Decades of Bailout 67

“What’s a Grecian urn? About 20,000 euros a year plus another 30,000 in EU subsidy scams.” – The Catholic Orangemen of Togo, p.7

Amazing the gems of wisdom you find scattered through my books! That variation on an old joke reflects an important truth. Most of the EU, including us, have been subsidising Greece ever since it joined the EU, through regional funds and the CAP, but mostly through the cost of massive scams and fraud perpetrated in Greece on those and indeed all other EU budgets, not to mention VAT fraud. The euro bailout is only an extension of the EU’s continuing and expensive commitment to drag Greece along with it.

The world likes a narrative of goodies and baddies. The current narrative popular with left-leaning people is that the Greeks are plucky little Keynseans being hammered to disaster by evil governments and bankers led by the IMF and EU. That is simplistic nonsense. There are no goodies in the power players on any side. Ordinary Greek people are indeed the victims, but so are ordinary German people and ordinary British people.

Greece, just like Italy (and quite probably the other Club Med countries, though on them I don’t want to claim more knowledge than I have) never actually met the EMS and euro convergence criteria. Everyone is suddenly astonished that Italy has a national debt of 140% of GDP – it was that level when I was working on the European economies in 1985, and it has never really changed. Redefinition of terms allowed a fudge to let Italy enter the Euro (that particular criteria being 40%). Greece has never produced any vaguely credible national statistics anyway. Lawlessness, tax evasion, money laundering and systematic corruption are the warp and weft of the Greek economy – it is difficult to capture that in a statistical yearbook.

These countries were brought into the Euro because of the political dynamic of European Union, which was bought into by political elites across the continent, (and which I would say has a lot of very good aspects, but that is a long argument for another day). The idea was that momentum was extremely important; that it was OK in this context to ignore reality, because the beneficial influence of the European Union would enable reality to catch up quickly to fit the framework.

Therefore Greece and Italy were allowed into the Euro even though they plainly did not meet the convergence criteria, exactly as Romania and Bulgaria were allowed into the EU even though they plainly did not meet the acquis communitaire –
reality was suspended in the interests of ever greater union. The effects of that in the Eurozone are coming home to roost now. The effects of Bulgarian and Romanian EU entry haven’t really worked through yet, but I predict tremendous problems in five years time.

I write as a supporter both of the Euro and of EU expansion – but not of the crazy decisions to abandon genuine adherence to the criteria required to make them work. I also write with the humility of knowing I have been wrong on these things in the past. Around 1995 I wrote a paper for the Cabinet Office strongly supporting Polish EU membership, in which I argued strongly that we should not join Germany in seeking a delay on the right of Poles to come to the UK. In it I predicted that at most 200,000 Poles would want to come. I was wrong by a factor of over four! That paper was very influential on UK policy.

I do not regret it in the least – I am delighted so many Poles have come. They make Britain a much better place and are a huge boost to the economy. Germany will lose out from having given us the chance to host them first.

The Euro has always been a system of subsidy from Germany to Greece; the bailout only makes that more obvious. Greeks have been paying themselves much more than they earn for a great many years. That is not stopping or starting now. Levels of public spending are a tiny bit of the problem. The Euro is a massively overvalued currency as related to the Greek domestic economy. Greece’s economic problems are much more related to lack of rule of law, massive corruption, an elite super rich paying no tax, and a gigantic black economy, than they are related to public spending.

Greece’s total debt will actually be reduced under this bailout package, plus payments delayed and maturity dates postponed. Do not be too impressed by the news that the banks are taking a haircut, variously reported at 20% or between 30 billion and 50 billion Euros. Look at it this way. These banks have lent money to Greece, at interest rates of over 10% higher than those they can charge elsewhere. If you are making 10% extra interest a year over ten years, and you have to lose 20% of your total to secure that, you are still coming out way, way ahead.

Actually the net effect of this bailout is not European taxpayers paying more to help Greeks, it is European taxpayers paying more to secure super-profits for the banks. What a surprise!

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67 thoughts on “Decades of Bailout

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  • Andy


    ”CIA failed in Somalia, officials say – Americas – International Herald Tribune”
    June 8, 2006

    ”CIA failed in Somalia, officials say”


    Why not reported.

  • Courtenay Barnett

    Uzbek in UK,

    You said ” Not to reproach you but it seems that you have been ‘avoiding’ to give your opinion on the famine problem in East Africa at present. It is believed that over 20.000 people have died of starvation in Somalia alone and this is in times when Greece is receiving billions of Euros to keep it afloat.”

    Ingo made an observation about the climatic factors.That too is highly relevant – but within political context.

    Surely the truth is a combination of factors. The old colonial powers have structured a world where there is a broad poverty rift between North and South. However,we are increasingly finding that the injustices in unfairt terms of trade, IMF and World Bank stipulatons ( read: John Perkins ‘Economic hit man’ on this) and broadly entrenched global injustice – is now increasingly moving North – the Greek prolem today, will be the Irish problem tomorrow and the UK and Germany might not be immune from the global financial contagion.

  • Jaded.

    Makes me sick. Just seen some muppet on BBC News 24 called John Paris, a radicalisation expert (LOL), giving out the ‘Al Qaeda’ horseshit.

  • mary
    Handily standing by for the BBC, the state broadcaster. A messenger for the neocons who have brought and still bring death and destruction to the Middle East.
    If it wasn’t so sick it would be funny to read that Prof Sir Lawrence Freedman of Chilcot Inquiry fame is one the Academic Partners listed under Governance on the website of the ICSR above.

  • Jaded.

    What a disgusting and odious traitor he is. How much did he sell out for? 30k and a crap car? Sicko.

  • Parky

    ITV were at it too on their main evening news, the correspondent suggested three likely perpertators but none included false flag ! now where’s larry ?

  • Jaded.

    Probably conveniently filming from a Norwegian bridge and then dancing a jig of delight if truth be told.

  • John Goss

    What’s in a name? Did you notice, Mary, that Porter Goss’s Chief of Staff was Patrick Murray when he was director of the CIA?
    Don’t know how to get this thread back on line except Goss studied Classical Greek and praised Greece for its security measures during the Olympics (2004). Perhaps it was the Olympics that bankrupted Greece. Let’s see what happens to the UK after 2012.

  • John Goss

    Ingo, there’s some sort of saying about thinking alike and it’s nothing to do with coincidence.

  • Courtenay Barnett

    Mary – no doubt – if you were in downtown Oslo and a bomb went off it would make you shit scared if it did not already do serious harm to you.
    At this stage I do not know who was behind the blast, but could I put some things in very human perspective?
    A. A religion is insulted by way of certain cartoons published ( qualifier – for my part I don’t see justification in killing a person because someone drew an insulting picture of my God). Decency, however, would suggest to me ( albeit I am not a religious person) that I don’t go around the world mocking those with Judeo-Christian or Muslim or Hindu or any other type of religious belief and belief in their God. Free speech in every country has it limits and boundaries. And human decency suggests that one need not insult, incite or provoke hostilities – when we full well know that provocation, by its very nature, can lead to violence.
    B. A lot of us in the West simply do not consider the dynamics of A above – but, just blame the Muslims and Islamists or the so-called Al Quiada.
    C. A person walking the streets of Tripoli has a right not to be fearful that a bomb will come hurling down on his or her head, home, family or public service facilities relied on and should be able to live in peace. Resolution 1973 permits a no-fly zone. I am not aware that since the passage of the UN resolution there has been any violation of the no-fly zone by the Libyan authorities. Thus, in point of law, one has to question the legality of the bombs being dropped on the Libyan people. Making war by way of what clearly is a war of aggression must be seen as a provocation.
    D. It is not improbable that for reason of the perceptions of some people of the Muslim faith there is a feeling that it is Muslims being attacked by the West in Libya. If this is so, at this stage, one is left to speculate whether or not the terrorist attack in Oslo and the shooting of the youngsters is not a soft target retaliatory strike in response to the terror bombings of the US/NATO in Libya.
    I do not condone the killing of innocent civilians . The Libyans on the streets of Tripoli are as much human as are the persons walking the streets of Oslo. Bombing either set of persons is in actuality – terrorism. There need to be no political gloss on the observation in the previous sentence. This kind of conduct must be condemned. A leader targeted by Western bombing at the leader’s family’s residence in Triopli. A leader in Oslo having his office targeted and destroyed b y a bomb. A family that loses its child or children in Tripoli – a family that loses a young loved one at a youth camp in Oslo. Can we just simply and honestly term all the attacks – terrorism?
    Can we just stop the fucking bombing and killing of innocent people?

  • writeon

    Craig’s analysis is pretty accurate… as far as it goes. Without going into too much detail… I think one can argue, and show, that the Greek debacle is not just an isolated malfunction of ‘Capitalism’ going off the rails, but rather; Greece, like Iceland, Ireland, Spain, Portugal, Italy… and arguably to United States, are part of an ongoing and escalating ‘collapse’ of the latest phase of ‘Capitalism’, or some might define it as the Great Depression Two.

    It’s easy to see why the Greek elite borrowed so much… because it was so easy to borrow. Essentially, the financial relief packages are designed primarilly to salvage the German, French, US, UK, and Dutch banks that lent Greece the money in the first place. The banks of course knew that if the Greek bubble burst they losses would be covered by their respective governments. It’s like playing roulette where not matter what happens one cannot lose!

    One can argue that the United States is in a worse economic position than Greece, but that their collosal debts are so huge that they cannot be allowed to ‘fail’ because the consequences for the world’s economy are too horrendous to contemplate; so the Americans can effectively ‘blackmail’ the entire world into lending and subsidizing their economy and standare of living, because the US is just too big to fail.

    Greece isn’t really a special case at all… it’s only the first case… after a fashion. The Greek economy is tiny compared to Spain and Italy… who are just as ‘bust’ as Greece… only letting that particular cat out of the bag, is in nobodies interests… at least not yet. If ‘capitalism’ was seen to be bust, that the entire western financial system was insolvent, this would have very serious consequences, so it’s in the interests of the ruling elite to divert attention from the dire state of capitalism, until the next world war puts everything back on the right track again.

  • tony_opmoc

    Sorry, This is O/T. It’s also deja vu and politically incorrect. It is also just an observation.

    I do photography.

    I have still reached no firm conclusions about 7/7, because there was so little to go on. 9/11 was different.

    However sometime after 7/7, I can’t remember when exactly, I was almost completely convinced that one of the photographs of the victims was that of an “actor” with fake blood and bandages. I can still remember the photograph.

    Today the photograph of one of the victims – a woman – of the Oslo bombings which is posted now on the front page of the Telegraph’s website – doesn’t look real. It looks fake blood – smeared all over – but with no serious injuries.

    My daughter and her friends from film school sometimes use fake blood when doing movies in our home when we are away. The results are almost identical.

    I admit, I could be completely wrong about this – and the victim may be real. It was just an immediate observation within a second of seeing the photo on the Telegraph.

    I am also puzzled how a University in Libya was bombed to hell during the academic day so far as I recall, with no injuries whatsoever.

    However, I realise I am now sounding like David Shayler – and he is definitely nuts – well so far as I can tell – though I have never actually met him – and I believe litte of what I read in the press. I reckon they make it up as they go along.


  • Uzbek in the UK

    Just to say that Evening Standard placed famine in Somalia on a “very respectful” 26th page after all news and just before all rubbish news. Usually I do not even read as far as 26th page, I was just looking for news on Somalia. Does not it clearly demonstrate priorities.
    I was ask about my suggestions. At the minute all needs to be done to save starving people. Why in the hell US need 250.000 marines. Let them at last do a good job and actually save people. With all satellite technologies that US have it will not be a problem to map every village in Somalia and airlift relief. US did during Berlin Blockade why not now? Is not it a difference that Berlin is in Europe and Somalia is in Africa?
    Long term strategy has to be stop exploiting other non Western states like colonies. Nail Fergusson is most definitely an intellectual charlatan but for once he was right by pointing out that Cold war was in fact Third World’s War.

  • voila

    I remember the UN was considering an important meeting regarding Palestine’s future in 2001. Then 9/11 happened almost next day and everybody forgot about Palestine, now Norway was considering to recognize Palestine as an independent state in september even if peace talks fail. Today’s bombings will certainly change the opinion of the public and politicians towards Palestine and those muslims living there. WHO IS WINNING?

  • dreoilin

    Suspect in custody is Anders Behring Breivik, Norwegian, age 32, called himself a nationalist, posted anti-Islam comments online, member of Oslo gun club and the Masonic Lodge.
    established company GeoFrame in 2009, to engage in the cultivation of vegetables – access to large amounts of fertilizer. (via Google translate)

  • Sunflower

    @Mary “Before anyone knows anything about the Oslo bombing, Bridget Kendall has used the word ‘Islamists’ for those responsible. She did go on to say that it could be an internal group with unknown motives but she has done her work for the day with this smear against Muslims.”
    Of course it’s not “islamists” doing this or any other of the so called “terror attacks”. The terrorists behind these attacks are the demons in charge of US/UK/Isreal/EU etc. The operative branch that actually carry out the attacks on their fellow countrymen are the intelligence services of those countries.
    Apart from them following the same script again and again and again its very easy to understand who is behind the attacks, just ask the simple question Qui Bono?
    The demons have started an all out war on the common man using media, economics and raw terror in order to create an Orwellian society. Nowadays they don’t even care if their operations are sloppy (from an intelligence point of view) they know that any obvious anomalies are easily handled through the media they fully control.
    Step out of the Matrix they created through perception management and it will not be very hard to put one and one together.
    Non-violent non-cooperation is the way to get them down on their knees, karma will do the rest.

  • Sunflower

    “established company GeoFrame in 2009, to engage in the cultivation of vegetables – access to large amounts of fertiliser.”
    Yea, right. And the moon is made out of cheese.

  • dreoilin

    @Uzbek in the UK,
    Quote from Channel 4 ‘Snowmail’ this evening:
    “The problem is politics. The Islamists who control the famine area are denying it’s even happening and they say they will not allow aid agencies in.
    The Americans won’t give the Islamists the resources to feed people themselves because of their links to al Qaeda. While this goes on tens of thousands are already thought to have died. Most are children.”
    They will die because of political maneuvering. And because it’s not safe for the aid agencies to go it alone.

  • dreoilin

    I take it you don’t believe that right wing extremists exist, and that you do believe that all terrorist attacks are ‘false flag’ attacks.
    I think that’s a foolish attitude.

  • Jaded.

    Do you believe in ‘Al Qaeda’ as a far reaching terrorist organisation seeking to attack the West Dreoilin?

  • dreoilin

    A far reaching terrorist organisation? No, I don’t. I do believe that there is a handful of Islamic extremists scattered around the globe who seek to do so. They may not even be linked, but may copy each other.

  • Sunflower

    Greetings Dreollin, “I take it you don’t believe that right wing extremists exist, and that you do believe that all terrorist attacks are ‘false flag’ attacks. I think that’s a foolish attitude.”
    First, what is false flag? “False flag terrorism” occurs when elements within a government stage a secret operation whereby the establishment pretend to be a targeted enemy while attacking their own forces or people. There a numerous examples of this in recent history.
    The argument that it is not possible that all “terrorist attacks” can be false flag, therefore false flag do not exist, and if you do believe that false flag operations take place you are foolish, is the politically correct view presented by corporate/intelligence media.
    Right wing, left wing, no wing, double wing and islamic wing terrorism all results in a legitimisation of a fascist global police state. Let’s see, are there people on this planet that likes the idea of being emperors of the earth? Would they have the resources to fool common people that they are totally innocent while proceeding ?
    Dreollin, please gIve us an example of a terrorist attack in recent time that wasn’t a false flag.

  • Vronsky

    “…all terrorist attacks are ‘false flag’ attacks.
    I think that’s a foolish attitude.”

    Yes it is foolish. However it would be worth knowing what proportion of ‘terrorist’ attacks *are* false flag, i.e. initiated, facilitated or actually executed by the security services of the victim state.
    Making a start at estimation: we know from history that the number will be non-zero (there have been false flags operations in the past and we have no reason to believe anything has changed). We know that attacks like ix/xi and vii/vii have extremely high political value to the victim government, such that they would certainly entertain such projects, and are known to have done. I’d guess (vaguely) that we’re looking at a percentage in double figures. Any other estimates? If we confine ourselves to the major ‘headline’ atrocities, is it perhaps more than 50%? Unfortunately we need to try to map this dark territory.

  • dreoilin

    “The argument that it is not possible that all “terrorist attacks” can be false flag, therefore false flag do not exist”
    I didn’t say that. And if you’d been here a bit longer you’d know that I pay little attention to the “politically correct view presented by corporate/intelligence media”.
    “please gIve us an example of a terrorist attack in recent time that wasn’t a false flag.”
    I assume you’ve heard of the IRA.

  • ingo

    Sunflower, try Timothy Mc Veigh. Are you denying that rightwing groups within Europe have strong links, not only to themselves but also to Israel?

    Nick Griffins well paid visit to Jerusalem some time back, speaking in front of an assembled crowd, clapping to his rightwing ideas, has orf course never happened has it?

    maybe Prince Phillip could allucidate the BBC somewhat on the machinations of Norways masonic chambers, although it might come out as another islamophobic rant, it makes you wonder whether there is an islamophobic copying machine in the BBC news editiorial room, in goes the real news on one side, and hey presto, out pops an islamophobically covered propaganda rant on the other end.
    Shame on the BBC, they are no different than the tabloids and their scrupellous methods, not one iota.

  • dreoilin

    “However it would be worth knowing what proportion of ‘terrorist’ attacks *are* false flag, i.e. initiated, facilitated or actually executed by the security services of the victim state.”
    Agreed, Vronsky. Hi, Ingo.
    (I’m going off for coffee and maybe a boiled egg or something. I was up half the night on the net!)

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