Financial Crisis in Greece

[Philosopher]

The Greeks invented narcissism, and it has caught up with them

http://www.smh.com.au/comment/the-greeks-invented-narcissism-and-it-has-caught-up-with-them-20150713-giak9y

The Greeks have railed against the "bullying" of its largest creditor, Germany, yet Greece itself has been a bully for decades. It worked to keep Macedonia out of the Eurozone, constantly denigrated its small neighbour, and even sought to deny Macedonia the right to name itself.
In Greek mythology, Narcissus was undone by Nemesis, the spirit of retribution against vanity. In the evolving modern Greek mythology, Nemesis has another name: Germany.

Spot on. But why now? Why are some Westerners making such pronouncemnets now? It strikes me as disengous.

[Philosopher]

A few thoughts:

Germany has been highly critical of Athens over its lax system of fiscal governance, poor tax regime and its unsustainably generous pensions system. However, it has come in for criticism for knowingly using Greece’s culture of corruption to its own advantage.

http://sputniknews.com/europe/20150714/1024617271.html

That Greece is a corrupt country cannot be doubted. That Greece has made the life of Macedonia and Macedonians miserable for years, even till this day, cannot be disputed. Greece's chickens have come home to roost.

Saying all that, I suspect many do not understand that, putting aside the Macedonian issue, and the nature of the Greeks, the bigger issue here is the criminal system operated by the IMF, the EU, the EC and the West in general.

Prosecutors in Athens have unveiled more details of alleged bribes paid by German companies – including state-owned railway company Deutsche Bahn – to secure lucrative arms contracts in Greece.

As lawmakers in Athens debate the latest ultimatum on austerity measures, which will hit the Greeks in the pocket and spell out years of increased taxes and welfare reforms, Germany has been accused of being complicit in the very corrupt practices that Greece is now being punished for.

It takes to two tangle.

What is happening in effect is that fictitious paper money (euros), which are printed from nothing and whose value is virtually nothing, is being used in exchange for actual wealth (Greek property, including its islands). What a deal. The West wants Greece to sign its life over (publiclly owned real estate) to the banks and European institutions in favor of worthless fiat currency.

Tsipras caved on everything – from slashing pensions to raising sales taxes to, in effect, turning Greece into an IMF colony (hundreds of millions across the Global South know exactly how this translates into economic disaster).

His only “victory” was on the whopping 50 billion euros of Greek public assets that would be placed in a trust based in notorious money-laundering paradise Luxembourg – as in privatization a-go-go, a.k.a. disaster capitalism, being able to “contribute” to pay debts. The fund will be based in Athens.

http://sputniknews.com/columnists/20150713/1024553249.html

I still maintain the Greek parliament will approve the bailout. Again, the larger point in this discussion is not Greece but globalization.

We will wait and see.

[George S.]

You know how they have been given a chance by bailing them out for the 4 th time.
If they stuff it up the eu /creditors would have to be stupid to keep bailing out [U]greece but such is life..
I couldn't help reading that greece is only a small percentage /blip on the eu.Its really affected all and sundry around the world.The thing is are they really committed to do as they promissed.???It seems to be more of the same rhetoric
I don't think seriously the creditors don't have much choice.Iwe are talking o ts a last ditch effort .There is also talks about asset confiscation etc all sorts of things to stave off vestiges of bankruptcy and bank closures.I can't beleive anything is going to change
for the better its just buying time.Its like trying to save the titanic from sinking.

[julie]

looking at the bail out, pretty much like the last one, its all going on interest payments and bailing out the banksters

In exchange for a few islands
The "agreekment" had a look over, is pushing raising pension age to 67
That is just about going to kill them in Greece lol, coming into line with western world pension age

I can't help it, I truly don't give a rats what happens to Greece

[Philosopher]

The threat to leave the euro was a trump card which Tsipras refused to play, because he put “being a good European” above ending austerity- and his people’s suffering. The Greek prime minister could also have played on the Western elite’s fears of Greece moving closer to Russia and China by threatening withdrawal from the EU and NATO. He could have nationalized the banks. But he did none of these things. Instead he grinned and joked with his country’s enemies as he agreed to make Greece a de facto colony of the EU and international capital.

The scale of Tsipras’ betrayal of the Greek people is truly staggering. Only 10 days ago, the Greeks voted by a sizeable majority to say ‘Oxi’ to the Troika’s demands. Now, Tsipras has agreed to even more cuts than were rejected, as well as putting €50 billion of his country’s national assets into a privatization ‘trust’ fund – all under EU supervision. And this from a man whose party had pledged to halt privatization in January’s election campaign. The deal that Tsipras has agreed to is so harsh that even the IMF has criticized it.

The Greek people were ready to resist, but Tsipras clearly wasn’t.

http://rt.com/op-edge/273829-tsipras-greece-bankers-austerity/

I recall these words of mine on this forum when Tspiras was elected.

The EU allowed this for a reason.

Consider this in the context of this:

Now, Tsipras, the ’radical leftist’ is asking the Greek Parliament to approve measures more extreme than anything ‘conservative’ governments in Greece would have dared to propose. In the same way that only a right-wing Republican like Richard Nixon could ‘go to China’ only a ‘progressive’ could have a chance of getting these extremely regressive proposals through the Greek Parliament.

Those who believe that the Troika was trying to get rid of Tsipras are missing an important point: It’s better for Greece’s creditors that a ’radical leftist’ such as Tsipras pushes to get these measures through, than a ‘right-wing’ figure. In fact, international finance capital likes it best when nominally ’left-wing’ parties do their dirty work for them-for the leaders of these parties will try and spin the ‘reforms’ as somehow ‘good for ordinary people’.

Like I wrote, politics are never as they appear, and never underestimate the Powers that Be to manipulate reality.

The Greek people have been taken for a ride...

[Gocka]

Its not all one large pre planned game. Greeks are just idiots, and their politicians arrogant fools for thinking they could get something out of this.

Not to mention its being ignored that there is a lot of disagreement within the all powerful "west" about what should even be done with Greece.

Now you even have the IMF purposing write off's that most of the "west" is against.

There are currently so many contrary positions in the west, its hard to lump them together in one large entity.

Its simple: The only leverage Greece had against the rest of the EU was the threat to default and leave the eurozone. Then it became clear that Tsipras wasn't willing to go that far. Greece bluffed, Germany called their bluff and made them pay for it.

Greece had nothing to offer, and that's why they are now Germany's bitch.

[Gocka]

Some drama in front of the parliament in Greece.

http://www.telegraph.co.uk/news/worldnews/europe/greece/11742925/Fierce-clashes-break-out-in-Greece-during-protest-over-bailout-deal.html

[Philosopher]

Looks like my analysis was right.

When you analyze these events, from the election of Tspiras, the referendum, to the bailout approval today in parliament, there is almost an invisible thread connecting these events. It is difficult to see, and subtle, very subtle, but easily perceived by the trained eye.

It all makes sense now.

[Gocka]

Bravo.

Now explain what happens when the Tsipras government collapses and when a populace that is between 60 to 70% against austerity elects new leaders?

There are no invisible threads. The government wasn't prepared to leave the euro, so they took what was offered because they are terrible negotiators and were left begging on their knees by the end of it.

Why is the IMF proposing contrary actions to what the "west" wants, how does that fit in to the master plan. What about Britain not wanting to be a part of it and Brussels trying to force them in, what strings connect them? What about Italy being in direct opposition to Germany? Or Finland's parliament threatening to dissolve if a bailout is given to Greece? Or how about the fact that Tsipras relied on opposition parties voting in the new austerity bill, or that fact that a third of his own party rejected it?

The simple truth is that nothing like this has happened in the modern context of the EU and the euro, and no one has any clue and what the hell to do about it. None of these characters are all knowing, they are just incompetent and arrogant.

None of this will stand unless the Greek people are willing to let it stand. Just because Macedonians are incapable of shaping their own destiny, or should I say because they choose to let others do it for them, it doesn't mean everyone is that way.

If you go by the referendum then, Greeks will reject this. We will find out in the coming weeks, how many, and how much Greeks are really against more austerity. I tend to this once these measures begin to take effect and cause more hardship, more and more people will resent Europe and their terms, if we aren't at that stage already.

What does our Greek friends predict? Will these measures hold up, or will the population revolt?

Looks like my analysis was right.

When you analyze these events, from the election of Tspiras, the referendum, to the bailout approval today in parliament, there is almost an invisible thread connecting these events. It is difficult to see, and subtle, very subtle, but easily perceived by the trained eye.

It all makes sense now.

[Risto the Great]

The Greeks will accept this. They have no choice. They are looking at their untouchable money in their bank accounts and getting very nervous.
They will blacken their economy even further and work out ways to further develop their economy based on subsistence. They will avoid the increased VAT this way. They will feel like they are still pulling a fast one on the EU. But they will be choked for many many years to come.



And Macedonia is still keen to get in. LOLZ all round.

[George S.]

Europe is blowing itself apart over Greece - and nobody seems able to stop it

Europe is blowing itself apart over Greece - and nobody seems able to stop it
Prime Minister Alexis Tsipras never expected to win Sunday's referendum. He is now trapped and hurtling towards Grexit
By Ambrose Evans-Pritchard, Athens
8:35PM BST 07 Jul 2015

http://www.telegraph.co.uk/finance/economics/11724924/Europe-is-blowing-itself-apart-over-Greece-and-nobody-can-stop-it.html

Like a tragedy from Euripides, the long struggle between Greece and Europe's creditor powers is reaching a cataclysmic end that nobody planned, nobody seems able to escape, and that threatens to shatter the greater European order in the process.

Greek premier Alexis Tsipras never expected to win Sunday's referendum on EMU bail-out terms, let alone to preside over a blazing national revolt against foreign control.

He called the snap vote with the expectation - and intention - of losing it. The plan was to put up a good fight, accept honourable defeat, and hand over the keys of the Maximos Mansion, leaving it to others to implement the June 25 "ultimatum" and suffer the opprobrium.

This ultimatum came as a shock to the Greek cabinet. They thought they were on the cusp of a deal, bad though it was. Mr Tsipras had already made the decision to acquiesce to austerity demands, recognizing that Syriza had failed to bring about a debtors' cartel of southern EMU states and had seriously misjudged the mood across the eurozone.

Instead they were confronted with a text from the creditors that upped the ante, demanding a rise in VAT on tourist hotels from 7pc (de facto) to 23pc at a single stroke.

Creditors insisted on further pension cuts of 1pc of GDP by next year and a phase out of welfare assistance (EKAS) for poorer pensioners, even though pensions have already been cut by 44pc.

They insisted on fiscal tightening equal to 2pc of GDP in an economy reeling from six years of depression and devastating hysteresis. They offered no debt relief. The Europeans intervened behind the scenes to suppress a report by the International Monetary Fund validating Greece's claim that its debt is "unsustainable". The IMF concluded that the country not only needs a 30pc haircut to restore viability, but also €52bn of fresh money to claw its way out of crisis.

They rejected Greek plans to work with the OECD on market reforms, and with the International Labour Organisation on collective bargaining laws. They stuck rigidly to their script, refusing to recognise in any way that their own Dickensian prescriptions have been discredited by economists from across the world.

"They just didn't want us to sign. They had already decided to push us out," said the now-departed finance minister Yanis Varoufakis.

So Syriza called the referendum. To their consternation, they won, igniting the great Greek revolt of 2015, the moment when the people finally issued a primal scream, daubed their war paint, and formed the hoplite phalanx.

Mr Tsipras is now trapped by his success. "The referendum has its own dynamic. People will revolt if he comes back from Brussels with a shoddy compromise," said Costas Lapavitsas, a Syriza MP.

"Tsipras doesn't want to take the path of Grexit, but I think he realizes that this is now what lies straight ahead of him," he said.

What should have been a celebration on Sunday night turned into a wake. Mr Tsipras was depressed, dissecting all the errors that Syriza has made since taking power in January, talking into the early hours.

The prime minister was reportedly told that the time had come to choose, either he should seize on the momentum of the 61pc landslide vote, and take the fight to the Eurogroup, or yield to the creditor demands - and give up the volatile Mr Varoufakis in the process as a token of good faith.

"They just didn't want us to sign. They had already decided to push us out"

Yanis Varoufakis

Everybody knew what a fight would mean. The inner cabinet had discussed the details a week earlier at a tense meeting after the European Central Bank refused to increase liquidity (ELA) to the Greek banking system, forcing Syriza to impose capital controls.

It was a triple plan. They would "requisition" the Bank of Greece and sack the governor under emergency national laws. The estimated €17bn of reserves still stashed away in various branches of the central bank would be seized.

They would issue parallel liquidity and California-style IOUs denominated in euros to keep the banking system afloat, backed by an appeal to the European Court of Justice to throw the other side off balance, all the while asserting Greece's full legal rights as a member of the eurozone. If the creditors forced Grexit, they - not Greece - would be acting illegally, with implications for tort contracts in London, New York and even Frankfurt.

They would impose a haircut on €27bn of Greek bonds held by the ECB, and deemed "odious debt" by some since the original purchases were undertaken by the ECB to save French and German banks, forestalling a market debt restructuring that would otherwise have happened.

"They were trying to strangle us into submission, and this is how we would retaliate," said one cabinet minister. Mr Tsipras rejected the plan. It was too dangerous. But a week later, that is exactly what he may have to do, unless he prefers to accept a forced return to the drachma.

Syriza has been in utter disarray for 36 hours. On Tuesday, the Greek side turned up for a make-or-break summit in Brussels with no plans at all, even though Germany and its allies warned them at the outset that this is their last chance to avert ejection.

The new finance minister, Euclid Tsakalotos, vaguely offered to come up with something by Wednesday, almost certainly a rejigged version of plans that the creditors have already rejected.

Events are now spinning out of control. The banks remain shut. The ECB has maintained its liquidity freeze, and through its inaction is asphyxiating the banking system.

Factories are shutting down across the country as stocks of raw materials run out and containers full of vitally-needed imports clog up Greek ports. Companies cannot pay their suppliers because external transfers are blocked. Private scrip currencies are starting to appear as firms retreat to semi-barter outside the banking system.

"We have to put our little egos, in my case a very large ego, away, and deal with situation we face"

Jean-Claude Juncker

Yet if Greece is in turmoil, so is Europe. The entire leadership of the eurozone warned before the referendum that a "No" vote would lead to ejection from the euro, never supposing that they might have to face exactly this.

Jean-Claude Juncker, the European Commission's chief, had the wit to make light of his retreat. “We have to put our little egos, in my case a very large ego, away, and deal with situation we face,” he said.

France's prime minister, Manuel Valls said Grexit and the rupture of monetary union must be prevented as the highest strategic imperative. "We cannot let Greece leave the eurozone. Nobody can say today what the political consequences would be, what would be the reaction of the Greek people," he said.

French leaders are working in concert with the White House. Washington is bringing its immense diplomatic power to bear, calling openly on the EU to put "Greece on a path toward debt sustainability" and sort out the festering problem once and for all.

The Franco-American push is backed by Italy's Matteo Renzi, who said the eurozone has to go back to the drawing board and rethink its whole austerity doctrine after the democratic revolt in Greece. He too now backs debt relief.

Yet 15 of the 18 governments now sitting in judgment on Greece either back Germany's uncompromising stand, or are leaning towards Grexit in one form or another. The Germans are already thinking beyond Grexit, discussing plans for humanitarian aide and balance of payments support for the drachma.

Mark Rutte, the Dutch premier, spoke for many in insisting that the eurozone must uphold discipline, whatever the financial consequences. "I am at the table here today to ensure that the integrity, the cohesion, the underlying principles of the single currency are protected. It is up to the Greek government to come up with far-reaching proposals. If they don't do that, then I think it will be over quickly," he said.

The two sides are talking past each other, clinging to long-entrenched narratives, no longer willing to question their own assumptions. The result could be costly. RBS puts the direct financial losses for the eurozone from a Greek default at €227bn, compared with €140bn if they bite the bullet on an IMF-style debt restructuring.

But that is a detail compared with the damage to the European political project and the Nato alliance if Greece is thrown to wolves against the strenuous objections of France, Italy and the US.

It is hard to imagine what would remain of Franco-German condominium. Washington might start to turn its back on Nato in disgust, leaving Germany and the Baltic states to fend for themselves against Vladimir Putin's Russia, a condign punishment for such loss of strategic vision in Greece.

Mr Lapavitsas said Europe's own survival as civilisational force in the world is what is really at stake. "Europe has not show much wisdom over the last century. It launched two world wars and had to be saved by the Americans," he said

"Now with the creation of monetary union it has acted with such foolishness, and created such a disaster, that it is putting the very union in doubt, and this time there will be no saviour. It is the last throw of the dice for Europe," he said.

[George S.]

Debt and militarism: the Greek tragedy Europe prefers to keep quiet about

Debt and militarism: the Greek tragedy Europe prefers to keep quiet about

http://www.pressenza.com/2015/07/debt-and-militarism-the-greek-tragedy-europe-prefers-to-keep-quiet-about/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+pressenza%2FQrjW+%28News+from+Pressenza+IPA+in+English%29

A particularly insightful opinion piece by Giles Fraser [1] for the Guardian reminds us that “In the 1980s, for example, the Greeks spent an average of 6.2% of their GDP on defence compared with a European average of 2.9%. In the years following their EU entry, the Greeks were the world’s fourth-highest spenders on conventional weaponry.” And “corrupt German companies bribed corrupt Greek politicians to buy German weapons. And then a German chancellor presses for austerity on the Greek people to pay back the loans they took out (with Germans banks) at massive interest, for the weapons they bought off them in the first place. Is this an unfair characterisation? A bit. It wasn’t just Germany.” In fact France was there too. His central point is that “As Greece’s spending on weapons shows, it’s not pensions or benefits that cripple economies, it’s the military-industrial complex”.

The Greek official that accepted bribes from German Arms Companies is now in prison but the Greek debt to those companies, and banks it took loans from to pay for them are considered sacrosanct.

“Greece should not make cuts in its defence spending and had played an important role in southern Europe as a NATO member, NATO Secretary-General Jens Stoltenberg told a German television station…” In fact Greece was seen as a first line of defence against Communism, leading to its 70’s military coup, and increased its military budget even more after the conflict with Turkey over Cyprus.
A bit of History

The history of militarism and debt is long and full of examples of movements that attempted to resist taxation on ordinary people in order to fund military campaigns.

It has been suggested that tax resistance played a significant role in the collapse of several empires, including the Egyptian, Roman, Spanish, and Aztec.

In 411 B.C Aristophanes’ play, Lysistrata poses the idea that Greek women could refuse to have sex with their war-mongering husbands until they agreed to stop fighting, combined with an early example of war tax resistance.

Alexander (the “Great”), however, apparently had only 70 talents of silver and 30 days’ supply of food for his Asia campaign; it would appear that he intended to live off the land and pay for his expedition with plunder. So we cannot blame the strongest Helleniser of Asia (in spite of not being Greek but Macedonian) for setting the example of militarism and debt.

The Zealots (ancient Judea) resisted the Roman poll tax during the 1st century AD, culminating in the First Jewish–Roman War.

Other historic events that originated as tax revolts include the American Revolution, the French Revolution and the 800 year old Magna Carta: In 1202 King John of England raised taxes to pay for a new war against France. The barons were furious at the waste of money and forced King John to agree a list of promises on 15th June 1215 when Magna Carta was born – one of the most important documents in the history of human rights.

The English Peasants’ Revolt of 1381 was precipitated by King Richard II’s heavy-handed attempts to enforce the third medieval poll tax, first levied in 1377 supposedly to finance military campaigns overseas.

Charles I of England tried to levy money without the consent of Parliament in coastal towns during a time of war, and it provoked increasing resistance. It was one of the causes of the English Civil War, where he lost his head.

In Britain income tax was introduced in 1799, to pay for weapons and equipment in preparation for the Napoleonic wars, whilst the US federal government imposed their first income tax in the Revenue Act of 1861 to help pay for the American Civil War.

In 1846 Henry David Thoreau refused to pay the annual $1.50 ($36 in 2010 dollars) Massachusetts poll tax levied for the Mexican War. These events were central to his developing ideas of Civil Disobedience.
Back to Greece

Economists have calculated that if Greece had cut defence spending to levels similar to other EU states over the past decade, it would have saved around €150bn — more than its last bailout. According to SIPRI (Stockholm International Peace Research Institute) statistics, even though Greek military spending has declined since the crisis, Greece is the second-biggest defence spender (in relation to its GDP) among the 27 NATO countries, after the U.S.

Whatever the result of the referendum, Greece must start a comprehensive plan of disarmament and default, as a matter of urgency, on the illegal military contracts it was bribed into entering.

As for the Troika, if they do not apply a more reasonable and compassionate hand, in particular now that the IMF has acknowledged the need for debt relief and allowing for growth and development to be part of debt repayment, Europe may well find itself with a military coup on its doorstep, and plenty of ultra-fascist groups festering in what little will be left of the country.

1. Dr Giles Fraser is priest-in-charge at St Mary’s Newington in south London and the former canon chancellor of St Paul’s Cathedral. Acting in that capacity he was central to allowing the establishment of the Occupy campsite at St Paul’s churchyard in 2011.

[George S.]

008 AIG Report: Create Crisis (Greece) to Introduce European Government

2008 AIG Report: Create Crisis (Greece) to Introduce European Government
Wednesday, 15 July 2015

http://macedoniaonline.eu/content/view/27746/52/

Yesterday, Nomura's Richard Koo presented one of the better assessments of the situation in Greece, when he said that the "IMF is slowly beginning to understand the Greek economy", which explains its strategic U-turn, one which now demands far greater debt cuts than what Europe, and Germany in particular, is willing to concede.

Koo further notes that "the reason is that Greece’s GDP has plunged because fiscal consolidation was carried out during a balance sheet recession, resulting in a destructive deflationary spiral that has devastated the lives of ordinary Greeks. While the nation may appear to be making progress when we view the data as a percentage of GDP, the raw data show an economy in collapse. This difference in perspectives widened the gap separating European creditors who thought everything is going well, and the Greek public who has been suffering serious declines in their standard of living. And this rift in perceptions was perhaps nowhere as evident as in the results of the national referendum on 5 July."

The observation of the Greek economic devastation is absolutely accurate, and is no surprise to our readers: it has been our base case that not only Greece, but the rest of Europe's peripheral countries would suffer an ongoing deterioration in living standards due to lack of an external rebalancing (thanks to the common currency) leaving internal devaluation (plunging wages, deflation, economic devastation) as the possibility to remain competitive in the Euro Area; however where our opinion differs from that of Koo is the "motives" behind the creditors' unwillingness to honestly interpret the situation on the ground in Greece.

Yes, it is true that it is the same creditors who were the next beneficiaries of some 90% of incremental debt-funded proceeds entering Greece (only 11% of the €220+ billion in Greek bailouts ever reached the general population), and as a result they may have had the impression that ordinary Greeks are also enjoying the spoils of their bailout.

They were not, as the events of July 5 showed.

But while the former Fed economist will surely attribute this "oversight" to mere carelessness or at best, stupidity, even if an entire nation of 11 million people is suffering more than ever in history as a result of what is, at best, a failed experiment, there may be a more ulterior truth to events in Greece in the past 5 years especially considering Germany's stern insistence on not writing off Greek debts despite what is now an accepted fact that without a major debt haircut Greece simply is unviable.

Meet Bernard Connolly.

Barnard is a British economist whose rise to prominence started when he worked for many years at the European Commission in Brussels, where he was head of the unit responsible for the European Monetary System and monetary policies. In other words, if any one was familiar with what the ascent of the Euro would lead to, it would be him.

We say "eventual" because he was terminated by the Commission in 1995. The catalyst may well have been his book "The Rotten Heart of Europe: The Dirty War for Europe's Money, a negative treatment of the European Exchange Rate Mechanism" which Eurocrats did not take too very lightly.

However, Bernard is more notable not his books, or his employment in Brussels, but where he went next and what he did there.

After ending his relationship with Europe, Bernaned worked at Banque AIG, the Paris-based financial arm of the infamous AIG whose collapse together with that of Lehman, was the primary catalyst for the great financial crisis. Bernard however was not in the front office and did not trade CDS, but was the global strategist. Here is euro skepticism flourished and culminated in a report on May 30, 2008, months before the GSEs and Lehman failed, and AIG was bailed out. The report was titled "Europe - Drive or Driven", and it should have been a must read for all Greek (and Europeans) some 7 years ago as it not only lays out precisely why Greece is now on the verge of not only sovereign capitulation but total collapse, but presents what may be the true motives behind Europe's perpetual crisis and why it almost appears as if the core European countries demand that the sick men of Europe, because Greece is just the first of many, remain and keep Europe in a state of perpetual turmoil.

And since this report is as relevant now as it was 7 years ago, we lay out some of its key highlights again.

The Global Economic Crisis and the EMU Crisis

The global crisis is the result of intertemporal misallocation (Greenspan; EMU). In effect, there has been a global Ponzi game.
In Europe, this was intensified by the myth that “current accounts don’t matter in a monetary union”: EMU is the biggest credit bubble of them all.
The treaty says that government should have the same credit status as private sector borrowers.

Monetary union means greater economic instability.

These two factors should mean a worsened credit standing in EMU, yet government bond spreads actually diminished in EMU and ratings agencies actually upgraded governments

When the bubble bursts…

A collapsing credit bubble in the world means collapsing domestic demand in deficit countries (e.g. US, Britain, Balkans, Baltics – and several euro-area countries)
- In the US, and to some extent Britain, domestic demand is being supported by rate cuts and, in the US, by a fiscal stimulus
- In the affected euro-area countries, it isn’t
- In the absence of support for domestic demand, affected countries will be forced into an improvement in net exports via improved competitiveness
- In the US and Britain, this is happening through currency depreciation; in the euro area it isn’t.

Yes, Varoufakis was right, and will be right in the end: the cost of a Grexit would have been too great in the future. However he did not anticipate that Europe has a just as powerful counterweapon: locking up Greek deposits indefinitely right now.

Greece folded.

Which brings us to the final question: What Europe Wants?

Here is Connolly's answer:

To use global issues as excuses to extend its power:

environmental issues: increase control over member countries; advance idea of global governance

terrorism: use it as an excuse for greater control over police and judicial issues; increase extent of surveillance

global financial crisis: kill two birds (free market; Anglo-Saxon economies) with one stone (Europe-wide regulator; attempts at global financial governance)

EMU: create a crisis to force introduction of “European economic government”.

And there it is: in four simple bullet points laid out in a 7 year old presentation, a prediction which is about to be proven right. Because once Greece folds, next will be Italy, Spain, Portugal, and so on, until the European Economic Government, also known as the "European Empire", controlled by a handful of "northern" European players and the bankers financially backing them, shifts from mere vision to reality

[George S.]

Is Europe under US Occupation?

Is Europe under US Occupation?
Thursday, 16 July 2015

http://macedoniaonline.eu/content/view/27751/49/

The capitulation of the Greek government to Berlin-led finance capital is a daunting watershed moment. It marks the “disciplining” of the wider European electorate under corporatist financier rule. What is happening in Greece is a forerunner for other European Union states. In that event, widespread social unrest can be expected.

The rapid expansion of American military forces across Europe over the past year has invoked the pretext of “defending” NATO allies from alleged Russian aggression. But an altogether different contingency is that Washington is preparing for a military coup in Europe – in the wake of economic collapse stemming from the Greek debt crisis.

Just last week, American army general Ray Odierno – a member of the US Joint Chiefs of staff – outlined plans for a new battalion of troops in Germany, along with heavy armour and other equipment. Odierno told the Wall Street Journal that the new military installations were to counter “the rising Russian threat”.

Germany is already under de facto US military occupation, since the end of the Second World War, with tens of thousands of American troops and a slew of garrisons. Why the need for more American military, and not in peripheral European states close to Russia, but right in the heart of Europe – Germany?

Similar increasing deployment of American troops, artillery, armour, warplanes and helicopters has taken place in other European NATO members over the past year under the guise of conducting war games. The result is that US military presence across Europe has never been greater at any time since the Cold War ended with the Soviet Union 25 years ago.

General Odierno said the “prepositioning” of troops and equipment in Germany and neighbouring states, including Poland and the Baltic countries, would allow for the rapid scale-up of American military in Europe “in the event of a crisis”. By “crisis” he was apparently alluding to a possible war with Russia.

But Washington planners may have another crisis in mind – the economic and social meltdown of the European Union.

In that event, the American military would be deployed to shore up fragile, discredited governments amid widespread social turmoil. These “care taker” governments may be similar in personnel to the parties already in power in European capitals. But their administrations will be increasingly autocratic and imposed without popular mandates, as is being evidenced in Greece. If a social crisis of full-blown poverty, soaring unemployment, public protests and industrial disruption were to culminate, then the American military forces in Europe will be in place to enforce the rule of these technocratic “governments”.

American political analyst Randy Martin, who writes at crookedbough.com, reckons that US rulers have anticipated the current turmoil in Europe over Greece. “The Greek crisis has been going on for five years and more,” says Martin. “You can bet that Washington has already drawn up plans on how to administer Europe politically and financially if the situation demands that intervention. And that situation is becoming more and more apparent almost by the day.”

He added: “Don’t forget that the NATO military alliance of 28 members is really just American military power outsourced in various European disguises. NATO formations across Europe are therefore tantamount to US military occupation of Europe,” says Martin. “This is exactly what Russian government figures have perceptively been saying for a long time.”

Since the Ukraine crisis erupted due to the US-sponsored coup in that country in February 2014, the Western media has been saturated with American claims of Russian aggression toward Europe. But, as Randy Martin points out, the narrative of a Russian threat is becoming increasingly threadbare. There is no evidence of Russian infiltration in Ukraine, no evidence of Russian military aggression toward Europe, and, moreover, Moscow has consistently refuted the allegations as “fantasy”.

Which leads one to conjecture: is the American militarisation across Europe for another purpose – the containment of the European Union as it comes under increasing social pressure from within due to economic collapse?

What is called the “Greek debt crisis” is in reality a symptom of a systemic breakdown in Western capitalism. Many other countries across the European Union also find themselves in similar condition of chronic fiscal arrears and drowning indebtedness. Italy, Spain and Portugal come to mind as having precarious debt loads that outstrip their respective economies. France, the second biggest economy in Europe, is also submerged with a total debt exceeding its national economic output.

The austerity measures that EU governments have been imposing on their populations are felt most acutely in Greece, manifested in the scenes of mass queues outside banks for a subsistence daily allowance, or desperate crowds at food stores and pharmacies searching for dwindling supplies of basic essential commodities. With the Greek government of Alexis Tsipras showing itself as a willing instrument of Europe’s banker-oligarchy to apply more austerity, the atmosphere among many ordinary Greeks is increasingly volatile and brooding.

But this scenario of economic collapse and social mayhem seen most vividly in Greece will likely be repeated in other EU countries because of the systemic nature of the crisis. The EU institutional creditors, led by Germany, want to teach the rest of Europe a lesson by disciplining Greece over its national finances.

However, austerity pushed to extreme will result in social revolt, not just in Greece, but across Europe. Washington is alarmed by the potential meltdown in Europe. Last week, President Barack Obama urged Germany’s Chancellor Angela Merkel and Greek Premier Alexis Tsipras to come up with a solution to the debt crisis. Obama’s Treasury Secretary Jack Lew echoed the concerns and warned: “There’s a lot of unknowns if this goes to a place that completely melts down in Greece.”

What we are witnessing in Europe is the emergence of autocratic centralised “government” serving the dictate of finance capital, which imposes austerity on the general population regardless of democratic mandate. The administrative, technocratic centre for this rule-by-banker-oligarchy in Europe is Berlin, which is, in turn, answerable to the technocratic administration in Washington under the control of Wall Street. What we have known up to now as sovereign national governments will henceforth be mere functionaries for the global banker elite.

The control of government by private corporate interests, with no democratic accountability, attests to the definition of fascism. As analyst Randy Martin comments: “What is taking shape in Europe and more so in the United States is the complete subjugation of government by finance capital. It is not an exaggeration or empty jargon to say that we in the West are succumbing to the rule of financial fascism.”

Banker-led technocratic administrations across Europe will engender rising popular protest and civil unrest. When American politicians talk about “meltdown” and their army generals talk about “securing Europe” what they really mean is securing Europe from its own angry people. Russia is but the bogeyman to justify American military occupation of Europe and the imperative of finance capital administered from Berlin.

The irony is that 70 years after the defeat of fascism in Europe, Europe is coming full circle under the same phenomenon. This time instead of Nazi jackboots, we have American ones. //Finian Cunningham

The views expressed in this article are solely those of the author and do not necessarily reflect the official position of MINA.

[George S.]

The Greeks invented narcissism, and it has caught up with them

The Greeks invented narcissism, and it has caught up with them
Date July 13, 2015
Paul Sheehan

http://www.smh.com.au/comment/the-greeks-invented-narcissism-and-it-has-caught-up-with-them-20150713-giak9y

Narcissus was Greek. That explains a lot. The Greeks created the figure of Narcissus and thus were the first to diagnose narcissism. The consequence for Narcissus in Greek mythology was severe.

The great "Oxi" no vote of the Greek people on July 5 may have been a national outpouring of defiance but it turns out to have been a national act of self-delusion. After the referendum, social media around the world were full of euphoria for the glorious outcome, but the referendum was a tactical charade by the Prime Minister.

Greece is in default. Its banks have been shut for a more than a week. Cash machines are running dry. The country has become a cash economy. Factories are closing down. The nation is subsisting on an estimated 40 billion euros hoarded during the past year. Foreign suppliers are refusing to provide goods or credit. Greek companies with large foreign-held debt face bankruptcy. The tourism industry is facing a melt-down of forward bookings.

Most bizarre of all, the Communist-led Syriza government has capitulated to creditors' terms that were expressly rejected by the people in the referendum. The government itself campaigned in favour of rejection. Yet, just days after the people spoke, Prime Minister Alexis Tsipras accepted the reviled terms of the creditors.

It is chaotic. Ambrose Evans-Pritchard, international business editor of The Telegraph in London, wrote from Athens last week, after interviewing key ministers: "Greek premier Alexis Tsipras never expected to win the referendum … He called the snap vote with the expectation – and intention – of losing it … leaving it to others to implement the [creditors' terms] and suffer the opprobrium …

"To their consternation, they won, igniting the great Greek revolt of 2015, the moment when the people finally issued a primal scream, daubed their war paint, and formed the hoplite phalanx ...

"Syriza has been in utter disarray for 36 hours. On Tuesday, the Greek side turned up for a make-or-break summit in Brussels with no plans at all, even though Germany and its allies warned them at the outset that this is their last chance to avert ejection."

On Saturday, as another round of emergency negotiations took place in Brussels, the former Greek Finance Minister, Yanis Varoufakis, wrote exasperatedly in The Guardian: "Greece's financial drama has dominated the headlines for five years for one reason: the stubborn refusal of our creditors to offer essential debt relief …

"In 2010, the Greek state became insolvent. Two options consistent with continuing membership of the eurozone presented themselves: the sensible one, that any decent banker would recommend – restructuring the debt and reforming the economy; and the toxic option – extending new loans to a bankrupt entity while pretending that it remains solvent.

"Official Europe chose the second option, putting the bailing out of French and German banks exposed to Greek public debt above Greece's socioeconomic viability … It takes the mathematical expertise of a smart eight-year-old to know that this process could not end well ...

"Our government was elected on a mandate to end this doom loop; to demand debt restructuring and an end to crippling austerity …

"Greeks, rightly, shiver at the thought of amputation from monetary union … To exit, we would have to create a new currency from scratch. In occupied Iraq, the introduction of new paper money took almost a year, 20 or so Boeing 747s, the mobilisation of the US military's might, three printing firms and hundreds of trucks. In the absence of such support, Grexit would be the equivalent of announcing a large devaluation more than 18 months in advance: a recipe for liquidating all Greek capital stock and transferring it abroad by any means available … "

In other words, Greece has never had a Plan B.

Varoufakis is half right. Greece self-evidently needs and deserves debt-restructuring to offset the austerity it has been forced to endure. It is incapable of restoring economic viability under present terms. But it is rich for Varoufakis to decry the "stubborn refusal" to accept common sense when that is exactly what Greece has done in its refusal to slash its enormous, unsustainable public sector (and political base).

This is narcissism writ large. The narcissist is highly critical of others, has a grandiose sense of entitlement, is incapable of accepting blame, and lashes out at criticism.

The Greek government cheated its way into the Euro. Successive governments wasted hundreds of billions of euros expanding public sector payrolls and obligations. Greece indulged in the multi-billion vanity of the 2004 Olympics. It wants to be treated differently to other Eurozone debtors. It wants another $80 billion in loans even as it defaults on existing debt. Yet it has refused to slash and reform its bloated public sector, even to the point of economic suicide.

With Greece now reduced to foreign aid – by any other name – to avoid economic collapse, it is the latest in a history of chronic political instability. In the past 100 years Greece has seen war, coups, republic, monarchy, occupation, civil war, military rule, socialism and now de facto bankruptcy.

Greece is exporting instability. The 19-member Eurozone is split over Greek Bail-out III. In Finland, the nationalist True Finns party says it will bring down the government if it agrees to another bailout for Greece.

The Greeks have railed against the "bullying" of its largest creditor, Germany, yet Greece itself has been a bully for decades. It worked to keep Macedonia out of the Eurozone, constantly denigrated its small neighbour, and even sought to deny Macedonia the right to name itself.
In Greek mythology, Narcissus was undone by Nemesis, the spirit of retribution against vanity. In the evolving modern Greek mythology, Nemesis has another name: Germany.