{17} The Greek Crisis

The German expression – Oberlehrer –fits the role Germans are playing in the Greek debt crisis. Oberlehrer translates as head teacher but it refers to someone who is a self righteous know it all intent on forcing a lesson down someone’s throat. In demanding that the Greeks choose a course of austerity and belt-tightening, Germans are forgetting their own history. Not only have they defaulted on loans more than once, they paid ridiculously low war reparations to Greece after World War Two. For a take on the German experiences with international debt, see Eduardo Porter’s article in the Times.

But this isn’t just about the Greeks and the Germans. The Greek debt crisis is part of a larger political agenda. In a letter sent from Germany, my American friend Melody Chavis summarizes what’s at stake and why she disagrees with the opinions she hears from Germans.

Melody Chavis:

… here in Germany, I hear people repeating so many of the media lies and omissions about the Greeks: they are spoiled spendthrifts, their pensions are far too high, they’re irresponsible and have to pay their debts as we all do, etc.

I get frustrated with this, as I can’t argue very well in German, and these views are so far from mine…to me, it’s clear that this attack on the Greeks by the world finance elites is one of the opening salvos in an attack on Europe and on social democracy. If that succeeds, then Europe will begin to break.  My German friends who are so judgmental of the irresponsible Greeks do not realize that Greek defiance may be protecting the futures of their own grandchildren, and their hopes for living in the social democracy that Germans have built. 

Though the “Troika” – the IMF, ECB and EC: International Monetary Fund, European Central Bank and European Commission -- say they fear the fallout of a Grexit and the resulting instability, there are some signs that they want Greece out of the Eurozone – such as the IMF changing the terms at the last minute, as soon as Greek’s President agreed to new austerity measures. 

I think it’s obvious that the world financial rulers – U.S.-based Goldman Sacs, and IMF (which overlap) and others hate social democracy.  They hate the example Americans and others around the world can see of populations with health care, subsidized food, environmental policies to turn away from fossil fuels, strong unionized workforces, large secure pensions, generous parental and sick leave, rules for CEO compensation far below US levels, strong consumer protections from Pharma and other sectors, flawless infrastructure and public transit.

The Eurozone structure makes it hard to help any one nation, whether Cyprus, Greece, Spain, Italy, Ireland, or Portugal.  If it were really a Union of Europe, with common financial governance, as is the United States, there would be no question.  If, for example, Florida with its many pensioners runs too high a debt or deficit after a financial collapse, no one would think of forcing every pensioner to live on 40% less, raising the price of electricity or gasoline 400 percent, lowering the minimum wage far below a living wage, etc.  All of this was done to the Greeks in the wake of the 2008 collapse.  The banks are seen in Europe as international entities, and they, who had given Greece loans that could not be paid back, were “saved” and “bailed out” using mainly French and German funds.  The Greek debt was restructured but not written down – the Greeks still owe it, and it is so much now that it cannot be repaid in hundreds of years.

How did this debt get there?  First, bad loans were given by the banks.  If one wants to speak in moral terms, the “moral hazard” of not paying back loans should go hand-in-hand with the “moral hazard” of issuing loans to those who probably cannot pay them.  One is supposed to be punished and learn not to do it again.  But when were the bankers punished?  Before the collapse, Greek debt was hidden.  Only in 2009 did it come out that the country’s deficit was twice what had been publicized.  Papandreou, the former President, had to admit the truth.  Yet the amount was still not impossible then.  The ratings agencies downgraded Greece bonds, and the banks then imposed extremely high interest rates on the debt and the bailout funds that made the amounts unpayable. 

The people with decision-making power – a small group, really, the heads of the Troika -- have only one tune to sing: more austerity, and pay.  Simply pay with money that is not there.  Though the measures have caused suffering to children, old people, poor people for the past five years, and have been a total failure, causing a depression in Greece and unemployment of 25% (higher for youth, up to 50%) the Troika wants only more of the same.  More austerity – cut the pensions even more deeply.

Where did those billions before 2008-9 go?  Where is the money now?  An estimated 70 Trillion world-wide is estimated to be stashed in tax havens, and surely a big portion of the stolen Greek funds are a part of that.   How is it stolen at first?  One common way if for “developers” to take out loans to build something: an airport, housing, power plants, whatever.  Either the project is never built or the “budget” is raised far over initial estimates, or what is built is shoddy or never finished.  The money is pocketed, politicians or their relatives or their firms get paid off.  The money leaves the country and so do the elites who borrowed it.  The stealing in Iraq and Afghanistan has been epic for 13 years, as billions in US tax dollars lined the pockets of “contractors” from many nations.  I’ve seen on TV an example in Spain – an airport that not one plane has ever landed at.  The people who do these crimes operate by the motto from Wall Street uncovered in emails between hedge funders trading in worthless loans.  “By the time this all blows up, UBG and IBG” short for “You’ll be gone and I’ll be gone.”  In other words, we can steal with impunity.

The ordinary Greek people did not borrow these billions.  On our TV we see interviews with a chef who is closing her restaurant, with no way to feed her children; a fisherman who cannot sell his fish; homeless people digging in garbage cans for food.  Yet the Troika expects them to live with even less, and pay.

And where is democracy?  The fact that a tiny group of wealthy people can impose such measures on millions, without any voice from the people is astonishing.  I admire the Greek leftist government for having asked the people to advise them in a vote.