Greece: The Epicenter of Global Pillage
by Stephen Lendman
Predatory bankers make serial killers look good by comparison. Their business model creates crises to facilitate grand theft, financial terrorism, and debt entrapment.
They steal all material wealth and then some. They systematically rob investors and strip mine economies for self-enrichment.
They demand they get paid first. They hold nations hostage to assure it. They turn crises into catastrophes.
They leave mass impoverishment, high unemployment, neo-serfdom, and human wreckage in their wake.
Their Federal Reserve/ECB/IMF/World Bank/political class lackeys do their bidding.
They’re more dangerous than standing armies. They wage war by other means. They cause “demographic shrinkage, shortened life spans, emigration and capital flight,” explains Michael Hudson.
They’re a malignancy ravaging societies and humanity. Greece is the epicenter of what’s metastasizing globally. The latest bailout deal highlights out-of-control pillage.
On February 20, New York Times writer Stephen Castle headlined, “Europe Agrees on New Bailout to Help Greece Avoid Default,” saying:
On Tuesday morning, Luxembourg president/Euro Group head Jean-Claude Juncker announced:
“We have reached a far-reaching agreement on Greece’s new program and private-sector involvement. The new program provides a comprehensive blueprint for putting the public finances and the economy of Greece back on a sustainable footing.”
In fact, it assures human misery and economic destruction, not restoration. It’s a deal only bankers can love. It demands Greece reduce its debt from 160% to about 120% of GDP by 2020, but how incurring more debt achieves it wasn’t explained.
It also demands sacking 150,000 public workers by 2015, slashing private sector wages 20%, lowering monthly minimum wages from 750 to 600 euros, cutting unemployment benefits from 460 to 360 euros, and reducing pensions 15% en route to eliminating them altogether.
Media reports said bondholders agreed to a 53.5% face value haircut – the equivalent of losing 75% overall. In fact, only 30% of toxic assets are involved. Most held aren’t touched. Greece must make good on them, no matter the impossible burden.
Private lenders will swap current holdings for new lower face value/lower interest rate bonds. Representing bondholders, Institute of International Finance’s Charles Dallara and BNP Pariba’s Jean Lemierre called the deal “solid….for investors, a fair deal for all parties involved.”
In other words, raping Greece for bankers is “solid” and “fair.” Its citizens had no say. Without rights, what’s best for them wasn’t discussed.
They’re left with huge wage and benefit cuts combined with mass layoffs. Greece faces less tax revenue to cover domestic priorities. In late 2011 alone, its economy shrank 7%. January revenues fell 7% year-over-year. Value-added tax receipts decreased 18.7% from last year. Death spiral financial deterioration continues monthly.
Moreover, the nation’s $650 billion debt burden is double the reported amount. The more it increases, the harder it is to service and repay, the more future aid’s needed, and deeper the country’s economic catastrophe heads for total collapse.
The deal escrows $170 billion to assure bankers get paid. Investment advisor Patrick Young got it right telling Russia Today that dealmakers don’t trust Greece living up to terms because its track record is so bad.
“So we now have a situation,” said Young, “where Greece said we’ll do anything you want, but the problem is” too great a burden to bear. “It’s a catastrophe pushing people to the brink of starvation.”
No matter. Finance ministers will give Greece some money on dreadful terms “where like a nine year old child, every Friday it has to go to daddy, say it’s done its homework, say it’s been a good boy, can it please have next week’s pocket money to pay its civil servants. (It’s) a horrible loss of sovereignty.”
Troika power runs Greece – the IMF, ECB and EU. They’re predators saying pay up or else.
Reports say its government will change its constitution to prioritize repaying debt ahead of vital domestic obligations.
Other terms involve lenders cutting interest rates on bailout loans by 0.5% over the next five years, and 1.5% thereafter. An estimated 1.4 billion euros would be saved by 2020.
The ECB will compensate by distributing profits on its 40 billion Greek debt holdings. In addition, Eurozone countries will contribute their Greek bond income through the end of the decade.
Still to be decided is EU/IMF burden sharing. Both agreed to contribute. Not discussed or considered is leaving 11 million Greeks on their own out of luck. They have three choices – starve, leave, or rebel.
The Rot Beneath the Surface
On February 21, Financial Times contributor Peter Spiegel headlined, “Greek debt nightmare laid bare,” saying:
“A ‘strictly confidential’ report on Greece’s debt projections prepared for eurozone finance ministers reveals Athens’ rescue programme is way off track and suggests the Greek government may need another bail-out” soon after the latest one.
Even under the most optimistic scenario, imposed austerity’s punishing Greece so severely, its burden’s impossible to bear.
Agreed on terms are “self-defeating.” Forced austerity elevates debt levels, weakens the economy, and prevents Greece “from ever returning to the financial markets by scaring off future private investors.”
As a result, continued financial infusions are needed. Double or more the agreed amount’s required. Current problems increase exponentially toward total collapse, default and bankruptcy.
The report explained Greece’s impossible burden. It also “paints a troubling outlook for the debt restructuring, expected to begin this week.” Bond swapping creates “a class of privileged investors who will chase off” others when Greece tries selling fixed income securities at market. Germany, the Netherlands and Finland opposed a deal doomed to fail.
The report warned “Greek authorities may not be able to deliver structural reforms and policy adjustments at the (envisioned) pace.” Perhaps never with shrinking revenues unable to cover liabilities.
It’s “now uncertain whether market access can be restored in the immediate post-programme years.” Left unsaid was restoring it’s impossible ever. Greece faces protracted deep depression. Its life force is ebbing. Only its obituary remains to be written.
A Final Comment
Greece’s debt deal provides a model for future European sovereign restructurings. It’s one of six or more troubled countries. Portugal looks like the next domino to fall, but Spain, Italy, Ireland, and others may follow.
Moreover, implementing Greece’s deal entails problems. Reality may prevent fulfilling promises. If April elections are held, new MPs may balk. Declaring a debt moratorium, defaulting and leaving the Eurozone are options.
Moreover, private lenders may object. Legal challenges may follow. A sweetheart banker deal may unravel. Pressuring China and Japan to help isn’t working. China Investment Corporation, the nation’s sovereign wealth fund, and Chinese central bankers aren’t willing to buy troubled European sovereign debt. According to one official, “(w)e aren’t stupid.”
How it all plays out isn’t known. Technocrats run Greece. They may cancel April elections and stay in power. Public sentiment remains the wild card. Impossible to bear pain may become uncontainable rage. More than buildings may burn.
If political Greece doesn’t care, people must act on their own. Revolutionary seeds are planted. They can erupt any time. Change only comes bottom up. It’s long past time to get started.
ABOUT THE AUTHOR: Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net. Also visit his blog and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US
Central time and Saturdays and Sundays at noon. All programs are archived for easy listening. He is also the author of “How Wall Street Fleeces America“
Another lucid and concise article from Lendman that shines a spotlight on the deteriorating situation.
ReplyDeleteTHE SECRET COTTON WAR, by Anton Zischka
ReplyDelete>>>>>1934<<<<< Ed Payot Paris
pp. 183
...Specialists are rebelling : scientific colloquies are proof as are publications in specialised periodicals* and events in America...
But not enough of them, yet. This will happen. But when ? Won't it be too late ? [We have] Technical progress everywhere. But what's the point of technical progress, absent organisation ?
In June 1933, the Cotton Textile Institute, which represents three quarters of the entire American cotton industry, outlined the situation in a confidential report : [« ] communist agitation in all their factories ; prices far too low ; practically unlimited working hours in Southern spinning mills ; worker pay between four and seven dollars weekly ; child labor in 56 % of their factories ; ruthless competition between the members of the Cotton Textile Institute. »
A core group of manufacturers became aware that the situation was untenable. First among all the industry groups in the United States, the cotton men appealed to Roosevelt, proposing a[n industry-specific] set of labor laws. General Johnson set about studying the case, seconded by George A. Sloan, and important industry figure, and William Green, the workers' representative. The manufacturers offered a 40-hour working week and ten dollars minimum weekly pay. The workers wanted fourteen dollars weekly minimum and a 40-hour work week. An agreement was reached, but only because General Johnson was neither a communist nor an important shareholder in any of the spinning mills, and because he was invested with sufficient authority to impose his arbitrary decisions, had no particular presuppositions on the matter, was unable to control any agreed outcome and was merely engaging the power of his logic.
Over the previous four years, the Cotton Textile Institute had been engaged in a vain attempt to reach a settlement in their spinning and weaving factories, and had tried to impose a scientific and rational work method in vain. Each privately believed that such proposals were the work of disloyal competitors, small factories were afraid that trusts might be attempting to crush marginal manufacturers. For four years no agreement had been possible. A disinterested arbiter managed a settlement in three weeks. On July 17, 1933, the proposed code was applied. 521,000 new workers were employed as a consequence, 100,000 more than the industry had ever hired in boom times.
tdr2011_embargo_en.pdf
Tr. Note:
You will note that predictability improved everyone's prospects, workers' and employers' alike, and that the $12 weekly wage the talks agreed so improved household budgets that product demand was immediately impacted, because the pace of economic exchanges picked up.