Greece’s Grat Depression of Today is far greater than1929 crash of the US and the resultant Great Depression here.
Yet back then the Great Society Projects and FDR’s initiative to get people employed saved the day whereas today in Europe there is not a shred of ethical and smart Leadership to be found anywhere.
So Greece is left to wallow in the winds of Misfortune and certain famine as a member of the richest conglomeration of countries that world has ever seen.
But one has to question WHY?
Why is this happening on the year of the Lord 2015?
I’ll tell You why…
Let’s start by talking about European banks…
More precisely about German and other Northern European banks.
From ‘02 until the financial crisis in ‘08, Wall Street shoved as much toxic waste down those banks’ throats as they could handle. It wasn’t hard. Like the Japanese banks and pension funds before them, the European banks were hell bent on indiscriminately buying assets from all over the globe.
They were so willing, and had such an appetite, that Wall Street helped hedge funds construct specially engineered products to sell to them, made of the most broken and risky subprime mortgages. These products—the banks called them “monstrosities” and later the media dubbed them as “rigged to fail”—only would have been created if they had reckless buyers, and the European banks were often those buyers.
When a bank buys an asset it is lending money; the seller is the borrower. In buying various assets European banks were doing what banks are supposed to do: lending. But by doing so without caution they were doing exactly what banks are not supposed to do: lending recklessly.
The European banks weren’t lending recklessly to only the U.S. They were also aggressively lending within Europe, including to the governments of Spain, Portugal, and Greece.
In 2008, when the U.S. housing market collapsed, the European banks lost big. They mostly absorbed those losses and focused their attention on Europe, where they kept lending to governments—meaning buying those countries’ debt—even though that was looking like an increasingly foolish thing to do: Many of the southern countries were starting to show worrying signs.
The 2010 bailout was a bailout of the German and French banks in everything but name, because they were the ones holding the overwhelming majority of all sovereign debt of the European countries within and without the Eurozone. All 28 European Union countries were seen as a safe bet but the 19 countries that were within the Eurozone and shared the common currency, were rated as especially safe, and beyond the possibility of failure.
Too secure to become a failure is how the countries that shared the EURO were seen by the bankers of the European countries but not so by their American, the Chinese, and their Japanese counterparts…
So the EUROS rolled through the European Economies sloshing the markets and nullifying the clarity and transparency of the regulators who were clearly asleep at the switch…
The success of the currency was always going to depend on the willingness of countries with more successful economies being prepared to transfer wealth to the weaker economies. A true political union could only be achieved by the creation of a joint European “Transfer” Union. And many countries chose to join in this. At last count there were 19 countries that chose to give up significant parts of their Sovereignty in exchange for the Common Currency. Yet what most European Citizens along with their Prime Ministers, Finance Ministers, and Central bankers, forgot was that the Common Currency was inevitably going to be controlled by the Ministry of Finance of the strongest economy of Europe — Germany — and that was a singular objective of the old guard of the German Reich still involved in running the affairs of the deep state of Germany today…
So the 19 countries that took the euro (sign: €; code: EUR) as the official currency of the eurozone, which consists of 19 of the 28 member states of the European Union: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain — were trading Sovereignty for the Security of a common currency and centralized Monetary Policy coming from Berlin.
Yet as it happens this was a critical blunder as most European politicians failed to follow the History Lessons learned from their youth.
Amongst all others, Greece also chose the loss of sovereignty that comes with joining the single currency. That has led to the appalling situation it faces today of losing control of its economic policy and its national assets, just as Portugal, Spain and Ireland did in their turn. But we should not allow the siren song of the anti-Europeans to blind us to the fact that it was the Euro and not the EU that gave the Banker-wankers and the German financiers this power. And it’s important to note that Great Britain, and other hold-out countries that didn’t join the common currency, do not face any similar loss of sovereign control precisely because they wisely rejected the Euro and its flawed design, in the first instance…
Ever closer union is the logic of the European project and of the single currency area. This forced Union, brought about by the design of the Euro, is now undermining the whole EU. Those countries that are part of the single currency area will inevitably develop political and democratic institutions to guide how their currency is governed. Indeed, it is an urgent necessity that they do so. But there must also be a way out for countries for whom the Euro is now destructive and a way forward for countries that choose not to join but still want to be part of the European partnership.
The coming train wreck was clearly visible; well before the Lehman Brothers collapse across the pond in Wall Street…
Yet a whole generation of European politicians decided to be blinded by indolent hope for a United Europe and force that issue and thus came the push back. The current rise of Euroscepticism across the continent is the direct consequence of Greece’s treatment by the Northern European fiscally strong members and especially Germany. And the EURO is now the dead weight for most all member countries that are all looking at convenient ways to escape from.
What was clearly designed as a project to enhance solidarity and encourage European federalism has done precisely the reverse. Whole countries are sacrificed into the altar of the Gods of the Germanic idea of European Union Federalism, under the “Deutche Uber Alles” mentality — without regard to the future.
By 2010 one of those countries—Greece—could no longer afford to pay its basic bills for food and medicine imports. Over the prior decade Greece had built up massive sovereign debt; a result of too many people buying too many things; too few Greeks paying too few taxes; and too many promises made by too many corrupt politicians; all wrapped up in questionable accounting. Yet despite clear problems, Northern European bankers had been eagerly lending to Greece all along, and kept on going to lend ever more.
That 2010 Greek crisis was temporarily muzzled by an international bailout, which imposed on Greece severe spending constraints. This bailout gave Greece no debt relief, instead lending them more money to help pay off their old loans, allowing the banks to walk away with few losses. It was a bailout of the banks in everything but in name.
This was a failed Austerity Bailout, because the problem was not even temporarily resolved because Greece has struggled immensely since then, with an economic collapse of historic proportion, and unemployment of more than a third of the population; the human costs of which can only be roughly understood, and certainly not felt by anyone who hasn’t lived in the country through this time of trials and tribulations…
Soon enough Greece needed another bailout in 2012, that was another still born failure. This new Failed Bailout package brought even more Austerity and led to massive loss of confidence in the European project.
Evidence of the dismal failure of all these policies is that Greece needed another Bailout as was agreed to be negotiated yet again this past week.
And the Merry Go Round keeps on spinning and the music keeps on playing on the European Luna Park called the EUROzone where the horses are wooden and the games of chance are all rigged for the house to win. The “House” being Germany, is the only one that stands to benefit long term from this vast Hall of Mirrors and House of Miracles, where all the fools get fleeced by the next greater Fool.
Yet while the Greeks have suffered massively, the northern European banks have yet to account financially, legally, or ethically, for their reckless decisions to lend without regard to the creditworthiness of the nation whose bonds they were buying as if they were going out of print…
And they perpetuated this charade and the Merry Go Round by playing musical chairs with the Greek politicians and by bailing out the banks all over again in 2010, rather than the country of Greece.
But what the European “smart as foxes” politicians failed to conceive is that by transferring the future losses of the European Banks from the Greek Crisis to the European public — they in effect were screwing their own people; long term. It was a classic case of bait-and-switch; rife with a nationalist sentiment that has corrupted the dialogue ever since.
Namely the silly Northern European Politicians who wanted to appear Champions of their National Fiscal Policies said in unison: “Don’t look at our reckless banks; look at their reckless borrowing.” Yet what they implied is: ” Don’t look at our hands while we perform this magic trick; look at the beautiful and sexy banks that we have.” And somehow they have managed to hide this magic transfer of “Ultimate Capital” and responsibility for the coming complete collapse of the European Banks — to the backs of their own citizens and the Future generation of Europeans.
One can count now the European Project as dead in the water because the European Union started with an economic agreement on “coal and steel” production and prices, and lots of good intentions. It was, at least in part, an attempt to diminish the rising nationalism that had led to past wars – through shared economic incentives and common goals that will eventually lead to a Federated Union of European States.
The economic unification became a currency union in 1999 with the creation of the euro zone. The common currency the EURO, was adopted despite a lack of political union, a sequence which many at the time described as putting through shared economic incentives, the cart before the horse.
Yet the Euro took off.
And along with the common currency came a wave of regulatory changes that provided the banking sector with more opportunities for growth — and the chance to become the Major Fool. The rule changes enabled the banks to treat the debt of all euro zone countries equally; Greece, as far as the rules were concerned, had the same risk factor as Germany.
How Cool is that kind of Magic…
The markets however that hadn’t absorbed the magic show put on by the Germans, had a different perspective, thus making Greece pay far more in interest rates in order to borrow; than other countries such as Germany and the northern alliance. However the smart banker-wankers smelling arbitrage, and led by the German and the Northern European banks, started seeing easy money, and thus restarted lending to Greece, happily receiving higher fees for the “same risk” as they erroneously perceived it.
It was the beginning to look like Christmas.
And a lot of gifts started gathering under the tree. Not all the gifts were welcome though and a self-fulfilling feedback loop with the banks at the center started emerging. Southern Europe and especially Greece, started borrowing more, allowing them to buy more, which caused them to grow, which collapsed the cost of their borrowing, with led them to borrow more, and so on so forth.
The buying spree benefited everyone, especially the northern European countries. The South boomed as things got built and bought, and the North boomed as factories churned out products to sell to the South. The banks sat in the middle, happily taking the spread, and making money both ways for the roundtrip Capital journey.
What a Ride…
The party was an all out Bachanalia. An orgy of Germanic proportions…
Yet only Bankers and Politicians were invited. All others had to pay the price.
But while the Norther European Banks enjoyed a Roman Orgy of Wealth and Power, the European periphery was mirred in crisis that was heavily exacerbated in Greece some years ago when the New Democracy Karamanlis government was sweet talked into hiding it’s massive debt through a shady deal with Goldman Sachs, that was engineered by Goldman’s current CEO, Lloyd Blankfein. Blankfein and his Goldman team helped Greece hide the true extent of its debt, so the EUropean Union partners will see it as “healthy” and in the process this “deal” almost doubled the Greek Sovereign Debt. And just as with the American subprime crisis, and the current plight of many American cities, Wall Street’s predatory lending played an important although little-recognized role in the Greek and the European Debt Crisis.
The deal was simple. In 2001, Greece was looking for ways to better it’s economy. Goldman Sachs thought that it might be best to just disguise Greece’s mounting financial troubles from the other Eurozone partners hoping to continue borrowing unchecked. The Maastricht Treaty required all eurozone member states to show improvement in their public finances, but Greece was heading in the wrong direction. When Goldman Sachs came to the rescue, arranging a secret loan of 2.8 billion euros for Greece, disguised as an off-the-books “cross-currency swap”—a complicated transaction in which Greece’s foreign-currency debt was converted into a domestic-currency obligation using a fictitious market exchange rate — the trap was set. Greece fell into it easily and Goldmans made billions along with Hedge Fund king Paulson who was supported by Goldmans at an arms length relation in order for the two to make close to a Trillion Dollars out of this Greek stupidity…
But on the face of it the Greeks looked good because as a result of the Goldmans swindle, about 2 percent of Greece’s debt magically disappeared from its national accounts books. Christoforos Sardelis, then head of Greece’s Public Debt Management Agency, later described the deal to Bloomberg Business as “a very sexy story between two sinners.” For its services, Goldman received a whopping 600 million euros ($793 million), according to Spyros Papanicolaou, who took over from Christopher Sardelis in 2005. That came to about 12 percent of Goldman’s revenue from its giant trading and principal-investments unit in 2001—which posted record sales that year. The unit was run by Blankfein.
This is without counting the profits from the hedges and the associated funds.
Then the deal turned sour. After the 9/11 attacks, bond yields plunged, resulting in a big loss for Greece because of the formula Goldman had used to compute the country’s debt repayments under the swap. By 2005, Greece owed almost double what it had put into the deal, pushing its off-the-books debt from 2.8 billion euros to 5.1 billion. In 2005, the deal was restructured and that 5.1 billion euros in debt locked in. Perhaps not incidentally, Mario Draghi, now head of the European Central Bank and a major player in the current Greek drama, was then managing director of Goldman’s international division.
Greece wasn’t the only sinner. Until 2008, European Union accounting rules allowed member nations to manage their debt with so-called off-market rates in swaps, pushed by Goldman and other Wall Street banks. In the late 1990s, JPMorgan enabled Italy to hide its debt by swapping currency at a favorable exchange rate, thereby committing Italy to future payments that didn’t appear on its national accounts as future liabilities.
But Greece was in the worst shape, and Goldman was the biggest enabler. Undoubtedly, Greece suffers from years of corruption and tax avoidance by its wealthy. But Goldman wasn’t an innocent bystander: It padded its profits by leveraging Greece to the hilt—along with much of the rest of the global economy. Other Wall Street banks did the same. When the bubble burst, all that leveraging pulled the world economy to its knees.
Even with the global economy reeling from Wall Street’s excesses, Goldman offered Greece another gimmick. In early November 2009, three months before the country’s debt crisis became global news, a Goldman team proposed a financial instrument that would push the debt from Greece’s healthcare system far into the future. This time, though, Greece didn’t bite.
As we know, Wall Street got bailed out by American taxpayers. And in subsequent years, the banks became profitable again and repaid their bailout loans. Bank shares have gone through the roof. Goldman’s were trading at $53 a share in November 2008; they’re now worth over $200. Executives at Goldman and other Wall Street banks have enjoyed huge pay packages and promotions.
Blankfein, now Goldman’s CEO, raked in $24 million last year alone.
Meanwhile, the people of Greece struggle to buy medicine and food.
Yet the Bankers of Northern Europe, Germany and Wall Street kept the party going fully assured of their fat bonuses, fatter bailouts, and fattest absolution from any liability for their profligacy and for their outright stupidity…
This feedback loop was uniquely European, dependent on the false sense of stability provided by a common currency, which amplified the bankers’ naive belief that a country within the Eurozone, could not default.
This loop kept going until the sheer weight of the debt amassed by Greece became too huge for the markets to ignore. It kept going until the markets, shocked by the U.S. housing crisis, prompted skepticism, which forced Greek borrowing fees to rise. The European banks, in too deep to stop, were still willing to lend, but others less so.
By 2010 this could go on no more. The markets refused to lend more to Greece and a bailout was necessary.
A well orchestrated PR narrative emerged of southern borrowers as the victims of only their own incompetence, sloth, and greed…
But the bailout was primarily focused on saving the Northern banks, not Greece: Rather than forgive a portion of the Greek debt and hand the banks a loss, Greece was to continue paying its bills. New money was lent by a variety of public sector entities (i.e.The European Commission, the IMF, and the European Central Bank) to pay off the old bills. The banks were consequently made whole, with most of the money from the new loans passing through Greece right back to the banks.
For acting as a conduit to a northern European bank bailout, Greece was asked to change its ways—to spend less, tax more, and restructure the public sector.
This did not work. Greece was plunged into an even more dire depression. Two years later it was once again unable to pay its bill and required a new bailout. This time Greece’s debt was cut, roughly by 40 percent, but by then the banks had far less to lose, with many of the loans having already matured and been fully paid.
That first furtive bailout of the banks in 2010 introduced and encouraged a narrative of southern borrowers as the victims of only their own incompetence, sloth, and greed. It allowed the banks to play the role of upset parents to immature children.
That narrative was further encouraged and politicized by passing any future losses from Greece onto the European public, mostly the northern European public, encouraging an us-versus-them mentality. It was policy dressed in nationalism: the antithesis of everything the common currency was supposed to stand for.
Why were the banks, rather than Greece, bailed out in 2010?
Why was Greece asked to change its ways and accused of reckless borrowing, rather than the banks accused of reckless lending?
One argument was that Europe was still not closely aligned enough, their regulators not coordinated enough, to pull off such an operation. The louder argument was that the European banks were too vulnerable, fragile, and essential, to suffer losses. Those losses would have propagated around Europe, collapsing other banks and other countries and, ultimately, breaking up the euro zone.
That argument continued: The banks were too central to the operation and health of the economy, no matter how recklessly they had behaved, to punish with losses. It is an argument one hears during a crisis in order to justify bank bailouts, to justify favoring the creditors over the borrowers.
It is a strong argument—because it appears to be mostly true…
Consequently it is also the strongest and best argument for why banks should be heavily regulated and controlled in the first place: to prevent exactly that sort of behavior—before it destroys their bank along with all the other banks, whole countries, and even complex economies.
Politicians, regulators, and bankers, can calculate the immediate costs of bank failures easily; yet they can’t calculate the costs of whole country failures, nor can they calculate the long-term human toll that follows…
Greece is experiencing immense pain from a Great Economic Depression far greater than that of the United States starting with the crash of the 1929 and extending well into the 1930s and all the way into the Second World War. Poverty, famine, migration, dustbowls, homelessness, suicides, addictions, family failures — all have risen.
A whole generation has been Lost because they have seen their present totally trashed, their near future totally diminished, and their far future diminished even more.
It is a sad instance of a time-old routine…
When lenders and borrowers are at odds, it is the borrowers who are blamed and the borrowers who suffer.
The Reckless Lenders usually keep on dancing upon the Graves of those they used to call valued Customers.
Look at the German and the Swiss Bankers and their behaviour toward the Jews during the Second World War…
Today’s German Bankers are doing the same thing.
Now though we have hopefully the accumulated Wisdom of having lived through that tragic past.
Fast Forward to 2015 and the newly installed Greek Government that came into being riding the cart of Anti-Austerity and National Independence…
It follows that on the 5th of July 2015, in the referendum initiated by the government of PM Alexis Tsipras and the Hellenic Parliament, the Greek people overwhelmingly rejected the Austerity measures imposed by the usurious Creditors, the Germans, and the Troika.
It was a splendid victory for democracy.
However this short lived Victory was followed by an agreement with the afforementioned band of Creditors, that was reached on Monday, 13th of July and that it will clearly lead to fresh austerity measures over several years if not decades.
This completely contradicts the will of the Greek people as expressed in the vibrant NO AUSTERITY as was vocalized by the majority of the Greek Voters during the referendum.
Yet his new Memorandum towards even more dramatic Austerity, was accepted by the Politicians, the Parliamentary Representatives of the Greek People without consultation with the public… During the night of 15th to 16th July, this new despicable “Memorandum” was adopted thanks to the voting support of four right-wing parties (PASOK, Potami, New Democracy, Independent Greeks) that brought their votes to PM Tsipras proposal, while 32 Syriza MPs voted against, and 7 abstained.
This New MEMORANDUM towards an Austerity agreement forces PM Tsipras and the Syriza party, to abandon essential commitments made during the 25th of January 2015 election campaign, which led to its historically significant victory. Syriza has binding responsibilities towards the Greek people and it is tragic that they were not respected, especially since the people very clearly showed their support both on 25 January and 5 July 2015.
The Greek government’s concessions to the creditors include pension cuts, even to people who receive pensions of less than 700 euros per month, and an extension of the retirement age into the waning years of Life; wages will remain restrained; labor relations will become more precarious; there will be an increase in indirect taxes, including those paid by lower income earners; the continuation and acceleration of privatization; the accumulation of new illegitimate debts to repay previous debts; the transfer of valuable Greek assets to an independent fund; further relinquishing of key elements of sovereignty, giving an upper hand to the creditors in matters of legislative power, enabling German controls of the Greek Economy, and even empowering the Bankers to alter the Democratic Will of the People.
Contrary to claims that in return for these detrimental concessions Greece will get three years of respite from debt obligations that will significantly boost its economic activity — it will in fact be placed in a position where it will be impossible to have any economic growth or even to be able to create the primary fiscal surplus that was announced in the plan, because they did not consider the continued hold on household purchasing power and public expenditure.
Harmful consequences are inevitable: in a few months or early next year at the latest, creditors will attack the Greek authorities for failing to comply with their commitments in terms of primary fiscal surplus and will introduce new demands. Neither the Greek people nor their government will have any respite. The creditors will threaten to bring the promised disbursements to a halt if new austerity measures are not implemented. The Greek authorities will be caught up in a spiral of concessions.
The Truth Committee on Public Debt established by the President of the Greek Parliament has documented in its preliminary report made public on 17 and 18 June 2015 that the debt claimed by the present creditors must be considered illegitimate, illegal and odious. The Committee has also shown that its repayment is unsustainable. On the basis of arguments derived from international and domestic law, the Greek government should have taken a sovereign decision to suspend debt repayment for the time that the debt audit takes to run its full course. Such a suspension of debt payment is quite possible. Since February 2015, Greece has paid €7 billion to creditors without receiving the €7.2 billion previously agreed upon in the bailout program that ended on the 30th of June 2015. Other amounts that should have been paid to Greece have not been transferred: the interest earned by the ECB on Greek securities, the projected balance for the recapitalization of banks, etc. If Greece suspends debt payment to its international creditors, it will save nearly €12 billion by the end of 2015 and the creditors would be compelled to make concessions. A radical reduction in the amount of debt could lead the way either to negotiation or to repudiation.
Contrary to the widespread claim that suspending payment would result in exiting the euro, it would have been possible to stay in the Euro if a series of sovereign measures of self-defense and economic recovery such as a strict control on banks, currency, and taxation (see below) had been implemented. It would have been perfectly possible to eschew the ECB’s, the Eurogroup’s and the EC’s unacceptable and illegitimate injunctions. The Tsipras government decided otherwise, and this has led to a tragic subordination to EU supervision, to more austerity and to the selling off of the Greek national heritage.
It is now clear that negotiations cannot convince the European Commission, the IMF, the ECB and the ultra right wing governments in Germany and Northern European countries to take measures that respect the rights of Greek Democracy and it’s citizens as well those of the people in general. The referendum of July 5th, to which those institutions were fiercely opposed, did not convince them. Instead, in contradiction with basic democratic rights, they have radicalized their demands. Without taking strong and sovereign measures of self-defense, the Greek authorities and the Greek people will not be able to put a stop to the human rights violations perpetrated by the creditors.
A host of measures should be taken at the EU level to restore Social Justice, Liberty, and true Democracy, but the periphery has to start safeguarding their People and their National Sovereignty from Project Europe pirates and privateers like the Bankers, the Creditors, and Mr Schauble and Co.
Technically, it is not difficult to do; but it must be noted that with the balance of power prevailing in the European Union, the countries with progressive governments can hope neither to be heard nor supported by the European Commission, the ECB, or the European Stability Mechanism. On the contrary, these institutions as well as the IMF and the Northern European governments under pressure from Germany — the 800 pound gorilla in the room — are actively opposing the current Greek experiment in order to demonstrate to all the people of Europe that there is no alternative to the Banker-Wanker model of governance.
However, if the Greek authorities adopt strong measures to protect their own country — they can gain genuine concessions and can force the Creditors, the Troika, and the Institutions to recognize the Democratic process decisions taken through the vote of the people of Greece.
Parallel to this it is also vital to find an alternative strategy of Finance and Independence leading to LIBERTY by initiating massive popular mobilizations in Greece and other European countries. The Greek authorities could draw on that Massively Popular Front, to thwart the attempts to isolate them — attempts that the forces opposed to change and opposed to social justice, will waste no time in making. In turn, such a stand from the Greek government would empower popular mobilizations and encourage the mobilized people to have confidence in their own strength.
On top of the suspension of the payment of illegitimate, illegal, odious and unsustainable debt, here are a number of Twelve alternative conditions in the agreement between PM Tsipras Greek government and the unruly Creditors, to be urgently submitted to democratic debate, that are likely to help Greece recover:
1. The Greek state is by far the main shareholder of the major Greek banks, representing more than 80% of the Greek banking sector, and it should therefore take full control of the banks in order to protect citizens’ savings and boost domestic loans to support consumption. First, the State should have assumed its majority stake in the banks and turned them into public-sector companies. Then, the State would have organized the orderly liquidation of these banks whilst ensuring the protection of small shareholders and savers, guaranteeing deposits up to 100,000 €. The State would have recovered the cost of cleansing the banks from major private shareholders who have caused the crisis and then abused public support. To do this it would have had to seize part of their assets which reach far beyond the banking sector. A ’bad bank’ should have been created to isolate and hold toxic assets with a view to their liquidation. Those responsible for the banking crisis should have been sued to pay once and for all. The financial sector must be thoroughly cleaned up and made to serve the people and the real economy.
2. The Greek authorities should retrieve control over the central bank. Yannis Stournaras, the current CEO (appointed by the government of Antonis Samaras), invests all his energy in preventing the changes that the people call for. He is a Trojan Horse that serves the interests of large private banks and neoliberal European authorities. The central bank of Greece should be made to serve the interests of the Greek population.
3. The Greek authorities also had the opportunity to create an electronic currency, denominated in euros, for internal use in the country. The public authorities could raise pensions and salaries in the public services and grant humanitarian aid to people by opening credit accounts for them in electronic currency that could be used for several kinds of payment: electricity and water bills, payment for transport and taxes, purchases of food and basic goods, etc. Contrary to a baseless prejudice, even private businesses would do well to voluntarily accept the electronic method of payment as it will allow them to sell their goods and settle payments to the government, including the payment of taxes and the various public services they use. The creation of this additional electronic currency would reduce the country’s needs in euros. Transactions in this electronic currency could be made by mobile phones as is the case today in Kenya, Ecuador, Philippines, etc.
4. The restrictions on capital flows must be maintained while the price of consumer goods must be controlled.
5. The privatization agency must be dissolved and replaced by a national asset management agency with an immediate halt to penurial privatizations; which will be responsible for protecting the public assets while generating revenue.
6. New measures should be adopted to achieve more tax justice, reinforcing those already taken, notably by levying heavy taxes on the richest 10% of the population, particularly the richest 1%, both on their income and on their assets. Similarly, it would be beneficial to significantly increase the tax on big companies’ profits and to withdraw the tax exemptions for shipping company owners, for Large Construction Company owners, and for the Media & TV Barons. Heavier taxes should be imposed on the Orthodox Church, which only paid a few million euros in taxes in 2014 and for the numerous monasteries amassing major real estate and vast donated ecclesiastical wealth.
7. Taxes on new businesses, new families, small income families, small properties, small wealth, and on essential goods and services, should be significantly reduced. This would benefit the majority of the population. A whole series of basic utility services should become free for a period of time — like public transport, electricity, and water to a certain limited level of consumption, etc. These social-justice measures would revive consumption.
8. The fight against tax evasion should be intensified by establishing substantial deterrents. Considerable amounts can thus be recovered.
9. An extensive public plan for job creation should be implemented to rebuild the public services destroyed by years of austerity starting with health and education, in order to pave the way for the necessary ecological transition.
10. This support to the public sector should be accompanied by measures which provide active support to small private ventures, and all StartUps, that are key elements in creating employment and prosperity within the Greek economy.
11. Public domestic borrowing measures may be adopted by issuing public debt securities within national borders. In fact, the State must be able to borrow to improve the living conditions of the population, for example by carrying out public utility works. Some of this work can be financed by the current budget through assertive policy choices, but government borrowing could enable other projects, broader in scope — for example the massive development of public transport to replace private cars; developing the use of renewable energy; creating or reopening local railway services throughout the urban and semi-urban sectors of the country; renovating, rehabilitating or constructing public buildings and social housing while reducing energy consumption and providing quality amenities. Such measures can also finance the ambitious plan for job creation outlined above.
12. It is urgent that a transparent policy of public borrowing be defined. Our proposal is twofold. A. Public borrowing should aim at guaranteeing an improvement in living conditions, discarding the logic of environmental destruction. B. Public borrowing must contribute to a redistribution of wealth and to reducing inequalities. That is why we propose that the financial institutions, large private corporations and wealthy households be legally bound to purchase – commensurate with their wealth and income – non-indexed government bonds at 0% interest. The remaining population can voluntarily acquire government bonds at an interest rate that will ensure a genuine and positive return (e.g. 3%), above inflation. So if the annual inflation is 2%, the interest rate actually paid by the State for the corresponding year will be 5%.
Such a policy of positive discrimination (similar to those adopted against racial oppression in the US, the caste system in India, or gender inequalities) will result in tax justice and less inequality of wealth distribution.
Finally, the Greek authorities should ensure that the Audit Committee as well as other committees working on the memoranda and on war damages can continue their task.
Other additional Capitalist Measures of a Great Society; are measures that can be democratically debated and implemented, on an urgent basis because they will complement these first emergency measures based on the following five pillars:
– Socializing banks and a part of currency creation.
– Preventing tax evasion and establishing a fair tax reform to provide the State with the necessary resources for implementing its policies.
– Protecting public property, including the national heritage, and placing it at the service of the entire community.
– Rehabilitating and developing public services.
– Supporting local private enterprises.
It is also important to launch Greece into a process of structural democratic change with active citizen participation. To achieve this constituent process, Greece must convene an election of a Constituent Assembly to draft a new democratically chosen Constitution. Once the Constituent Assembly – which should operate on the basis of grievances and proposals received from the people – adopts the draft, it will be submitted to popular vote.
Exiting the Euro Zone. After the Greek Parliament adopted the disastrous agreement of 13th July, on the 16th, an alternative must include the possibility of voluntarily exiting the Euro Zone if the Greek people support this prospect. This option is comforted by the Greek Parliament’s capitulation on July 16th and by the very content of the agreement. Moreover the Greek people will soon understand that if they want a future that includes justice and emancipation, Greece must get out of the euro zone. In this case, the above propositions remain valid, especially the socialization of banks similar to the nationalization of France’s banking system after the Liberation. These measures should be combined with a significant monetary reform, inspired by the system implemented by the Belgian government after World War II. This reform will specifically aim at deflating the incomes of those who got rich at the expense of others. The principle is simple: during the changeover to another currency, there should be no automatic parity between the old and the new currency (the existing euro against a new drachma, for example) beyond a certain limit.
The amount exceeding the limit must be blocked in an escrow account and its origin must be justified and authenticated. In principle, any amount exceeding the specified ceiling will be exchanged at a less favourable rate (for example, two former euros against one new drachma). When a criminal origin can be proved, the sum may even be forfeited. Such monetary reform would distribute part of the wealth in a more socially just manner. Another objective of the reform is to reduce the money in circulation in order to fight inflationary trends. To be effective, strict control over capital movements and foreign exchange must be established.
Here’s an example (of course the rates are indicative and may be modified after analyzing the distribution of liquid household savings and the adoption of stringent criteria) :
€1 would be exchanged against 1 new drachma (n.D.) up to 200,000 euros
€1 = 0.7 n. D. between 200,000 and 500,000 euros
€1 = 0.4 n. D. between 500,000 and 1 million euros
€1 = 0.2 n. D. above 1 million euros
If a household owns € 200,000 in cash, it gets 200,000 n.D in exchange.
If it has € 400,000, it gets 200,000 + 140,000 = 340,000 n.D
If it has € 800,000, it gets 200,000 + 210,000 + 120,000 = 530,000 n.D
If it has € 2 million, it gets 200,000 + 210,000 + 200,000 + 200,000 = 810,000 n.D
A genuine alternative logic can be triggered and Greece can finally liberate itself from its creditors’ control.
This will result in multiple positive outcomes for the Greek people and for all the Peoples of Europe; who could start again believing in a change and a Union that favors justice over bankers greed.
Simple because the ever closer union is the logic behind the European project and certainly it is the reason of the single currency zone. However this forced Union, brought about by the design of the Euro, is now undermining the whole EU.
As usual the Road to Hell is paved with Good Intentions. Perdition is now upon us and the Rapture Is Imminent…
Pray You All — pray hard, because, the End is Near.
But maybe the end can be avoided and the Rapture pushed back if those countries that are part of the single currency area the Euro; happen to develop political and democratic institutions fir for a Union of Equals, that can guide how their common currency is governed.
Indeed, it is an urgent necessity that they do so.
But there must also be a way out for countries for whom the Euro is now destructive and far too expensive to exit. And it goes without saying that there has to be a way forward for countries that choose not to join the Euro but still want to be part of the European partnership — to thrive in Unison.
And inside a respectful Union.
Once You begin to see — to really SEE reality — there is only one way of doing this thing anymore.
Austerity has got to go.
And that opens the way towards the Road of Independence for the Greek People and towards rebuilding their Economy and their Banking Sector quickly and effectively.
Only then can True Liberty be regained by the Greek People.