For the past six months the Greek government has been giving battle in conditions of unprecedented economic asphyxiation, to implement your mandate, of Jan. 25. It was a mandate to negotiate with our partners to end austerity and to restore prosperity and social justice to our country.
(It was) for a viable agreement which would respect both democracy, common European rules and would lead to a definitive exit from the crisis.
Throughout this negotiation period, we were asked to adopt bailout agreements which were agreed with previous governments, even though these were categorically condemned by the Greek people in the recent elections.
But we did not, even for a moment, contemplate yielding. That is, to effectively betray your own trust.
After five months of tough negotiations our partners, unfortunately, concluded at the Eurogroup the day before last with a proposal, an ultimatum, to the Hellenic Republic and the Greek people.
An ultimatum which contravenes the founding principles and values of Europe. The value of our common European structure.
The Greek government was asked to accept a proposal which accumulates unbearable new burdens on the Greek people and undermines the recovery of Greek society and its economy, not only maintaining uncertainty, but by amplifying social imbalances even further.
The proposals of the institutions include measures which lead to a further detribalization of the labor market, pension cutbacks, new reductions in public sector salaries and an increase in VAT on food, eateries and tourism, with an elimination of tax breaks on the islands.
These proposals clearly violate European social rules and fundamental rights to work, equality and to dignity, proving that the aim of some partners and institutions was not a viable and beneficial agreement for all sides, but the humiliation of the entire Greek people.
These proposals prove the fixation, primarily of the International Monetary Fund, to tough and punitive austerity.
It makes it more imperative than ever that leading European forces rise to the occasion and take initiatives which will draw a line under Greek debt, a crisis which also affects other European countries, threatening the future of European unification.
My fellow Greeks, we are now burdened with the historic responsibility, (in homage to) to the struggles of the Hellenic people, to enshrine democracy and our national sovereignty.
It is a responsibility to the future of our country. And that responsibility compels us to answer to this ultimatum based on the will of the Greek people.
A while ago I convened the cabinet, where I suggested a referendum for the Greek people to decide in sovereignty.
The suggestion was unanimously accepted.
Tomorrow the plenary of the Greek parliament will convene to ratify the proposal of the cabinet for a referendum next Sunday, July 5, posing the question of the acceptance or rejection of the proposal by the institutions.
I have already communicated my decision to the President of France and the German Chancellor, the President of the ECB, while tomorrow in correspondence to the EU leaders and institutions I will formally request a few days extension of the (bailout) program so the Greek people can decide, free of pressure or coercion, as is dictated by the Constitution of our country and the democratic tradition of Europe.
My fellow Greeks,
To this blackmail-ultimatum, for the acceptance on our part of a strict and humiliating austerity (proposal), and with no end to it in sight nor with the prospect of allowing us to ever stand on our feet economically or socially, I call upon you to decide sovereignly and proudly, as the history of Greeks dictates.
To this autocratic and harsh austerity, we should respond with democracy, with composure and decisiveness.
Greece, the cradle of democracy, should send a strong democratic answer to Europe and the world community.
I am personally committed to respect the result of your democratic choices, whatever those may be.
I am absolutely certain your choice will honor the history of our country, and send a message of dignity to the whole world.
In these crucial hours, we must all remember Europe is the common home of its people. There are no owners or guests in Europe.
Greece is, and will remain an indispensable part of Europe and Europe an indispensable part of Greece. But Greece without democracy is a Europe without identity or a compass.
I call upon you all to take the decisions worthy of us.
For us, future generations, for the history of Greeks.
For the sovereignty and dignity of our people.
_________________ Minds are like parachutes.
They only function when open.
The U.S. And EU Will Collapse Regardless Of Economic ‘Contagion’
In order to understand what is really going on around the globe in terms of the collapsing economy, we must set aside false mainstream versions of reality. When it comes to the EU and its current fiscal turmoil, it is very important to, in some respects, ignore Greece entirely. That’s right; forget about all the supposed drama surrounding Greek debt obligations. Will they find a way to pay creditors? Will they default? Will they make a deal with Russia and the BRICS? Will there be last-minute concessions to save the system? It doesn’t matter. It’s all a soap opera, an elaborate Kabuki theater run by international financiers and globalists.
It is most important to remember the fundamentals. Greece will default on its debts. Period. There is no way around it. Maybe Greece makes a deal today, maybe it makes a deal tomorrow; but eventually, the country’s ability to stretch out its resources in order to meet its exponential liabilities will end. It is inevitable, and no last-minute “deal” is going to change the math at the core of it all.
Why are so many economists so worried about a little country like Greece? It's all due to a great lie: a dishonest narrative being perpetuated by the establishment that if Greece falls, defaults or leaves the EU, this could trigger a domino effect of other nations hitting a debt wall and following suit. The lie embedded in this narrative is the claim that Greece will cause a “contagion” through the act of default. Let's be clear - there is no contagion. Multiple countries within the EU have developed their own debt problems in spite of Greece over the past couple of decades, not because of Greece. Each of these countries, from Italy, to Spain, to Portugal, etc. has its OWN sovereign debt disasters to deal with caused by its own fiscal irresponsibility. The only legitimate reason for a so-called contagion is the fact that these countries have been forced into socialist interdependency through the EU structure.
Never forget this: The EU is in trouble not because of Greece, but because of forced supranational interdependency. The EU by all rights should not exist, nor should any centralized supranational single currency system.
I would also point out that globalist institutions like the International Monetary Fund are highly motivated to initiate disaster in the EU, despite some people’s assumptions that the EU is some kind of representative model of globalization. It’s not. If this were the case, then the IMF would not be stiffing Greece on debt aid while continuing to help Ukraine despite Ukraine’s similar inability to pay.
Why would the globalists want a partial breakup of the EU? What would they gain from such an event? That’s easy; they gain crisis, chaos and an opportunity to present a false dialectic.
Europe is not at all representative of what globalists really want in terms of economic and political structure, no matter what many people assume. It is a, rather, a kind of facsimile; a half measure. When Europe hits the bottom of the financial abyss and the bewildered public begins asking what the hell happened, the elites will be there with an immediate explanation. They will claim that it was not the EU’s interdependency that was the problem. Instead, they will assert that the EU was actually not centralized ENOUGH. They will claim that in order for a supranational economy and currency to work, we must also have supranational governance. In other words, the system failed because it needs to be stabilized by global government.
The Fabian socialists will argue that it was the barbaric and outdated institution of national sovereignty that caused the full-spectrum crisis. They will completely gloss over the negative effects of an interdependent economic system and the fact that a lack of redundancy leaves cultures simpering and impotent. We’re all one big human village after all, so we should accept the idea that we all succeed or fail together. Free markets and individual innovation apparently have nothing to do with a thriving economic structure. What we really need is a hive mind amalgamation that turns us all into easily replaceable parts in a massive rumbling lawnmower that chews up our heritage, history and principles for the sake of some arbitrary greater good and the promise of alchemical floating cities in the sky where no one has to work anymore.
The fall of the EU is a means to an end for globalists. There is almost no nation or institution they will not sacrifice if that sacrifice can be exploited to further their goal of total global political and economic dominance. They don’t just want a completely centralized system; they want all of us to BEG them to put that system in place. They want the masses to think it was all our idea. This is the most pervasive and effective form of slavery, when the slaves are manipulated into demanding their own enslavement. When the slaves are fooled into believing their enslavement is something to be proud of — a badge of honor in service of the collective, if you will.
The fall of the U.S. will be no different in this regard. We do not necessarily have a supranational structure like the EU. So our narrative for collapse will be slightly different, and the engineered lesson we are meant to learn will be carefully crafted.
You see, Americans are meant to play the role of the spoiled imperialists who are finally getting what we deserve, an economic punch in our tender parts. We are the new Rome, bread and circuses and all. And when the U.S. comes crashing down like Europe, the Fabians will be there yet again to admonish the greed inherent in national sovereignty and the destructive aspirations of power that must be squelched by a more evenhanded global political system. I don’t really know how many people out there realize this, but we are meant to play the bad guys in the global theater being put on by the elites. Americans are the villains, the rest of the world plays the role of innocent victim, and globalist centers like the IMF and the BIS are meant to play the heroes, coming to the rescue of humanity when all appears lost.
Our debt generation by far outmatches that of the whole of EU nations combined, a fact I outlined in Part 3 of my series One Last Look At The Real Economy Before It Implodes. Unlike Greece, though, the U.S. has the direct option to print fiat at will in order to prolong punishment for our massive debt spending. However, as we have seen with recent market reactions to the very notion of an interest rate hike by the Federal Reserve in September, such an event will trigger extensive outflows from stock markets and herald the end of the “new normal.” Again, why would the banksters do this? Why not keep interest rates at a constant near zero? It is not as if there is any public pressure to raise rates; in fact, it's quite the opposite. Why is the Fed ignoring the hundreds of signals showing that the U.S. is in a recession and pushing ahead with discussion of interest rate hikes despite what one might logically conclude would be in the Fed's best interest?
The Fed knows that the only things propping up American markets are free money and blind faith by the public that banks and government will act to stop any pain or economic suffering, should such a potential for crisis arise. When the free money is gone and that faith disappears, then we will have an epic catastrophe on our hands. The globalists within the Fed know this, and they want this - at least , they want a controlled version of this. The elites NEED the fall of the current U.S. system exactly because this will make way for the rise of what they often term the “great economic reset.” This reset is the next stage in the plan for total global economic centralization.
This is not about contagion. There is no such thing. It is an excuse, a scapegoat designed to distract from the real problem. This is about a concerted effort over the past several decades by internationalists to maneuver Western cultures into a position of vulnerability. When people are weak and frightened, they become malleable. Social changes you would have never thought possible today become very possible tomorrow in the midst of a crisis. I believe we are now seeing the onset of the next great crisis, and the fundamentals of economy support my view. When the entire European system hangs by the thread of Greek debt and the entire U.S. system hangs by the thread of near zero interest rates and blind market faith, something is about to shatter. There is no going back from such a condition. There is only the path forward, and the path forward is not pleasant or comfortable and it cannot be ignored.
We cannot forget that crisis is in itself a distraction as well. Whatever pain we do feel tomorrow, or the next day, or the next decade, remember who it was that caused it all: the international banks and their globalist political counterparts. No matter what happens, never be willing to accept a centralized system. No matter how reasonable or rational it might sound amid the terror of fiscal uncertainty, never give the beast what it wants. Refuse to conform to the dialectic. This is the only chance we have left to get back to true prosperity. Once we cross the line into the realm of worldwide institutionalized interdependency, we will never know prosperity or freedom again.
_________________ "A person hears only what he understands."
Johann Wolfgang von Goethe
Greece – The Way Out. Troika Involved in “Financial Terrorism”.
It’s “Economic Waterboarding”
by Peter Koenig
What the troika is doing to Greece these days is the pinnacle of financial terrorism. It is economic waterboarding. It is blackmail of the first degree.
These people are neoliberal fascists, putting an ultimatum to the Greek government – ‘either you present us with an acceptable austerity program, or we will prepare one for you’ – literally.
An austerity plan you better accept, lest you may default and be expelled from the European monetary union and maybe even the EU.
That is their threat. That is what Brussels does to a brother; to one of theirs. There is not a shred of solidarity left in this miss-called ‘Union’. This ‘Union’ doesn’t deserve to exist.
‘No-Solidarity’ is the brand mark of Europe. It is depicted all over the map.
Another glaring example is the EU's refusal to aid the trans-Mediterranean
refugees, the victims of wars and conflicts inspired by Washington and
carried out in full complicity with Europe – Libya, Syria, Sudan, Iraq,
Egypt, Somalia, Central Africa, Yemen – and more.
In Greece the troika is applying a strategy of ‘reverse objectives’.
The EU does not want Greece or any other member, no matter how weak
economically, to leave the Eurozone. A Grexit risks causing a chain
reaction. By threatening to expel they are inviting Greece to beg for mercy.
Earlier during these month long ongoing negotiations, Madame Lagarde,
the Iron Lady of the IMF, the epitome of a marionette to the Masters of
Washington, had the audacity to observe, "I want to talk to adults," when
she referred to obtaining a ‘better, more serious’ austerity plan. She is the
personification of IMF supremacy.
Mind you, it is the IMF, the extended arm of the US Treasury that calls the
shots in Brussels. The EU, acting as vassals, plays along in full ideological
complicity. A socialist government in the EU cannot be tolerated; even less
so as it hosts the key European NATO base. The Greek people are being
penalized for having had the audacity to elect a socialist government –
How dare they! – That’s the verdict.
It is however also amazing how adamant Mr. Tsipras and Syriza defend
the idea of staying at all cost in the Eurozone. Why? – The Euro is doomed.
The Euro is barely 15 years old. We all remember the happier times with
our own sovereign national currencies. With the onset of the Euro,
Europeans have become enslaved to predatory banking. Europe has
surrendered its sovereignty to a bunch of monster mega banks, all linked
to Wall Street.
In fact, the European Central bank (ECB) is not a real central bank, but
a mere instrument of Wall Street. Mr. Draghi, the President of ECB, is a
former Goldman Sachs executive. In other words, Goldman Sachs runs
Europe’s monetary and economic policy.
The mystery remains – why commit suicide, economic suicide of an
entire nation, by stubbornly clinging to a sinking ship – yes, the western
monetary system with its dollar-based greed economy is doomed. It is
only a question of time. All signs are on the wall.
Do the Greek people who still believe in the shattered vision of the
‘glamorous euro’ know this? Does the European citizen at large realize that
his life savings might disappear in thin air? The European Commission has
just passed a law that gives the banks the right to steal – yes, steal – the
money from depositors to save themselves, the banks that is, from
collapse. It is called ‘bailing-in’ as opposed to ‘bailing-out’ which has been
the previous, but minor crime, stealing tax payers’ money.
The bail-in has already been trialed in Cyprus – remember, on 25 March
2013, a test run for a new rescue strategy for too-big-to-fail (TBTF) banks
was unveiled for the world in Cyprus, when close to 50% of bank deposits
were stolen by the banks. The rest of Europe just smiled for spite – this
can never happen to us. They called it disparagingly a ‘haircut’. No
solidarity then, no solidarity today.
As of August 2015, this strategy of deceit and theft by Big Finance will be
law in the Eurozone. Hardly any Euro-citizen knows about it. Otherwise
there would be a run on the banks. Or do people just hope it will never
happen? – It will happen. It is just a question of time. But when it happens
it will be too late to act. We must act now. One way of acting is getting out
of the Eurozone.
Greece has a unique opportunity to exit the Eurozone gracefully, head
high, telling the troika, especially the fratricidal Brussels gang, that
honoring the election commitment to the Greek people is a priority.
No more austerity, no more pension cuts, no more privatization of public
services and public assets, no more closing of hospitals – for these
honorable reasons Greece will exit the Eurozone – not surrender, never
surrender. This is not surrender; this is a wise move that will lead Greece
into a new and prosperous future.
There are two ways of going about it. One would be the traditional one –
defaulting at the end of June, unable paying back the € 1.6 billion owed to
the IMF for the ill-begotten ‘rescue’ package. This illustrious, but criminal
institution has already declared on 25th June, it will not extend the
payment due date of 30 June, as this would be against IMF policy.
Defaulting is nothing new. This was done by many countries before Greece
– Argentina, Bolivia, Ecuador – and – yes – even Germany. According to
German economic historian Albrecht Ritschl, Germany has defaulted 3
times on its debt in the 20th Century. The last time in the 1990s. He calls
Germany’s defaults the biggest debt transgressions in Europe’s history.
Greece’s debt pales if compared to the German defaults. – Why does
nobody seem to remember? – It’s simple – because the bought
mainstream media is silent about it.
Defaulting on her debt, Greece would simultaneously declare exit from the
Eurozone, taking back monetary and fiscal autonomy and returning to its
own currency, the drachma. The next step would be nationalizing and
regulating Greek banks, activating the Greek Central Bank as a sovereign
institution that makes monetary policy, using local banks to jump start the
local economy, followed by negotiating Greece’s 360 billion euro debt with
her creditors and with a devalued drachma – at Greece’s terms and
A bolder, unusual but totally legal solution – call it Plan B – would be for
the sovereign Greek Central Bank to produce (electronically – as all banks
do, including the ECB) her own currency, the Euro. “Printing” a nation’s
own currency is every country’s sovereign right.
The Euro is still Greek’s currency. For a bank producing money is
producing debt. In this case the Central Bank of Greece creates an
internal debt of 1.6 billion euros to service the IMF loan at the end of June
– an internal debt to be dealt with domestically, not with outside
interference. There is no EU or ECB rule forbidding a central bank to
create its own money mass. It may not have happened before in the
Eurozone, but it is not against any rule. That would be a Master Move,
probably admired by many countries in similar predicaments.
Simultaneously Greece would declare it is leaving the Eurozone, reverting
to the drachma, nationalize and restructure its banking system which will
then lend to the Greek productive and service sectors to quickly revamp
her economy. This is a sovereign and legal action. Brussels might be
furious and in shock. Would they call for a boycott within the EU and even
beyond? – Perhaps. So what? There is Russia and China and other
members of the BRICS and the Shanghai Cooperation Organization (SCO)
to ‘bail Greece out’ with emergency supplies. These are countries still
remember the meaning of solidarity. Greece may soon be surrounded
by amigos also from Europe, friends who think alike and want to act the
same, just didn’t dare.
As recently said by one of Russia’s top economists, Sergey Glacyev, the
future for Greece lays in diversity, including in the East, restoring and
developing her economy in association with Russia and China, becoming
part of the new Silk Road, a Chinese initiative for economic development
stretching from Shanghai all the way through Central Asia, Russia – and
maybe Europe, if and when Europe will wake up.
This sick Washington-led system needs to get a cold shower, a slap
in the face.
Greece undeniably will remain part of Europe; but Greece may also
become the gateway to a NEW Europe of sovereign federal states for
which solidarity is a principle of the union – a Europe decoupled from the
hegemony of the dollar and detached from the fangs of the decaying US
* Peter Koenig is an economist and geopolitical analyst. He is also a
former World Bank staff and worked extensively around the world in the
fields of environment and water resources. He writes regularly for Global
Research, ICH, RT, Sputnik News, the Voice of Russia / Ria Novosti,
TeleSur, The Vineyard of The Saker Blog, and other internet sites.
He is the author of Implosion – An Economic Thriller about War,
Environmental Destruction and Corporate Greed – fiction based on facts
and on 30 years of World Bank experience around the globe. He is also a
co-author of The World Order and Revolution – Essays from the Resistance.
_________________ Minds are like parachutes.
They only function when open.
The FTSE 100 fell 1.97%
Germany’s Dax dropped 3.56%
France’s Cac closed 3.74%
Italy’s FTSE MIB lost 5.17%
Spain’s Ibex ended down 4.56%
Dow Jones currently down 1.37%
The question for referendum
“Should the agreement plan submitted by the European Commission,
European Central Bank and the International Monetary Fund to the
June 25 eurogroup and consisting of two parts, which form their single
proposal, be accepted?
The first document is titled ‘Reforms for the completion of the Current
Program and Beyond’ and the second ‘Preliminary Debt sustainability
Letter of support for Greece
A number of academics, including former Archibishop of Canterbury
Rowan Williams, have written to us to support the Greeks and calling on
the European union to recommit to the principles of democracy:
Over the past five years, the EU and the IMF have imposed unprecedented
austerity on Greece. It has failed badly. The economy has shrunk by 26%,
unemployment has risen to 27%, youth unemployment to 60% and, the
debt-to-GDP ratio jumped from 120% to 180%. The economic catastrophe
has led to a humanitarian crisis, with more than 3 million people on or
below the poverty line.
Against this background, the Greek people elected the Syriza-led
government on 25 January with a clear mandate to put an end to
austerity. In the ensuing negotiations, the government made it clear that
the future of Greece is in the Eurozone and the EU. The lenders, however,
insisted on the continuation of their failed recipe, refused to discuss a write
down of the debt – which the IMF is on record as considering unviable –
and finally, on 26 June, issued an ultimatum to Greece by means of a non-
negotiable package that would entrench austerity. This was followed by a
suspension of liquidity to the Greek banks and the imposition of capital
In this situation, the government has asked the Greek people to decide the
future of the country in a referendum to be held next Sunday. We believe
that this ultimatum to the Greek people and democracy should be
rejected. The Greek referendum gives the European Union a chance to
restate its commitment to the values of the enlightenment – equality,
justice, solidarity – and to the principles of democracy on which its
legitimacy rests. The place where democracy was born gives Europe the
opportunity to recommit to its ideals in the 21st century.
_________________ Minds are like parachutes.
They only function when open.
Deeply drunken performance from The President of the European Commission,
Jean-Claude Juncker, who bitch slapped EU leaders, and called the Hungarian PM 'dictator'
in front of the press at the EU-Eastern Partnership summit in Latvia during May 2015.
What an idiot goon!
Bet he spends long nights worrying about the Greek people, NOT.
We definitely on the right side of this struggle.
_________________ Minds are like parachutes.
They only function when open.
No BS from Hudson, but acute awareness of the strategic and tactical
landscape. Read the article and then you'll appreciate how Varoufakis'
game theory is fronted by Tsipras. Playing a blinder so far.
Today's Tsipras disarming tactic: 'the vote is not about euro exit.'
Yep. In the same way that Xmas is good news for turkeys. <wink>
JUNE 29, 2015
The Greek Debt Crisis and Crashing Markets by MICHAEL HUDSON
Back in January upon coming into office, Syriza probably could not have won a referendum on whether to pay or not to pay. It didn’t have a full parliamentary majority, and had to rely on a nationalist party for Tsipras to become prime minister.
(That party balked at cutting back Greek military spending, which was 3% of GDP, and which the troika had helpfully urged to be cut back in order to balance the government’s budget.)
Seeing how unyielding the opposition was, Syriza’s stance was: “We would like to pay. But there’s no money.”
This kept throwing the ball back into the troika’s court. The Institutions were so unyielding that Syriza’s approval rating in the polls rose by 13% by June. Greek voters became increasingly incensed at the Troika’s demand for further pension cuts and privatizations.
Tsipras and Varoufakis were willing to pay the IMF with the IMF’s own funds, in what V. called “extend and pretend.” But their only interest in keeping current on debt was to obtain additional funding that could be used to pay domestic pensions and other basic government budgetary expenditures.
The basic tactic in such tensions between creditors and debtors is clear: once debt repayments exceed new loans, stop paying.
So when The Institutions made it clear that no more credit would be forthcoming without Syriza adopting the old Pasok/New Democracy capitulation to Troika demands, Tsipras and Varoufakis decided it was time to call a referendum eight days hence, on Sunday, July 5.
Late Friday night and into the early Saturday morning hours, Greeks ran to the ATM machines to convert their checking and savings deposits into euro notes, expecting that the end game would involve a likely 30% depreciation of the drachma – and that indeed, the ECB would stop lending to support Greek banks (the only role the ECB wanted to play).
Syriza had no love for the banks. They were the vehicles through which the oligarchs controlled the Greek economy, after all. For a month, they had been discussing how to separate the banks into “good bank” and “bad bank,” either nationalizing them (wiping out stockholders) or creating a Public Option alternative.
Most important, once out of the eurozone, Greece could create its own Treasury to monetize its spending. The Institutions called this “scrip,” but the Greeks could establish it as their national currency. They would escape from euro-austerity – except, of course, to the extent that the ECB waged economic war on Greece by imposing its own capital controls.
By going through the sham negotiations with The Institutions, Syriza gave Greeks enough time to protect what savings and cash they had – by converting these bank deposits into euro notes, automobiles and “hard assets” (even boats).
Businesses borrowed from local banks where they could, and moved their money into eurozone banks or even better, into dollar and sterling assets. Their intention is to pay back the banks in depreciated drachma, pocketing a 30% capital gain.
What commentators miss is that Syriza (at least its left) wants to be transformative. It wants to free Greece from the post-military oligarchy that evades taxes and monopolizes the economy. And it wants to transform Europe, away from ECB austerity to create a real central bank. In the process, it demands a clean slate of past bad debts. It wants to reject the IMF’s austerity philosophy and refusal to take responsibility for its bad 2010-12 bailout.
This larger, transformative picture is at the center of Syriza-left plans.
I’m in Germany now (on my way to Brussels), and have heard from Germans that the Greeks are lazy and don’t pay taxes. There is little recognition that what they call “the Greeks” are really the oligarchs. They have gained control of the old coalition Pasok/New Democracy parties, avoided paying taxes, avoided being prosecuted (New Democracy refused to act on the “Lagarde List” of tax evaders with nearly 50 billion euros in Swiss bank accounts), orchestrated insider dealings to privatize infrastructure at corrupt prices, and used their banks as vehicles for capital flight and insider lending.
This has turned the banks into vehicles for the oligarchy. They are not public institutions serving the economy, but have starved Greek business for credit.
So one casualty apart from the credibility of the eurozone, the ECB and the IMF will be these banks. Syriza is positioning itself to provide a public option – public banks that will promote the economy, and a national Treasury that will spend government money INTO the economy, not drain it to pay the Troika for having bailed out French and other banks back in 2010-1.
The European popular press is as bad as the U.S. press in describing matters. It warns of “hyperinflation” if a central bank monetizes as much as one euro of government spending in the way that the U.S. Fed does, or the bank of England or any other real central bank. The reality is that nearly all hyperinflations stem from a collapse of foreign exchange as a result of having to pay debt service. That was what caused Germany’s hyperinflation in the 1920s, not domestic German spending. It is what caused the Argentinean and other Latin American hyperinflations in the 1980s, and Chile’s hyperinflation earlier.
But once Greece frees itself from the odious debts forced upon it at financial gunpoint in 2010-12, its balance of payments will be roughly in balance (subject to some depreciation of the drachma; 30% is a number I heard bandied about in Athens last week).
To mimic Margaret Thatcher, “There is No Alternative” to withdrawing from the eurozone. The terms dictated for remaining in it was to sell off all of what remained in Greece’s public sector to European and U.S. buyers, at insider prices – but not to Russian buyers, even for the gas pipeline that was to have been sold.
Evidently the eurozone financial strategists thought that Tsipras and Varoufakis would simply surrender, and be promptly voted out of power, thereby crushing their socialist policy agenda. They miscalculated – and are now hoping to create as much anarchy as possible to punish the Greek people. The punishment is for not continuing to support their client oligarchy, which has moved most of its assets out of reach of the government.
But instead of Syriza losing credibility, it is the ECB – which refuses to create money to finance economic recovery, but only to pay the oligarchs’ banks so that they can continue to control the government. This control is now being weakened precisely because their banks are being weakened.
Greece’s Parliament last week released its Debt Truth Commission report explaining why Greece’s debts to the IMF and ECB are odious, and were taken on without a popular referendum approving these loans. Indeed, Mrs. Merkel and Mr. Sarkozy obeyed Mr. Obama and Geithner when the latter insisted at a G8 meeting that the ECB ignore the IMF economists’ analysis that Greece could not pay its debts, and bail out the banks. Geithner and Obama explained that U.S. banks had placed big financial bets that Greece would pay its private bondholders, so the ECB and IMF had to lend the government the funds to pay – but had to overthrow the country’s Prime Minister Papandreou who had urged a referendum on whether Greek people really wanted to commit economic and political suicide.
Financial technocrats were put in place to serve the domestic oligarchy and foreign bondholders. Greece was under financial attack just as deadly as a military attack. Finance is war. That is this week’s lesson.
And for the first time, debtor countries are realizing that they are in a state of war.
This is why markets are crashing on Monday, June 29.
* * *
Eurozone financial strategists made it clear that they wanted to make an example of Syriza as a warning to Spain’s Potemos party, and anti-euro parties in Italy and France. The message was supposed to have been, “Avoid our austerity and we will cause chaos. Look at Greece.”
But the rest of Europe is interpreting the message in just the opposite way: “Remain in the eurozone and we will only create money to strengthen the financial oligarchy, the 1%. We will insist on budget surpluses (or at least, no deficits) so as to starve the economy of money and credit, forcing it to rely on commercial banks at interest.”
Greece has indeed become an example. But it is an example of the horror that the eurozone’s monetarists seek to impose on one economy after another, using debt as a lever to force privatization selloffs at distress prices.
In short, finance has shown itself to be the new mode of warfare. Resisting debt leverage and financial conquest is as legal as is resisting military invasion.
_________________ Minds are like parachutes.
They only function when open.
Last edited by Fintan on Mon Jun 29, 2015 8:09 pm; edited 1 time in total
Actually the full conference has the most amazing historical disposition on how we arrived at today's events.
The surplus pillars and deficit hinterlands of Bretton Woods and the Volcker plan to turn the US into a super deficit vacuum post 1971 is beautifully explained.
The video above then appears at about 40mins.
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