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Peoples News No. 122 Out Now

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Peoples News No. 122 Out Now

Contents 

P1. Greeks do the decent thing – Irish EU officials helpful; as usual! The Greek parliament has overwhelmingly adopted a “humanitarian crisis” bill to help its poorest people, ignoring pressure from the EU to halt the legislation.

P1.  TTIP and education. Proposals to make education a ‘traded’ commodity could cost the Irish taxpayer millions, by allowing investors in ‘for-profit’ colleges to sue the government for loss of profit as a result of state investment in public education.

 

P2. Draghi calls for quicker and deeper Eurozone integration. European Central Bank President Mario Draghi has called for a “quantum leap” in institutional convergence of the eurozone.

 

P3. The IFA pronounces on TTIP. EU negotiators must ensure the interests of Irish and European farmers are not sacrificed in pursuit of an overall trade deal with the US, the Irish Farmers’ Association (IFA) has warned.

P4. Blockupy!! This week some 17,000 people gathered in Frankfurt to protest against the European Central Bank (ECB). The protest culminated in acts of violence which of course attracted a great deal of publicity.

P5.  Irish data commissioner happy with EU/US data transfer agreement! A lawyer for the European Commission told an EU judge on Tuesday last that he should close his Facebook page if he wants to stop the US snooping on him.

P6. Next, an Energy Union – as EU integration deepens! EU leaders agreed on 19 March to construct an Energy Union with what the EU Commission has spoken of as a ?dynamic governance process.

P7. How to Measure Impacts of Trade – The Copenhagen Report for the Irish Government on the impact of TTIP. The Copenhagen Economics Report (CER) released today Friday 27th is sure to cause controversy on the basis of its underlying rationale for the initiative.

P9. To know the truth and call it a lie. The reaction among German political parties to EU President Juncker’s call for a full blown EU army provides a cautionary tale for us all.

P11. Why the agri-food community should oppose TTIP. Here are some reasons the agri-food community need to oppose TTIP and fight for something far better as agri-food policy in the EU in general!

P14. TTIP 2015 deadline likely to be missed. EU trade officials have conceded that the 2015 deadline to agree the TTIP trade deal with the United States is likely to be missed.

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dunnesdecency

We Are All Dunnes Stores Workers

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This Thursday, April 2nd, workers in Dunnes Stores throughout the country are coming out on a one-day strike.  In essence, the dispute boils down to two urgent issues.

The first is zero/low hour contracts.  Such contracts require employees to be available for work but do not guarantee hours of work.  Therefore, workers cannot be assured of their income from one week to the next.  And because hours and shifts change, workers cannot plan childcare, eldercare, family time or leisure.

The Dunnes Stores Workers are seeking what is called ‘banded hours’.  This means people are rostered in such a manner that they are guaranteed a minimum and maximum number of working hours and, so, income.

While Dunnes Stores management might claim (if they ever went public to defend their position) they require roster flexibility, banded hours are widespread throughout the industry (e.g. Tesco, Marks & Spencer, Arnotts, Pennys, to name a few).  This is from Jennifer who has worked for eight years with Tesco:

‘Unlike my Dunnes colleagues, I am much more fortunate in that I have the stability and security of a banded contract. This allows me the guarantee of 30-35 hours every week but also, it does not restrict me to 35 hours. In the event that extra hours become available, I am able to work up to and including 39 hours weekly.’

The fact is that flexibility is a diversion.  Management uses the roster as an instrument of control, punishment and reward to create a compliant and submissive workforce.  If you try to organise a union in the workplace or make a health and safety complaint – don’t expect too many hours next week.

It is also an instrument of payroll cleansing.  This from a Dunne Stores worker:

‘I tell them I can’t work between 2pm and 5pm because of child care issues . . . but they keep putting me on the 2-6pm shift.  They are trying to push me out after 9 years because I’m on an old contract with higher wages.  They want to replace me with cheaper staff on new contracts.’

No wonder that in a survey of Dunnes Stores workers, 85 percent stated that insecurity of hours is used as a method of control.

It is, however, the second issue that cuts to the heart of the matter.  Quite simply, Dunnes Stores management treat their employees as nothing more than a factor of production.  What the Dunnes Stores workers are seeking is terribly simple and far-reaching:

‘You will acknowledge us.’

You will acknowledge us when we want to discuss our contracts, our pay, our working conditions.  We are not mere instruments in the value-added creating process.

Again, management will divert the issue by claiming it is about a union demanding recognition.  It is not.  It is not about Mandate or any trade union.  It is about what the workers want.  Do you or don’t you want to be a member of a union?  Do you or don’t you want to negotiate with your employer collectively?  Do you or don’t you want to appoint a trade union as your negotiating agent?  Do you or don’t you want to take industrial action?  It all starts, proceeds apace and ends with the individual worker and what she or he wants.

The Dunnes Stores workers have made their decision.  They have joined a trade union, sought to negotiate with management, were ignored, and have voted by an overwhelming majority to take this
one-day action.  Now they are paying a considerable price. Management is putting pressure on workers with threats of redundancies and layoffs (in a letter that wasn’t even signed) and especially key activists and workplace representatives whose working hours and income is under threat.

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2010

Not a Vintage Year

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This is a post by Michael Burke originally posted on Notes on the FrontMichael works as an economic consultant. He was previously senior international economist with Citibank in London. He blogs regularly at Socialist Economic Bulletin.  You can follow Michael at @menburke

The publication of the ESRI’s latest Quarterly Economic Commentary follows the recent publication of the national accounts for 2014. But they were both strangely muted affairs given that the headlines were GDP growth of 4.8% in 2014 and GNP growth of 5.2%. The ESRI is forecasting 4.4% and 4.1% respectively for 2015- although it does not have a very good forecasting track record.

Not only are these the strongest actual and projected growth rates since the recession began but they are also the strongest growth rates in both the EU and in the OECD. So why the long face? Why are people still taking to the streets to protest water charges and the government parties getting no bounce in the opinion polls?

One factor is that despite all the talk of recovery, even on the distorted GDP measure of activity the patient is still convalescing. The economy has not returned to its pre-recession peak, as shown in Chart 1 below. GDP contracted by 12% from the end of 2007 to the end of 2009. In the 5 following years about 70% of that shortfall has been recovered.  On that trend it will be 2016 before the economy is finally in recovery.

Chart 1. Real GDP

MB ESRI 1

On most indicators including GDP the level of activity is now back to around the level last seen in 2010, which was hardly a vintage year. Following a deep recession, industrialised economies much more usually bounce back equally sharply. But this is a slow, painful and incomplete recovery from a deep recession.

Stagnation apart from exports

There is another factor in the subdued mood. GDP is a measure of activity. But it is not designed to be a measure of prosperity. It is widely accepted that recorded export activity is hugely distorted by the activities of multinational company operations in Ireland. Yet since the economy stopped contracting at the end of 2009 these highly distorted net exports (exports after imports are deducted) have risen by an annualised €16bn, almost exactly equal to the rise in GDP.  Net exports, many of them purely fictitious, account for the entirety of the partial recovery.

Chart 2 below shows that the key components of domestic activity are either still falling or are stagnating after a sharp fall. Personal consumption is over €7bn below its peak on an annualised basis and is stagnating. Government spending is €5.6bn below its peak and continues to contract. Popular anger is actually inclined to grow the more there is talk of ‘recovery’.

But the most dramatic contraction is in fixed investment which is now €23.6bn below its peak at the beginning of 2007. The decline in investment led the recession and continues to act as the main brake on recovery. The fall in investment now far outstrips the total decline in GDP since the recession began.

Chart 2 Personal Consumption, Government Consumption and Investment

MB ESRI 2

There might be grounds for increased optimism if the ESRI were plausibly making the case for higher consumption, government spendign and investment. But that is not the case. Private consumption and government consumption are projectedf to rise by just 2% and 0.5% respectively in 2015. Investment is forecast to rise by 12.5% following a double-digit increase in 2014. Even if the ESRI’s optimism is borne out, the fall in investment is now 60% from its peak. So it would take another 4 years of growth at that pace to begin a full recovery.

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elly

Kelly

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“He has balls”, a Labour Party source   

 d

The clasp of his handshake once reassured

prospective mothers-in-law

he’d not disappoint their daughters.

And though his infrastructure’s

in desperate need of an upgrade,

he’s confident he can get his

waterworks fit for purpose,

ladies and gentlemen, here tonight,

and those at home

watching on TV, sometime

within the next twenty

five years. And if doing so

 d

involves flogging

every last rain drop,

from Bellmullet to Garryduff,

at a savage discount, to the guy

who despite his wallet’s ongoing

morbid obesity, has hair

that looks like it’s been stuck

to the skull with Evo-stick,

then Kelly’s the kind of pragmatist

who’ll make shit like that happen,

whether anyone asked

it to or not.

 d

His tongue rough

as the carpet in a room

where Stevie Coughlan

once talked against the Jews.

For the past six months,

every erection he’s had

has been a member

of the Heavy Gang

about to throw a Provo

onto the railings

from a Garda Station

second storey window.

 d

According to recent polls,

in certain areas of Tipperary,

he’s only slightly less popular

than Richard the Third. At least

half a percent less hated

than this time last week.

Of unequivocal victory,

he has no alternative

but to be certain.                                           

 d

KEVIN HIGGINS

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1

Grassroots Gathering 2015

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Grassroots Gathering 2015
Joining the dots between grassroots movements, communities, campaigns…

Call for contributions and registration info

St. John Bosco Youth Centre, Drimnagh, Dublin


Friday April 17 (evening) – Sunday April 19th (afternoon)

We are coordinating with local water charges groups so as to fit in with the Burn the Bills demo.

A grassroots gathering is a one-off event run by a local group bringing together people involved in different community campaigns and social movements to learn from each other’s experiences, talk about what works and what doesn’t, develop networks and make alliances. Joining the dots – imagines a raising of awareness, a politicisation leading to radical transformation, it may also envision a strategic connection between diverse campaigns and collective actions in order to advance, strengthen, consolidate and collaborate in struggle with unity and purpose.

There have been over a dozen of these gatherings in different parts of the country over the last eleven years and they have helped support all sorts of different campaigns and movements – campaigning against the water charges, resisting Shell in Erris, campaigning against cuts, supporting women’s right to choose, advocating for housing rights and resisting evictions, challenging neo-liberalism in the EU, campaigning against deportation and the direct provision system, creating free space for young people, fighting for environmental justice, highlighting US military use of Shannon, challenging racism and more.

We’re looking for contributions – offers to host workshops or even just to give a short talk, as well as artistic and children’s events. Please let us know by Tuesday April 7th (just after the Easter bank holiday) if you would like to do something so we can finalise a programme. You can email us at grassrootsgathering2015@gmail.com or find us at https://www.facebook.com/GrassrootsGathering.

A good workshop for this gathering has any speakers talking for just 5 or max 10 minutes each to get a discussion going – remember most other people there are also activists. A really good workshop has people from different movements giving 5-minute intros about the same kind of practical problem from their own experiences and then a discussion. We aren’t looking for events which are mostly made up of one person talking or which are mostly about trying to sell other people on a specific issue. So please let us know if you’d like to do a short intro or organise a whole workshop!

Typical sessions might include:
- How to organise, strategy and tactics, direct action, dealing with police…
- getting people involved, mobilising communities, media of all kinds, politicisation…
- education, understanding the issues, working together against austerity…
- arts workshops, film showing, children’s activities, outdoors activities…

It’s not for profit (and we all get to muck in with washing up, passing the hat and generally helping out), it isn’t run by any political party and nobody will try to recruit anyone.

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svmay

The March Issue of Socialist Voice is Out Now

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The March issue of Socialist Voice is out now. 

Northern workers protest against austerity
Eugene McCartan
On Friday 13 March tens of thousands of public-sector workers took part in a day of action against proposed cuts, job losses, and welfare cuts. 
Called by the Northern Ireland Committee of the Irish Congress of Trade Unions, it brought public transport, ambulance services and other public services to a standstill. Economic misery and bloody chaos Tommy McKearney The soap opera that surrounded SYRIZA’s limp attempt to negotiate with the vicious, agenda-driven European Union, led by the financial sector, has understandably captured huge attention during the recent past.
As with all the best action within that genre, viewers were kept in mock suspense while the inevitable dénouement was played out. The American media: a masterful work of deception Richard Bryant I have been fascinated by the coverage surrounding Brian Williams’s inability to accurately remember certain details concerning his time in Iraq and New Orleans.
It is a story that says much about our culture and the times in which we live. The Greek people are in a double bind Mary MacMahon Since the election of the SYRIZA government in Greece earlier this year the European media have gone into overdrive to marginalise the Greek people and the new government.
Even the very limited agenda of SYRIZA, which raised so much hope within Greece and throughout Europe, has been dashed on the real existing European Union—not the air-fairy one that is the darling of the social democrats, ultra-leftists, and broken-down Labour Party types and their supporters within the trade union movement. “Divide and rule” still the strategy of the United States Tom Bateson In early March the Obama regime issued an executive order placing sanctions on seven Venezuelan officials for alleged violations of human rights and the political prosecution of opposition protesters since February 2014. The statement refers to “the unusual and extraordinary threat to the national security and foreign policy of the United States posed by the situation in Venezuela.” Merkel’s poodle Alan Hanlon Adolf Hitler had a German shepherd dog named Blondi. Hitler liked to have photos taken of himself with Blondi, or with children, as part of his campaign to groom the German people into thinking of him as a man of peace, who loved animals and children, instead of the street thug that he was. Take it down from the mast? Tomás Mac Síomóin Irish representatives, along with fellow EU neo-liberals, ganged up on Greece in the recent negotiations between the elected representatives of that country and the EU. Their stance, lauded by most of the Irish media, has already made a hollow mockery of next year’s official 1916 commemoration. What’s left of Labour? Robert Navan On the 28th of January last Dáil Éireann debated a motion to approve the terms of the free-trade agreement between the European Union and Colombia, sometimes known as the EU-Colombia Trade Agreement.  
The agreement has been in operation since August 2013 but still requires ratification by all member-states. Back from the future Jenny Farrell The “Cold War” is not over. And it won’t be—until the very last memory of an alternative to the society of capital is deemed eradicated. So let us take a moment to stem this drive for oblivion.

As the rewriting of GDR (East German) history continues unabated, there are some areas in which the servant scribes find this a little more difficult. Film review: Some dreams are worth fighting for Jenny Farrell Jimmy’s Hall, perhaps Ken Loach’s last major feature film, is of special interest as it celebrates the life and struggle of the Irish communist Jimmy Gralton.
It is rare indeed to come across a film that unashamedly stands by the tradition of struggle by the dispossessed against the combined forces of economic, political and religious power, Theatre: Counter culture Paul Doran
Counter Culture at the New Theatre, Dublin, Monday 16 March This was a very enjoyable evening, organised by the James Connolly Festival, which is fund-raising for its major list of public events taking place in May.

 

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New University / ReThink UvA occupation at the University of Amsterdam

ICTU Youth, USI and IFUT statement in support of University of Amsterdam occupation

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The Irish Congress of Trade Unions (ICTU) Youth, the Union of Students in Ireland (USI) and the Irish Federation of University Teachers (IFUT) want to express our support for the New University / ReThink UvA occupation at the University of Amsterdam.

The demand to put an end to “managerialism, real-estate-speculation and precarious labour in Higher Education” should unite students and staff across the world. 

In Ireland, the campaigning group Third Level Workplace Watch recently highlighted the terrible conditions facing adjunct staff in our Higher Education institutions – where lecturers are surviving on welfare, in ‘permanent’ part-time status for years, and working sixty hours per week while barely making minimum wage.

At the same time, students are facing exorbitant increases in fees as budgets for Higher Education are cut by successive austerity governments. In the twenty years between 1995 and 2015 these fees have increased 1,579%. From an adjusted figure of just under €190 in 1995 to €3,000 for incoming students. 

The balance of funding for Higher Education in Ireland is moving from public to private. In some cases this takes the form of major multinational corporations directing scientific research, in others EU research grants being used in the development of drones and “counter-terrorist” weaponry. Little if any of this enjoys democratic oversight.

Still again this neoliberalisation takes the form of increased emphasis on attracting international students – who pay exorbitant, unsubsidised fees and are set into competition with Irish students for places in a process antithetical to genuine internationalism. These students can expect to pay more for poorer services too.

The neoliberal university in Ireland is profoundly changing the student experience. Most students aspire to engage in the free and critical pursuit of knowledge, to use our time in Higher Education for personal development and to become rounded citizens of society. However, increasingly it seems like we are reduced to consumers in a rat race, with degrees little more than stamps of social capital meant to improve our chances in the job market.

But this is not simply a problem in Higher Education. In Further Education budget cuts have forced the closure of many programmes. Community education and training has also been devalued, utilised as a source of free labour and a means to hide real unemployment figures. 85,000 people are on ‘labour activation’ schemes in Ireland at the moment which are often exploitative and result in little experience being gained. Apprentices have found themselves burdened with extortionate fee increases too.

The occupation in Amsterdam inspires many of us – both students and staff – who are trying to understand how we can break these cycles which worsen year-on-year. In Ireland we understand, like you do, that it is time for a fight back.

We send our solidarity to all of those involved in the occupation and in our common struggle for an education system that is democratic, developmental and focused on serving the needs of society rather than the careers of technocrats or the profits of business.

Derek Keenan (Chairperson, Irish Congress of Trade Unions Youth)

Laura Harmon (President, Union of Students in Ireland)

Mike Jennings (General Secretary, Irish Federation of University Teachers)

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cl

What would Europe Win from a Grexit? ‘Peace and quiet. (Pause…) For a period’

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Two recent interviews with Marxist economist, and now Greek MP Costas Lapavitsas are worth have a look at, particularly as they outline his view of the strategies that Syriza need to follow during the engineered ‘breathing space’ created by recent negotiations with the European institutions. He also outlines how a strategy he has long advocated, a Greek exit from the Euro, should be managed.

The first, published on the 12th of March in Jacobin magazine. The interviewer was Sebastian Budgen, an editor at Historical Materialism.

And Varoufakis himself explicitly located his position within a kind of Keynesian framework, and is allied with people like James Galbraith who are openly Keynesians.

Let me come clean on this. Keynes and Keynesianism, unfortunately, remain the most powerful tools we’ve got, even as Marxists, for dealing with issues of policy in the here and now. The Marxist tradition is very powerful in dealing with the medium-term and longer-term questions and understanding the class dimensions and social dimensions of economics and society in general, of course. There’s no comparison in these realms.

But, for dealing with policy in the here and now, unfortunately, Keynes and Keynesianism remain a very important set of ideas, concepts, and tools even for Marxists. That’s the reality. Whether some people like to use the ideas and not acknowledge them as Keynesian is something I don’t want to comment upon, but it happens.

So I cannot blame Varoufakis for that, for associating himself with Keynesians, because I’ve also associated myself with Keynesians, openly and explicitly so. If you showed me another way of doing things, I’d be delighted. But I can assure you, after many decades of working on Marxist economic theory, that there isn’t at the moment. So yes, Varoufakis has worked with Keynesians. But that isn’t really, in and of itself, a damning thing.

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1a

The People’s News No. 121 Out Now!

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P1. Juncker: The EU needs an army. The European Union needs its own army “to face up to Russia“, as well as to restore the bloc’s standing around the world, according to EU Commission President Jean-Claude Juncker.

P2. Is “Another Europe” Possible? There are over 100,000 EU rules, international agreements and legal acts binding on or affecting Irish and other citizens across the EU.

P3. Save the Date:  Friday, 27 March 2015: Protest – Scrap TTIP! 10.00 – 11.00.  Venue:  Dublin Castle, (Dame St Entrance). EU Trade Commissioner, Cecilia Malmström, will be in town.

P4. A Dilemma for 2016? Dominic Hannigan, Labour TD, the chairman of the Oireachtas Joint Committee on European Union Affairs seems to believe that were Britain the leave the EU many of the financial institutions currently based in London would move to Dublin!

P4. An obstacle to real and sustained growth: Despite a fairly shameless campaign to persuade us that the worst is behind us most people are aware of the fact that we are still burdened with huge government, corporate and private debts.

 

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1t

Economic Fundamentals and a Unified Irish Economy

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This article is based on a background paper which was delivered to a fringe meeting at the recent Sinn Féin Ard Fheis

In Ireland there are two separate economic entities. Their separation means they run up against the fundamental laws of economics, as first identified by Adam Smith[i]

In the first instance it is the size of the home market which determines the scope of the division of labour. But in Ireland both economies, by their separation, have a truncated home market. This was not always the case. As part of the British Empire the North East portion of the island was highly integrated into what was then the largest ‘home’ market in human history. At the same time most of the rest of the island was primarily a breeding ground for cattle, to help feed the large metropolitan imperial centres.

Post-Partition the situation has dramatically changed.  The Empire is gone while the southern economy has both developed a home market of a certain size while integrating itself to one of the world’s largest markets in the EU. This is the key fundamental fact which explains the dramatic changes in average living standards in the two parts of the Ireland since Partition. 

This is illustrated in Fig.1 below, which shows per capita GDP using common international Dollars (adjusted for Purchasing Power Parities, first Angus Maddison and then OECD). It amounts to a startling transformation of relative prosperity within Ireland.

To specify the data, Maddison shows that per capita GDP in Ireland in 1921 was $2,533 and that in Britain it was $4,439 (and from a variety of sources that average incomes in the north-east counties of Ireland was at least on a par with Britain). From OECD data per capita GDP in RoI was $37,581 in 2013 and in the UK it was 34,755 (and the ONS data shows NI per capita output was 82% of the UK level).

 fig1_mb

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1a

Starving Ourselves: Ireland’s Low-Spend Economy

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When we look at the headline numbers, it appears that Ireland is a low-spend economy – that is, Government spending is well below EU averages.  This helps explain why we don’t have anything near the public services, income supports and investment that other EU countries enjoy.  However, it is claimed that a significant part of the extra spend in other EU countries is due to their older demographic which necessitates higher public resources (pensions, healthcare, etc.).  Strip this away, and we may find that Ireland is actually a high spending country.

Seamus Coffey has contributed to the debate by doing just that – stripping out spending on the elderly.  When this is done Ireland comes in, not near the bottom, but near the top:  the 5th highest public spending economy in the EU-15, even ahead of ‘high-spend, high-tax’ Sweden.

This is a politically loaded argument.  If it can be established that we are, in fact, a high spending country this would justify a tax-cutting agenda.   We have the money, so the argument would go, we just don’t spend it right.

So are we an average or even high spending economy by EU standards?  No.  Not even close.  In fact we are starving ourselves of public resources.  Let’s go through this argument because I’m sure we’ll hear more of this as the campaign to cut taxes continues.

Headline Figures

First, with the help of the EU Ameco database, let’s look at primary expenditure (public spending excluding interest payments) with an adjustment for GDP per the Irish Fiscal Advisory Council (which has created a hybrid measurement between GDP and GNP).  2012 is the last year we have data for old age expenditure – and as we will see below, it is highly misleading to make any conclusions about spending levels for this year.

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AAWorldNotOurs

Progressive Film Club & Ireland-Palestine Solidarity Campaign

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A reminder of our screening this Saturday, in conjunction with the Ireland-Palestine Solidarity Campaign, which features the multi-award winning “A World not Ours”.

We will be having two screenings this month. Details of our show on the will be sent next week.

2.30pm: The Great Book Robbery (2012)

Telling the story of the systematic looting in 1948 of 30,000 Palestinian books in a joint operation by the nascent Israeli army and the Israeli national library. A remarkable illustration of how one culture emerges from the dust of another after it has laid it to waste; the moment Palestinian culture is destroyed is also the moment a new Israeli consciousness is born, based not only on the erasure of the Arabs’ presence in Palestine but also on the destruction of their culture.

¦ Directed by Benny Brunner.
¦ In English & Hebrew, with English subtitles.

**3.45pm: A World Not Ours (2012)

An intimate, humorous, portrait of three generations of exile in the Palestinian refugee camp of Ain el-Helweh, in Lebanon. Personal recordings, family archives, and historical footage ensure the film is a sensitive and illuminating study of belonging, friendship, and family. Filmed over more than 20 years by multiple generations of one family, is more than just a family portrait; it is an attempt to record what is being forgotten, and mark what should not be erased from collective memory.

“Flips storytelling and Mideast-Arab cliches on their heads … The Wonder Years in a refugee camp” – Variety

¦ Directed by Mahdi Fleifel.
¦ In Arabic, with English subtitles.

**A note of thanks to the directors

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greek_n

Syriza’s Only Choice: A Radical Step Forward

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An article by Spyros Lapatsioras,[1] John Milios[2] and Dimitris P. Sotiropoulos[3]

 “One must know how to employ the kairos of one’s forces at the right moment. It is easy to only lose a little, if one always keeps foremost in the mind the idea that unity is never the trick, but the game.” [4]

1. Introduction

The transitional “bridge Agreement” of the 20th of February is a truce intended by the Greek government and welcomed by the other side (the European “institutions”). Within the truce period (the next four months), the conditions for negotiating the next agreement will be shaped. This could mean that everything is still open. However, that is not true for two reasons. First, the very transitional agreement changes the balance of power. Second, the “hostilities” will continue in the course of the next four months (i.e. the review of the commitments and the re-interpretation of the terms by each party).

2. The agreement of the 20th February: A first step on slippery ground… 

2.1 Negotiation targets

In the first substantive phase of negotiations at the Eurogroup of the 12th February, the Greek government sought an agreement on a new “bridge program” stating that it would be impossible to extend the existing program on the grounds that it has been rejected by the Greek people:

  1. The “bridge program” would not involve conditions, reviews and so on, but should be an official manifestation of the willingness of all parties to negotiate without pressure and blackmail and without any unilateral action.
  2. In the above context, Greece would forgo the remaining installments of the previous program, with the exception of the return of the 1.9 billion euros that the ECB and the rest of Eurozone’s national central banks gained from the holding Greek bonds (programs SMP and ANFA). Greek authorities could issue treasury bills beyond the limit of 15 billion euros to cover any liquidity emergencies.
  3. At the end of this transitional period: (a) Greece would submit its final proposals, which according to the program of the government would include a new fiscal framework for the next 3-4 years and a new national plan for reforms; (b) the issue of a sovereign debt restructuring-reduction would come to the negotiating table.

The German government and the “institutions” (EU, ECB, IMF) came to the negotiations with the position that Greece had to request a six-month “technical extension” of the existing program – renamed as the “existing arrangement” – to enable its successful completion. 

2.2 The outcome of the negotiation

The agreement of the 20th of February includes a four-month extension of the “Master Financial Assistance Facility Agreement (MFFA), which is underpinned by a set of commitments.” The extension of the Agreement (“which is underpinned by a set of commitments”) means: (a) evaluations by the three “institutions,” (b) commitments and conditions, (c) scheduled installments as they appear in the previous Program, subject to a positive evaluation, (d) return of the profits from holding Greek bonds by the ECB and national CBs, but subject to a positive evaluation by the “institutions” (even given the “independence” of the ECB).

In short there is a rejection-withdrawal of the Greek government’s negotiation targets (1) and (2). In addition, there is no explicit reference to how the government will cover its short term financing needs (e.g. issuing treasury bills to cover bond redemptions, interest payments and other possible emergencies) until the completion of the assessment. In this regard, the reference to the independence of the ECB may imply its “discretion” in assessing the extent to which the Greek government responds positively to the “commitments” that accompany the extension of the agreement (something which undoubtedly will complicate any “interpretative” attempts in relation to the agreement on the part of Greek government).

At the same time, the February 20 Agreement includes the statement: “The Greek authorities have also committed to ensure the appropriate primary fiscal surpluses or financing proceeds required to guarantee debt sustainability in line with the November 2012 Eurogroup statement.” This means that the Greek government refrains from the target of debt restructuring-reduction and adopts the sustainability plan based on debt repayment mostly through primary surpluses. This implies the rollback from point (3b) of its initial negotiating package.

What the Greek government has won (aside from the mere change in terminology, about which there was intense debate) is:

  • A. Part (a) of section (3) of its initial suggestions, namely the right to propose reforms to the “institutions” for approval with regard to fiscal consolidation and growth. The policy measures agreed by the previous government (reduction of pensions and increase of VAT in the islands) were thus taken out. Both sides agreed to give particular emphasis to the “overdue” fight against corruption and tax evasion, public sector efficiency, improving the tax system, etc.[5]
  • B. Further negotiations on the size of the primary surplus for 2015. Instead of the previously agreed 3% of GDP, the new agreement leaves open the issue of a lower primary surplus for 2015: “The institutions will, for the 2015 primary surplus target, take the economic circumstances in 2015 into account.”

It is clear that the new agreement is a truce, but truce is by no means a tie. The agreement is a first step on slippery ground. The Greek government may have gained time, but the political landscape seems quite tough, having minor similarities with the initial minimum negotiation targets set by the Greek side on the 12th February.

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