In 1971 Bretton Woods failed. The United States implemented a new strategy:
Disregard its twin deficits and act as a gargantuan vacuum cleaner that sucked in the trade surpluses of Germany, Japan and later China, attracting into Wall Street between $3 to $5 billion net on each working day.
Forcing productivity and zero real wage rises created a further daily 5$ billion domestically for corporations.
All this money, in Wall Street banks, created new money with financialisation.
By 2007 for every one dollar issued by the Fed 50 dollars of this bank private money (mainly CDOs) were circulating.
It took a small correction in the housing market to collapse this bubble and we write 2008.
The CDOs became worthless and to save the criminal banks, governments printed trillions of public money. Debt was transferred to the tax payer.
The banking system was not reformed, to the contrary, it kept the freedom to speculate, to short and manipulate the world economy.
A common currency, like the Euro, requires monetary and fiscal coordination.
As long as debt, taxes and government expenditure stays national, the weakest members of this monetary union have to run deficits and borrow.
A country which creates surplus (like Germany) needs to invest this surplus in the weaker members, to create employment and development, to maintain their health and their demand for German products. It was never done.
Borrowing was easy and rampant until 2008.
Enter 2008: The European banking system (mainly Germany and France) holds debt from Spain, Italy, Greece and others.
Germany, mainly, could have searched for a sustainable debt relief and repayment, taking into account the debtors ability, instead it instructed austerity and the granting of new and expensive loans to repay ultimately the German banks.
Enter 2015: Expensive $240 billion loans did nothing to help Greece.
25% unemployment (50% unemployed youths), halving of pensions, failing medical and social assistance and being treated as a 2nd class European is the result of the mantra "that debt is a contract and contracts must be honoured" (Lagarde).
The political class failed and Greece could have gone to 'Golden Dawn', the fascists, but it did not, as others in Europe do by taking refuge in nationalistic and xenophobe movements, instead it voted in a modern socialist alternative, based on democracy and solidarity.
Enter Syriza: The Thessaloniki declaration demands:
1. Confronting the humanitarian crisis
2. Restarting the economy and promoting tax justice
3. Regaining employment
4. Transforming the political system to deepen democracy
On (4) the immediate programme is:
Regional organization of the state. Enhancement of transparency, of the economic autonomy and the effective operation of municipalities and regions. We empower the institutions of direct democracy and introduce new ones.
Empowerment of citizens’ democratic participation. Introduction of new institutions, such as people’s legislative initiative, people’s veto and people’s initiative to call a referendum.
Empowerment of the Parliament, curtailment of parliamentary immunity, and repeal of the peculiar legal regime of MPs’ non-prosecution.
Regulation of the radio/television landscape by observing all legal preconditions and adhering to strict financial, tax, and social-security criteria.
Re-establishment of ERT (Public Radio and Television) on a zero basis.
More details on the programme: