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Catastroika (2012)
After 2 years of "rescuing",
the austerity-loving governments... ...raise sovereign debt from 115% of GDP to 160%. One out of two young workers is unemployed. Thousands of others emigrate or have to live by with 500 Euros per month. Suicide rates increase by 20%, while homeless people in Athens surpass 20.000. The constitution is circumvented. Bankers and former supporters of the military junta... ...occupy key positions of the state machinery. Everything is now ready for the last act of the tragedy. Greeces complete sell off. INFOWAR PRODUCTIONS presents A documentary by Katerina Kitidi and Aris Chatzistefanou Scientific editor Leonidas Vatikiotis Edit Aris Triantafyllou Music Active Member Ermis Georgiadis Production manager Thanos Tsantas The short 20th century comes to an end. The West envisions the end of history. And tries to implement it in Russia. The transition includes the biggest experiment... ...in privatisation, in the history of mankind. An experiment that will lead a nation to utter disaster. The fire sale of a whole country, planned in the West and implemented by Russian oligarchs, couldn't take place without limiting democratic freedoms. The rules of the game must change. After the 1993 mini coup d'etat against the parliament, Yeltsin feels ready to accelerate privatisation. I'm absolutely certain that privatization in 1994... This process was called Catastroica. Catastroica in Russia is usually presented as an exception... ...in the history of mass privatisation. In fact, it was just an extreme example... ...of how the fire sale of national assets... ...is incompatible with political or economic democracy. The practice of fire sales comes with the neoliberal wind... ...that blows for the first time at the Univesrity of Chicago. Professors such as Friedrich von Hayek and Milton Friedman... ...seek a laboratory in order to test... ...the so-called free market and minimal state intervention. But, since no democratic government agreed to implement their ideas, they turned to Pinochet's Chile... ...and afterwards to general Evren's Turkey. Margaret Thatcher will finally find a way... ...to bring neoliberal privatisation to western Europe. In order to achieve this, it will take two wars... ...and the limitation of democratic freedoms. Thatcher's Britain is a typical case of how the infringement... ...of labor law and the violation of workers' rights... ...coincided with an increase of repressive measures. The most characteristic example is that, nowadays, according to british law, when more than four people are picketing outside a workplace, the protest can be banned... because it can affect the morale of those working in the company. Neoliberalism, which promises less state control, demands a strong state mechanism in order to be implemented. However, the blood-thirsty dictators and Thatcher's shock policy... ...have an expiration date. New means must therefore be found... ...for the infliction of mass privatisation. Institutions such as the IMF and the World Trade Organisation... ...played a leading role in the sell-off of whole countries. The European Union followed suit. The conditions laid down by the IMF, as well as the big american and european banks... ...demand the total submission of peoples' rights. Debt becomes the excuse to push for Greece's fire sale. However, once again, a small obstacle must be overcome: Democracy. The European Union and the greek financial elites... ...got to the point of appointing a former central banker... ...as prime minister of Greece. Taking over from Papandreou, Lukas Papademos appoints bank executives, like Gikas Hardouvelis of Eurobank, in the prime minister's office. Political and economic power relations... ...turn into an interbank deal. What is happening in Greece is very serious. Democracy was born here... ...and the international financial system now decides... ...that it should die here as well. I think that the scientific term is junta. We have a group of politicians headed by a banker, who is, in fact, responsible for Greece's bankrupcy to a great extent. It is a banker's junta... ...with no more popular legitimisation than the 1967 junta. Papademos' government is only one step towards Greece's financial control. The EU, however, sends many more supervisors to the country. The German pro-consul is Horst Reichenbach. He arrives in Greece as head of an army of technocrats. He is followed by many EU and IMF employees... ...that are appointed to major ministries. We find ourselves in a neo-colonial period... ...when international financial and political centers... ...impose policies not only in Africa or Latin America, but also Europe... ...and this becomes an inherent part of capitalism's organization. The country's control by foreign and greek financial interests... ...is achieved mainly via two loan agreements. The goal is to impose the creditors' conditions... ...and turn work into slavery. Labour relations return to the 19th century. In order for these regulations to pass, another coup is necessary. This time a parliamentary one. The first loan agreeement never came to the parliament for ratification, which is clearly anti-constitutional. The second one was presented three times as a blueprint. The creditors were obviously asking for changes... ...and needed a preaproval of this blueprint. It is obvious that our political leaders do not intend... ...to implement the constitution, but the political orders they receive from abroad. Whoever dares to talk about a parliamentary coup... ...and to question the policies of the government and the troika... ...is characterised as a populist. This is impudent, it is an insult! You talk about a coup... ...because the government which was elected by a vast majority... ...asked for a bill to be voted as urgent. You have to apologise for this insult towards the institutions. You are the advocate of the Greece of the drachma, the Greece of poverty, the Greece of humiliation, you and everyone like you. No more rescuing The ideological terrorism escalates. Mainstream media blackmale citizens... ...saying that, if they do not accept the loan agreements, ...the super market shelves will soon be empty... ...and the country will return to the stone age. There will be chaos. Greece will become a Thirld World country. There will be ration coupons... Having done away with democracy... ...the governments prepare for the sale of public assets. They start off with a tested recipe.... ...by turning public servants into the crisis' scapegoat. The greek government is lying, by saying that it doesn't know... ...the public servant's number and then that they reach one million. It withholds the fact that the public sector's size and the average wages... ...do not overcome the european average. Public administration' defects are well known. But it is usually the state- nurtured financial elites... ...the first to accuse the public sector. After preparing the public opinion for the fire sale, the only thing missing is the mechanism to do that. All eyes turn to the german Treuhand, the company that transformed the 10th largest industrial power... ...into a shopping catalogue of 510 pages. Eurosaal - the euro room. In a 280 sq.m. room beats the heart of the german ministry of finance, for some, the heart of the eurozone. The room has its own dark history... ...synonymous with the course of the modern german state. Here, the Luftwaffe officers planned their strategy... ...for the bombardment of european cities. After the war, the soviet army installed here its headquarters, whereas in this very room, the first constitution... ...of the German Democratic Republic was signed. The architectural monster that Goering constructed... ...as the largest building block in Europe... ...now houses the biggest industrial enterprise of that period. After the dissolution of the Eastern Bloc, Treuhand undertakes the sell-off of East Germany's public assets. A disastrous experiment... ...that results in millions of unemployed workers... ...and a crushed industrial base in the area. Historically, it is a tragic event, because the Treuhand idea derived from various DDR movements. When the people of East Germany realised... that reunification was in fact an acquisition by West Germany, Treuhand was already a state within a state in Berlin. In order for the bureaucratic monster to function, it used equipment and networks of the east german armed forces. Treuhand is transformed into an economic occupation army. It started working when East Germany typically existed, but it was basically influenced by western politicians and managers... ...and economic sharks. They had this popular slogan at the Treuhand: ... ...which stands for There is no Alternative... ...and Thatcher's portrait was hanging in many offices. Treuhand owns 8,000 companies, ...and 4 million sq. km. of arable land and forests. More importantly, it holds the fortune of 4,5 million workers in its hands. And then, the plundering begins. They privatised even on weekends, up to 10-15 businesses. This of course was the real dilemma... ...which brought about chaos and fraud. People with no financial background appeared... ...in order to buy businesses. They didn't have any money, but took part in auctions, took the money from the companies, paid their bills... and dissolved the company. There are innumerable examples. A lot of companies went bankrupt. Of the 4,5 million workers there were 1,5 million jobs left. The privatisation criteria were not always financial. Many decisions were taken in political offices, while several businesses closed... ...so as not to threaten their competitors in West Germany. Truehand's companies had value. It is said they were problematic. Some of them indeed were, but others were competitive... with the western companies and exported goods to the West. There were accusations that political parties were bribed... ...in order to put pressure for certain privatisations. In Bischoferrode there was a potash factory, which is important for industrial activities. Such factories were found both east and west. But BASF's influence was very big... and as a monopole this company didn't want any competition. Thus, although there were investors interested in the factories... ...they had to be destroyed. The toll of Treuhand's action is terrifying. The GDP in areas of East Germany shrinked by 30%, while unemployment rised from 0 to 20%. But, most importantly, after selling out a whole country, Treuhand succeeded in presenting billions of losses. Treuhand created a 300 billion DM debt and a 60 billion DM profit, but we expected to get 600 billion DM. There is a lot of debt left... ...which is still owed to the corresponing fund. This fund is not included in the federal budget. It cannot be considered a model as many companies were destroyed. With a 250 billion debt, it can't be a model for other countries. However, the president of the Eurogroup, Jean-Claude Juncker, presented Treuhand as a model for Greece. A month later, the Greek "Asset Development Fund" is created. The greek Treuhand is housed in a building... ...behind the former parliament. The three parties supporting the austerity measures... ...share the organisation's administration. This is professor emeritus Koukiadis of Aristotle University. Mr. Konstantinos Mitropoulos is the manager and central figure. He owns a company, Kantor, and has worked for the Latsis group. A few months later, the journalist that presented the fund's structure... ...is appointed as its spokesman. Other key-positions are occupied by many executives... ...of the two companies managed by Kostas Mitropoulos. The fund is supervised... ...by Herve Le Roy of the french embassy... ...and Maarten Verwey of the dutch ministry of finance. The troika also appoints 3 members of the fund's board of experts. The conditions set by the troika in Greece for the fund's function... ...resemble those in occupied countries. The privatisation costs devolve upon Greek taxpayers, whereas the profits, which were initially estimated to reach 50 billion euros, go to the creditors. The fund operates with great secrecy... ...assigning extreme powers to its members. The latter take on the sale or the concession... ...of buildings, land, infrastructure and share packages. The fund can exploit the littoral zone or the ancient monuments. The only condition is that they remain in place. Even before the creation of the fund, government officials had started advertising greek assets... ...in road shows, like a travelling circus. Zorba's Greece is a country subject to foreign multinationals... ...that control the infrastructures. A country in serious debt with a corrupted political system. The situation was similar to the interwar period. Especially between the years 1924-1930... ...Greece was an ideal candidate for lending. There was a series of huge scandals. The governments were bribed, even Venizelos' consultants. Foreign embassies directly intervened in all this. One example was the contract with Power company, another one was the contract with Ulen. These contracts were of a colonial nature... ...and proved to be very profitable for those who invested in them. Almost a century later, the troika, in collaboration with the Greek governments, demands the privatisation of the country' s infrastructure. What isn't explained to the citizens... ...is that privatisation and derregulation experiments... have failed even in the most powerful economies of the planet. The biggest failures concern infrastructure... ...such as railways, water and electricity networks. People say you can read the history of the economic system... ...on the railways. The steam that promoted the industrial revolution... ...turned into a speculative bubble for the american economy, when dozens of private companies... ...spread kilometers of metal rails across the USA. At first, the railways symbolised... ...the state's central role in the economy and infrastructures. But after World War II, economic liberalism replaced by the car most mass transportation. Four wheels and a steering wheel... ...lead the lower middle-class dream... ...into the highways of the new economy. This trend reached Europe with a delay of a few decades. When the Turkish dictators tried Pinochet's neoliberal experiment, Turgut Ozal characterised the railways a communist creation. However, railways in Europe... ...remained mainly under state control. That is untill Great Britain tried a disatrous experiment. Like a movie without a happy end. Even Margaret Thatcher recognised that... ...trains do not function effectively outside of the public sector. But John Major proceeded to their privatisation in 1993... ...and the british public reacted. The trains, the rail network and the maintance services... ...ended up in the hands of different private companies. So many of them, that the maintenance alone... ...was undertook by 2,000 companies. The loss is tragic. The three most serious accidents caused by privatisation... ...cost 42 lives whereas 600 are injured. The derailment of privatisation did not just cost lives. In a three year period, the state payed to the companies in the form of subsidies... ...what it had earned by the sellout of the railways. And the cost for the taxpayers did not stop there. Greece does not learn anything from the british experience. The greek governments put forth the railways privatisation plan. Their effort is supported by the media. The trains are slow, never on time, usually dirty. The annual losses of the OSE and TRAINOSE group... ...reach 1.2 billion euros. They present greek railways... ...as the biggest loss-making public service in Europe. But whom does this debt belong to? The state forced the railways to borrow money for its development. There is no equivalent case in Greece... ...as highways, ports and airports were all funded by the state. These loans are now presented by the governments as OSE's debt. This is untrue. for infrastructure development. The major TV stations, behind which lie major contractors, are bombarding us with lies and slander. The critique is focused... ...on the employees' salaries and the operation cost. This way major scandals go unnoticed... ...which involve politicians, greek and foreign companies. Tens of millions of euros... ...are spent on railway lines that never work. Trains are rented in prices in which they could be bought. The state buys trains from Siemens... ...without the appropriate network to use them. It also pays contractors for works that are never delivered. There is a certain deliberateness. We degrade our national wealth so as, after its degradation, to slander it and convince the greek public opinion... ...that maybe a private company... ....is a far better solution for the greek railways. In the name of rationalisation, the government further degrades the railways. It cuts down the personnel at the expense of quality, increases prices over 60% and closes a big part of the tracks. Especially on the part Argos-Tripoli-Kalamata... ...several millions of euros were invested. And today there are no trains there. When counting only profits or losses, the privatisation advocates forget that... ...the railways are first of all a service for the citizens. A service paid by generations of greek taxpayers. There was a time when in Greece private debts were nationalised... ...but today there is an effort to privatise the profit... ...that the citizens could enjoy through public services. What did private companies invest in this sector... ...in order to buy it at a price much lower than its value? If the railways are like a book on economic history, the water network teaches us how to manage a monopoly. At this sector, its Paris' turn to pay the bill of privatisation. Two multinational companies... ...of great financial and political power, Veolia and Suez, claim the administration of the water network in Paris. And Jacques Chirac offers it to them. In 1985, a political decision was taken by Jacques Chirac, mayor of Paris at the time, to divide Paris based on the two river banks of the Seine... ...and by dividing it this way... ...to confide to each major private group and its subsidiaries... ...a bank for the distribution and the billing of water. There was no technical or economic argument. I think there was an ideological stance... ...that said that the private sector is more effective. The citizens received more and more expensive bills. The prices kept rising for 15 years. As far as the prices are concerned, the bills were multiplied by 260%. It is true that we' ve had an increase of the water price... ...without a technical or economic explanation. When the municipality changed in 2001, with a majority of the left, the ecologists, the communists, it was decided to take back the water services. The new municipal water company, which was created in 2010, decreased the bills by 8%... ...and invested all the profits in network amelioration. There is also a very important question, a question of democracy. If public administration is properly implemented, it permits... ...greater political control by the citizens of Paris. Veolia and Suez reacted, as they lost... ... a net income of 60 and 30 million euros a year respectively. They put pressure on the government, the municipality and the unions... ...against Anne Le Strat that started the process. They kind of see me as the devil incarnated. The fight for Paris brought forth... ...the intertwining of interests of multinationals and politicians. Jerome Monod, the manager of Lyonnaise des Eaux, was a leading figure in Jacques Chirac's party. Regardless of their connections, however, the water multinationals seemed to loose the battle against the citizens. However, the EU turned its back to the citizens' decisions. The multinational companies are the decision makers in Brussels and Italy became their next target. Vote Yes For public water services With a secret letter that they sent to the new italian prime minister, Trichet and Draghi , of the European Central Bank, demanded the same thing that was rejected by the italian people. We know that in the countries where the IMF intervenes... ...the water services are privatised. We know very well that senior executives of Suez and Veolia... ...are executives and consultants of the IMF. We know very well that executives of Suez and Veolia... ...are related to the ECB, that in the European Parliament many people are paid to lobby... ...and promote the interests of these multinational companies, that people from these companies join governments... ...and when these governments go they return to the companies. In Greece, the Papandreou government appoints... ...as CEO of the public water company a former executive of Veolia. Nikos Bardis, who promoted privatisation... ...on behalf of the french multinational company, now characterises Greece a stronghold of the Soviet Union. However, privatisation plans didn't start at the era of the Troika. The fire sale of the water network of Athens and Thessaloniki... ...begun during Simitis' government, when the networks went public. Within a decade, bills rose more that 200%, whereas services did not improve by 200%, they got much worse. In 2008, the New Democracy party restarted the privatisation process... ...and three joint ventures prepared for battle. There was the Suez group with Ellaktor, there was Veolia with the Marfin group, and there was the spanish Aqualia with GEK-Terna. Suez executives visited the public water company's buildings. I do not know what was discussed behind closed doors. What we do know is that these companies... ...and Suez in particular... ...have been accused abroad... ...for bribing public servants and politicians... ...in countries of the civilised West. If something like that happened elsewhere... ...it is very likely that it will also happen in Greece. -Elections have interrupted or temporarily postponed... ...the privatisation course of the Thessaloniki water company. If you get elected, will you continue the privatisation process, or you disagree with privatisation? -We are against water privatisation. This was another unfulfilled campaign promise of the PASOK government. After the elections, the government continued... with the privatisation plans of two profitable enterprises: the Athens and the Thessaloniki water companies. The main argument of the government... ...and the companies that are after the water resources... ...is that they are not going to buy our rivers, our springs; that they are not going to take our networks and leave. The networks stay here. Just as the Acropolis stays here. They are only going to take over the management, the maintenance, the distribution, the billing policy. What these privatisation advocates fail to mention is that the cost... ...of the replacement of the network will still be paid by the citizens. Therefore, the companies have no motive to maintain this network. Insufficient maintenance means profit for the private company; infrastructure destruction means replacement by the greek citizens. The profit goes to the private company, the damage is inflicted upon the greek taxpayer. Like a sorcerer's apprentice, Europe will pay for the privatisation of the infrastures. The market forces, however, will show their true face... ...even in the birthplace of neoliberalism, the USA. Towards the end of the '90s... ...California deregulates the electricity market. But the deregulation civilisation... ...is lost along with electricity power. The power companies can increase the wholesale price uncontrollably. In order to achieve this, they develop complex fraud strategies with code names. The companies even stop producing electricity... ...to create shortages and increase the kilowatt hour price. -Las Vegas Cogen, this is Rich. -Hey Rich. This is Bill up at Enron. This is gonna be a word of mouth kind of thing. We want you guys to get a little creative... ...and come up with a reason to go down. Ok, so we're just coming down for some maintenance. -So the rumor's true? They're fucking taking all the money back from you guys? All the money you guys stole from poor grandmonthers in California? -Yeah, granma Millie man. -Now she wants her fucking money back for all that power... ...jammed right up her ass for fuckin' 250 dollars a megawatt hour. In California, citizens pay the cost of the experiment, when market forces leave millions of them literally in the dark. The deregulation of the energy market in California... ...was imposed under huge pressure by big businesses. But even they suffered losses by the deregulation. As the retail prices could not follow... ...the mad speculative game of the wholesale prices, the system begun to collapse. Europe will experience its own dark days... ...due to the deregulation and privatisation of the energy market. The deregulation starts with the Maastricht Treaty... ...when the EU promises improvement of services and price decrease. Until 2006, no private company invested in electricity. This is basic public infrastructure, it demands major capital and the return is slow. There is no easy and quick profit for the private companies. Therefore, gradually, from 2000 to 2006, in order for the market to attract private investors, the consumption bills started to rise. The taxpayers do not just pay more expensive bills. Without knowing it, they subsidize the private energy producers. Mytilinaios owns Aloumina and Latsis the oil refineries. They needed electricity... ...so they created power production units for their own companies. However, they realised that it is less profitable to consume their own power. So, they sold their electricity to the public power company... ...for a 100 euros per megawatt hour wholesale, while the public power company sold electricity to them... ...and to other industrialists for 43 euros. In the case of photovoltaic power, the public company buys it at 51 cents, while it sells it for 11 cents per kilowatt hour. Due to the constant increase of the bills, private companies... ... realise they can profit also from electricity provision. Hellas. The no1 private power company is here. Dr. Lampros the rheumatologist and Mrs. Fotini... ...changed power company without changing their meter. So, at some point, there appeared private electricity providers. Provider simply means middleman. They sold plain air. With a share capital of 60,000 euros, a very small amount, one could get a license to provide electricity. A company that produces electricity via renewable sources. Where did they get the renewable energy they advertised? From the public power company. At first, private companies had to guarantee... ...that they had the electricity they promised to sell. But the EU released them from this obligation. They did not have to guarantee... ...that they had what they intended to sell! The greek regulatory authority for the energy sector... ...will open the door to companies... ...among which the Enrons of Greece will emerge. The biggest such providers were Energa and Hellas Power. Both companies did not pay back to the public sector expenses... ...it had assumed for electricity production and distribution. At some point they ceased paying back any money, even the amount necessary for the energy... ...they had agreed to purchase by contract. They also collected the tax added to the electricity bills... ...and the money went straight to Switzerland. The cases of Energa and Hellas Power... ...are just the tip of the iceberg of the millions of euros... ...that the deregulation costs to greek citizens. During the 12 years of energy market deregulation... ...there was no decrease of beurocracy... ...nor did the services improve... ...nor did the fuel mixture ameliorate. On the contrary, the energy dependence of the country grew... ...while the bills rose by more than 80%. The taxpayers are the first victims. But employees are also affected. Before the deregulation of the market, that started in '98-'99, the public power company had 35,000 employees, while today it has 22,000. There was a considerable personnel decrease... ...which was replaced by contractors, contractor employees and a lot of precarious workers. The contractors are not interested so much in quality. On the contrary it is of their interest... ...when the maintenance is not proper. There have also been a lot of accidents. Not a year goes by without two, three or four lethal accidents. Indifferent to the public interest and the consequences on society, the parties supporting the memorandum now promote... ...more privatization of the public power company. Its real value, according to the official data, is 16-17 billion euros. How much is it valued in the greek stockmarket? Unit five that is planned to be built in Ptolemaida... ...has a budget of 1.5 billion. The whole company will be sold... for a price lower than the cost of one of its units. The greek people paid... ...for the electricity networks to reach even the smallest village... ...and these networks will now be exploited by private companies. Most of these private companies... ...feed off the state and earn instead of offering. The public power company was not built by the private sector. It operated for 60 years thanks to the public's money. It brought electricity to the whole country. It is ours and we cannot give it away. A lot of examples from around the world prove that... ...privatisation affects negatively citizens, workers and services. Today, privatization is presented as necessary... ...in order to cope with the debt crisis. However, even privatization advocates disagree. The world crisis that the private sector has created... ...becomes a pretext for a general attack against public assets. An attack that is sometimes disguised. Privatisation does not concern only the cases... ...when whole services are taken away from the state, in the form of, let's say, concessions. It is also privatisation when universities are evaluated... ...not for the level of education they provide... ...but according to how attractive this education is to the market. The privatisation effort is expanded... ...even to what Marx called "general intellect", namely, the accumulated social and technological knowledge... ...that produces the wealth of a society. However, the effort to privatise everything... ...leads to the emergence of strong resistance by the people, who realize that everything can change... ...if there is political will. The problems of the economy aren't mainly legal; they are political. When a political decision is taken, everything can be reversed. The answer to privatisation, however, cannot be the return to the situation that brought us where we stand. The goal is for public property to be controlled... ...by those who created it: the workers. The Greek people must fight for that, because, if it doesn't, it won't be able to rise up again. Will the modern man be able to fight his tendency... ...to be inactive, to stay silent? Besides, Thucydides has already said that: It's either freedom or tranquility. You need to choose. You will either be free or tranquile. You can't have both. |
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