10 - Greece - Everyone Loves a Troika

Greece: The Epicenter of Global Pillage

February 22nd, 2012
by Stephen Lendman


Predatory bankers make serial killers look good by comparison.
Their business model creates crises to facilitate grand theft,
financial terrorism, and debt entrapment.

They steal all material wealth and then some. They systematically
rob investors and strip mine economies for self-enrichment.

They demand they get paid first. They hold nations hostage to
assure it. They turn crises into catastrophes.

They leave mass impoverishment, high unemployment, neo-serfdom, and
human wreckage in their wake.

Their Federal Reserve/ECB/IMF/World Bank/political class lackeys do
their bidding.

They're more dangerous than standing armies. They wage war by other
means. They cause "demographic shrinkage, shortened life spans,
emigration and capital flight," explains Michael Hudson.

They're a malignancy ravaging societies and humanity. Greece is the
epicenter of what's metastasizing globally. The latest bailout deal
highlights out-of-control pillage.

On February 20, New York Times writer Stephen Castle headlined,
"Europe Agrees on New Bailout to Help Greece Avoid Default,"
saying:

On Tuesday morning, Luxembourg president/Euro Group head
Jean-Claude Juncker announced:

"We have reached a far-reaching agreement on Greece's new program
and private-sector involvement. The new program provides a
comprehensive blueprint for putting the public finances and the
economy of Greece back on a sustainable footing."

In fact, it assures human misery and economic destruction, not
restoration. It's a deal only bankers can love. It demands Greece
reduce its debt from 160% to about 120% of GDP by 2020, but how
incurring more debt achieves it wasn't explained.

It also demands sacking 150,000 public workers by 2015, slashing
private sector wages 20%, lowering monthly minimum wages from 750
to 600 euros, cutting unemployment benefits from 460 to 360 euros,
and reducing pensions 15% en route to eliminating them
altogether.

Media reports said bondholders agreed to a 53.5% face value haircut
- the equivalent of losing 75% overall. In fact, only 30% of toxic
assets are involved. Most held aren't touched. Greece must make
good on them, no matter the impossible burden.

Private lenders will swap current holdings for new lower face
value/lower interest rate bonds. Representing bondholders,
Institute of International Finance's Charles Dallara and BNP
Pariba's Jean Lemierre called the deal "solid....for investors, a
fair deal for all parties involved."

In other words, raping Greece for bankers is "solid" and "fair."
Its citizens had no say. Without rights, what's best for them
wasn't discussed.

They're left with huge wage and benefit cuts combined with mass
layoffs. Greece faces less tax revenue to cover domestic
priorities. In late 2011 alone, its economy shrank 7%. January
revenues fell 7% year-over-year. Value-added tax receipts decreased
18.7% from last year. Death spiral financial deterioration
continues monthly.

Moreover, the nation's $650 billion debt burden is double the
reported amount. The more it increases, the harder it is to service
and repay, the more future aid's needed, and deeper the country's
economic catastrophe heads for total collapse.

The deal escrows $170 billion to assure bankers get paid.
Investment advisor Patrick Young got it right telling Russia Today
that dealmakers don't trust Greece living up to terms because its
track record is so bad.

"So we now have a situation," said Young, "where Greece said we'll
do anything you want, but the problem is" too great a burden to
bear. "It's a catastrophe pushing people to the brink of
starvation."

No matter. Finance ministers will give Greece some money on
dreadful terms "where like a nine year old child, every Friday it
has to go to daddy, say it's done its homework, say it's been a
good boy, can it please have next week's pocket money to pay its
civil servants. (It's) a horrible loss of sovereignty."

Troika power runs Greece - the IMF, ECB and EU. They're predators
saying pay up or else.

Reports say its government will change its constitution to
prioritize repaying debt ahead of vital domestic obligations.

Other terms involve lenders cutting interest rates on bailout loans
by 0.5% over the next five years, and 1.5% thereafter. An estimated
1.4 billion euros would be saved by 2020.

The ECB will compensate by distributing profits on its 40 billion
Greek debt holdings. In addition, Eurozone countries will
contribute their Greek bond income through the end of the
decade.

Still to be decided is EU/IMF burden sharing. Both agreed to
contribute. Not discussed or considered is leaving 11 million
Greeks on their own out of luck. They have three choices - starve,
leave, or rebel.

The Rot Beneath the Surface

On February 21, Financial Times contributor Peter Spiegel
headlined, "Greek debt nightmare laid bare," saying:

"A 'strictly confidential' report on Greece's debt projections
prepared for eurozone finance ministers reveals Athens' rescue
programme is way off track and suggests the Greek government may
need another bail-out" soon after the latest one.

Even under the most optimistic scenario, imposed austerity's
punishing Greece so severely, its burden's impossible to
bear.

Agreed on terms are "self-defeating." Forced austerity elevates
debt levels, weakens the economy, and prevents Greece "from ever
returning to the financial markets by scaring off future private
investors."

As a result, continued financial infusions are needed. Double or
more the agreed amount's required. Current problems increase
exponentially toward total collapse, default and bankruptcy.

The report explained Greece's impossible burden. It also "paints a
troubling outlook for the debt restructuring, expected to begin
this week." Bond swapping creates "a class of privileged investors
who will chase off" others when Greece tries selling fixed income
securities at market. Germany, the Netherlands and Finland opposed
a deal doomed to fail.

The report warned "Greek authorities may not be able to deliver
structural reforms and policy adjustments at the (envisioned)
pace." Perhaps never with shrinking revenues unable to cover
liabilities.

It's "now uncertain whether market access can be restored in the
immediate post-programme years." Left unsaid was restoring it's
impossible ever. Greece faces protracted deep depression. Its life
force is ebbing. Only its obituary remains to be written.

A Final Comment

Greece's debt deal provides a model for future European sovereign
restructurings. It's one of six or more troubled countries.
Portugal looks like the next domino to fall, but Spain, Italy,
Ireland, and others may follow.

Moreover, implementing Greece's deal entails problems. Reality may
prevent fulfilling promises. If April elections are held, new MPs
may balk. Declaring a debt moratorium, defaulting and leaving the
Eurozone are options.

Moreover, private lenders may object. Legal challenges may follow.
A sweetheart banker deal may unravel. Pressuring China and Japan to
help isn't working. China Investment Corporation, the nation's
sovereign wealth fund, and Chinese central bankers aren't willing
to buy troubled European sovereign debt. According to one official,
"(w)e aren't stupid."

How it all plays out isn't known. Technocrats run Greece. They may
cancel April elections and stay in power. Public sentiment remains
the wild card. Impossible to bear pain may become uncontainable
rage. More than buildings may burn.

If political Greece doesn't care, people must act on their own.
Revolutionary seeds are planted. They can erupt any time. Change
only comes bottom up. It's long past time to get started.

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Stephen Lendman lives in Chicago and can be reached at
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