"Good for Europe"

The Euro and Social Dialogue

Yesterday, the euro zone's finance ministers approved the latest deal on granting Greece another tranche of loans. At the end of last week, the Greek government, the relevant EU institutions - the Commission, the ECB and the ESM - as well as the IMF agreed on five conditions that Athens must meet to receive another five billion euros in loans from the bailout program by January 22, 2018. The conditions include the sale of more state-owned property, measures that will further aggravate the social crisis, along with severe limitations to the right to strike, aimed at significantly weakening resistance to these new austerity measures. All this must be codified into law by the Greek government by early January. The agreement reached is "good for Greece and Europe," according to Valdis Dombrovskis, European Commission Vice-President for the Euro and Social Dialogue.[1]

Privatize Profits

This time, the sale of state-owned property hits four lignite power plants owned by the Public Power Corporation (PPC), which must be sold to private investors. The move is classified as "an important step towards opening the energy market."[2] Crown jewels of Greece's transport infrastructure had been previously privatized, particularly to the benefit of German companies. The German Fraport AG, for example, had been awarded the operation management of the most lucrative 14 airports of Greece's 37 regional airports. The Greek state still holds the less profitable airports, including those regularly running a deficit. (german-foreign-policy.com reported.[3]) The majority stake in the Thessalonica Port Authority was sold to a German company, the Deutsche Invest Equity Partners (DIEP). The sale of the operating company which - in the first six months of 2016 alone, generated a profit of 5.5 million euros with a turnover of around 21.2 million euros [4] - is scheduled to be finalized with the signing of the contract on December 15. Only the Greek state-owned train operator Trainose was sold to the Italian state-owned Ferrovie Dello Stato Italiane railway group.

Opportunities for the Rivals

Meanwhile it is becoming apparent that the selling off of Greek state property - to a large extent imposed by Berlin - is increasingly missing its intended purpose and is no longer opening profit opportunities solely to western companies. Chinese companies are increasingly benefiting from Greece's privatizations. The best known example is the China Ocean Shipping Company's (COSCO) purchase of the majority of the Piraeus port operator, near Athens. China's harbor investments have brought the port to the eighth largest in Europe and the third largest at the Mediterranean. And because it is considered one of the terminals of China's mega New Silk Road project, it is believed that this port could eventually become Southern Europe's number one harbor.[5] And Chinese companies are continuing to invest. In June, the State Grid Corporation of China announced it has completed purchase of a 24-percent stake in Greece's power grid operator, ADMIE, that sale - like the four lignite power plants now - had been imposed by the EU within the framework of its bailout program.[6] Most recently, the state-owned Shenhua Group has begun to cooperate with the electricity supplier PPC and the Copeloúzos Group, of the oligarch Dimítris Copeloúzos. The latter is also operating Greece's regional airports in collaboration with Fraport. Shenhua has acquired 75 percent of shares in four wind farms and plans to invest together with PPC and Copeloúzos an estimated 3 billion euros.[7]

A Loss of Control

China's rapidly growing significance for the starving Greek economy has led to Athens beginning to refuse to support EU measures directed against Beijing. Last June, for example, the Greek government had refused to approve an EU resolution accusing the People's Republic of China of human rights abuses. Berlin is outraged at seeing its control over the EU's periphery being contested. (german-foreign-policy.com reported.[8])

Into Homelessness

In line with the most recent agreement between the government, the IMF and the EU institutions, Athens will implement the sale of four lignite power stations. It also agreed to step up foreclosures on housing, which will affect those indebted home owners, who because of the crisis - and their unemployment - cannot meet their loan payments. A law, prohibiting foreclosure sales of primary residences, expires at the end of the year and has not been renewed. Massively driving people into homelessness will become possible. Foreclosures have already begun to intensify. It has been reported that destitute pensioners are already being evicted from their homes. Last Wednesday, protests in Athens and Thessalonica were brutally crushed by police, to permit the implementation of measures demanded by the EU. In the capital, the forces of repression even used teargas against demonstrators in enclosed spaces.[9] As the social situation continues to degrade, Athens has promised the EU to restrict the right to strike. According to this agreement, from now on, strikes may only be permitted if they are explicitly endorsed by at least 51 percent of the union members. This measure is intended to nip resistance to the austerity dictate imposed by Brussels and Berlin in the bud.

397 Euros a Month

Upon closer inspection, the alleged economic successes, being recently mentioned to justify these new measures, prove to be a sham. For example, the slight economic growth of 0.7 percent and the 0.8 percent in the first and second quarters of 2017 had again already collapsed to only 0.3 percent by the third quarter. The situation of Greece's four largest banks is disastrous. Nearly half of the loans they have issued, are defaulted due to the debtor's unemployment or the fact that the debtor can only remain afloat with miserably-paying jobs.[10] How the banks will pass the ECB's stress test in February remains a mystery. The drop in the unemployment rate to 20.6 percent in August, following a peak of 27.9 percent in September 2013, while youth unemployment dropped from 45.2 percent in the summer of 2016 to 40.2 percent in August 2017 has also turned out to be a mirage. This drop is due to the dramatic increase especially in part-time jobs. Therefore the amount of those with part-time jobs has skyrocketed from 99,000 in 2008 to 267,000, with the average monthly part-time income at €397. For those who this year entered a new employment, less than half of these were full-time jobs. Thus the population's impoverishment is being further exacerbated, without showing up in unemployment figures.

[1], [2] Gerd Höhler: Griechenland erfüllt Bedingungen für nächste Hilfstranche. handelsblatt.com 03.12.2017.

[3] See also The Only Remaning Boom Sector.

[4] See also Those Who Have, Shall Get.

[5] See also The Limits of the Dictates.

[6] China's State Grid completes purchase of Greek power grid operator stake. chinadaily.com.cn 21.06.2017.

[7] Chryssa Liaggou: Shenhua joins power market through deal with PPC, Copelouzos. ekathimerini.com 02.11.2017.

[8] See also Berlin Calls for a "One-Europe Policy".

[9] Alexandra Amanatidou: Aufbegehren gegen Ausverkauf. junge Welt 01.12.2017.

[10] Gerd Höhler: Griechenland erfüllt Bedingungen für nächste Hilfstranche. handelsblatt.com 03.12.2017.