The Greek did it, then …
The Greek voted a historic no last week in response to Germany and its cohort’s demand for complete capitulation to the Troika (the European Commission, the European Central Bank and the International Monetary Fund). I’ts not known what the outcome of the Greek debt debacle is going to be. One however must be very proud of the Greek people. The masses stood up against an immoral blackmail by bankers and banker states of the European Union.
Nobel Laureate Economist Paul Krugman believes the people did the right thing. He said the following.
Europe dodged a bullet on Sunday. Confounding many predictions, Greek voters strongly supported their government’s rejection of creditor demands. And even the most ardent supporters of European union should be breathing a sigh of relief.
Of course, that’s not the way the creditors would have you see it. Their story, echoed by many in the business press, is that the failure of their attempt to bully Greece into acquiescence was a triumph of irrationality and irresponsibility over sound technocratic advice.
But the campaign of bullying — the attempt to terrify Greeks by cutting off bank financing and threatening general chaos, all with the almost open goal of pushing the current leftist government out of office — was a shameful moment in a Europe that claims to believe in democratic principles. It would have set a terrible precedent if that campaign had succeeded, even if the creditors were making sense. What’s more, they weren’t.
Bankers lend money. It is a business. They charge interest for profit and to mitigate the expectation that some debts will go bad. Ultimately, the creditors, the private bankers must be held responsible for their good or bad investments.
Private bankers loan uncontrollably to Greece in the heydays of irresponsible lending. They made bad bets. Now they want to enslave all Greek citizens with crippling austerity programs. They want to impoverish the Greeks as they extract payments for the bad debts they made.
When the Troika bailed out the Greeks a few years ago, it was not the Greeks getting bailed out. It was the private European bankers that were made whole. In other words it was a transfer of European public money from the European taxpayers to a private few. Now the Troika wants to collect the money, the European population’s tax dollars, from the Greeks.
The reality is that absent interest payments, Greece has been running a primary budget surplus or close to it. What Greece needs is what many private companies get, bankruptcy to restructure. Yes there will be creditors (in this case deservedly the Troika) left holding the bag. But think of the excess profits and pilfering bankers have been effecting continuously over time. Bankers have been bailed out by the masses many times. The 2008 financial crash is probative.
Banks however never give the masses a break. Citizens with passbook savings accounts making less than 1% as their monies are loaned out at 12%, 15%, 26%, and higher.
If the Troika wants to recover the monies it transferred to private bankers, then they should tax the private banks going forward. Having the Greeks suffer because of the irresponsibility of the ‘suits’ on either side is in itself irresponsible.
The joy that the Greek people felt after their no vote was palpable. They knew hard times were coming. They knew the vote was symbolic but gave their Left-wing Greek Prime Minister Alexis Tsipras a stronger spine as he tried to get a better deal. They knew they would likely still be absorbing a bit more austerity.
A tentative deal was struck today. While it is advertised that Greek Prime Minister Alexis Tsipras capitulated, he did not. He negotiated, Comments abound about Tsipiras being crucified by all the EU leaders. Anyone who understands those statements know they were to appease the individual governments that must vote to support the deal.
Tsipiras held strong to ensure the 50 billion Euro asset sale remained in Athens. Much of the tax increases will ultimately be paid appropriately by the Greek Oligarchy. Make no mistake, it is still austerity. Absent the Greek vote it would have been worse. As it is now, Greece gets breathing room in the short term. Greece gets both debt relief and an influx of capital with the new deal. Many on the Left are wary. That said one must remember that a leader must do what is best for his country. Any deal is fungible. The immediate suffering warrants an immediate action. Tsipras knows he has the backing of the overwhelming majority of his people. Germany, Europe, and the Troika knows that as well. If the new deal is unbearable, it will likely be broken. For now a deal, removes the financial shackles from its citizens immediately. One hopes that as they get their house in order, if it becomes necessary later, they must break the deal in their national interest. After-all, Germany still owes billions to them that Germany has not paid back in their national interest.
Austerity is a proven failure not only in Greece but everywhere. The practice has been debunked. A 28 year old university student discovered the economic fraud that was effected by two of its proponents whose papers were used as the Austerity Bible of the Right.
Make no mistake. The extortion attempted by the Troika and all of those pushing austerity measures is to depress people. It is the attempt to overthrow democratically elected left leaning governments.Their goal is to dismantle the social safety net throughout the industrialized world to further enrich the few. It’s about the complete obliteration of a welfare state and the growth of an Ayn Randian society.
A no vote to ‘austerity’ by the Greeks is a powerful statement to the world’s plutocracies. The Greek know that attempts will be made to have them suffer more. Complete capitulation to the Troika and indirectly to the US and the international banking system would have set a precedent. It would have set the precedent of the masses enslaved by the few.