Greece’s fight is for democracy in Europe. That’s why we must support it

[umbertino]

The EU powers told Greeks their world would cave in unless they acquiesced by voting yes. The no vote has raised the political stakes even higher

 

 

Monday 6 July 2015 13.31 BST

By Owen Jones

 

 

From the cradle of democracy, a lion has roared. It is difficult to overstate the pressure the Greek people have both endured and defied. A country that has already experienced an austerity-induced economic disaster with few precedents among developed nations in peacetime has suffered a sustained campaign of economic and political warfare. The European Central Bank – which has only recently deigned to publish some of the minutes of its meetings – capped liquidity for Greek banks, driving them to the verge of collapse. There were stringent capital controls, and desperate queues outside banks followed. A country desperate to stay within the euro was told it would be ejected, and with calamitous results.

 

Martin Schulz, the European parliament’s president and a so-called social democrat, whose attitude towards democracy can be generously described as ambiguous, called for the removal of Greece’s elected government in favour of a technocratic government.

 

It wasn’t bluster. That’s what the EU and the markets previously pulled off in Greece and, yes, in Italy: however much justifiable distaste exists for Silvio Berlusconi, it should have been his own people who removed him. In Greece itself, the oligarch-owned “free media” acted as a political machine (sound familiar?), pumping out relentless propaganda in favour of capitulating to the creditors’ demands. An alliance between Greece’s economic elite and the EU great powers told the Greek people: however tough your lives have been in the last few years, your world will cave in unless you acquiesce. And still the Greek people voted no – not narrowly, but overwhelmingly.

 

The referendum was, of course, a rejection of an austerity programme that has unleashed what is commonly described in Greece as a humanitarian crisis. Since Lehman Brothers crashed in 2008, austerity has always relied on the displacement of blame from elites to elsewhere. It was Goldman Sachs who helped the then Greek government to cook the country’s books to win entry into the euro. It was German and French banks who profitably and recklessly lent to Greece, just as US banks disastrously showered subprime mortgages on low-paid Americans. It was Germany who benefited from being able to export its consumer goods to peripheral European countries such as Greece.

 

After the crash, Greece was forced to implement measures that sent debt hurtling to 180% of GDP, doubled poverty, left a quarter of Greeks and over half of young people without work, raised the suicide and infant mortality rate, left many without healthcare, and shrunk the economy by a quarter. Precious little of the bailouts went to Greece; instead they went to the European banks that had recklessly lent in the first place. While Germany’s postwar economic renaissance owed everything to debt relief – including from war-devastated countries such as Greece – Athens was denied the write-offs it desperately needed. As French economist Thomas Piketty points out, “Germany is the single best example of a country that, throughout its history, has never repaid its external debt”, and Berlin is “profiting from Greece” because of its high-interest loans. The weak euro makes German goods so internationally competitive, and has been a linchpin of the country’s recent economic success.

 

But this revolt was about something much bigger, and that is why Greece remains in great danger. This is about the very nature of the European Union itself. The European project was founded in the rubble of a war of annihilation, genocide and totalitarianism. It was intended to secure peace, prosperity and democracy for the people of Europe. This dream has become something of a nightmare for a growing number of Europeans. A democratic deficit is unaddressed. The Transatlantic Treaty Investment Partnership is negotiated in secret with large corporations, conspiring to give them the power to sue elected governments in secret courts to try to stop policies they believe hit their profits. The EU treaty negotiated in 2011 effectively forbade any future eurozone government from pursuing an expansionary fiscal policy. Other treaties and directives enshrine free-market dogma in law. Austerity is mindlessly implemented across the eurozone with terrible human consequences: in Spain, too, around half of young people are out of work.

 

Syriza was a revolt against this Europe of austerity and corporate power, in favour of a democratic, socially progressive Europe. Podemos in Spain is part of this revolt, as is Sinn Féin in Ireland. If the referendum had produced a yes, then it would have represented a potentially terminal defeat for this gathering pan-European revolt. Instead, it has now been emboldened. Unfortunately the EU elites are not stupid, and realise this. They fear – justifiably – that if Syriza is seen to win concessions, the rebellion will spread. The resignation of Yanis Varoufakis is almost certainly part of an attempt to allow them to save face and do a deal.

 

But the EU is in a genuine bind. If Greece is ejected from the eurozone, the currency is no longer an indivisible union and a precedent will be set for the ejection of its members. If the ECB abandons Greece, the eurozone’s reputation will not recover. This is why Greece has bargaining power in its quest for debt relief and for an abandonment of austerity that has already ravaged the country. The EU still wishes to make an example of the country: by forcing Syriza to implement policies that will destroy the government, by making “the economy scream” (to quote Henry Kissinger) until it is ejected from office, or even a disastrous default and removal from the eurozone. It may still succeed. And that is why Greece desperately needs support.

 

 

 

‘The EU was intended to secure peace, prosperity and democracy. This dream has become something of a nightmare for a growing number of Europeans’.

Photograph: Marios Lolos/Xinhua Press/Corbis

 

 

http://www.theguardian.com/commentisfree/2015/jul/06/greece-democracy-europe-eu

[Jim1cor13]

Thank you Umbert  

 

I am aware of Goldman Sachs involvement that few talk about today. Goldman has dirt

on their hands because of the deal they helped Greece with back in 2001, and they

should account for their role, but rarely do the 'big' boys get much other than rewarded

as we saw in 2008.

 

http://wallstreetonparade.com/2015/06/goldman-sachs-doesnt-have-clean-hands-in-greece-crisis/

 

Are Goldman Sachs executives Lloyd Blankfein, Gary Cohn and Addy Loudiadis losing any sleep over elderly pensioners waiting outside shuttered banks in Greece, desperately trying to obtain their pension checks to pay their rent and buy food? Are these Goldman honchos feeling a small pang of conscience over the humiliation by creditors of this once proud country? Perhaps Blankfein, who famously espoused that he’s “doing God’s work” might shed a tear or two for the small child clinging to her elderly Grandmother’s hand as she searches in Athens for an ATM that will give her $66 from her bank account – the maximum allowed per day under the newly imposed capital controls.

 

According to investigative reports that appeared in Der Spiegel, the New York Times, BBC, and Bloomberg News from 2010 through 2012, Blankfein, now Goldman Sachs CEO, Cohn, now President and COO, and Loudiadis, a Managing Director, all played a role in structuring complex derivative deals with Greece which accomplished two things: they allowed Greece to hide the true extent of its debt and they ended up almost doubling the amount of debt Greece owed under the dubious derivative deals.

 

A February 2012 BBC documentary on the Goldman Sachs deal provides a layman’s view of the dirty underbelly of the deal, calling it “a toxic import” from America that is “hastening” the downfall of Greece.

 

On March 5, 2012, Nick Dunbar, who appears in the BBC documentary on the Goldman Sachs deal and author of The Devil’s Derivatives, penned a revealing article for Bloomberg News with Elisa Martinuzzi. The writers describe the Goldman Sachs deal with Greece as follows:

 

“On the day the 2001 deal was struck, the government owed the bank about 600 million euros ($793 million) more than the 2.8 billion euros it borrowed, said Spyros Papanicolaou, who took over the country’s debt-management agency in 2005. By then, the price of the transaction, a derivative that disguised the loan and that Goldman Sachs persuaded Greece not to test with competitors, had almost doubled to 5.1 billion euros, he said…

 

“A gain of 600 million euros represents about 12 percent of the $6.35 billion in revenue Goldman Sachs reported for trading and principal investments in 2001, a business segment that includes the bank’s fixed-income, currencies and commodities division, which arranged the trade and posted record sales that year. The unit, then run by Lloyd C. Blankfein, 57, now the New York-based bank’s chairman and chief executive officer, also went on to post record quarterly revenue the following year…

 

“The revised deal proposed by the bank and executed in 2002, was to base repayments on what was then a new kind of derivative — an inflation swap linked to the euro-area harmonized index of consumer prices…

 

“That didn’t work out well for Greece either. Bond yields fell, pushing the government’s losses to 5.1 billion euros, according to an analysis commissioned by Papanicolaou. It was ‘a very bad bet,’ he said in an interview.”

 

The deal was restructured again in 2005 according to the Bloomberg article, this time locking in the 5.1 billion euro debt.

 

For the unschooled to the ways of Wall Street, one might jump to the conclusion that Greece and its finance officials were knowing participants in the deal. That would be a reasonable assumption were it not for counties and cities and school districts across America that were similarly fleeced and hoodwinked by investment banks on Wall Street.

 

In March 2010, the Service Employees International Union (SEIU) released a study showing that from 2006 through early 2008, Wall Street banks are estimated to have collected as much as $28 billion in termination fees from state and local governments who were desperate to exit abusive derivative deals. That amount does not include the ongoing outsized interest payments that were, and still are being paid in some cases. Experts believe that billions of these abusive derivative deals may still remain unacknowledged by embarrassed municipalities.

 

Back in 2010 when German Chancellor Angela Merkel first heard of these derivative deals to hide sovereign debt among European Union partners, she had this to say: “It’s a scandal if it turned out that the same banks that brought us to the brink of the abyss helped to fake the statistics.”

 

Well, that’s exactly what happened. Wall Street padded its profits with these deals in order to extort massive bonuses for its executives from its shareholders on the basis that it was “doing God’s work,” when in fact it was catastrophically leveraging up the global economy with secret, off-balance-sheet debt deals. Wall Street then crashed the global economy in 2008 to 2009, just as it had from 1929 to 1932. And the people who structured these deals not only still have their jobs but they’ve received promotions and ever higher compensation while the people of Greece struggle to buy medicine and food.

 

Given this undeniable set of facts, Merkel’s choice of the word “scandal” to describe the unfolding Greek tragedy seems perhaps a bit mild.

[umbertino]

Grazie Jim.

[divemaster5734]

The only reason banksters getaway with their perverted actions in America is because America is the only country in the world allowed to print money at will.

All our politicians are owned by those same banks, dem and con both.

Every fed reserve chairman has come from a wall street bank, and they have all left to another position at wall street after the Fed.

It is a racket, perpetrated on trusting humans, around the world.

Greese can't win by forcing them to continue to give them money on their terms.

They will need to rebuild their own currency through strong manufacturing and infrastructure.

The euro is the banksters money. They can't be forced to give it away.

I am genuinely hoping the people of Greece win, but they will need to prove they don't want or need anything from the banksters to do so.

[Jim1cor13]

The only reason banksters getaway with their perverted actions in America is because America is the only country in the world allowed to print money at will.

All our politicians are owned by those same banks, dem and con both.

Every fed reserve chairman has come from a wall street bank, and they have all left to another position at wall street after the Fed.

It is a racket, perpetrated on trusting humans, around the world.

Greese can't win by forcing them to continue to give them money on their terms.

They will need to rebuild their own currency through strong manufacturing and infrastructure.

The euro is the banksters money. They can't be forced to give it away.

I am genuinely hoping the people of Greece win, but they will need to prove they don't want or need anything from the banksters to do so.

 

Thanks DM. I will return to my ever present question that is never answered...why do

people STILL believe one party is better than another when both are frauds? They are

indeed OWNED by their money masters and yet we still think one is "better" than the other?

 

How do we change this perception that so many party loyalists even on this site who still

think one is better? Some would say the 'lesser of two evils', but that is nonsense. They

have both played a role in the decay of this country, and yet 2016 will be another illusion of

'change' by some new face that cannot and iwll not buck the current system. I find it

both fascinating and delusional that we are still moved by ANY of the posers.

 

Sorry to get off topic, but I am amazed at how politicians continue to pull the

wool over so many eyes just for the sake so someone can feel proud their "hero"

is in office. No wonder we are so screwed up and in denial.

[umbertino]

Quote

Thanks DM. I will return to my ever present question that is never answered...why do

people STILL believe one party is better than another when both are frauds? They are

indeed OWNED by their money masters and yet we still think one is "better" than the other?

End Quote

Agreed Jim...That applies once again all over the world ( at least on Planet Earth)... Unfortunately