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Greek Parliament Votes to Keep Greece Locked in its Debt Trap

Amidst growing protests Greek parliament votes more austerity to appease its creditors as Greece again runs out of money.

Alexander Mercouris

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Quietly and with none of the public drama of the first half of 2015 Greece is slipping back into crisis.

The cause of the crisis is the same as always.

Greece is bankrupt.  During the property and credit boom that led up to the 2008 crisis it took on far more debt than it could pay.  However instead of being allowed to default or to agree an IMF monitored restructuring with its creditors, Greece in order to remain in the eurozone borrowed more money from the EU’s institutions to pay its debts, which were only partly reduced.  As a condition for this lending the EU institutions – led by German Chancellor Merkel who organised the original bailout – insisted Greece impose harsh austerity on itself so that it could achieve the budget surplus needed to repay the extra debt.

As at the great majority of economists who looked at this situation predicted, this austerity led directly to a collapse in investment and demand as both were strangled by a host of new taxes and benefit cuts insisted upon by Merkel and Greece’s EU creditors.  These have caused the economy to spiral down into recession, with Greece’s euro membership allowing for no countervailing relief such as might have been provided by depreciating the currency. 

The recession has in turn cut tax receipts whilst increasing spending by more than the EU institutions allowed for, causing Greece to miss its budget targets.  That in turn has meant that Greece regularly finds itself with insufficient money to pay the creditor institutions – the EU and the IMF – the instalments it owes on its existing loans. 

Greece has accordingly been forced to turn repeatedly to its institutional creditors – the EU and the IMF – to ask for more money.  After fraught negotiations the money – or enough of it to enable Greece to get through the immediate crisis – is provided.  However Greece is obliged in return to agree to yet more austerity, causing the whole process to repeat itself. 

In the meantime, as the economy contracts and the lending increases, the debt burden on the country grows greater.

This is the cycle Greece has been trapped in ever since it negotiated its first bailout in 2009.

Its causes are twofold: the refusal of its EU creditors led by Germany’s incompetent Chancellor Angela Merkel to allow Greece any debt relief whilst it remains in the eurozone – resulting in impossible demands being made of the country – and the corresponding refusal of the Greek elite – backed by the most vocal part of the Greek population – to consider any alternative to remaining in the eurozone despite the impossibly harsh austerity this is imposing on the country. 

Disastrously, instead of either party rethinking its approach in light of the repeated failure, they simply blame each other, with the Germans and the EU criticising the shiftless Greeks and the Greeks complaining the Germans and the EU have let them down by refusing to pay for them to remain in the eurozone.

Though this cycle has repeated itself continuously since 2009, it appeared to come close to breaking last year after the election of the radical leftist Syriza government. 

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For a few fraught months it seemed as if Syriza, led by its Prime Minister Alexis Tsipras and his finance minister Yanis Varoufakis, was prepared to break the cycle. 

Varoufakis very publicly challenged the entire economic logic of a strategy that had obviously failed  and which was causing severe hardship in Greece.  His over-confident theatrical personality, his unorthodox negotiating tactics, and his habit of telling his EU colleagues to their faces things they didn’t want to hear, however simply managed to turn the EU leaders against him despite the obvious truth of much of what he was saying.

Eventually the EU’s most powerful finance minister, Germany’s Wolfgang Schauble, proposed that Greece exit the eurozone so that it could sort itself out outside it. This would have come with a debt holiday and a 50 billion euro sweetener to help Greece ride out the storm that would have resulted.

Despite a referendum result in Greece that seemed to give Tsipras and Varoufakis the political cover they needed, it turned out that Tsipras was as committed to Greece’s euro membership as the rest of Greece’s elite. 

Instead of embracing Schauble’s proposal he rejected it, accepting yet another bailout brokered by Italy and France, which kept Greece in the eurozone but which came with more commitments to yet more austerity.

The cycle that Greece has been trapped in since the first bailout in 2009 therefore was simply perpetuated.

What was extraordinary about this last bailout which Tsipras agreed to last summer was that – as I and many others said at the time – it was even more detached from reality than all the others.    Its demands and its targets are so obviously unachievable – making it only a question of time before it unravels – that even one of the creditor institutions that is supposed to be supporting the bailout – the IMF – has publicly said it has no belief in it.  It is calling for Greece to be granted the debt relief the EU refuses to grant it and says the primary budget surplus target the bailout requires Greece to achieve should be reduced to more realistic levels. 

These are essentially the same demands Varoufakis was making last year, which the EU leaders led by Merkel and Schauble summarily rejected.  Latest indications are they reject them still.

This explains the situation in Greece now.  The looming crisis point is July when Greece has to pay debt instalments of more than $3 billion.  It lacks the money to do this and is therefore obliged to enact more legislation increasing taxes and cutting pensions in order to get more bailout funding released.

On Sunday after a heated debate that is what the Greek parliament agreed to do. 

It did so in a way that shows the levels of absurdity and cynicism to which Greek politics have sunk. 

Tsipras – once the champion of the Greek left, elected just over a year ago to end austerity – supported measures that will deepen the austerity. 

His opponents in the fervidly pro-EU conservative New Democracy party opposed him in the parliament though the measures he proposed perpetuate an austerity they supported when in government and which is demanded by the EU, which they support.

Greece’s fundamental problem – and Europe’s – is that there is no obvious way out of this crisis. 

At a time when German politicians are criticising the European Central Bank for its loose monetary policies and are even blaming it for causing the rise of the anti-immigrant AfD, any proposal to write off Greek debt or to soften the demands on Greece – as demanded by the IMF – would be guaranteed to provoke uproar in Germany.  It is doubtful that Chancellor Merkel – her political position weakened by the migrant crisis – could persuade her CDU party to agree to it. Her CSU coalition partner would almost certainly oppose it.

In Greece meanwhile – though opinion polls show support for the country’s euro membership to have sunk to unprecedentedly low levels – since Tsipras’s 2015 U turn no viable political force prepared to challenge the orthodoxy by contemplating a euro exit exists.  An attempt by a breakaway group of former Syriza insiders led by former parliamentary speaker Zoe Konstantopoulou and former energy minister Panagiotis Lafazanis to create such a force has ended in a split.  It is not yet clear whether in the event of new elections any of the politicians involved in this group would gain election to the parliament, and even if they did they would only be a small minority of the parliament with little influence.

Despite angry protests in Greece and the growing disillusion of the IMF the endless nightmare that is the Greek crisis therefore seems set to continue.

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US Sanctions Foster Emergence of Multipolar World

US sanctions negatively affect the economies of the targeted countries, but they also push the nations hit by them to move closer to each other.

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Authored by Arkady Savitsky via The Strategic Culture Foundation:


Russia, Iran, China, and now Turkey are in the same boat, as all have become the target of US sanctions. But none of those nations has bowed under the pressure. Russia had foreseen the developments in advance and took timely measures to protect itself. The Turkish national currency, the lira, is plummeting now that Washington has introduced sanctions as well as tariffs on steel and aluminum, in an attempt to compel Ankara to turn over a detained American pastor. Turkish President Erdogan said it was time for Turkey to seek “new friends,” and Turkey is planning to issue yuan-denominated bonds to diversify its foreign borrowing instruments. On Aug. 11, President Erdogan said Turkey was ready to begin using local currencies in its trade with Russia, China, Iran, Ukraine, and the EU nations of the eurozone.

The recent BRICS summit reaffirmed Ankara’s commitment to the Contingent Reserve Arrangement (CRA) that is geared toward de-dollarizing its member states’ economies, and the agreement to quickly launch a Local Currency Bond Fund gives that policy teeth. Turkey has also expressed its desire to join BRICS.

Ankara is gradually moving toward membership in the Shanghai Cooperation Organization (SCO). It has been accepted as a dialog partner of that organization. Last year Turkey became a dialog partner with ASEAN. On Aug. 1, the first ASEAN-Turkey Trilateral Ministerial Meeting was held in Singapore, bringing together Turkish Foreign Minister Mevlüt ÇavuşoğluASEAN Secretary General Dato Lim Jock Hoi, and Singaporean Foreign Minister Vivian Balakrishnan, who is serving as the 2018 ASEAN term chairman. The event took place under the auspices of the 51st ASEAN Foreign Ministers’ Meeting that attracted foreign ministers and top diplomats from 30 countries.

Ankara is mulling over a free-trade area (FTA) agreement with the Eurasian Union. This cooperation between Ankara and the EAEU has a promising future.

Meanwhile, the Industrial and Commercial Bank of China (ICBC) has provided a $3.6-billion loan package for the Turkish energy and transportation sector. Turkey and China have recently announced an expansion of their military ties. As one can see, Turkey is inexorably pivoting from the West to the East.

Russia has a special role to play in this process. The US Congress has prohibited the sale of F-35 fighter jets to Turkey because of the risk associated with Ankara’s purchase of the S-400 air-defense system. In response, Turkey is contemplating a purchase of Russian warplanes. Ankara prefers Russian weapons over the ones offered by NATO states. As President Erdogan put it, “Before it is too late, Washington must give up the misguided notion that our relationship can be asymmetrical and come to terms with the fact that Turkey has alternatives.”

On Aug. 10, Russian President Vladimir Putin and Turkish President Recep Erdogan discussed the prospects for boosting economic cooperation. Both nations are parties to the ambitious Turkish Stream natural-gas pipeline project. Ideas for ways to join forces in response to the US offensive were also on the agenda during the visit of Russian Foreign Minister Sergey Lavrov to Turkey, Aug. 13-14, although Syria was in the spotlight of the talks. One mustn’t forget that Russia was the first country to be visited by the Turkish president after the failed 2016 coup.

As a result of some tough times resulting from US sanctions, Iran is redoubling its efforts at building foreign relationships. Under US pressure, European companies are leaving Iran, with China gradually filling the void. Now that US and European airspace companies are moving their business ventures out of Iran, this presents a good opportunity for Russian aircraft, such as the MS-21 or IL-96-400M. The Russian automaker GAZ Group is ready to supply Iran with commercial vehicles and light trucks powered by 5th generation engines.

Tehran is an observer state in the SCO, and it is to become an essential hub for the Chinese Belt Road Initiative (BRI). On June 25, a freight train arrived in the Iranian city of Bandar-e Anzali, a port on the Caspian Sea, having passed through the China-Kazakhstan-Iran transportation corridor and entering the Anzali Free Zone that connects China to both the Kazakh port of Aktau and to Iran, thus creating a new trade link to the outside world. This gives a boost to the BRI. On Aug. 12, the five littoral states (the Caspian Five) signed the Caspian Sea Convention — the fruit of 22 years of difficult negotiations. This opens up new opportunities for Iran and other countries of the region as well as the BRI. The idea to form a new economic forum was floated at the Caspian Five summit.

China and Russia back the idea of Iran’s full-fledged SCO membership. In May Tehran signed an interim FTA agreement with the EAEU. Greater EAEU-BRI integration under the stewardship of the SCO is also on the horizon.

According to the Daily Express, Iran could band together with Russia and China in an anti-US alliance. Iran may also get an observer status in the CSTO. Iran-Turkey trade has recently revived, and that bilateral relationship includes burgeoning military cooperation.

Nothing can be viewed in just black and white, and every coin has two sides. The US sanctions do negatively affect the economies and finances of the targeted countries, but in the long run, they will also push the nations hit by them to move closer to each other, thus encouraging the emergence of the multipolar world the US is trying so hard to resist.

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It’s Official: ‘Britain’s Democracy Now At Risk’

It’s not just campaigners saying it any more: democracy is officially at risk, according to parliament’s own digital, culture, media and sport committee.

The Duran

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Via True Publica, authored by Jessica Garland – Electoral Reform Society:


Britain’s main campaign rules were drawn up in the late 1990s, before social media and online campaigning really existed. This has left the door wide open to disinformation, dodgy donations and foreign interference in elections.

There is a real need to close the loopholes when it comes to the online Wild West.

Yet in this year’s elections, it was legitimate voters who were asked to identify themselves, not those funnelling millions into political campaigns through trusts, or those spreading fake news.

The government trialled mandatory voter ID in five council areas in May. In these five pilot areas alone about 350 people were turned away from polling stations for not having their papers with them — and they didn’t return. In other words, they were denied their vote.

Yet last year, out of more than 45 million votes cast across the country, there were just 28 allegations of personation (pretending to be someone else at the polling station), the type of fraud voter ID is meant to tackle.

Despite the loss of 350 votes, the pilots were branded a success by the government. Yet the 28 allegations of fraud (and just one conviction) are considered such a dire threat that the government is willing to risk disenfranchising many more legitimate voters to try to address it. The numbers simply don’t add up.

Indeed, the fact-checking website FullFact noted that in the Gosport pilot, 0.4 per cent of voters did not vote because of ID issues. That’s a greater percentage than the winning margin in at least 14 constituencies in the last election. Putting up barriers to democratic engagement can have a big impact. In fact, it can swing an election.

In the run-up to the pilots, the Electoral Reform Society and other campaigners warned that the policy risked disenfranchising the most marginalised groups in society.

The Windrush scandal highlights exactly the sort of problems that introducing stricter forms of identity could cause: millions of people lack the required documentation. It’s one of the reasons why organisations such as the Runnymede Trust are concerned about these plans.

The Electoral Commission has now published a report on the ID trials, which concludes that “there is not yet enough evidence to fully address concerns” on this front.

The small number of pilots, and a lack of diversity, meant that sample sizes were too small to conclude anything about how the scheme would affect various demographic groups. Nor can the pilots tell us about the likely impact of voter ID in a general election, where the strain on polling staff would be far greater and a much broader cross-section of electors turns out to vote.

The Electoral Reform Society, alongside 22 organisations, campaigners and academics, has now called on the constitution minister to halt moves to impose this policy. The signatories span a huge cross-section of society, including representatives of groups that could be disproportionately impacted by voter ID, from Age UK to Liberty and from the British Youth Council to the Salvation Army and the LGBT Foundation.

Voters know what our democratic priorities should be: ensuring that elections are free from the influence of big donors. Having a secure electoral register. Providing balanced media coverage. Transparency online.

We may be little wiser as a result of the government’s voter ID trials. Yet we do know where the real dangers lie in our politics.

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Corrupt Robert Mueller’s despicable Paul Manafort trial nears end (Video)

The Duran – News in Review – Episode 79.

Alex Christoforou

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Paul Manafort’s legal team rested its case on Tuesday without calling a single witness. This sets the stage for closing arguments before the judge hands the case to jurors for a verdict.

Manafort’s defense opted to call no witnesses, choosing instead to rely on the team’s cross-examination of government witnesses including a very devious Rick Gates, Manafort’s longtime deputy, and several accountants, bookkeepers and bankers who had financial dealings with Manafort.

Closing arguments are expected on Wednesday. Jurors may begin deliberating shortly after receiving their final instructions from judge Ellis.

Manafort case has nothing to do with Mueller’s ‘Trump-Russia collusion witch-hunt’ as the former DC lobbyist is accused of defrauding banks to secure loans and hiding overseas bank accounts and income from U.S. tax authorities.

U.S. District Judge T.S. Ellis III denied a defense motion to acquit Manafort on the charges because prosecutors hadn’t proved their case.

The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss the circus trial of Trump’s former Campaign Manager Paul Manafort, and how crooked cop Robert Mueller is using all his power to lean on Manafort, so as to conjure up something illegal against US President Donald Trump.

Remember to Please Subscribe to The Duran’s YouTube Channel.

Via Zerohedge

Prosecutors allege he dodged taxes on millions of dollars made from his work for a Ukrainian political party, then lied to obtain bank loans when cash stopped flowing from the project.

The courtroom was sealed for around two hours Tuesday morning for an unknown reason, reopening around 11:30 a.m. with Manafort arriving around 10 minutes later.

The decision to rest their case without calling any witnesses follows a denial by Judge T.S. Ellis III to acquit Manafort after his lawyers tried to argue that the special counsel had failed to prove its case at the federal trial.

The court session began at approximately 11:45 a.m.:

“Good afternoon,” began defense attorney Richard Westling, who corrected himself and said, “Good morning.”

“I’m as surprised as you are,” Judge Ellis responded.

Ellis then heard brief argument from both sides on the defense’s motion for acquittal, focusing primarily on four counts related to Federal Savings Bank.

Federal Savings Bank was aware of the status of Paul Manafort’s finances,” Westling argued. “They came to the loans with an intent of doing business with Mr. Manafort.”

Prosecutor Uzo Asonye fired back, saying that that even if bank chairman Steve Calk overlooked Manafort’s financial woes, it would still be a crime to submit fraudulent documents to obtain the loans.

“Steve Calk is not the bank,” Asonye argued, adding that while Caulk may have “had a different motive” — a job with the Trump administration — “I’m not really sure there’s evidence he knew the documents were false.”

Ellis sided with prosecutors.

The defense makes a significant argument about materiality, but in the end, I think materiality is an issue for the jury,” he said, adding. “That is true for all the other counts… those are all jury issues.”

Once that exchange was over, Manafort’s team was afforded the opportunity to present their case, to which lead attorney Kevin Downing replied “The defense rests.

Ellis then began to question Manafort to ensure he was aware of the ramifications of that decision, to which the former Trump aide confirmed that he did not wish to take the witness stand.

Manafort, in a dark suit and white shirt, stood at the lectern from which his attorneys have questioned witnesses, staring up at the judge. Ellis told Manafort he had a right to testify, though if he chose not to, the judge would tell jurors to draw no inference from that. – WaPo

Ellis asked Manafort four questions – his amplified voice booming through the courtroom:

Had Manafort discussed the decision with his attorney?

“I have, your honor,” Manafort responded, his voice clear.

Was he satisfied with their advice?

“I am, your honor,” Manafort replied.

Had he decided whether he would testify?

“I have decided,” Manafort said.

“Do you wish to testify?” Ellis finally asked.

“No, sir,” Manafort responded.

And with that, Manafort returned to his seat.

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