Mission & Name
US Foreign Policy (Dr. El-Najjar's Articles)
Banker Occupation of Greece
By Stephen Lendman
Al-Jazeerah, CCUN, June 27, 2011
Economist Michael Hudson calls it "Replacing Economic Democracy with
Financial Oligarchy" in a June 5 article by that title, saying:
After being debt entrapped, or perhaps acquiescing to entrapment, the
Papandreou government needs bailout help to pay bankers that entrapped them.
Doing so, however, requires "initiat(ing) a class war by raising its taxes
(harming working households most), lowering its standard of living - and
even private-sector pensions - and sell off public land, tourist sites,
islands, ports, water and sewer facilities" - in fact, all the country's
crown jewels, lock, stock and barrel, strip-mining it of everything of worth
at fire sale prices.
Why? Because the US-dominated IMF, EU and
European Central Bank (ECB), the so-called "Troika," demand it as the price
for bailout help that wouldn't be needed if Greece wasn't trapped in the
euro straightjacket. Membership means foregoing the right to devalue its
currency to make exports more competitive, maintain sovereignty over its
money to monetize its debt freely, and be able to legislate fiscal policies
to stimulate growth.
Instead they're entrapped by foreign banker
diktats demanding tribute. They call it a "rescue." In May 2010, the
Papandreou government agreed to earlier austerity in return for loans. Now
they're at it again, demanding more or they'll collapse the entire economy,
or so they say. And the same scheme is replicated in Ireland and Portugal.
Moreover, it's heading for Spain, and potentially most of Europe and America
as representative governments head closer to "financial oligarchy."
In other words, it amounts to financial coup d'etat authority over sovereign
governments unless popular anger prevents it, involving more than street
protests or short-term strikes accomplishing nothing.
Street broker, financial analyst, radio/TV host, and consummate critic Max
Keiser calls it "banker occupation" for good reason. They:
-- set the terms;
-- issue diktats;
pressure, bribe or otherwise cajole or force governments to acquiesce; and
-- burden working households with higher unemployment, wage and benefit
cuts, higher taxes, and other austerity measures to assure financial
predators profit - always at their expense, forcing once prosperous nations
to surrender sovereignty to financial oligarchs, ruling world economies like
Hudson said European central planning concentrated
financial power in "non-democratic hands" from inception under European
Central Bank (ECB) dominance. Operating like a financial czar over its 17
Eurozone members, it:
-- "has no elected government (to) levy taxes;
-- (t)he EU constitution prevents (it) from bailing out governments,"
unlike the Fed able to monetize US debt in limitless amounts; and
"the IMF Articles of Agreement also block it from giving domestic fiscal
support for budget deficits," saying:
"A member state may obtain IMF
credits only on the condition that it has 'a need to make the purchase
because of its balance of payments or its reserve position or developments
in its reserves.' "
However, despite ample foreign exchange
reserves, IMF loans are offered "because of budgetary problems," precisely
what it's not allowed to do. As a result, "when it comes to bailing out
bankers," said Hudson, "rules are ignored" to save them and their
counterparties from incurring losses. And it works the same way in America
under the Fed, dispensing open-checkbook amounts to Wall Street on demand.
No wonder Hudson calls finance "a form of warfare," operating like
pillaging armies, taking over land, infrastructure, other tangible assets,
and all material wealth, devastating nations in the process, causing
unemployment, poverty, neoserfdom, "demographic shrinkage, shortened life
spans, emigration and capital flight."
fiscal legacy, in fact, caused today's crisis, squeezing public spending in
favor of the rich the rich, especially with sweetheart tax policies letting
much of their income go undeclared.
Financial deception followed.
On February 8, 2010, Der Spiegel writer Beat Balzli headlined, "How Goldman
Sachs Helped Greece to Mask its True Debt," saying:
In 2002, Goldman
helped them borrow billions by circumventing Eurozone rules in return for
mortgaging assets. Using creative accounting, debt was then hidden through
off-balance sheet shenanigans, employing derivatives called "cross-currency
swaps in which government debt issued in dollars and yen was swapped for
euro debt for a certain period - to be exchanged back into the original
currencies at a later date."
Debt entrapment followed, nations like
Greece held hostage to repay it, the usual price being structural adjustment
harshness, making a bad situation worse. In 2010, in return for a $150
billion loan, Papandreou imposed:
-- large public worker layoffs
(around 10% overall);
-- public sector 10% wage cuts, including a
30% reduction in salary entitlements;
-- cutting civil service
-- freezing pensions;
-- raising the average
retirement age two years; and
-- higher fuel, alcohol, tobacco, and
luxury goods taxes, knowing much more lay ahead given Greece's worsening
More bailout help is now needed in return for greater
austerity, as well as selling off Greece's crown jewels as explained above.
On June 24, New York Times writer Stephen Castle headlined, "Europeans Agree
to a New Bailout for Greece with Conditions," saying:
The deal "came
a day after Greece agreed with international creditors to more austerity
measures (requiring parliamentary approval) as part of revised plans for
2011-15 aimed at" assuring bankers are first in line to get paid, popular
and national interests be damned.
An agreement in principle expects
half the funds offered to come from new loans, a fourth from state asset
sales, and the remainder from private sector contributions.
unspecified larger amount (of around 110 billion euros in total) will follow
an initial 12 billion euro emergency loan with strings. They include:
-- laying off another 20% of public workers;
-- privatizing public
enterprises and assets on the cheap;
-- a one-time personal income
levy from 1 - 5%, depending on income;
-- lowering the tax-free
income threshold to 8,000 euros annually from 12,000;
-- setting the
lowest tax rate at 10%, with exemptions for people up to age 30, over-65
pensioners, and disabled people; and
-- annually taxing the
self-employed an additional 300 euros.
Up to $120 billion in cuts
are expected though final figures haven't been announced, depending on
amounts raised from asset sales and private contributions.
response, public anger is visceral through daily protests. The ruling PASOK
party's approval rating is 27%. Over 90% of the public are dissatisfied with
Greece's governance. Another 90% say the country is "on the wrong path."
About 80% are unhappy with their lives, and 70% are concerned that
conditions will keep deteriorating.
Nonetheless, on June 22,
Papandreou won a parliamentary vote of confidence ahead of two more steps
the IMF and Eurozone leaders require before releasing more funds - agreeing
on their demanded austerity plan and enacting measures to implement it.
In fact, acting IMF managing director John Lipsky (a former JP Morgan
Investment Bank vice chairman) said no opposition will be tolerated. In
other words, Eurozone nations have no option but to obey IMF diktats, Lipsky
acting more like a commissar than banker.
At the same time,
austerity, privatizations, and greater debt amounts are self-defeating.
Workers, of course, are hardest hit unless mobilized mass action stops it.
Ideally they can do it by general strike, shutting down the country, setting
non-negotiable demands, staying out until predatory banker diktats are
rejected, and prevailing by letting nations regain their sovereignty and
people their rights.
That's how labor battles are won. It works the
same everywhere when rank and file determination stays the course to
Stephen Lendman lives in Chicago and can be reached at
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