that we can identify parts that could be considered illegitimate (how much of which might be considered illegal is yet unknown). The term “illegitimate” is one that carries moral and ethical connotations which in themselves can sometimes hold more force than the weight of the law.

Illegitimate it is to cut funds devoted to education and health in the sum of 10 billion euros and just a few days later announce the bailout of Bankia, allowing the write off of nearly 4.5 billion euros and supporting the bank with more than 19 billion euros. Illegitimate it is to accept the nationalisation of debts accumulated by property developers, constructors and banks, who profited from property speculation, and not honour the payments of basic social services. Illegitimate it is to guarantee the payment of debts that were borrowed by those who brought us to bankruptcy simply because they are endebted to German, French or North American banks (guarantees that, in the case of Bankia, are estimated at nearly 30 billion euros) and not to guarantee the most basic social rights that we believed had been guaranteed for life. Illegitimate it is to allow Mr Blesa (Caja Madrid) and Mr Rato (Bankia) to operate in the property sector with their colleagues from the PP in a totally irresponsible manner (read Esperanza Aguirre, Juan José Olivas or Francisco Camps) and, now that the house of cards is falling, not demand that they take any responsibility whatsoever for this mess. Illegitimate it is that the government is mixed with and permeated by those that have their own personal economic interests and speak out now with the sole agenda of finding a way to help them clear up the mess from their party with our own money.

Coming to a realisation of all of this, a section of Spanish society is now demanding the unilateral suspension of payments, an audit of all the debt so that it’s origin is made clear, a rejection of all illegitimate debt and the charge of all those responsible (whether they be Spanish nationals of foreigners) for bankrupting the country. This part of civil society (organised under the Peoples Debt Audit Platform; We Don’t Owe, We Won’t Pay! [Plataforma Auditoría Ciudadana de la Deuda ¡No Debemos, No Pagamos!]), is conscious of the necessity of a citizen centred movement that might change the orientation of power so a full audit of the debt would be possible.

As in other countries where the shock of debt has been felt for many years (the case of Ecuador for example), it becomes necessary that a full audit is carried out to expain how and why the public debt has more than doubled in just five years (surpassing 36% of GDP by 2007 and estimated at 80% of GDP by the end of 2012). An audit that can decide categorically whether it is legitimate and how much of the increase in public debt has been due to the saving of the financial system, helping the bank executives to avoid their responsibilities. An audit that could resolve as to whether it is fair and legitimate that, in 2012, the state will have to pay more than 28 .8 billion euros in interest accumulated on debt whose origin is unknown. An audit of the debt that would allow for the allocation of political and judicial responsibilities to those who enriched themselves illegally with public money. A citizens audit that would serve as a means of pressure and restraint to prevent the government transferring huge tranches of private bank debt to the public books (as happened in Argentina in 2001, Iceland in 2008, Ireland in 2010 and Portugal in 2011). A social audit to control the black hole of private Spanish debt. An audit of the debt as an excuse for the awakening of the consciousness and the politicisation of the populus with the aim that we make our own future and never again leave our destiny and that of future generations in the hands of corrupt politicians and bankers. Such is the situation, that this seems the only path the people can take to recover their power and economic, social and political sovereignty; in other words, the only path that would be truly “honourable”.

This article was originally publish in Spanish on June 14th 2012]

08 de Jun 2012

Imagining the Revolution of the 99%

English

By Madrilonia

Madrilonia is one of the most politically active blogs that gained recognition during last year’s protests of the 15M movement. This article discusses the possibility of a Government fall in the following weeks.

On May 15th of last year we said: “Nobody expected the Spanish Revolution.” It’s been 12 months of debates and actions, of getting to know each other, and testing what we could do together. We see that bipartisanship has not listened to a single one of our demands. How then can we defeat the dictatorship of the market? How can we win a new regime of rights for all? How, in short, can we conquer a real democracy?

A government without a parachute

The first premise that we need to remember is that the current crisis is political and only political. There is no economic argument that justifies austerity policies that ultimately push us into recession. The problem lies only in the accounting hole of the large Spanish and European financial institutions – generously fattened off of several decades of successive financial bubbles united in an economic model based in brick, mega events and infrastructure that we never asked for and that today show an authentic black hole of debt and dispossession – and the incapacity to find a profitable business niche in a situation of the general decline of the market. In this sense, all of the decisions directed by financial rigor, austerity and deficit control are only oriented toward defending the interests of the large creditors – banks and investment funds – that have turned the public debt into big business, the only business now available.

The second premise results from the first: the political decisions that have ended up leading to the debt crisis are made only in a few centers of power. At the European level, the only one that really matters, the centers are the German government of Angela Merkel and the rigidly orthodox European Central Bank. At the Spanish scale, but only as a simple messenger, the last link of a long chain of command that begins with the large financial institutions: the State government and the autonomous communities, which can be more or less in agreement with the ideology of adjustment and debt, but don’t have any plans other than to cut rights and welfare.

We see that our government doesn’t do anything to stop the debt from growing and growing. Latin America lived a lost decade. A decade of poverty is foreseen for Greece. The growing snow ball must be stopped. The more time passes, the poorer we will become, the more unstructured our public services will become, the less room or maneuver we will have. Any government that doesn’t say enough and break the vicious circle of debt is an illegitimate government. A government that sells its citizens to save the banks’ profits is an illegitimate government. In Argentina, after the crisis of 2001, only the government’s fall opened a process that ended the debt. In Iceland, only the expulsion of the politicians allowed for the default and change of economic direction. But, how to overthrow a government? The rhetoric of bipartisan democracy is powerful, although legitimacy does not only depend on votes.

Blackmail no longer works

We launch ourselves into anticipating some events of the immediate future: there will continue to be new attacks on the market, the risk premium will go above 600 points, European intervention in the Spanish economy will stop being wrapped up in the rhetoric of “European politics” to be one of direct control of the public accounts to guarantee the debt. At the same time, there will appear, and they are already here, the first talks of reform: they will talk about abandoning, always partially, austerity measures, of recovering the path to economic growth, of partially maintaining the Welfare State. However, we shouldn’t conform, it’s only about rhetoric and partial measures to dole out a process of brutal dispossession. Simply, our political class, both Spanish and European, totally lacks an alternative that doesn’t consist of following the mandates of those that really direct the continent’s economic activity: the large financial institutions.

When they say, “we can’t allow the occupation of the plazas, it will erode confidence in the markets,” they are giving us a clue. What would happen if at some point we remained in the plazas? In Egypt they defeated a dictator and in Iceland a corrupt government. But, what would happen if the risk premium shot up without people in the streets? In Italy they have imposed a president that nobody voted for. When Rajoy’s government falls, maybe they will convoke elections or establish an alliance between the PSOE [Partido Socialista Obrero Español – Spanish Socialist Workers’ Party], the CIU [Convergència i Unió – Convergence and Union (Catalan Party)] and the PNV [Partido Nacionalista Vasco – Basque Nationalist Party] to ensure the debt payment and to balance the power of people taking the streets. But they would only govern to be the privileged witnesses of the rapid erosion of their legitimacy, by making visible the separation between society and the political class, between the real country and the representation of the country.

“Spain is too big to be bailed out,” we’ve heard said a thousand times. What would happen to the German and French banks, the creditors, if they saw that there is no way to pay the debt. If Italy is infected? Even more interesting, what if movements like the 15M take hold in other countries, like Italy? Could they be capable of maintaining the same policies of austerity and cuts in favor of the creditors with Europe socially boiling over and the currency in free fall? Could they continue governing as if nothing were happening? Could they maintain the same policies of social dispossession throughout the continent faced with movements that bring together diverse peoples on a European scale? Could they continue accelerating the looting in the context of blatantly leading economies to ruin?

A democratic revolution

Because of this, the revolution seems to consist in displacing the current political elites that aren’t going to do anything for the common people. The fundamental question resides in the following equation: how to make the destitution of the political class be paralleled by the constitution of new forms of democracy at different scales from the local to the continental? Here, again, there is no path to follow. Undoubtedly, we will find valuable all experiences of the creation of alternatives, self-management and the direct appropriation of public services, updating forms of use and management of common goods. Also, the assemblies in the plazas or work sites and digital networks provide experiences and tools for the democratization of politics and power. Without these experiments, in fact, there can be no real democracy. It is time for change, for innovation.

In parallel, new electoral candidates will appear – for example, the pirate parties or broad coalitions of small parties – that will attempt to wrest away the ability to exercise political power from within existing institutions, even if only so that those same institutions don’t impede the creation of other new ones. We will have to demand of them, of these new political platforms, that they have clear and consented upon democratization programs, and remind those candidates that their mandates are revocable and should be fully under the control of of new forms of democratic intervention and should assume the ability to generate proposals for citizen assemblies. Ultimately, that they should obey and do it thanks to a new system, a system that is more democratic and more just. There are more than enough examples of of new forms of institutions like those that have crossed Latin American in the last ten years or those that have emerged from the Icelandic revolution. The party system doesn’t work, the near absolute delegation of sovereignty to someone who doesn’t have any responsibility for their voters is dangerous for democracy and welfare. From the days following May 15, 2011, we have spent a long time thinking about this constituent process: what new forms of direct participation and deliberation to use, how to reform the electoral system, what social rights will need to be legislated, what type of financial controls to impose and what kind of economy we want to promote, and much more. Much, therefore, is already advanced, we only need a way to make it happen by uniting forces.

This is only one of the possible stories. Be it is how it described here or in another way, we will only stop society’s submission to the debt payment if the 99% lose our fear and say enough. We can never really know how to change things, but it can only be accomplished with much desire. For the moment, maybe, it is enough to insist in a method that works and that we know. Repeat ourselves and repeat ourselves. Occupy the plazas and avoid any provocation. For every eviction, a new concentration of thousands, tens of thousands, until the plazas are ours again. And when it is necessary to stay indefinitely in the plazas, with a unanimous scream: “They don’t represent us.” With one goal: A real democracy.

[This article was originally published in Spanish on May 14th 2012]

21 de Mayo 2012

Notes on Bankia: a bailout called nationalisation

English

Editor’s note: Government announcement of a partial nationalisation of Bankia, the country’s fourth largest bank, gained international attention due to the threat of a possible Spanish default.

Spanish finance minister Luis de Guindos first announced on monday, may 21 that the bank would need an estimated €7’5bn to fix its troubled real state assets. Public spending cuts to meet european budget reduction demands will reach €27bn this year only. Update: On Friday, May 25 Spanish government recognized that Bankia will eventually receive a total €23’5 bn.

Social movements as 15M and debt audit groups continue to reject Government funding of troubled banks as Bankia.

Notes on Bankia: a bailout called nationalisation

By Juán Hernández Vigueras. Translation: Mario Lewis, AEIOU traductores.

“Between June and December 2010 the Banco Financiero y de Ahorros (BFA) [Financial and Savings Bank] was created as a result of the merger of Caja Madrid and Bancaja firstly and Caja Canarias, Rioja, Ávila, Segovia and Layetana afterwards, under the ad hoc legal system of the SIP (Institutional Protection System). This system, which integrates assets and liabilities in these banks, has been passed by the two majority parties to cover the disaster caused by property speculation and, by the way, the responsibilities of a disastrous bank management, at the expense of the taxpayer. In March 2011, nearly more than a year ago, Bankia was launched as a subsidiary company of BFA, a new private bank which contributed with 4,465 million € to the FROB, the national fund for bank rescue. The aim was to resolve the insolvency problems of Bancaja and others, especially Caja Madrid, “the one that has suffered the worst consequences of the brick crisis”.

“During the development of the new bank project of Madrid, the financial engineering assigned the so-called “toxic” assets (that is unpayable loans, houses and plots without a market) to the “bad bank”, the BFA; and the good assets with doubtful validity were assigned to the only subsidiary company, Bankia. This complex operation of accounting manipulation expected that future profit from Bankia could cover the insolvency of the parent bank, which, according to what is said, at present has zero capital. The rest came from financial accountability and their experts; The expression “toxic values”, launched in Wall Street to denominate the subprime assets when they lacked market and nobody knew what their value was, has been interestedly applied in Spain to avoid mentioning the properties with real physical existence but with an imaginary carrying amount as nobody knows their fair value on the market (mark to market); they are assets which are not being sold or bought neither now or in a long time.

Which precise accounting criteria were the starting points to separate in the accounts the good and the bad assets and establish their distribution between BFA and Bankia?"

Juan Hernández Vigueras is a Spanish author member of ATTAC Spain. The complete article was published in the website of the left wing magazine Sinpermiso. Read full text here (in Spanish).

DIAGONAL English

DIAGONAL is a grassroots communication project based in Madrid. We print a biweekly newspaper and run this website with daily updates. We only accept adds from social collectives (cooperatives, non-profit or kindred associations) and exist thanks to a large base of suscriptors that collaborate with us. If you would like to help with translations or editorial suggestions, please contact english [at] diagonalperiodico.net.