The resignation of the Greek Finance Minister is the clearest possible indication that my last posting was correct and that Greece is ready to climb down in negotiations, in exchange for any sliver of a fig-leaf. The “Troika” is very keen that there will be another bail-out because of course the money goes to the bankers to whom the political elite are beholden. It is increasingly plain that Tsipras does not have the balls for debt repudiation. Yesterday’s choice was meaningless; debt repudiation is the only real alternative.
No bail-out will make any difference, we will be enmired in the same issues again every six months, but with less drama. The Euro will survive because it is the resilient currency of the World’s largest economy. Merkel will continue to manage it cleverly – she has just demonstrated that Germany can determine who is Greece’s finance minister. Greeks will suffer through more austerity, comforted by yesterday’s meaningless shout of defiance, and large corporations and banks will get their hands on Greece’s remaining state assets.
I think the lesson from this is that the 21st Century corporate and banking state is beyond amelioration. Any change needs to be a fundamental challenge to the system. It will seem strange to future generations that a system developed whereby middlemen who facilitated real economic transactions by handling currency, came to dominate the world by creating a mathematical nexus of currency that bore no meaningful relationship to real movements of commodities.
After the extremely unpopular rule of the Colonels, NATO will have a hard time installing a new government in Greece through any process that resembles a coup. If it tries, we’re talking about guerrilla war.
Stalin didn’t supply the Greek Communists during the Greek Civil War. Russia and Serbia today can.
Habbabkuk : “But the question is really how did those govts get into a situation where they can borrow only at 18% rather than at 2%? That, too, is _Econ 101 stuff. 🙂”
Indeed. The high percentage indicates the perceived elevated risk in making the loan (or investment, if you will). There is a large return (18%), but a correspondingly larger risk that it won’t be returned at all. If there was perceived to be negligible risk, the percentage would be near zero.
So the banks can’t scream “Foul!” because they might not get back their usurious loans (much of which was to pay back their own interest from previous loans – in effect money straight back to themselves), no more than a loan shark is entitled to whine should their indebted victim default.
That’s just business.
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[ Mod: This had been caught in the spam-filter ]
Off topic but a fantastic Channel 4 dispatches tonight.
They need to do PFI next.
How do both Labour and Conservative allow such corruption?
@Grill
6 Jul, 2015 – 7:32 pm
Whilst what your link says is essentially correct, what it doesn’t stress enough is that previous Greek governments borrowed huge amounts on the open markets.
The open markets are essentially no different to Wonga, et al, who charge huge amounts of interest.
As Craig points out, all monies that have so far gone to Greece have not been to pay off initial loans, but to pay off some of the interest on those loans.
I’ll try to dig-up a credible link. Suffice to say that Greece is presently being asked to pay upwards of 1000% interest on these loans,
The lunatics who come on threads like this to defend such highway robbery are just propagandists of the banking system.
Interesting article from a few days ago from the Canadian National Post about Solon’s debt forgiveness program, the Seisachtheia: Eleni Panagiotarakou: Why does a supposedly democratic Europe fear the upcoming referendum in Greece?. Article connects Solon with his successor Cleisthenes (who, although the article does not mention it, is the one who introduced the Athenian system of choosing officials, jurors, and legislators by lot).
Interesting article by a German criticizing the incoherence of alleged supporters of democracy criticizing the plan to have a referendum in Greece: Todesstoß für die EU?
Griechenland/EU Angebliche Demokraten lassen Griechenland wie eine heiße Kartoffel fallen. Auf welche Werte will sich die EU denn künftig überhaupt noch glaubwürdig berufen? [Death Blow for the EU? Greece/EU: Self-proclaimed democrats are dropping Greece like a hot potato. What values will the EU be able to appeal to credibily in the future?].
The article mentions Solon:
The article goes on to argue that it was quite deliberate that the banksters chose to make Greece their victim, as they intend to overthrow traditional Western culture, and replace it with the crassest materialism and worship of Mammon.
Greece is presently paying about 200 million euro every month in interest payments…
http://www.theguardian.com/business/2015/apr/24/greek-debts-what-does-it-owe-when-will-the-money-run-out
That’s more than a billion euro a year; not to pay off the loans, but just to pay off the interest on the loans.
What the feck is ‘interest’ at that level, except highway robbery?
Remember Greece is not alone in this. Resistance to EU bank rule is international.
http://ak-europa.eu/_includes/mods/akeu/docs/main_report_de_330.pdf
The report above happens to be an Austrian party weighing in but it supports the position of UNCTAD and the G-77, the HRC, and the UNGA, including much of Europe as it falls piecemeal into the periphery (Wallonia and Sicily will follow Carinthia and Central Europe.) This suggests that the long game is to drag Europe back in line with UN Charter Articles 56 and 103, palliating the troika’s scorched-earth coercion as it discredits the EU and NATO.
Habba/Glenn
Perhaps the real problem was that when the loans were originally made they were at interest rates that were too low for the risk that they entailed – and as a consequence Greece was able/emcouraged too borrow much more than it could actually do so. The same happened with previous sovereign debt crises and with asset backed securities – when free markets and supposedly intelligent bankers failed to price risk properly. The market mechanism does not work properly in this regard and this is why it needs proper regulation.
I don’t understand. Is Germany going through ‘austerity’? From my random conversations with German workers, it seems that some are – terrible working hours, cutting down on benefits for the young and disabled. But this is only anecdotal. I imagine that a country with flash cars to sell is better off than one with olives – but is that really the ‘European project’? And what’s happening in, say, Luxembourg?
The Telegraph: BBC chief Lord Hall likely to be quizzed by MPs over ‘Islamic State bias’ row
The Corporation’s director general is under fire for defying David Cameron over his demand that the BBC stops describing Isil as ‘so-called Islamic State’ and uses ‘Daesh’ in broadcasts.
Glenn Greenwald comments: “The days when the UK pretended to have a free press appear to have come to an end: more honest this way “
“Your special subject tonight is the economies of the European community…How much does Greece owe?”
“367 billion dollars”
“Correct. And who do they owe it to?”
“Mostly to the other European economies”
“Correct. How much does Ireland owe?”
“865 billion”
“Correct. And who do they owe it to?”
“Other European economies, mostly”
“Correct. How much do Spain and Italy owe?”
“One trillion dollars each”
“Correct. Who to?”
“Mainly France, Britain and Germany”
and so on – carry on here
https://www.youtube.com/watch?v=I5QwKEwo4Bc
Nasty pair of little bullies here.
http://i.telegraph.co.uk/multimedia/archive/03366/hollande-merkel_3366534b.jpg
Tomorrow’s Torygraph headline reads
‘Germany refuses to let Greece off hook’
Merkel visited Hollande today as the enforcer of her order.
Is it not true that the German economy is underwriting this?
(largely) underwriting
Technicolour, the reason this meme get’s implanted in the public’s brain is because the media whores are the exact same people who lend money to the likes of Greece.
I know, I’m stating the obvious.
Technicolour
6 Jul, 2015 – 22h35
“Your special subject tonight is the economies of the European community…How much does Greece owe?”
Nice one Tech. But I almost feel guilty laughing in this situation. But then I learnt something new this evening: The Greeks have a no-naturalised-citizens policy! Arrogant as hell! Racist too? Someone tell me I’m wrong, please.
People using ‘the European Project’ phraseology. A project has usually meant to me as something with a beginning, a middle and an end.
“Where is Portugal going to get the money that it owes to Germany if Germany can’t get back the money it loaned to Italy?”
https://www.youtube.com/watch?v=I5QwKEwo4Bc
Alcyone: yes, I don’t understand it either. I imagine they thought that the strongest economy (Germany?) should just be able to lend money to turn other states into – what?
lend = make up
Tech, yes exactly what? I enjoin you in your question. Or was it just a case for relative ease of milking their markets on behalf of high-tech cars. Give it a rest a bit. But then again, I hear the Greeks are quite lazy? Can somebody please tell me I’m wrong.
I heard that Goldman Sachs was brought in in the early days to do a highly effective job in cooking, no not kleftiko (same root as kleptomaniac), but the Government’s books. And that they were paid very handsomely for the party.
I’m not sure you could call a region whose joy lies in beauty and arts and passion ‘lazy’. Perhaps they are not producing enough meaningless yet ultimately destructive plastic temporary fixes for the market.
“I hear the Greeks are quite lazy?”
Where did you hear that from? Whose standards are judging ‘lazy’? What is ‘lazy’? Odd.
That’s what a lot of Germans seem to think.
Tech, from a Polish friend of mine who ran a successful catering business there for some years and then had to pack up and leave because of the downturn. Fortunately she had another skill and qualification to fall back on and is busy working hard to establish herself in London, with some initial success.
Does the joy of ” beauty and arts and passion ” lie in a limited region? Of course if you are beautiful, you shall receive tourists, but you still have to work while the tourists enjoy their holidays.
Excellent interview with a Syriza MP, another economist, who outlines the options for Greece in the days and months ahead:
Two parts.
https://www.youtube.com/watch?v=_BW_7AYoApU
The other possibility is that this is all being deliberately engineered, with or without the cooperation of Syriza, so that the Greeks in desperation settle for whatever they’re given.
Certainly, the brinkmanship of Varoufakis and Tsipras is so reckless that it’s hard to believe that there is not more going on here. Neither of them strike me as credible figures.
The name-calling at the EU is probably merely be a ploy to deflect attention from the treachery and/or incompetence of the Greek government.
Two parts here:
http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=14186