The Perils of Christine


An audio version of this article is available on Soundcloud

Two months after her conviction on criminal charges of misusing public money while serving as France’s Minister of Finance, Christine Lagarde, current managing director of the International Monetary Fund (IMF), was back at it, demanding that the Greek government do both as she says and as she does and misuse public money, specifically pension money, further reducing payment obligations that have already been reduced some 30-40 percent; and enhance the collecting of tax revenues so that….so that Greece might……..  might  what?  Receive a debt reduction?

Lagarde insisted that her partners in this menagerie a trois, the European Central Bank (ECB) and the European Stability Mechanism (ESM), lift their snouts from the killing floor they have made of the body of Greece and provide a bit of debt relief.   “The debt is unsustainable,” declared Madame Lagarde. “Let us provide relief lest Greece be reduced to ashes that blow away in the first strong wind that comes across the Atlantic.”

Lagarde is a strategic thinker, and this is what “strategy” amounts to for the bourgeoisie:  “Slow down.  Take smaller bites. Let’s give the host a piece of meat, an iron supplement, something. The blood is so anemic.”

Lagarde was convicted of criminal negligence, carelessness, incompetence in allowing the 2008 payment of some €403 million in public money to Bernard Tapie, a backer of then president Nicholas Sarkozy.  The special court that decided the case also excused Madame Lagarde from punishment because of her busy schedule and pressing responsibilities.  “Au moins, elle n’a pas commis de viol, ou agir comme un proxénète,” said the court.

Meanwhile, Dominique Strauss-Kahn, convicted of nothing, was scratching his head and thinking “WTF?” and “Why me?” and “It must be anti-semitism.”

“Convicted but excused” is the  current equivalent of “graduated with honors” on the curriculum vitae of the candidate bagmen and bagwomen, diplomas courtesy of Trump University.

Competent, incompetent, diligent, careless, criminal, civil, legitimate, fraudulent– all of these apparent opposites are just different aspects, different moments, in the circuits of capital, in the turnover of capital, in the accumulation of capital.  Convicted and excused is but the life cycle of capitalist reproduction.

Greece has suffered through three bailouts, during which the economy has contracted by 25 percent, the unemployment rate for young people has exceeded 50 percent, sovereign debt has climbed to 185 percent of GDP, 1/3 of the population has fallen below the poverty line, and government benefits to families have fallen by one-half.  The pension replacement ratio, pension payments as a percent of pre-retirement earnings, has declined from 95 percent in 2008 to 67 percent in 2014.

Now if that isn’t enough misery, privation, suffering to produce a boon, I don’t know what is.

But it isn’t.  Non-performing loans account for more than 1/3 of all loans outstanding, twice the percentage of NPLs strung around the necks of Italian banks.  Fully 50 percent of all commercial loans are in the non-performing category, and the recovery ratio from the non-performing loans is less than 35 cents on every euro of face value.

This is what constitutes  2,3,  many bailouts under advanced capitalism:  Perpetual bankruptcy.

Since nothing frightens a banker with non-performing loans like providing debt relief (except realizing the loss), Madame Lagarde’s proposal for debt relief  drove  Herr Wolfgang Schäuble to near apoplexy.  Wolfie muttered something about Die verrückte Frau von Chaillot, and declared that Germany would not agree to further payments under the bailout agreement  without the participation of the IMF, a threat  that only Tsipras and the Syriza government could take seriously.  Germany’s refusal to participate would trigger the immediate, complete,  and catastrophic devaluation of the Greek sovereign debt of which Germany is the largest holder.

The rationale for austerity is always called “growth.”  “Structural adjustment” is marketed as the basis for “sustainable growth.”  The IMF thinks that a) Greece’s outstanding debt is “unsustainable” and b) Greece’s “programs” to meet the Troika demands undermine the basis for “sustainable growth.”

The bailout agreements require the Greek government to increase the collection of taxes. The actual rate of collection has declined steeply and consistently throughout the period of the bailouts,  In 2010, the government’s collection rate amount to more than 70 percent of assessed taxes.  In 2015, the collection rate had declined below 50 percent.

Required to reduce its “economic footprint” to “match” declining revenues, the Greek government has reduced its purchases on goods and  services not only to a level below every other country in the eurozone, but to a level that has idled public transportation as replacement parts for buses have not been purchased; and to a level that has paralyzed public health services as hospitals cannot purchase syringes, and pharmacies cannot purchase medications.

Madame Lagarde’s, (no relation to Madame Defarge; Defarge knits as she defends revolution; Lagarde unravels in service to counter-revolution) team at the IMF argues that the 3.5 percent primary budget surplus required of, and agreed to by, the Syriza government, is unrealistic, while a budget surplus of 1.5 percent is realistic, and achievable.

Realistic?  Realism, like all other aspects of bourgeois political economy is in the eye of the beholder.  History, on the other hand, is material.  So, between 2009 and 2015, how many countries in the EU 27 have achieved an actual budget surplus?  Let us count them, using fingers and toes, or maybe just fingers if you’ve been exposed to enough mutagens.

In 2009, 0 of the 27 ran any surplus.
In 2010, 1 country (Luxembourg).
In 2011, 2 countries (Luxembourg and a friend).
In 2012, 1 (Luxembourg again).
In 2013, 1 (you rock, Luxembourg.  Fly your fiscal flag high).
In 2014, 4 countries.
In 2015, 4 countries.

So there you have it; 27 countries, 7 years, 189 opportunities, 13 actual incidents of surplus.  So much for realism.

Unsustainable, indeed. The IMF proclaims that the failures are not the results of sustaining capitalism, but rather of improper policies, and the improper application of policies.  This assignment of failure to category rather than system is identical to the claims made by and for the Syriza government prior to and during its assumption of power.  With an identity of interest in sustaining capitalism, it is absolutely certain that the IMF, the ECB, ESM, Herr Schäuble will reach yet another agreement which Syriza will embrace like the penitent embraces the whip.

And all will agree that what is being done, the demolition of the economy, the impoverishment of the Greek people, the destruction of living standards, is being done in the name of “sustainable growth.”

The first step of opposition is the rejection of this ideology of “sustainable growth” by and through total repudiation of the outstanding sovereign debt and the entirety of the agreements with the IMF, ECB and ESM.  There is no such thing as “structural adjustment.”   There is only capital versus workers.  There is only capital, and anti-capital.

February 19, 2017

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