Check out a series of video reporting from Greece by the Reelnews network, “an activist video collective, set up to publicise and share information on inspirational campaigns and struggles.”


Look at their playlist for the following short videos:

1) Our Present is Your Future: How to destroy public health services (Reel News) Over a third of hospitals to close. Exhorbitant charges. Healthworkers not being paid. But doctors are leading an astonishing fightback.

2) It’s still like being in a war zone — Immigrants in Greece (Reel News)

3)  Crisis (Reel News)  Don’t believe the lies — the Greek public debt is down to the banks and the rich. With extracts from the film “Debtocracy”.

4) That’s Our Power — Rank and File Organising (Reel News) The growth of rank and file committees, featuring the three longest all out strikes ever in Greece (steel factory, national newspaper & TV station), plus hospital occupations.

5)  Solidarity — Not Charity: Community Organising (Reel News)  Local assemblies are springing up all over Greece, organising community kitchens, clothing exchanges and other acts of practical solidarity.

New research from the Cornerhouse highlighting the links between ecological and financial crisis:

New markets in environmental services are springing up all over the world – biodiversity markets, wetlands markets and species markets, in addition to the climate markets that got their start more than 15 years ago. Britain is no exception. Its Department of Environment, Food and Rural Affairs is enthusing over the economic potential of a “market in conservation projects” populated by a “network of biodiversity offset providers”.

What lies behind this trend? Some historical perspective is necessary to answer this question. Environmental services markets are not aimed merely at “solving environmental problems at the lowest cost”. More importantly, they redefine those problems in a way that creates new assets, economic sectors and property rights. As part of the neoliberal response to the economic crisis that set in during the 1970s, they function to loosen regulatory constraints on business, relax Environmental Impact Assessment (EIA) requirements, and open up new profit opportunities for an increasingly dominant financial sector.

“Hedge funds have been known to use hardball tactics to make money. Now they have come up with a new one: suing Greece in a human rights court to make good on its bond payments.”

Article From the NY Times. The international pressure on Greece is mounting as bondholders do all they can to extract maximum value from the ticking time bomb of its debt. Yet as this chart shows, the ‘all-important’ bond market only constitutes a third of greek debt holdings:

If Greece were to announce a default its own banks, pension funds and household savers would also suffer huge losses, possibly plunging the country into a more acute crisis. The situation then, is far more complex than ‘greece vs. the international money markets’. The question of how or even if greece can resolve the contradictions of its current predicament remains open.

With all the fear and speculation surrounding the current wave of credit rating downgrades, this chart gives a useful indication of the global situation (liable to change at any moment mind!).

A credit rating gives an indication of how risky an investment a state is percieved to be. Although ostensibly only a ‘guide’ provided by the rating agency, a lower rating almost always leads to higher borrowing costs for a govenrment. This means big trouble when states ‘refinance’ (basically renewing old debt), as they are suddenly hit with a much higher interest bill on their debts.

Here’s a run down of what Standard & Poor’s (one of the three main rating agencies, along which Moody’s and Fitch) ratings indicate:

AAA: The best-quality borrowers, reliable and stable

AA: Quality borrowers, a bit higher risk than AAA

A: Economic situation can affect finance

BBB: Medium-class borrowers, which are satisfactory at the moment

BB: More prone to changes in the economy

B: Financial situation varies noticeably

CCC: Vulnerable and dependent on favorable business, financial and economic conditions to meet financial commitments.

CC: Highly vulnerable.

C: Even more highly vulnerable.

D: Defaulting on commitments.

Ratings from AA to CCC may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.

State debt and the crisis in the Eurozone

“The fact that almost every state in the world is in debt – and the more powerful it is the bigger the debt – first of all begs the following questions: why have these states permanently contracted debt? Why is it that most of the states in the world were able to pile up their debt over such a long time without any problems? Who are the creditors and why have they readily and increasingly accommodated loans / lent money to the states?”

From the Wine and Cheese appreciation society of greater London. The first of a four part series explaining how state debt functions and its role in the eurozone crisis.

Fantastic This American Life radio show on a ProPublica and NPR investigation into Magnetar, a hedge fund which made billions after helping to create the CDO market, whilst betting on its collapse. Collaterlaised Debt Obligations (CDOs) are the (sub-prime) mortgage backed securities which went toxic and brought down the financial system.

“Magnetar had figured out how dysfunctional the system had become – and was going to exploit that dysfunction.”

Iceland has had a rocky time. All but declared bankrupt, it’s three major private banks nationalised in less than a week. Pressured by the IMF and the European Union to re-pay a $10 billion bail-out equivalent to each of it’s 310,000 citizens paying 100 Euros a month for 15 years with 5.5% interest [1], and $5 billion to Britain and the Netherlands in compensation to those who lost their savings in ‘Icesave’ accounts.

But a refusal to accept that “citizens had to pay for the mistakes of a financial monopoly” drove committed opposition to such a settlement.[2] First the coalition government fell after intense public protest – now known as the ‘Household Revolution’.Then the Icelandic president refused to ratify a repayment plan without a referendum. In a first referendum held in March 2010, 93% voted against repayment, and a second referendum from April 2011 brought back 59% against repayment.[3]

The government launched an investigation, by the Office of the Special Prosecutor (OSP), to seek and prosecute those responsible for the financial crisis. The ex-president of Kaupthingbank, Sigurdur Einarsson, had an Interpol international arrest warrant out for him for some time[4], before returning to Iceland to face interrogation by the OSP.[5] In September 2010, the former Prime Minister, Geir H. Haarde was charged with negligence and mismanagement in the run up to the 2008 economic collapse.[6] With a team of 16, special legislation passed granting it total access to the banks’ records, and a commitment to ‘asset tracking’, [7] the OSP makes Iceland the one country with a concerted programme to prosecute bankers and pursue debt repayment with reclaimed banks’ assets rather than the public purse.

Iceland’s resistance to the IMF and it’s refusal to place the burden of repayment onto citizens who had no control over the banks responsible for the financial crisis is unique. It sits strangely amongst the austerity programmes rolled out across Europe, the cuts to public spending and the privatisations which European populations are repeatedly told are ‘unavoidable’ if we are to re-pay ‘our’ financial-crisis incurred debts. It seems that Iceland has not only adopted the approach of ‘can’t pay, won’t pay’, but of at least attempting to place the burden onto those responsible. Perhaps this tiny country presents a large example to the rest of Europe.

Clear article by John Lanchester in the London Review of Books on Greek debt and the threat posed by Greece’s default:

Any abrupt form of Greek default, caused by the lenders’ failing to lend or the Greeks’ missing a bond payment, would be what is known as ‘disorderly’, an eventuality that would play out as anything from a mild local spasm to a full-scale continent-wide meltdown, featuring the collapse first of the euro and then of the EU itself. The collapse of Lehman Brothers in September 2008 was one of these ‘credit events’. It is in their nature that they are chaotic and unpredictable, and all the more so because the fundamentals of the economic order, as constituted in 2008, are still intact. Who owns that Greek debt? As I’ve said, mainly French and German banks. Yes, but banks insure their debt via the use of complex financial instruments. Insure it with whom? Don’t know: some of it is insured with British banks as counter-parties to the risk, but that risk will be insured in its turn, so that the identity of the person holding the parcel when its last layer of wrapping comes off is a mystery. That mysteriousness was the thing that made Lehman’s collapse turn instantly into a systemic crisis.

Whilst some EU governments push for further loans and austerity, and further-reaching crisis, non-compliance and resistance within Greece is spreading like wildfire. The Greek people know that they face decades of sever austerity, working harder for less with removed social security, and that the extreme interest rates (5.2%) imposed for the so-called ‘bailout’ loans do not simply provide some insurance for lenders. They are also helping to keep French and German banks in business. Banks which the same EU governments have provided taxpayer-backed guarantees against Greek default to..

“the outstanding Greek debt is mainly owned by French and German banks. This is why the Western European governments are especially keen on the ‘bailout’: it’s helping to keep their banks solvent…

German savings go to German banks to lend to other countries so that they can buy German goods from German companies who then save their earnings in German banks who lend it to … and so on.”

I’d like to recommend two items published on the Transnational Institute’s website as introductory reading on the sovereign debt crisis in Europe.

An article by Maricia Frangakis, titled ‘Greece marks failure of EU integration’, provides a good overview of the situation in Greece.

“The ‘bail-outs’ provided by the EU and the IMF do not solve the problem of over-indebtedness. In fact, they make it worse. This is because the austerity measures to which they are tied intensify the recession of the Greek economy. While GDP is shrinking, the ratio of both the public deficit and debt increase. Further, the ongoing speculation against Greek government bonds keeps increasing the interest rates and therefore the burden of the debt.”

Second an interview with Susan George, by Nick Buxton, gives a wider view of structural problems at the EU level.

“The European Central Bank is the obstacle to success, not the Euro per se. The ECB doesn’t lend to governments but to banks, at 1% or less, and then banks lend to governments—short term Greek and Irish debt has “junk” status and is now priced at 20%.”


Economist Duncan Weldon, on the False Economy blog, examines the Office for Budget Responsibility’s debt forecasts and finds a predicted increase of 35.5% in household debt between 2010 and 2015, with the income to debt ratio (i.e. a measure of how easily people manage to pay their debt) expected to hit an all time high. It’s not good news for us.

Duncan Weldon shows how the OBR’s own figures reflect the impact of Osborne’s cuts on public debt:

“…the OBR forecast for June 2010 (pdf) – before his [Osborne’s] first budget – predicted that household debt in 2014 would stand at £1,718bn. But following two Osborne budgets that number has now been revised up to £1,963bn – an increase of £245bn. In other words as a result of Osborne’s policies the direct debt burden on UK households is set to increase by nearly a quarter of a trillion pounds in the next three years.”

In other words, Osborne’s cuts are aimed at cutting the ‘public debt’ (government debt), but expect a rise in private household debt as people have to cover the reduction, or total disappearance, of public services.

“Back in June last year, before Osborne’s policy changes, the OBR forecast (pdf) that public sector net debt (government debt) would be £1,294bn in 2013/14. After two budgets and a spending review they have revised that (pdf) to £1,251bn – a reduction of only £43bn.

Here we can clearly see the impact of Osborne’s changes over the next three years: public debt down by £43bn BUT private household debt up by £245bn – five times as much.”

Private household debt can mean more business for the banks. This seems like yet another way that the crisis is being transfered from the private banks to the public…

Read the full article on the False Economy blog here.

“…the special allure and danger of an elaborate credit system lie in its relationship to class society. If more capital has been accumulated than can be realised as a profit through exchange, owing perhaps to ‘the poverty and restricted consumption of the masses’ that Marx at one point declared ‘the ultimate reason for all real crises’, this condition can be temporarily concealed, and its consequences postponed, by the confection of fictitious values in excess of any real values on the verge of production. In this way, growth and profitability in the financial system can substitute for the impaired growth and profitability of the class-ridden system of actual production. By adding over-financialisation, as it were, to his model of overaccumulation, Harvey means to show how an initial contradiction between production and realisation later ‘becomes, via the agency of the credit system, an outright antagonism’ between the financial system of fictitious values and its monetary base, founded on commodity values. This antagonism then ‘forms the rock on which accumulation ultimately founders’. In social terms, this will take the form of a contest between creditors and debtors over who is to suffer more devaluation.”

Review of David Harvey’s The Enigma of Capital and A Companion to Marx’s ‘Capital’, by Benjamin Kunkel in the London Review of Books.

An article by Dariush Sokolov originally published by Libcom explores four dominant ‘stories’ attempting to explain the financial and economic crisis.

Overview and comparison of different theories about the crisis – Keynesians, stagnationists, Marxists, globalisation.

crisis stories
These notes come from the reading I’ve done recently trying to understand the causes of the current economic crisis. There are thousands of books, essays and articles out there now, but they all work within a few basic explanations or underlying “stories”. Here I outline and compare four of the main ones.

I’m not trying to present a new “anarchist interpretation of the crisis”, or to say anything particularly original. Just, hopefully, to help clarify some of the theoretical and ideological background to all the punditry, and bring some ideas and links together so that people can dig further for themselves.

Number one is the mainstream “Keynesian” story. Basically, corrupt and/or stupid politicians and regulators took the leash off greedy and/or irrational bankers. The more sophisticated version traces things back to problems of market psychology – as Keynes put it, the “animal spirits” of investors.

According to alternative left (mainly Marxist) theories, crises come from deeper “structural” flaws in capitalist production. There are two main variants to look at: underconsumptionist or “stagnation” theories (e.g., the “Monthly Review” school); and falling rate of profit theories (e.g., some Marxist academics, and basically any Trotskyist party line.)

All of these stories are about troubles in the developed markets of the US and the rest of the “first world”. But could the root causes lie in global economic shifts away from US dominance to a world where production is elsewhere? This is the fourth and last story.

Continue reading the article here.

So to that part of the population who are working, austerity means some will be working harder, longer, some will be working less, and shorter, but all will be reproducing a lesser social basis for reproduction. All that was substantial will become marginal, and the marginal will become substantially greater.

For that part of the population retired and receiving a pension, fewer will retire; fewer will receive pensions, those that do will receive less.

For that part of the population born into poverty, deprived of a basic, necessary education, of proper medical care, even more will be born into greater poverty. Even more will be cheated of and by an even poorer education. Even more will be excluded from already inadequate medical care.

All value must be devalued. “Everything must go!” is the slogan of this bourgeoisie’s staying in business forced liquidation sale.

Essential reading at The Wolf Report


Get every new post delivered to your Inbox.