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Greece’s Corporate Owners Asphyxiating the People

February 8, 2012

by Nathalie Savaricas
The Independent
February 8, 2012

That’s enough, we can’t take it anymore.” That was the popular chant coming from protesters in Athens yesterday during the latest 24-hour general strike against the country’s austerity measures. Teachers and doctors joined bank employees to demonstrate against a new round of expected cuts as the cash-strapped country continued to negotiate new reductions in spending to help keep the economy afloat.

Several thousand demonstrators from the public and private-sector unions braved the heavy rainfall, gathering outside Parliament to voice their opposition at the latest proposed measures to secure a €130bn (£108bn) bailout package. Minor clashes broke out when protesters tried to remove a cordon near the parliament building. Police sprayed tear gas and at times clashed with strikers, whose anger intensified overnight when a further 15,000 job cuts were announced.

Since the onset of the crisis, the austerity drive has sent unemployment to a record high of 18.2 per cent and the country’s finances into a spiral of recession. Despite the deepening pain, crowds at protests have increasingly dwindled.

“People are scared and haven’t really realised what’s happening yet,” George Pantsios, an electrician for the country’s public power corporation, said. He has only been receiving half of his €850 monthly wage since August. “But once we all lose our jobs and can’t feed our kids, that’s when it’ll go boom and we’ll turn into Tahrir Square.”

Prime Minister Lucas Papademos was scheduled to wrap up a new reforms package with party leaders that back his unity government last night, which will pave the way for more bailout money.

The conservative daily Kathimerini newspaper’s headline said: “Merkel and Sarkozy’s asphyxiating pressure.” It was a reference to lenders’ demands to axe another 15,000 civil servants by the end of the year and cut the minimum wage by 20 per cent.

The European Union and the International Monetary Fund said the measures are needed to restore Greece’s competitiveness and reduce its mounting €300bn debt.

Many in the crowds yesterday said the talks were being used as an excuse to squeeze extra revenue from the sick man of Europe and they fear additional cuts will only stifle any hopes of growth. “We’re already bankrupt. This new agreement will simply be our tombstone and the meeting will be the final curtain of this play,” said Corinna Panopoulos, a state psychologist who demonstrated outside the parliament building.

Ms Panopoulos, who is single and has two children, said she had seen her salary drop by a third and has moved in with her mother to make ends meet. Her sister, Christina, who works as a supply teacher, will lose her state job in June.

Another woman had been forced to close her business: “I should leave and go abroad for work, but I want to stay and fight because my country needs me now.”

The patience of Greece’s creditors is wearing thin as the financial woes threaten to spill into other countries.

Filed under World Tagged with austerity measures, corporations own greece, economic crisis, European Union, greece

Greece is a victim of money hungry Hedge Funds

January 19, 2012

by Les Leopold
Alternet
January 19, 2012

Who are the real villains on Wall Street? When it comes to institutionalized greed and corruption, nothing tops the too-big-to-fail banks like JP Morgan Chase, Bank of America and Goldman Sachs. But these financial giants form only one part of the financial oligarchy. Lurking in the shadows are aggressive hedge funds that are just as lethal to our economic well being. If Goldman Sachs is a vampire squid, as Matt Taibbi so aptly named it, then hedge funds are like schools of piranhas or sharks, eager to strip the financial carcass to the bone.

The sharks at this very moment are circling Greece, waiting to devour that nation’s resources. To understand this attack we need to enter into the rotting innards of our financial system.

But aren’t the Greeks lazy?

Let’s starts with a closer look at why Greece has accumulated so much debt. The answer is not because they sit around sipping retsina rather than working. Instead it has everything to do with the attempt of Europe to improve the lot of the Greek people so they would embrace democracy. Let’s not forget that from 1967 to 1974 Greece was ruled by a military junta that inflicted enormous pain on its people. Helping the Greek people escape poverty was critically important. Greece’s entry into the European Union and the access to capital it provided, allowed the Greek people to rebuild the foundations of prosperity and democracy.

Of course, our vampire squid banks also played a critical role in exacerbating the debt problem. When Greece hit the debt limits set by the EU, large U.S. banks profited mightily by structuring loans to Greece to skirt those rules.

But the biggest blow came from the 2008 financial crash, which was wholly caused by Wall Street’s reckless gambling spree. When the world economy nearly collapsed into another Great Depression, the weaker economies in the EU took the biggest hit. Ireland, Portugal and Greece suffered enormous job loss and massive declines in tax revenues. These countries became the victims of the vast housing bubble that was pumped up by Wall Street’s fantasy financial schemes. Yes, they had accumulated too much debt, but the problem would have been manageable were it not for the Wall Street-created crash.

Enter the piranha hedge funds

Hedge funds are lightly regulated, privately managed investment funds created and designed for the super-rich, who expect to get much higher rates of return than the rest of us. While you and I are lucky to see a 2 percent increase in our 401ks, hedge funds hope to see gains far in excess of 10 percent. Pension funds and endowments have also followed the super-rich into these funds to gain access to these outsized returns. There are 8,000 or so hedge funds that now manage a total of nearly $2 trillion.

But making these super-profits doesn’t come easy. Hedge funds don’t just get lucky on a few stocks or bonds. They look for an edge, and more than a few go over the edge by engaging in criminal activity like insider trading. Others hope to get to the Promised Land by being tough SOBs who don’t think twice about impoverishing people. Those SOB hedge funds are circling Greece right now, doing all they can to get their hands on the money the European Union wants to lend Greece to reduce its long-term debt problems.

Here’s the play: Greece does not have enough money to pay off the loans that are coming due in the next year. So the EU and the International Monetary Fund have assembled a bailout package to help Greece make those payments. In exchange, the Greek people are being asked to suffer through enormous cuts in government spending – which means cuts in jobs, incomes, healthcare, pensions and public education. Everyday citizens are making enormous sacrifices.

Filed under Special Reports, World Tagged with bank of america, corporate corruption, corporate greed, Goldman Sachs, greece, hedge funds, JP Morgan

Global Bank Run Begins in Greece

December 6, 2011 2 Comments

by Ferry Batzoglou
Spiegel Online
December 6, 2011

Many Greeks are draining their savings accounts because they are out of work, face rising taxes or are afraid the country will be forced to leave the euro zone. By withdrawing money, they are forcing banks to scale back their lending – and are inadvertently making the recession even worse.

Georgios Provopoulos, the governor of the central bank of Greece, is a man of statistics, and they speak a clear language. “In September and October, savings and time deposits fell by a further 13 to 14 billion euros. In the first 10 days of November the decline continued on a large scale,” he recently told the economic affairs committee of the Greek parliament.

With disarming honesty, the central banker explained to the lawmakers why the Greek economy isn’t managing to recover from a recession that has gone on for three years now: “Our banking system lacks the scope to finance growth.”

He means that the outflow of funds from Greek bank accounts has been accelerating rapidly. At the start of 2010, savings and time deposits held by private households in Greece totalled €237.7 billion — by the end of 2011, they had fallen by €49 billion. Since then, the decline has been gaining momentum. Savings fell by a further €5.4 billion in September and by an estimated €8.5 billion in October — the biggest monthly outflow of funds since the start of the debt crisis in late 2009.

The raid on bank accounts stems from deep uncertainty in Greek households which culminated in early November during the political turmoil that followed the announcement by then-Prime Minister Georgios Papandreou of a referendum on the second Greek bailout package.

Papandreou withdrew the plan and stepped down following an outcry among other European leaders against the referendum, and a new government was formed on Nov. 11 under former central banker Loukas Papademos. That appears to have slowed the drop in bank savings, at least for the time being.

Bank Withdrawals Worsening Crisis

Nevertheless, the Greeks today only have €170 billion in savings — almost 30 percent less than at the start of 2010.

The hemorrhaging of bank savings has had a disastrous impact on the economy. Many companies have had to tap into their reserves during the recession because banks have become more reluctant to lend. More Greek families are now living off their savings because they have lost their jobs or have had their salaries or pensions cut.

In August, unemployment reached 18.4 percent. Many Greeks now hoard their savings in their homes because they are worried the banking system may collapse.

Those who can are trying to shift their funds abroad. The Greek central bank estimates that around a fifth of the deposits withdrawn have been moved out of the country. “There is a lot of uncertainty,” says Panagiotis Nikoloudis, president of the National Agency for Combating Money Laundering.

The banks are exploiting that insecurity. “They are asking their customers whether they wouldn’t rather invest their money in Liechtenstein, Switzerland or Germany.”

Nikoloudis has detected a further trend. At first, it was just a few people trying to withdraw large sums of money. Now it’s large numbers of people moving small sums. Ypatia K., a 55-year-old bank worker from Athens, can confirm that. “The customers, especially small savers, have recently been withdrawing sums of €3,000, €4,000 or €5,000. That was panic,” she said.

Marina S., a 74-year-old widow from Athens, said she has to be extra careful with money these days. “I have no choice but to withdraw money from my savings,” she said.

Bad Loans

The shrinking Greek bank deposits compare with bank loans totalling €253 million. Analysts say the share of bad loans could rise to 20 percent next year, or €50 billion, as a result of the recession. This in turn will worsen the already pressing liquidity problems faced by Greek banks.

Nikos B., a doctor in the Greek military, has had enough of the never-ending crisis his country is going through. While the 31-year-old has a secure job, repeated salary cuts have made it increasingly hard for him to make ends meet.

He needs most of his money to make loan repayments for a small car. “How can I clear my account? There’s hardly anything in it,” he says. He started learning German two months ago and wants to leave Greece. “As soon as possible!”

Nikos pauses and looks down. He quietly utters words that must be painful for a proud Greek. “It would be best to change nationality.”

Filed under World Tagged with bad loans, bank run, banking system, global depression, greece, greek bank run, withdrawing money

New ‘scary’ predictions for the Eurozone to justify loss of Sovereignty

November 29, 2011 2 Comments

‘Deep Depression’ is the new term used in main stream media to justify another bank bailout and the surrender of political and economic sovereignty.

AFP
November 29, 2011

Europe is reeling from warnings it faces a “deep depression” if the eurozone collapses and that every EU nation’s credit rating could be hit without firm action to resolve the debt crisis.

An updated growth report from the OECD on Monday said the crisis was now just one step away from plunging advanced economies into an abyss of recession and could trigger waves of bankruptcies.

And Moody’s, one of the three main ratings agencies, warned that even solid economies such as Germany might have to have their credit status revised — a move which would force them to pay higher borrowing costs.

Italy meanwhile, under pressure from Germany and France who have warned Rome that it could wreck the eurozone if it fails to master its debt problem, launched a patriotic drive to encourage people to buy bonds.

And while Belgium managed to raise 2.0 billion euros ($2.66 billion) in a bond auction, it had to agree to investor demands for a 5.65 percent return for benchmark 10-year bonds compared to 4.37 percent less than a month ago.

Meanwhile in Washington, US President Barack Obama told top European officials they must act now, with decisive force, to fix the debt crisis which threatens to damage the fragile US recovery.

“This is of huge importance to our own economy,” Obama said after hosting EU representatives at the White House.

“The United States stands ready to do our part to help them resolve this issue.”

Despite the bad news, European stocks and the euro rebounded sharply on Monday after days of sustained heavy losses. Investors reacted positively to a report saying Italy was to get an International Monetary Fund bailout — later flatly denied.

The Organisation for Economic Cooperation and Development report forecast that the United States faced a period of slow growth, Japan’s economy would shrink 0.3 percent this year and developing nations would also see a slowdown.

But its starkest warning was reserved for the 17-nation eurozone, which it said was set for growth of 1.6 percent and next year just 0.2 percent.

The OECD said there was still time for decisive action by policymakers to avert a far worse outlook, urging the European Central Bank to buy up devalued government debt bonds in huge quantities.

But Germany has been holding out against that idea, arguing that the priority is for countries in trouble to reform their economies.

Polish Foreign Minister Radek Sikorski nevertheless on Monday called on Germany to do more, saying the eurozone’s collapse would result in an “apocalyptic” crisis.

The OECD spoke also broached the possibility of a eurozone break-up.

An exit by one or more countries “would most likely result in a deep depression in both the exiting and remaining euro area countries as well as in the world economy,” it said.

“The euro area crisis represents the key risk to the world economy at present,” it said. “A large negative event would… most likely send the OECD area as a whole into recession.”

Moody’s considered the same scenario, saying “the probability of multiple defaults… is no longer negligible” and that would “significantly increase” the likelihood of one or more members dumping the currency.

“Moody’s believes that any multiple-exit scenario — in other words, a fragmentation of the euro — would have negative repercussions for the credit standing of all euro area and EU sovereigns,” the ratings agency added.

“The continued rapid escalation of the euro area sovereign and banking credit crisis is threatening the credit standing of all European sovereigns.”

The European Union’s three biggest economies — Germany, France and Britain — have so far maintained their triple A credit rating.

But countries such as Italy, Spain, Greece, Ireland, Portugal and most recently Belgium have all suffered rating downgrades that have accelerated unsustainable rises in their borrowing costs over the past two years.

A report on the website of the French paper La Tribune, citing several sources, suggested Standard & Poor’s might downgrade France in the next few days. A spokesman for the ratings agency refused to comment.

IMF chief Christine Lagarde also dismissed a report in La Stampa that suggested the International Monetary Fund was preparing a bailout package for Italy worth up to 600 billion euros.

La Stampa said the IMF would guarantee rates of 4.0 percent or 5.0 percent on the loan — far better than the borrowing costs on commercial markets.

But Lagarde said Monday: “The IMF does not invest, the IMF lends. And it lends when it is requested by a country that needs assistance.

“At this point in time, we have not received any request from Italy, nor are we negotiating with either Italy or Spain.”

Italy’s 1.9-trillion euro public debt and low growth rate have spooked the markets in recent weeks.

But analysts said the markets were unconvinced by the denial.

Greece, Portugal and Ireland have all received bailouts but a rescue of Italy, the eurozone’s third-biggest economy, would be on a totally different scale.

Filed under World Tagged with bank bailout, britain, economic sovereignty, euro, Eurozone, France, germany, greece, political sovereignty, spain

The EU’s architects never meant it to be a democracy

November 14, 2011

The rise of a “technocracy” was always part of the plan for Europe.

by Christopher Booker
UK Telegraph
November 14, 2011

So, as headlines scream that vain bids to save the euro threaten us with “Armageddon”, the EU’s ruling elite has toppled two more elected prime ministers, to replace them with technocratic officials who can be trusted to do Brussels’s bidding.

The new Greek prime minister, Lucas Papademos, was the man who, as head of Greece’s central bank, fiddled the figures to enable Greece to get into the euro (against the rules) in the first place – before being rewarded with a senior post in the European Central Bank. He is no more democratically elected than Mario Monti, who will most likely be Italy’s new prime minister and had hurriedly to be made a “senator for life” to qualify him for the job. Monti’s main qualification is that, as a former senior EU Commissioner, he has long been a member of the Brussels elite himself.

One of the few pleasures of watching this self-inflicted shambles unfolding day by day has been to see the panjandrums of the Today programme, James Naughtie and John Humphrys, at last beginning to ask whether the EU is a democratic institution. Had they studied the history of the object of their admiration, they might long ago have realised that the “European project” was never intended to be a democratic institution.

The idea first conceived back in the 1920s by two senior officials of the League of Nations – Jean Monnet and Arthur Salter, a British civil servant – was a United States of Europe, ruled by a government of unelected technocrats like themselves. Two things were anathema to them: nation states with the power of veto (which they had seen destroy the League of Nations) and any need to consult the wishes of the people in elections.

As Richard North and I showed in our book The Great Deception, this was the idea that Monnet put at the heart of the “project” from 1950 onwards, modelling his “government of Europe” on precisely the same four institutions that made up the League of Nations – a commission, a council of ministers, a parliament and a court. Thus, step by step over decades, Monnet’s technocratic dream has come to pass.

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Filed under World Tagged with EU, EU commissioner, EU technocracy, european project, European Union, greece, League of Nations, no democracy, ruling elite, technocracy, the great depression, United States of Europe

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Greece’s Corporate Owners Asphyxiating the People

Greece is a victim of money hungry Hedge Funds

Global Bank Run Begins in Greece

New ‘scary’ predictions for the Eurozone to justify loss of Sovereignty

The EU’s architects never meant it to be a democracy

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