Euro Blackmail 67

Watching the international blackmail of Papandreou and Greece to cancel his referendum plan has been pretty ugly – I imagine the diplomatic style and atmosphere of the Munich conference was similar. The joy in the financial markets at the cancellation of the referndum may be foolish.

The Greeks have effectively given up all effective sovereignity over their economy. To do that without having voted on it is quite a difficult step for any people to take, particularly a people as nationalistic as the Greeks. There will be blowback.

There has been little reporting or understanding of what happened on the ground in Greece over the last week. 372 Foreign “advisers” moved in to take over Greek ministries, in some cases even sequestring minsters’ offices. They have absolute financial control of budgets and have to approve and sign off spending before money is paid out. In effect, these advisers are now the government of Greece. 28% of these “advisers” are civil servants from other Euro states. The majority are of bankers, and executives of private financial institutions, accountancy and consultancy firms.

Anybody who thinks this is going to work out is raving mad.

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67 thoughts on “Euro Blackmail

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  • Edward

    “There has been little reporting or understanding of what happened on the ground in Greece”

    This sounds about par for our wonderful news media.

  • ingo

    Absolutely right Edward, our media is to blame for keeping us dumm and stumm over Europe. It is frightening what people understand of Europe.
    Contrast this with our coverage of US affairs, already we are being informed about Obama’s plans, what Michelle Bachmann, sic, is arguing the toss with senator Caine over, etc. Not one of our European partners elections are covered in this way as if we are ankered of the New Foundland coast.
    the lack of interest in our bigest market and its politics is frightening and I cannot see this improving under the sniping ConDems.

  • Iain Orr

    I get a daily email book extract, often on a topical subject, from . Today’s (with the introduction) is below. It highlights a worrying dimension to Greece’s economic woes – which also applies to the UK – the use of public sector jobs as an electoral resource for political parties. That said, excessive pay levels for most senior bankers, CEOs, senior civil servants and industrial oligarchs contribute to a public climate of amorality underlying the anecdotal abuses described below. I could live with a system in which (as with drug-dealers) excessive total assets – apart from the family home – were regarded as prima facie evidence of criminality. Documentation should be required to show that none of the income was based on tax-avoidance, employing people at under the minimum wage or foreclosing on assets missold to purchasers.

    Extract begins:

    In today’s excerpt – Greece is a country at the heart of the current European financial crisis. The country had entered the European Union under the administration by manipulating its financial data so that it appeared to conform to the European Union’s exacting financial requirements. It had then kept the truth about its debt and deficits from the EU until a scandal brought down the administration of Prime Minister Kostas Karamanlis in 2009 and incoming prime minister George Papandreou and his administration quickly discovered the catastrophic depths of their country’s financial problems:

    “The long-term picture was … bleak. In addition to its roughly $400 billion (and growing) of outstanding government debt, the Greek number crunch­ers had just figured out that their government owed another $800 billion or more in pensions. Add it all up and you got about $1.2 trillion, or more than a quarter-million dollars for every working Greek. Against $1.2 trillion in debts, a $145 billion bailout was clearly more of a gesture than a solution. And those were just the official numbers; the truth is surely worse. ‘Our people went in and couldn’t believe what they found,’ a senior IMF official told me, not long after he’d returned from the IMF’s first Greek mission. ‘The way they were keeping track of their finances – they knew how much they had agreed to spend, but no one was keeping track of what he had actually spent. It wasn’t even what you would call an emerging economy. It was a third world country.’…


    “In just the past twelve years the wage bill of the Greek public sector has doubled, in real terms – and that number doesn’t take into account the bribes collected by public officials. The average government job pays almost three times the average private-sector job. The national rail­road has annual revenues of 100 million euros against an annual wage bill of 400 million, plus 300 million euros in other expenses. The average state railroad employee earns 65,000 euros a year. Twenty years ago a successful business­man turned minister of finance named Stefanos Manos pointed out that it would be cheaper to put all Greece’s rail passengers into taxicabs: it’s still true. ‘We have a railroad company which is bankrupt beyond comprehension,’ Manos put it to me. ‘And yet there isn’t a single private com­pany in Greece with that kind of average pay.’ The Greek public-school system is the site of breathtaking inefficiency: one of the lowest-ranked systems in Europe, it nonetheless employs four times as many teachers per pupil as the highest-ranked, Finland’s. Greeks who send their children to pub­lic schools simply assume that they will need to hire private tutors to make sure they actually learn something.


    “There are three government-owned defense companies: together they have billions of euros in debts, and mounting losses. The retirement age for Greek jobs classified as ‘arduous’ is as early as fifty-five for men and fifty for women. As this is also the moment when the state begins to shovel out generous pensions, more than six hundred Greek professions some­how managed to get themselves classified as arduous: hair­dressers, radio announcers, waiters, musicians, and on and on and on. The Greek public health-care system spends far more on supplies than the European average – and it is not uncommon, several Greeks tell me, to see nurses and doctors leaving the job with their arms filled with paper towels and diapers and whatever else they can plunder from the supply closets.”
    Michael Lewis “Boomerang – Travels in the New Third World”, Norton 2011 pp43-45
    Extract ends

  • Mike

    The Greeks had already ‘given up all effective sovereignty over their economy’ long before joining the euro. You’re falling foul of the mainstream media’s ridiculous terminology – the oxymoronic phrase ‘sovereign debt crisis’. A sovereign nation CANNOT have a national debt – it WILL have a sovereign money supply with which even the idea of having to borrow money just does not make sense.

    The UK gave up our national sovereignty in 1694 when we allowed the then private bank of England to create money out of nothing and loan it at interest to the government. At that time, the BoE had a reserve ratio of 50% – effectively allowing them to loan twice what they actually held on deposit.

    Since those early days two things have happened; private banks have consistently sought to reduce the reserve requirements to the point that last year, Mervin King actually called for reserve requirements to be entirely. The other worrying trend is that government created, debt-free money, in the form of cash has been dwindling as a percentage of our money supply – from 40% in the 1960’s to a mere 3% today. This means 97%, the lions share of the UK money supply, in fact this is true of most economies around the world, is created as an interest bearing debt.

    The notion of paying down the deficit in this current financial system obviously means we’ll be taking money out of circulation, causing a depression as far as the eye can see. What people are failing to ask is if our entire money supply is debt and must be paid back with interest, just where exactly does the money to cover the interest payments come from? It can only come from more debt. There is a constant demand for the money supply to grow, i.e. the level of indebtedness to increase. We’re never going to get out of this mess until we through the economists and financial pundits out of the temple.

    As Michael Rowbotham wrote in his book ‘Grip of Death’, “When a profession fails to deliver, people inevitably suffer. When that profession happens to be the study and practice of economics, the entire world suffers. The deluge of social and environmental problems brought on by humanity’s endeavours to be ‘economic’ suggest that the economics profession is not just failing – its advice is proving mind-bogglingly destructive.”

    The Greeks are suffering from Stockholm syndrome – when it became known that the Greek government in 2002 had colluded with the giant hydra-headed spider, the mighty Goldman Sachs, to falsifying financial data and hide billions of debt using a currency swap, the Greek government sent in their intelligence service to investigate but the team was headed up by a former Goldman Sachs banker. Conflict of interest doesn’t even come close to describing the level of fraud and cover up employed. What amazes me is people who should be in jail for such crime are still receiving mega bonuses every year – welcome to the age of the plutocracy / corporatocracy.

    It would surprise me if blackmail of Papandreou was the only method employed – death threats by economic hitmen or even assassinations by their jackals are the norm in such circumstances, as is shown in Bill Still’s documentaries ‘Money Masters’ and ‘The Secret of Oz’, both available here –

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