Syriza, The EU Institutions & Struggle For Democracy

[polly7]

By Tom Vouloumanos

June 30, 2015

On the night of June 26th, following several days of dead end negotiations with EU creditors, the Greek Prime Minister Alexis Tsipras convened an emergency cabinet meeting of the SYRIZA lead governing coalition and announced in the early hours of June 27th, that the Greek government would not cave in to blackmail and ultimatums. In fact, what prompted the emergency meeting was that the Greek government was offered a final take it or leave it proposal authored mostly by the IMF. The deal that was offered completely reneged the little progress that had been made up to that point with major concessions from the Greek side and instead called for even worse austerity measures than what was asked of the previous pro-austerity government that was tossed out of office on January 25, 2015. The Greek government said that it could not sign such an absurd proposal that would destroy an economy already in shambles and a society facing a humanitarian disaster. Yet, given that its mandate was to reach a deal with the creditors and not a rupture, it said that it would give the final say to the people that have not been heard in the last 5 years of economic neoliberal barbarity: the Greek population. To the shock of the EU and Greek establishments, Alexis Tsipras announced that he would put the final proposal to a referendum on July 5, 2015.

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Greeks, after 5 years of worsening austerity, poverty, unemployment and suicides without any hope of getting out of the crisis finally had enough and voted for the anti-austerity Coalition of the Radical Left (SYRIZA). In the 5 months since being elected, the Left wing Greek government has been making reasonable yet non-recessionary proposals to the EU creditors in order to get a viable deal so that badly needed funds, which have been due to Greece since last year, be released. It has also argued that its debt is unsustainable and some sort of write down using a variety of possible technical methods should be made. During this time, it has not reversed the austerity measures imposed by the last government and has continued making its payments to the creditors. This government, and the society it was elected by, has been under financial asphyxiation. Yet, it did not bend; it maintained its red lines of no new cuts to social spending, pensions, salaries or additional regressive taxes. After weekly pronouncements of Greek default and Eurozone expulsions, Greek Prime Minister Alexis Tsipras sent on June 21st, 2015 a watered down proposal to the EU creditors that was considered a major compromise.

In fact, the proposal still did not contain cuts in social spending but rather distributive tax increases. Varoufakis had argued that given that the Greek economy had shrunk by one-fourth, what was now needed were expansionary investments and policies to get the economy towards growth. In essence, tax overhaul and social investments that would increase demand and produce jobs for a society, where the majority is now at or under the poverty line, where almost 60% of young people are unemployed and where another 200,000 young people have lost hope and simply left.

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The Greek side showed that it can meet the financial demands of the lenders but by using other means. The lenders were not just interested in the results, they were very interested in the means as well. Yet, what business is it of the creditors which method a supposedly sovereign state meets its obligations with, it’s the results that should count right? Yes, if it was about economics, but it’s not. It’s about politics, class politics. Europe is essentially governed by an unaccountable technocracy supported by the converging interests of financial institutions, oligarchs and state planners from the larger European economies. The European technocracy wants to impose a single neoliberal model on the European continent effectively neutralizing elections.

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Democracy is a threat to the European technocratic order.

Therefore, the IMF and its partners in the European establishment wanting to crush the SYRIZA government, offered it an impossible agreement.

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The longer the Greeks resist and at least attempt by any means at their disposal to survive the assault of the European technocratic order, the more likely it will inspire other Europeans to rise up as well. Nothing less than the end of a cruel neoliberal order may be at stake, which opens a space for alternative bottom up economics in a life after austerity.

Let us hope that the Greeks find the strength to say NO on July 5, 2015 with the same determination that they said NO in 1940. Another world may indeed be possible.

Complete article: https://zcomm.org/znetarticle/syriza-the-eu-institutions-struggle-for-democracy/


An older article:

Syriza Against the Machine

By Tom Vouloumanos
Source: teleSUR English
April 13, 2015

The German state is simply the most powerful guarantor of the privileges of this European establishment, after the US of course. As such, the German establishment convinced large sectors of the German working class that they have common interests and that they are bailing out their southern European neighbors who are too lazy, too corrupt or too disorganized to run a modern successful economy. The European Media made sure that simple facts were not known to the public of the northern European states. They were not told that the loans to Greece were not for bailing out Greeks but for bailing out European banks, as these loans simply financed debt repayments. With each loan, the debt increased further, forcing more loans on condition that the country privatizes its resources, destroys its social state, throws people into unemployment and poverty. All of which shrink the economy decreasing the country’s ability to service its debt and pay its creditors, forcing it to borrow even more conditional bailout money, further increasing its debt and accelerating austerity and so on and so forth; a vicious cycle that is leading to the third worldization of the European periphery countries.

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In an interview on a popular TV political talk show, Ston Eniko hosted by Nikos Hatzinikolaou, Panos Kammenos, leader of Syriza’s junior coalition partner, Anel (Independent Greeks) and Defense Minister, admitted that “they don’t want an agreement!” Kammenos explained that Varoufakis meets with European officials, proposes and negotiates a series of reforms, the officials agree, then three days later 25 more points of discussion are emailed to the Greek government. This has been the modus operandi of the European officials since the February 20, 2015 truce. No matter how many reforms Varoufakis presents to these officials, they are unacceptable as they are not austerity reforms. The Greek government has been working hard showing that it can increase revenue by tackling corruption, tax evasion and off shore accounts. It has provided clear number crunching evidence that its measures would be far more efficient for increasing government revenue than privatizations, pension cuts and other austerity measures which are destroying the Greek economy and torturing the population in the midst of an EU engineered humanitarian crisis. Greece has been coming to the table with viable plan, after viable plan thinking it would get sensible responses but it has realized that the goal of the European establishment is to make the Government of the Left bend and follow orders. The political plan is austerity; it has nothing to do with economic data, it has everything to do with who wields economic power. Syriza and its junior partner’s unpardonable sin is that they have stood up to this establishment.

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Yet, the destabilization tactics do not stop there.

When Syriza came to power, it immediately got rid of the barricades that surrounded the Parliament building and announced that it was going to close down the type C jails where many anarchists are held as well as scrap the draconian anti-terror laws. Syriza activists were involved in many of the street demonstrations of the last years that were met with riot squads, teargas and police brutality. Nevertheless, there have been odd occupations in recent weeks by small groups of anti-authoritarian activists of Syriza’s headquarters and the offices of the left alternative radio station it owns, Sto Kokkino, with demands that Syriza move on issues it already has announced it will move on. Moreover, Sto Kokkino has been a leading voice in reporting state repression against anarchists, left activists and migrants. When a small group of anarchists raised banners on the steps of parliament, the Syriza Parliamentary President, Zoe Konstantopoulos, in the face of inflammatory calls by the opposition to crack down on the “terrorists”, refused to send in the riot police and defended the right of citizens to protest and dissent. So why is Syriza being targeted? It has long been known that many of the most violent elements in protests and demonstrations, known as Koukoulofori (hooded ones) have been agents provocateurs on the payroll of the riot squads, called MAT for Units for the Reinstatement of Control, a group that Syriza plans to dissolve. The presence of Nazis, fascists and right wing fanatics in the police force has been a reality in Greece, since the collaborationists were absorbed into the para-state apparatus after the German retreat in WWII in order to hunt down the Left wing guerrillas that liberated the country. Some of these para-state elements, have infiltrated many radical left and anarchist groups, one may suspect that these last actions have been encouraged and prodded by reactionary elements within the police who are worried about Syriza’s commitment to purge the Nazi and fascist presence within the Greek gendarmerie (in the 2014 euro-elections, 50% of police officers voted for Golden Dawn).

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If the EU and ECB creditors continue to tighten the noose around Greece’s neck and demand that the Greece continue to bleed its population and sell off its property and resources, refusing sensible but non-recessionary economic reform plans, and holding out on cash flow until it surrenders, then the Greek government will simply hold out on paying back its debt repayments to the European creditors and instead meet its payroll, education, health and other requirements. Kammenos said as much on that same talk show. Syriza’s argument is that there is no mechanism to kick Greece out of the euro and if the European institutions consider Greek holding back on payments until it receives its next tranche of loans as a default well then a bankruptcy within the euro would mean that the entire debt Greece owes will be written off. The Syriza lead government has been able to meet its debt payment requirements without any new loans all the while continuing to pay for its internal requirements. This of course, is no way to live as the state is in a socially dire situation but there is no reason to make things even worse with more austerity measures.

Complete article: https://zcomm.org/znetarticle/syriza-against-the-machine/

Published on
Monday, June 29, 2015
by Project Syndicate

byJoseph Stiglitz

NEW YORK – The rising crescendo of bickering and acrimony within Europe might seem to outsiders to be the inevitable result of the bitter endgame playing out between Greece and its creditors. In fact, European leaders are finally beginning to reveal the true nature of the ongoing debt dispute, and the answer is not pleasant: it is about power and democracy much more than money and economics.

Of course, the economics behind the program that the “troika” (the European Commission, the European Central Bank, and the International Monetary Fund) foisted on Greece five years ago has been abysmal, resulting in a 25% decline in the country’s GDP. I can think of no depression, ever, that has been so deliberate and had such catastrophic consequences: Greece’s rate of youth unemployment, for example, now exceeds 60%.

It is startling that the troika has refused to accept responsibility for any of this or admit how bad its forecasts and models have been. But what is even more surprising is that Europe’s leaders have not even learned. The troika is still demanding that Greece achieve a primary budget surplus (excluding interest payments) of 3.5% of GDP by 2018.

Economists around the world have condemned that target as punitive, because aiming for it will inevitably result in a deeper downturn. Indeed, even if Greece’s debt is restructured beyond anything imaginable, the country will remain in depression if voters there commit to the troika’s target in the snap referendum to be held this weekend.

By contrast, a no vote would at least open the possibility that Greece, with its strong democratic tradition, might grasp its destiny in its own hands. Greeks might gain the opportunity to shape a future that, though perhaps not as prosperous as the past, is far more hopeful than the unconscionable torture of the present.

Full article: http://www.commondreams.org/views/2015/06/29/europes-attack-greek-democracy

Greece grasping its destiny in its own hands, Greeks being able to shape their own future is the IMF's worst nightmare.

Tsipras slams EU’s ‘blackmail’ and its attempt to ‘hinder democratic processes’

By Alexis Tsipras
Source: Links.org
June 29, 2015

Yesterday’s Eurogroup decision to not approve the Greek government’s request for a few days’ extension of the program — to give the Greek people a chance to decide by referendum on the institutions’ ultimatum — constitutes an unprecedented challenge to European affairs, an action that seeks to bar the right of a sovereign people to exercise their democratic prerogative.A high and sacred right: the expression of opinion.
The Eurogroup’s decision prompted the European Central Bank (ECB) to not increase liquidity to Greek banks, and forced the Bank of Greece to recommend that banks remain closed, as well as [imposing] restrictive measures on withdrawals.

It is clear that the objective of the Eurogroup’s and ECB’s decisions is to attempt to blackmail the will of the Greek people and to hinder democratic processes, namely holding the referendum.

They will not succeed.

Full article: https://zcomm.org/znetarticle/tsipras-slams-eus-blackmail-and-its-attempt-to-hinder-democratic-processes/


An End to the Blackmail

For six months now the Greek government has been waging a battle in conditions of unprecedented economic suffocation to implement the mandate you gave us on January 25.

The mandate we were negotiating with our partners was to end the austerity and to allow prosperity and social justice to return to our country.

It was a mandate for a sustainable agreement that would respect both democracy and common European rules and lead to the final exit from the crisis.

Throughout this period of negotiations, we were asked to implement the agreements concluded by the previous governments with the Memoranda, although they were categorically condemned by the Greek people in the recent elections.

However, not for a moment did we think of surrendering, that is to betray your trust.

Full article: https://zcomm.org/znetarticle/an-end-to-the-blackmail/


Europe’s Attack on Greek Democracy

By Joseph E. Stiglitz

We should be clear: almost none of the huge amount of money loaned to Greece has actually gone there. It has gone to pay out private-sector creditors – including German and French banks. Greece has gotten but a pittance, but it has paid a high price to preserve these countries’ banking systems. The IMF and the other “official” creditors do not need the money that is being demanded. Under a business-as-usual scenario, the money received would most likely just be lent out again to Greece.

But, again, it’s not about the money. It’s about using “deadlines” to force Greece to knuckle under, and to accept the unacceptable – not only austerity measures, but other regressive and punitive policies.

But why would Europe do this? Why are European Union leaders resisting the referendum and refusing even to extend by a few days the June 30 deadline for Greece’s next payment to the IMF? Isn’t Europe all about democracy?

In January, Greece’s citizens voted for a government committed to ending austerity. If the government were simply fulfilling its campaign promises, it would already have rejected the proposal. But it wanted to give Greeks a chance to weigh in on this issue, so critical for their country’s future wellbeing.

That concern for popular legitimacy is incompatible with the politics of the eurozone, which was never a very democratic project. Most of its members’ governments did not seek their people’s approval to turn over their monetary sovereignty to the ECB. When Sweden’s did, Swedes said no. They understood that unemployment would rise if the country’s monetary policy were set by a central bank that focused single-mindedly on inflation (and also that there would be insufficient attention to financial stability). The economy would suffer, because the economic model underlying the eurozone was predicated on power relationships that disadvantaged workers.

And, sure enough, what we are seeing now, 16 years after the eurozone institutionalized those relationships, is the antithesis of democracy: Many European leaders want to see the end of Prime Minister Alexis Tsipras’s leftist government. After all, it is extremely inconvenient to have in Greece a government that is so opposed to the types of policies that have done so much to increase inequality in so many advanced countries, and that is so committed to curbing the unbridled power of wealth. They seem to believe that they can eventually bring down the Greek government by bullying it into accepting an agreement that contravenes its mandate.

Full article: http://www.informationclearinghouse.info/article42276.htm


Financial Coup in Greece

By Stelios Kouloglou

May 31, 2015 "Information Clearing House" - "Le Monde Diplomatique " - Like the traditional Greek song, in Athens “everything changes and everything stays the same”. Four months after Syriza’s victory, the parties that had governed since the overthrow of the military dictatorship — the Panhellenic Socialist Movement (Pasok) and New Democracy (rightwing) — have been completely discredited. The first radical leftist government since the “mountain government” at the time of the German occupation is very popular (1).

Although the “troika”, hated because of its responsibility for the current economic disaster, is no longer mentioned, its three “institutions” — the European Commission, European Central Bank (ECB) and International Monetary Fund (IMF) — continue their policies. With threats, blackmail and ultimatums, a new “troika” is imposing the same austerity on the government of Alexis Tsipras.

With wealth generation down by 25% since 2010 and an unemployment rate of 27% (more than 50% for those under 25), Greece has an unprecedented social and humanitarian crisis. But despite the results of the January elections, which gave Tsipras a clear mandate to end austerity, the European Union continues to treat Greece as a naughty pupil who must be punished by the stern teachers in Brussels, to discourage daydreaming voters in Spain and elsewhere who still believe in the possibility of governments opposed to the German dogma.

This situation is like Chile in the 1970s, when US president Richard Nixon was determined to topple Salvador Allende to prevent leftwing contagion in America’s backyard. “Make the economy scream,” said Nixon, and when it did, General Augusto Pinochet took over.

The silent coup under way in Greece is using more modern tools, including credit rating agencies, the media and the ECB. Two options will remain for Tsipras’s government: to be strangled financially if it keeps trying to implement its programme, or to renege on its promises and fall, abandoned by its voters.

Full article: http://www.informationclearinghouse.info/article42014.htm


The Greek Tragedy: Some things not to forget, which the new Greek leaders have not.

By William Blum – Published February 23rd, 2015

American historian D.F. Fleming, writing of the post-World War II period in his eminent history of the Cold War, stated that “Greece was the first of the liberated states to be openly and forcibly compelled to accept the political system of the occupying Great Power. It was Churchill who acted first and Stalin who followed his example, in Bulgaria and then in Rumania, though with less bloodshed.”

The British intervened in Greece while World War II was still raging. His Majesty’s Army waged war against ELAS, the left-wing guerrillas who had played a major role in forcing the Nazi occupiers to flee. Shortly after the war ended, the United States joined the Brits in this great anti-communist crusade, intervening in what was now a civil war, taking the side of the neo-fascists against the Greek left. The neo-fascists won and instituted a highly brutal regime, for which the CIA created a suitably repressive internal security agency (KYP in Greek).

In 1964, the liberal George Papandreou came to power, but in April 1967 a military coup took place, just before elections which appeared certain to bring Papandreou back as prime minister. The coup had been a joint effort of the Royal Court, the Greek military, the KYP, the CIA, and the American military stationed in Greece, and was followed immediately by the traditional martial law, censorship, arrests, beatings, and killings, the victims totaling some 8,000 in the first month. This was accompanied by the equally traditional declaration that this was all being done to save the nation from a “communist takeover”. Torture, inflicted in the most gruesome of ways, often with equipment supplied by the United States, became routine.

George Papandreou was not any kind of radical. He was a liberal anti-communist type. But his son Andreas, the heir-apparent, while only a little to the left of his father, had not disguised his wish to take Greece out of the Cold War, and had questioned remaining in NATO, or at least as a satellite of the United States.

Full article: http://williamblum.org/aer/read/137



A New Mode of Warfare

The Greek Debt Crisis and Crashing Markets

By Michael Hudson

June 29, 2015

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.

Greece: ‘third world’ aid and debt

By Michael Roberts
Source: Michael Roberts Blog
February 22, 2015

One of the cruel ironies of the last minute deal between the Eurogroup and the Greek government for a four month extension to the existing ‘aid’ programme monitored by the Troika is that in any sane meaning it is not aid at all.

In return for staying in the Troika programme for another four months to end-June and keeping to the still to be agreed conditions on fiscal targets, government spending and privatisations, the Eurogroup, the ECB and the IMF will disburse the outstanding tranches of loans under the existing programme. The FT might call this “aid” but it is nothing of the kind. It is not even bailout money for Greek banks. The €11bn funding for that has been returned by the Greeks to the Troika who are keeping it for ‘security’.

.....But most of that will be immediately recycled back to the Troika as repayments of debt and interest for previous loans and government bonds that are maturing. In the upcoming four months, the IMF must be paid back €5.3bn while the Greeks must also roll over short-term T-bills bought by the Greek banks worth about €11bn. So the Troika ‘aid’ will just disappear and the Greek people will see none of it to help with government spending.

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This is just like ‘Third World’ aid that used to be distributed by the World Bank and other international agencies back in the 1980s and 1990s. Most of this ‘aid’ ended up in corrupt dictators’ pockets or in repaying previous debt. The people never saw it. And the debt levels stayed where they were, as they do for Greece now.

Back then, eventually the international agencies agreed what was called a Brady debt swap that wrote off a portion of the debt that could never be repaid. No such plan is available to Greece, although Syriza asked for it in their negotiations with the Eurogroup.

https://zcomm.org/znetarticle/greece-third-world-aid-and-debt/

Germany owes Greece money for the war – but morality needn’t come into it
Hagen Fleischer

Instead of focusing on the emotionally charged issue of reparations for the second world war, Berlin and Athens should set up a future fund for the joint rehabilitation of a ‘shared’ history

Nazi Germany’s 3.5-year occupation of Greece was bloody and destructive. The Paris reparations conference in 1945 accepted calculations that estimated damage to Greece to amount to 7bn pre-war US dollars. It should be made clear that this wasn’t automatically the suggested reparation payment, as often has been maintained by Greek politicians and journalists: the purpose of the conference was not to come up with absolute sums but to work out percentages of a then still unspecified reparations pool.

Yet it’s important in this case to make a distinction between reparation payments for war crimes and repayments of so-called Besatzungsanleihe: monthly loans demanded from the Greek government in 1942-44 to pay for the maintenance costs of the German army in Greece and further military activity in the Mediterranean, even delivering food from starving Greece to Rommel’s “Afrika-Korps”. In early 1945, in the final days of the Third Reich, a group of high-ranking German economists calculated this “German debt (Reichsschuld) to the Greek state” to amount to 476m Reichsmarks, which would be roughly €10bn today.

This would however require a major change of attitude on Germany’s behalf. Only Berlin has the power to open talks about a historic consolidation with Greece. Until then, we continue to exist with an absurd situation where democratically elected German postwar governments of all colours continue to be in denial about the existence of this debt, which was officially recognised even by the Nazi regime.

http://www.theguardian.com/commentisfree/2015/feb/10/germany-greece-second-world-war-reparations

Go after your war reparations, for a start.

How the Monsters at Goldman Sachs Caused a Greek Tragedy

By Jim Hightower, AlterNet
Posted on March 4, 2010, Printed on March 4, 2010

Another Greek-based cargo ship and its crew was recently hijacked by Somalian pirates, costing the Greek owners an undisclosed amount in ransom.

Such ongoing acts of brazen piracy off the coast of Somalia have riveted the establishment media's attention. But the same news hawks have missed (or ignored) a much more brazen, longer-running and far larger robbery in Greece by Gucci-wearing thieves who are more sophisticated than common pirates -- but lack a pirate's moral depth.

I refer to -- who else? -- Wall Street financiers. Specifically, Goldman Sachs.

SNIP...

In 2001, Goldman's financial alchemists formulated a scheme to allow the Greek government to hide the extent of its rising debt from the public and the European Community's budget overseers. Under this diabolical deal, Goldman funneled new capital from super-wealthy investors into the government's coffers.

Fine. Not so fine, though, is that, in exchange, Greek officials secretly agreed that the investors would get 20 years' worth of the annual revenue generated by such public assets as Greece's airports. For its part, Goldman pocketed $300 million in fees paid by the country's unwitting taxpayers.

CONTINUED...

http://www.alternet.org/story/145884 /

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x7846579

True Earthling (616 posts)

How the crooks at Goldman Sachs helped cook the books for Greece

When corrupt bankers collude with corrupt governments financial calamities are soon to follow.

An old article but good refresher on how we got to this point...

The bankers, led by Goldman’s president, Gary D. Cohn, held out a financing instrument that would have pushed debt from Greece’s health care system far into the future, much as when strapped homeowners take out second mortgages to pay off their credit cards.

It had worked before. In 2001, just after Greece was admitted to Europe’s monetary union, Goldman helped the government quietly borrow billions, people familiar with the transaction said. That deal, hidden from public view because it was treated as a currency trade rather than a loan, helped Athens to meet Europe’s deficit rules while continuing to spend beyond its means. Athens did not pursue the latest Goldman proposal, but with Greece groaning under the weight of its debts and with its richer neighbors vowing to come to its aid, the deals over the last decade are raising questions about Wall Street’s role in the world’s latest financial drama.

In dozens of deals across the Continent, banks provided cash upfront in return for government payments in the future, with those liabilities then left off the books. Greece, for example, traded away the rights to airport fees and lottery proceeds in years to come. Critics say that such deals, because they are not recorded as loans, mislead investors and regulators about the depth of a country’s liabilities.

http://www.nytimes.com/2010/02/14/business/global/14debt.html?_r=2&pagewanted=all

http://www.democraticunderground.com/1002752412


Octafish (46,825 posts)
17. Greece has noted it's no hobnailed boot on their face; it's a vampire squid.

Sorry to mix Orwell and Taibbi metaphors for the game of greedheads:



Goldman Sachs, Greece Didn’t Disclose Swap Contract

By Elisa Martinuzzi
Bloomberg - February 17, 2010 13:31 EST

Feb. 17 (Bloomberg) -- Goldman Sachs Group Inc. managed $15 billion of bond sales for Greece after arranging a currency swap that allowed the government to hide the extent of its deficit.

No mention was made of the swap in sales documents for the securities in at least six of the 10 sales the bank arranged for Greece since the transaction, according to a review of the prospectuses by Bloomberg. The New York-based firm helped Greece raise $1 billion of off-balance-sheet funding in 2002 through the swap, which European Union regulators said they knew nothing about until recent days.

Failing to disclose the swap may have allowed Goldman, a co-lead manager on many of the sales, other underwriters and Greece to get a better price for the securities, said Bill Blain, co-head of fixed income at Matrix Corporate Capital LLP, a London-based broker and fund manager.

“The price of bonds should reflect the reality of Greece’s finances,” Blain said. “If a bank was selling them to investors on the basis of publicly available information, and they were aware that information was incorrect, then investors have been fooled.”

CONTINUED...

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=akqC4y5U7MnU



Then, there's the Big Picture...



Draghi at the Central Bank

Is Goldman Sachs Poised to Takeover Europe?

by MIKE WHITNEY
CounterPunch, OCTOBER 31, 2011

Goldman Sachs is about to take over Europe, but you wouldn’t know it by reading the papers.

On Tuesday, G-Sax alum, Mario Draghi, will take the helm at the European Central Bank replacing retiring ECB president Jean-Claude Trichet. The appointment has slipped by the media virtually unnoticed even though the ECB is the most powerful institution in the EU and is likely to play a critical role in solving the debt crisis.

Draghi was formally a Managing Director at Goldman. He also served as an advisor to the Bank of Italy in 1990, chairman of the Italian Committee for Privatisations, and was an Executive Director of The World Bank from 1984 to 1990. His bio. affirms his globalist pedigree which makes him the perfect candidate to replace the curmudgeonly Trichet who failed to comply with all of Big Finance’s demands. That’s not likely to be the case with Draghi.

The new ECB chief faces the difficult task of trying to pacify Germany while implementing policies that are opposed by the German political class as well as the German people. It won’t be easy, even for a skilled diplomat like Draghi. But Draghi will move forward with his bank-centric agenda, because it may be the last chance to keep the 17-member monetary union from disintegrating.

First, he will lower interest rates by .50 basis pts (from 1.5% to 1.%) at the ECB meeting on November 3 even though headline inflation in the eurozone is presently 3 percent and even though the move is bound to raise eyebrows in Berlin. Then he will announce that the ECB will step up its controversial bond buying program (already 170 billion euros) in order to push yields on soaring Italian debt below 6 percent. The Italian 10-year bond has zoomed to over 6.15 percent since the EU leaders announced their “breakthrough” agreement last Thursday. That means that bondholders do not believe the deal will solve the crisis. Draghi will act quickly to address the situation despite German opposition. Italy has 1.9 trillion euros in debt, 200 billion of which will come-due next year. Rising yields pose an existential threat for the faltering country.

In exchange for ECB support, Draghi will demand that Prime Minister Silvio Berlusconi (Bunga-bunga) push through unpopular reforms that target the unions and pensions. Italy will also be required to privatize more of its public assets and services. At the same time, the bank bailouts will continue mainly through easing new capital requirements and by underwriting bank debt so banks can issue bonds that are guaranteed by the ECB. Here’s the scoop from Bloomberg:

“European banks, which need to refinance more than $1 trillion of debt next year, may struggle to fund themselves until policy makers follow through on a pledge to guarantee their bond sales.

European Union leaders promised this week to “urgently” look at ways to guarantee bank debt in a bid to thaw funding markets frozen by the sovereign debt crisis. Lenders have found it hard to sell bonds for the past two years and have increasingly turned to the European Central Bank for unlimited short-term emergency financing…

In the U.S., the Temporary Liquidity Guarantee Program allowed banks to issue bonds with backing from the FDIC for as long as three years…

European governments including France, Spain, the U.K. and Germany guaranteed some bonds issued by their banks to reassure investors after the collapse of Lehman Brothers Holdings Inc. in September 2008. In May 2010, the EU ended the program when it said banks that relied on the pledges would face a review of their long-term viability.” (“European Bank Debt-Guarantee Proposals May Struggle to Thaw Funding Market”, Bloomberg)


Guarantees on bank debt is a direct subsidy to big finance, which is why we think that a former G-Sax exec. will support the policy.

Draghi is no fool, he knows that the German plan that was announced last week is more of the same “extend and pretend”. It has no chance of ending the crisis. Regardless of the stock market’s (positive) reaction, borrowing costs are still rising, the credit markets are in turmoil, and the clock is ticking. It’s now or never. Either the ECB takes the initiative and acts as lender of last resort or the eurozone is toast.

CONTINUED...

http://www.counterpunch.org/2011/10/31/is-goldman-sachs-poised-to-takeover-europe/

"I'd say 99-percent of the People are missing from the benefits of austerity picture, but they just happen to be off camera. Goldman Sachs' government division will make sure they are brought back in the frame for the scene where they get to pick up the tab."

http://www.democraticunderground.com/?com=view_post&forum=1002&pid=6193048

[dixiegrrrrl]

1. Very good post with lots of good info.

K&R

[polly7]

2. Thank you dixiegrrrrl.

I'm so sad for the people of Greece, more austerity will just simply kill a lot of them - the past suicides, hopelessness, unbelievable unemployment rates - i don't know what they'll do. Most of the money Greece got went right back into feeding the predator loans - they need to get out and rebuild on their own - I know they would get the help from others to do it.