P.S.P: THE TRUTH ABOUT BANKRUPTCY IN GREECE

STEVE PELOTAS

As my friend Roman emperor Vespasiano said to me ‘’Pecunia non olet’’(money doesn’t smells) free-market economy, and capital, has found an appropriately modern form to declare their physical and moral odorlessness’.

Money, has become the measure of man. The external reality is characterized by a totalitarian mode of thinking and thus reduced to a universal money game. Limited to the dual logic of either winning or losing, this game avoids any consciousness of greed, fraud or betrayal promoting brutality, sadism and indifference to suffering. In cynically ignoring any other value but that of money, the game maintains demoralization. Good and evil have no meaning any longer except failure and success.’

The mainstream media, have the following narrative for the economic crisis in Greece: the government spent too much money and went broke[1]; the generous banks gave them money, but Greece still can’t pay the bills because it mismanaged the money that was given. That it is a big fat lie … not only about Greece, but about other European countries such as Spain, Portugal, Italy and Ireland who are all experiencing various degrees of austerity. It was also the same big, fat lie that was used by banks and corporations to exploit many Latin American, Asian and African countries for many decades.

Greece did not fail on its own. It was made to fail.

In summary, the banks wrecked the Greek government and deliberately pushed it into unsustainable debt so that oligarchs and international corporations can profit from the ensuing chaos and misery.

The bankers mafia game to international finance unfolded in four stages.

Stage 1: The first and foremost reason that Greece got into trouble was the “Great Financial Crisis” of 2008 that was the brainchild of Wall Street and international bankers. If you remember, banks came up with an awesome idea of giving subprime mortgages to anyone who can fog a mirror. They then packaged up all these ticking financial bombs and sold them as “mortgage-backed securities” at a huge profit to various financial entities in countries around the world.

A big enabler of this criminal activity was another branch of the banking system, the group of rating agencies – S&P, Fitch and Moody’s – who gave stellar ratings to these destined-to-fail financial products. Unscrupulous politicians such as Tony Blair got paid by Big Banks to peddle these dangerous securities to pension funds and municipalities and countries around Europe. Banks and Wall Street gurus made hundreds of billions of dollars in this scheme.

But this was just Stage 1 of their enormous scam. There was much more profit to be made in the next three stages!

Stage 2 is when the financial time bombs exploded. Commercial and investment banks around the world started collapsing in a matter of weeks. Governments at local and regional level saw their investments and assets evaporate. Chaos everywhere!

Vultures like Goldman Sachs and other big banks profited enormously in three ways: one, they could buy other banks such as Lehman brothers and Washington Mutual for pennies on the dollar. Second, more heinously, Goldman Sachs and insiders such as John Paulson (who recently donated $400 million to Harvard) had made bets that these securities would blow up. Paulson made billions, and the media celebrated his acumen. (For an analogy, imagine the terrorists betting on 9/11 and profiting from it.) Third, to scrub salt in the wound, the big banks demanded a bailout from the very citizens whose lives the bankers had ruined! Bankers have chutzpah. In the U.S., they got hundreds of billions of dollars from the taxpayers and trillions from the Federal Reserve Bank which is nothing but a front group for the bankers.

In Greece, the domestic banks got more than $30 billion of bailout from the Greek people. The supposedly irresponsible Greek government had to bail out the hardcore capitalist bankers.

Stage 3 is when the banks force the government to accept massive debts. One of the proven techniques used by the parasitic international bankers is to downgrade the bonds of a country. And that’s exactly what the bankers did, starting at the end of 2009. This immediately makes the interest rates (“yields”) on the bonds go up, making it more and more expensive for the country to borrow money or even just roll over the existing bonds.

From 2009 to mid-2010, the yields on 10-year Greek bonds almost tripled! This cruel financial assault brought the Greek government to its knees, and the banksters won their first debt deal of a whopping 110 billion Euros.

The banks also control the politics of nations. In 2011, when the Greek prime minister refused to accept a second massive bailout, the banks forced him out of the office and immediately replaced him with the Vice President of ECB (European Central Bank)! And what would this new guy do? Sign on the dotted line of every paperwork that the bankers bring in.

(By the way, the very next day, the exact same thing happened in Italy where the Prime Minister resigned, only to be replaced by a banker/economist puppet. Ten days later, Spain had a premature election where a banker puppet won the election).

The puppet masters had the best month ever in November 2011.

Few months later, in 2012, the exact bond market manipulation was used when the banksters turned up the Greek bonds’ yields to 50%!!! This financial terrorism immediately had the desired effect: The Greek parliament agreed to a second massive bailout, even larger than the first one.

Now, here is another fact that most people don’t understand. The loans are not just simple loans like you would get from a credit card or a bank. These are loans come with very special strings attached that demand privatization of a country’s assets.

Stage 4: Now, the rape and humiliation of a nation begin under the name of “austerity” or “structural reforms.” For the debt that was forced upon it, Greece had to sell many of its profitable assets to oligarchs and international corporations. And privatizations are ruthless, involving everything and anything that is profitable. In Greece, privatization included water, electricity, post offices, airport services, national banks, telecommunication, port authorities (which is huge in a country that is a world leader in shipping) etc. Of course, the ever-manipulative bankers always demand immediate privatization of all media which means that the country gets photogenic TV anchors who spew establishment propaganda every day and tell the people that crooked and greedy banksters are saviors; and slavery under austerity is so much better than the alternative.

In addition to that, the banker tyrants also get to dictate every single line item in the government’s budget. Want to cut military spending? NO! Want to raise tax on the oligarchs or big corporations? NO!

After privatization and despotism under bankers, the government’s revenue goes down and the debt increases further. How do you “fix” that? Of course, cut spending! Lay off public workers, cut minimum wage, cut pensions, cut public services, and raise taxes on things that would affect the 99% but not the 1%. For example, pension has been cut in half and sales tax increase to more than 20%. All these measures have resulted in Greece going through a financial calamity that is worse than the Great Depression of the U.S. in the 1930s.

After all this, what is the solution proposed by the heartless bankers? Higher taxes! More cuts to the pension! It takes a special kind of a psychopath to put a country through austerity, an economic holocaust.

If every Greek person had known the truth about austerity, they wouldn’t have fallen for this. Same goes for Spain, Italy, Portugal, Ireland and other countries going through austerity. The sad aspect of all this is that these are not unique strategies. Since World War II, these predatory practices have been used countless times by the IMF and the World Bank in Latin America, Asia, and Africa.

This is the essence of the New World Order — a world owned by a handful of corporations and banks; a world that is full of obedient, powerless debt serfs.

THE NEW COLONIALISM [2]

A new form of colonialism is emerging in Europe. Unlike the possession in the old colonies, and form the compliant governments of the 20th century, in the 21st century, it is “colonialism by means of financial asset transfer.” It is colony wealth extraction by colonizing country managers, assigned to directly administer the processes in the colony by which financial assets are to be transferred. This new form of colonialism by direct management plus financial wealth transfer is now emerging in Greece and Ukraine.

Behind the appearance of the recent Greek debt deal is the reality of European bankers and their institutions — the European Commission, European Central Bank, IMF, and European Stability Mechanism (ESM) — who will soon assume direct management of the operation of the economy, according to the Memorandum, signed August 14, 2015, by Greece and the Troika. The Memorandum spells out direct management in various ways. In the case of Ukraine, it is even more direct. U.S. and European shadow bankers were installed by U.S.-Europe last December 2014 as Ukraine’s finance and economic ministers. They have been directly managing Ukraine’s economy on a day-to-day basis ever since.

The new colonialism as financial asset transfer takes several practical forms: as wealth transfer in the form of interest payments on ever rising debt, in firesales of government assets sold directly to the colonizer’s investors and bankers, and in the de facto takeover the colony’s banking system and bank assets in order to transfer wealth to shareholders of the colonizing country’s private bankers and investors.

The recent third debt deal signed August 14, 2015, between Greece and the Troika of European economic institutions adds another $98 billion to Greece’s debt, raising Greece’s total debt to more than $400 billion. Nearly all the $98 billion is earmarked for debt payments and to recapitalize the Greek banks. Wealth is extracted in the form of Greeks producing more, or cutting spending and raising taxes more, in order to create what’s called a primary surplus from which interest and principal is to be paid.

The Greeks aren’t going to have their goods produced and sold cheaper to Germany to re-export at higher price and profit — i.e. 19th century colonialism. Multinational corporations aren’t going to relocate to Greece so they can pay cheaper wages, lower costs, and then re-export to the rest of the world for profit — i.e. U.S. late 20th century colonialism. The Greeks are going to work harder and for less in order to generate a surplus that will return to the Troika institutions in the form of interest payments on the ever-rising debt they owe. The Troika are the intermediaries, the debt collectors, the State-Agency representatives of bankers and investors on behalf of whom they collect the debt payments. They are supra-state bodies and the new agents of financial wealth extraction and transfer.

The Greek-Troika Memorandum defines in detail the direct management as well as what and how the wealth will be extracted and transferred. The Memorandum begins by stating explicitly that no legislation or other action, however minor, by Greece’s political institutions can be taken without prior approval of the Troika. The Troika thus has veto power over virtually all policy measures in Greece, all legislative or executive agency decisions, and by all levels of government.

Furthermore, Greece will no longer have a fiscal policy. The Troika will oversee the writing of a budget. The Memorandum calls for a total restructuring of Greek taxes and spending that must occur in the new budget. And Troika representatives will monitor compliance to ensure that Greece adheres to the Troika’s budget. Every Greek agency and every Greek Parliament legislative committee will thus have its ‘Troika Commissar’ looking over its shoulder on an almost daily basis.

The Memorandum states the Troika also has the power to appoint “independent consultants” to the Boards of Greeks banks. Many old bank board members will be removed. Troika appointees will now manage the Greek banks on a day-to-day basis, in other words. Greek bank subsidiaries and branches outside Greece will be “privatized,” i.e. sold off to other Euro banks. The Greek banks are thus now Greek in name only. They will become appendages and de facto subsidiaries of northern Euro banks working behind the veil of the Troika and at the shoulder of their Greek banker counterparts. The several tens of billions of dollars allocated to recapitalize the Greek banks will reside in Luxembourg banks, not in Greece.

The World Bank will redesign the Greek welfare system and a new social safety net system. New appointees to run the Labor Ministry, after approved by the Troika, will “rationalize the education system” (i.e. teacher layoffs and wage cuts). The new, Troika vetted Labor Minister will implement the proposals of Troika “independent consultants” to limit “industrial actions” (i.e. strikes) and collective bargaining and will, following consultants’ recommendations, institute new rules for collective dismissals (i.e. mass layoffs). Pensions will be cut, retirement ages will be raised, and workers’ health care contributions will be increased.

The $50 billion Privatization of Greek Government Assets Fund will remain in Greece. However, it will operate “under the supervision of the relevant European institutions,” according to the Memorandum. The Troika will decide what is to be privatized and sold at what (firesale) price to which of its favored investors. In the meantime, privatization sales in progress or identified will be accelerated.

What both Greece and Ukraine represent is the development of new more direct management of wealth extraction, and the transfer of that wealth in the form of financial assets. In past government debt bailouts, the IMF and other institutions set parameters for what the bailed out country must do. But the country was left to carry out the plan. No longer. It’s now direct management to ensure the colony does not balk or delay on the transfer of financial assets enabled by ever rising debt.

GRERK OLIGARCHY [3]

Greece now ranks near the bottom of European countries when it comes to social mobility and near the top of rankings measuring inequality -- a problem that Greek politicians and the media have almost entirely ignored. Today, over 90 percent of the unemployed receive no government assistance whatsoever, some 20 percent of Greek children are estimated to live in extreme poverty, and millions of people lack health insurance.

The colonialists ever, were colluding with local élite to promote their economic interests. These élites -which consisted of the worst of natives- became the ruling class of the colonized countries. In the form of economic colonialism pioneered by the U.S. in the post-1945 period, the colonizers replaced the costs of direct administration and military occupation with compliant local élites who allowed the colonizers to plunder the wealth extracted in exchange for being allowed to rule on behalf of them.

Two unknown to many, words from old communists’ terminology are comprador and rentiers. Comprador, means the intermediary, the foreign bosses’ contractor. Rentiers, means the loan shark, who is treasuring from rents, titers and annuities [4].. Two words that might have been forgotten as such, but as political and economic concepts and attributes (especially as subgroups of the local ruling capitalist class in colonies and protectorates, like ours) unfortunately remain vivid.

Comprador, literally means 'buyer', and comes from the Portuguese. Five centuries ago, in Portuguese colonies, the "compradores" were the head of foreign companies native workers and the mediators between foreign bosses and local customers. Thereafter, the term was expanded to all colonial regimes to include the part of the native bourgeoisie being subservient to foreign interests. Thus the term acquired its current negative sense: this parasitic 'comprador' big bourgeoisie, still works while serving with profit in mind the interests of foreigners and of course ... itself in all neo-colonial regimes.

When the comprador gains enough money by exploiting their countrymen and become himself a boss he becomes a rentier, ie an "earner", who benefits of rent and interest, loan shark.

Rentiers, for our people, are men who do not need to toil to earn a living, those who live off the interest-bearing or profit from rents and investment at the expense of course of the rest of workers. They exist as early as the 18th century in Greek literature, by the meaning of the private usurer, the black marketeers that before the creation of "normal" banks were roaming in Greek countryside with full pouch and lend the peasants in outrageous conditions, stealing actually their land and converting free people to crofters, debt slaves.

The namely "fireplaces", accumulate land, money and all kinds of "clienteles" exploiting many, generation by generation, in some cases even before the revolution of 1821, when they served the sultan in Phanari, and later as the new state members or sponsors of the three national parties ... (English, French and Russian).

Contemporary Greek oligarchs, follow the same tradition.. “These guys have avoided paying tax through the Metaxas dictatorship, the Nazi occupation, the civil war and the military junta.” Some naïve believed that Greece’s accession to the European Union, in 1981, was supposed to improve things. But EU membership, did not weaken traditional Greek hierarchies; it strengthened them. It was while the Greek economy was catching up to the rest of Europe -- providing the oligarchs with new sources of credit and cash -- that the country’s institutions began to break down.

Since the early 1990s, a handful of wealthy families have dominated Greek politics [3]. These élites have preserved their positions through control of the media and through favoritism, sharing the spoils of power with the country’s politicians.
The vested interests have obscured the cold reality of rising inequality by focusing obsessively on "growth" as the fix-all to inequality.

GROUPS OF INTERESTS

In Greece today there are numerous groups of interests that they grab anything they can while roaming freely through various aspects of social and economic activity. At the same time, the existence of pools of rent is widespread throughout the economy as a result of government regulations that aim specifically to create such revenues by obstructing competition, and also by reducing transparency and accountability in the management of public funds in a way that allows the proliferation of proceeds seeking.

Greece is unable to grow its economy because of the entrenched powers of these groups. It is difficult, if not impossible, to set up a new business when the existing ones have so much control over the political and financial processes that can prevent the occurrence of new businesses.

These groups spend most of their available time and power to defend their privileges for a comfortable income that does not require them to work. They promote legislation that will favor them and constantly seeking new opportunities for them to increase their revenue. In this effort, they rationally invest time and money to influence policymakers and public administration.

These numerous speculative groups restrict competition in product and services markets, increase bureaucracy and administrative burdens, and actively seek to establish opacity in all administrative and legal processes in order to form an environment in which they will be able to increase revenue earned. At the same time, they actively strive to prevent justice to such an extent that the society will not be able to hold them accountable for their actions.

BANKRUPTCY AND THE ATTITUDE OF EUROPEAN UNION

"This class structure and the economic model are the fundamental problem facing Greece that not allows any hope for economic growth. By joining the Eurozone these conditions deteriorated.

All European and International agents had glimpse long before the crisis that the situation with the Greek economy was heading into derailment. Then, they did not intervene; they let evolving the mess and they rubbed their hands. They knew that in the end the country will be sold out for a pittance.

When crisis erupted after 2010, Oligarchs and the group of interest had no intention of paying taxes as the troika began demanding Greece balance the books, which is why the burden fell on employees and pensioners.

Brussels didn’t intended to address cumbersome regulations and dysfunctional institutions, cronyism and criminality. «To the benefit of a favored few, these regulations remain largely unchanged, even as the country’s infrastructure crumbles, poverty increases, and corruption persists.

By bailing out Greece without demanding fundamental reforms, the European Central Bank, the European Commission, and the International Monetary Fund have only strengthened the status quo. Even worse, the troika has lined the pockets of the very forces that brought about the economic collapse in the first place.

Greek former finance minister Yanis Varoufakis in his Article at Guardian on August 18, 2015 has accused European leaders of allowing oligarchs, who dominate sections of the economy, to generate huge profits and continue to avoid paying taxes while punishing ordinary people in a detailed critique of the country’s bailout deal [5] .

In contrast to the weaker financially strata prevails terror, horror and social chaos.

Overall unemployment stands at 27 percent, and youth unemployment exceeds 50 percent, providing an ideal recruiting ground for Nazis’ and Fascist groups.

THE TRUTH ABOUT BANKS

Banks from the late 80s do not work in the traditional manner, ie not investing depositors' money giving profits to the applicant by means of the interest. Banks chose a mode that promises other earnings. That creates the 'investment' and 'products', which are virtual, called by various exotic names and promise big profits while concealing the risk. One banking product for example, can be a "bet" on whether it will rain in Cairo or to collapse the economy of Greece. While it may seem simplistic example, it is a reality. Banks have created an unreal, racing capitalism, irrelevant with investing in the real economy and the social benefit.

When global crisis erupted, Greek bankers, with first and foremost the Governor of the Bank of Greece C. Provopoulos, argued that Greece run no risk because Greek banks were strong and were not exposed to toxic products such as those led to the downfall of the US Lehman Brothers. In the immediate future, the banking literature changed, banks appeared to be infected by the crisis through the financial problem of the country and demanded State support.

The governments directly recapitalized the banks, namely borrowed at high interest rates to ensure cash at banks. People pays this loan.

But why have collapsed the "strong" Greek banks that a few years before were advertising the Greek banking miracle in the Balkans? Because they were forced to buy bonds of the Greek State which were clipped, bankers reply. Is this true? It's half true.

The losses of banks did not come from government bonds as bankers want to say. The Greek banks had no money. Their Recapitalisations were coming from successive loans they made to each other. I.e Bank A lent to an offshore company which was of the Bank's B interests to display liquidity. After the Bank B, lend another company of Bank’s A's interest, which made an increase of A’s capital. The virtual money was circulating with the permission of the Bank of Greece giving a false image of strength and money for banks.

But bankers have made even greater abominations. They gave loans to offshore companies belonging to themselves and their families, without guarantees and then charged the deceptive loan to the Bank loss stealing small shareholders. They also showcased loans to entrepreneurs (always without guarantees) who made a share capital increase to their own businesses. So they created an image of powerful business with borrowed and not returned, manipulating and deceiving investors who invest in the same companies because of a false image that had been created.

Many bankers sold or rented to their own banks or to the State, buildings that were purchased in multiples of real prices, with loans of their banks, through interposed persons.

Simultaneously they gave loans to parties to have the political cover and to the media to ensure the silence on the scandal. Large amounts took abroad through scams with branches of banks that opened in the Balkans. They created through the media parrots the image of bank economic miracle in the Balkans, and thus channeled funds to foreign borrowers who were none other than themselves.

All these scandals and the straight robbery of money, appeared as infection by the crisis. Black holes from the robbery and the transaction with interconnected “coteries” (the ALTER Channel had taken 600 million euros without guarantees) appeared as a result of the crisis. So in the name of stability of banks, these were recapitalized with our money. But not the banks but bankers. Banks were not checked before recapitalization in order to find out what part of the damage was due to the crisis and what was due to the robbery. The Bankers, who were thrown the banks away (if they had not robbed them) were able to continue to run the banks.

The state through the Financial Stability Fund took 80% of the shares of banks but the state can exercise no authority. While the recapitalization was to bring stability, liquidity and functioning of the Greek economy, loans were stopped, the enterprises that must been saved began to close and homes to be auctioned. Unproductive businesses continued to take loans such as media, despite their debts and their damage and of course commercials from banks. Mega channel for example, with 25 € million losses, and 200 €million debts loan took 110 € million to continue to operate mainly to support that government and banks follow the proper policy. What banking process can be deemed as beneficial such a loan? Correspondingly loans are almost all SMEs in Greece.

After recapitalising the banks , the government of Samaras – Venizelos proceeded to the crown of the scandal. The Article 2 of the " multiple draft Act " enables old failed bankers, to buy back their shares, to recapitalize, not at the price the state bought (FSF), but at ridiculous prices. So for example in Eurobank, while the state bought the Bank's shares at 1.24 euros per share, now the banker can buy back them at 30 cents.

Banks not only operate scandalously even as part of the economy but they are the very authority. Moreover the Act 4021/11 (of course by Venizelos) confers powers to the Bank of Greece and the banks, over the control and operation of the government and the Parliament. There is no doubt that the banks are actually the state.

IT HAS OCCURRED A RUPTURE BETWEEN THE GREEK OLIGARCHY AND THE EUROPEAN ESTABLISHMENT?

The international neoliberal press often appears revelations about Greek oligarchs scandals, suggesting the Greek oligarchy and local interest groups as the cause of suffering.

Wolfgang Schäuble openly accused the corrupt Greek economic élites. Extensive article on German magazine Stern titled the «Monopoly Millionaires" about "Greek economically powerful families" claims that for generations 2,000 families formed the existing system and amassed substantial profits [7].

This attack on the Greek business establishment reinforces the scenarios that lenders and Troika being in head-on collision with the Greek economic interests that were built after dictatorship. It seems like blaming each other.

Capitalists always had internal conflicts. The implicit controversy reflects a rearrangement of the global economic system. Greek banks pass into foreign hands. New deals need to be made between native oligarchs and the European establishment.

The model of colonization is changing. The local élite has established its interests in Greece through access to legislative policy and judiciary. This situation does not allow outsiders entrepreneurs to make investments. According to the new model, the European institutions will have direct control over administration and finances that until now were free field of action of the local oligarchy, which should be adapted to the flood of globalization. The native élite has demonstrated great flexibility in adapting to global dynamics that governing the flow of power and money. Attached to this new order has already made the updates and is lined up with the winning side. Therefore, the effort made by some to show a contrary is misleading rendering people unable to discriminate the truth from the lies.

Today strategic choice of capital is the conquest and occupation of survival goods for populations such as water, energy, health, land. People will be blackmailed to pay for them, forced by the dilemma to pay or to die. Unlike consumer capitalism where there was an illusion of free choice now there will be no choice. Respectively unlike the consumer capitalism, where there was an illusion of democracy, at the political superstructure, in predatory capitalism democracy will yield to more authoritarian regimes.