Schlagwort-Archive: #debt

Michael HUDSON: A New Mode of Warfare – The Greek Debt Crisis and Crashing Markets; ICH June 29, 2015

http://www.informationclearinghouse.info/article42274.htm / full text attached

A New Mode of Warfare
The Greek Debt Crisis and Crashing Markets

By Michael Hudson

June 29, 2015 “Information Clearing House”– Back in January upon coming into office, Syriza probably could not have won a referendum on whether to pay or not to pay. It didn’t have a full parliamentary majority, and had to rely on a nationalist party for Tsipras to become prime minister. (That party balked at cutting back Greek military spending, which was 3% of GDP, and which the troika had helpfully urged to be cut back in order to balance the government’s budget.)

Seeing how unyielding the opposition was, Syriza’s stance was: “We would like to pay. But there’s no money.” (…)

I’m in Germany now (on my way to Brussels), and have heard from Germans that the Greeks are lazy and don’t pay taxes. There is little recognition that what they call “the Greeks” are really the oligarchs. They have gained control of the old coalition Pasok/New Democracy parties, avoided paying taxes, avoided being prosecuted (New Democracy refused to act on the “Lagarde List” of tax evaders with nearly 50 billion euros in Swiss bank accounts), orchestrated insider dealings to privatize infrastructure at corrupt prices, and used their banks as vehicles for capital flight and insider lending.

This has turned the banks into vehicles for the oligarchy. They are not public institutions serving the economy, but have starved Greek business for credit.

So one casualty apart from the credibility of the eurozone, the ECB and the IMF will be these banks. Syriza is positioning itself to provide a public option – public banks that will promote the economy, and a national Treasury that will spend government money INTO the economy, not drain it to pay the Troika for having bailed out French and other banks back in 2010-1.

The European popular press is as bad as the U.S. press in describing matters. It warns of “hyperinflation” if a central bank monetizes as much as one euro of government spending in the way that the U.S. Fed does, or the bank of England or any other real central bank. The reality is that nearly all hyperinflations stem from a collapse of foreign exchange as a result of having to pay debt service. That was what caused Germany’s hyperinflation in the 1920s, not domestic German spending. It is what caused the Argentinean and other Latin American hyperinflations in the 1980s, and Chile’s hyperinflation earlier.

But once Greece frees itself from the odious debts forced upon it at financial gunpoint in 2010-12, its balance of payments will be roughly in balance (subject to some depreciation of the drachma; 30% is a number I heard bandied about in Athens last week).

To mimic Margaret Thatcher, “There is No Alternative” to withdrawing from the eurozone. The terms dictated for remaining in it was to sell off all of what remained in Greece’s public sector to European and U.S. buyers, at insider prices – but not to Russian buyers, even for the gas pipeline that was to have been sold.

Evidently the eurozone financial strategists thought that Tsipras and Varoufakis would simply surrender, and be promptly voted out of power, thereby crushing their socialist policy agenda. They miscalculated – and are now hoping to create as much anarchy as possible to punish the Greek people. The punishment is for not continuing to support their client oligarchy, which has moved most of its assets out of reach of the government. (…)

HUDSON_A-New-Mode-of-Warfare150629.pdf

The Greek Tragedy: Curtain Closes On Most Absurd Act – MoA 27.06.2015

The Greek Tragedy: Curtain Closes On Most Absurd Act

Nothing was posted here so far on the Greece tragedy. I did not touch the issue as there was excellent coverage elsewhere and what the whole issue produced so far was more absurd theater than serious economic policy. But one act of the drama is now coming to a preliminary end and the tragedy may now unfold into something new with potential serious geopolitical consequences.

Greece took up a lot of debt when banks were giving away money without caring for the ability of the debtor to pay back. When that game ran out, some six years ago, Greece could not no longer take up new credit to pay back its old debts. That is the point where it should have defaulted.

But the Greece government was pressed on to pay back the debt to the commercial banks even when it had no money and not enough income to ever do so. Bank lobbyists pressed other EU governments to raid their taxpayers to indirectly cover the banks’ losses. These other governments then pushed Greece to take on “emergency loans” from their states to pay the foreign commercial banks.

Nothing of that money ever reached the people in need in Greece. Here is a gif that explains what happened to all those foreign taxpayer loans treats “given to the Greek”. (…)

http://www.moonofalabama.org/2015/06/the-greek-tragedy-curtain-closes-on-most-absurd-act.html

A Refresher from Macropolis: 11,7 % from 226,7 Billion) (=Mrd.) Euro-Debt was for GR-Government needs

http://www.macropolis.gr/?i=portal.en.the-agora.2080 / via zerohedge.com
Where did all the money go?
Jan 5, 2015
By: Yiannis Mouzakis

… So for those who don’t recall, here is a refresher from Macropolis, which a few months ago showed that of the €226.7 billion euros disbursed to Greece since the first Greek bailout, an equivalent to almost 125% of Greece 2014 GDP, “the combined allocation to the Greek state’s operating needs was just 11 percent of the total funding, at circa 27 billion euros.

Greek%20bailout%20uses%202_0.jpg

That’s right: hundreds of billions “spent” to rescue Greece… with the vast amount of proceeds used to promptly repay the very sources of these funds: the IMF and the ECB.

So will this time be any different, and will the Greeks receive anything extra? Alas no, because here are the near-term Greek debt interest and maturity payments…

Greece%20near%20term%20amortization_1_0.jpg

Greece%20near%20term%20interest_1_0.jpg

… and the longer term.

Greek%20payments.jpg

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Martin Zeis
globalcrisis/globalchange NEWS
martin.zeis

IMF Humiliates Greece, Repeats It Will Keep Funding Ukraine Even If It Defaults

zerohedge, June 19, 2015 — www.zerohedge.com/news/2015-06-19/imf-humiliates-greece-repeats-it-will-keep-funding-ukraine-even-case-default
(in German from DWN after the english text )
IMF Humiliates Greece, Repeats It Will Keep Funding Ukraine Even If It Defaults
One week ago, we were stunned to learn just how low the political organization that is the mostly US-taxpayer funded IMF has stooped when, a day after its negotiators demonstratively stormed out of the Greek negotiations with “creditors”,  Hermes’ ambassador-at-large Christine Lagarde said that the IMF “could lend to Ukraine even if Ukraine determines it cannot service its debt.”
In other words, as Greece struggles to avoid a default to the IMF on debt which was incurred just so German banks can remain solvent and dump trillions in non-performing loans to US hedge funds and Greek exposure, and which would result in the collapse in the living standards of an entire nation (only for a few years before an Iceland-recovery takes place, one which Greece would already be enjoying had it defaulted in 2010 as we said it should), and as the “criminal” IMF does everything in its power to subjugate an entire nation, or else let it founder, the IMF told Soros’ BFFs over in Kiev, that no matter if they default to its private creditors (in fact please do since Russia is among them), the IMF would keep the debt spigot flowing.
Courtesy of the US taxpayer of course.
Fast forward one week when, with Greece one step closer to a full-blown financial collapse, the IMF comes out and tell Ukraine – which already passed a law allowing it to impose a debt moratorium at any moment – not to worry, that even in a default it will keep providing unlimited funds. From Reuters:
Ukraine’s efforts to strike a debt restructuring deal with its creditors will allow the International Monetary Fund to continue to support the country even if the talks are not successful, the head of the IMF said on Friday.
“I … welcome the government’s continued efforts to reach a collaborative agreement with all creditors,” IMF Managing Director Christine Lagarde said in a statement. “This is important since this means that the Fund will be able to continue to support Ukraine through its Lending-into-Arrears Policy even in the event that a negotiated agreement with creditors in line with the program cannot be reached in a timely manner.
We will pass comment on this latest grand IMF hypocrisy and ask if Greece would rather be in Kiev’s place which at the behest of “Western” leaders, it sold, liquidated, and otherwise “lost” all of its gold. Or, like Ukraine, Athens is willing to part with its $4 billion in gold just to appease the Troika as it sells all of its 112.5 tons of official gold to unknown buyers. A transaction which would buy Greece about 3-6 months of can kicking and a few stray smiles from Chrstine Lagarde.
Martin Zeis
globalcrisis/globalchange NEWS
martin.zeis@gmxpro.net
 Meldung auf Deutsch von DWN 20.06.2015:

 IWF demütigt EU: Ukraine ist kreditwürdiger als Griechenland

Der IWF wird weiter internationale Steuergelder in die Ukraine pumpen – auch wenn das Land pleitegeht. Diese Aussage ist eine Ohrfeige für die Euro-Retter, denn der IWF blockiert weitere Kredite für Griechenland genau mit der Begründung, dass das Land auf einen Bankrott zusteuere. (…)
http://deutsche-wirtschafts-nachrichten.de/2015/06/20/iwf-demuetigt-eu-ukraine-ist-kreditwuerdiger-als-griechenland/

MUST READ: Greek Debt Committee Just Declared All Debt To The Troika “Illegal, Illegitimate, And Odious”; Report 17.06.2015

previous mail + report-attachment … m.z.
zerohedge, June 17, 2015 — http://www.zerohedge.com/news/2015-06-17/greek-debt-committee-just-declared-all-debt-illegal-illegitimate-and-odious

Greek Debt Committee Just Declared All Debt To The Troika “Illegal, Illegitimate, And Odious”

It was in April when we got a stark reminder of a post we first penned in April of 2011, describing Odious Debt, and why we thought sooner or later this legal term would become applicable for Greece, because two months ago Greek Zoi Konstantopoulou, speaker of the Greek parliament and a SYRIZA member, said she had established a new “Truth Committee on Public Debt” whose purposes was to “investigate how much of the debt is “illegal” with a view to writing it off.”

Moments ago, this committee released its preliminary findings, and here is the conclusion from the full report presented below:

All the evidence we present in this report shows that Greece not only does not have the ability to pay this debt, but also should not pay this debt first and foremost because the debt emerging from the Troika’s arrangements is a direct infringement on the fundamental human rights of the residents of Greece. Hence, we came to the conclusion that Greece should not pay this debt because it is illegal, illegitimate, and odious.
As we predicted over four years ago, Greece has effectively just declared that it will no longer have to default on its IMF (or any other debt – note that the dreaded “Troika” word finally makes an appearance after it was officially banned) simply because that debt was not legal to begin with, i.e. it was “odious.”

If so, this has just thrown a very unique wrench in the spokes of not only the Greek debt negotiations, but all other peripheral European nations’ Greek negotiations, who will promptly demand that their debt be, likewise, declared odious, and made null and void, thus washing their hands of servicing it again.

And another question: when Greece says the debt was illegal and it no longer has to make the June 30 payment, what will be the Troika’s response: confiscate Greek assets a la Argentina, declare involutnary default, sue it in the Hague?

Good luck.

From the full just released report by the Hellenic Parliament commission:

Hellenic Parliament – Press Releases
Athens, June 17, 2015

Hellenic Parliament’s Debt Truth Committee Preliminary Findings – Executive Summary of the report

URL: http://www.hellenicparliament.gr/en/Enimerosi/Grafeio-Typou/Deltia-Typou/?press=cb2bae76-752a-473b-a943-a4ba00d8da6a

(…)

Greek-Debt-Truth-Committee-Report150617.pdf

imagining-our-shared-future Yanis Varoufakis – thoughts for the post-2008 world

http://yanisvaroufakis.eu/2015/03/20/of-greeks-and-germans-re-imagining-our-shared-future
Yanis Varoufakis – thoughts for the post-2008 world
Posted on March 20, 2015 by yanisv

Of Greeks and Germans: Re-imagining our shared future

Any sensible person can see how a certain video[1] has become part of something beyond a gesture. It has sparked off a kerfuffle reflecting the manner in which the 2008 banking crisis began to undermine Europe’s badly designed monetary union, turning proud nations against each other.

When, in early 2010, the Greek state lost its capacity to service its debts to French, German and Greek banks, I campaigned against the Greek government’s quest for an enormous new loan from Europe’s taxpayers. Why?
I opposed the 2010 and 2012 ‘bailout’ loans from German and other European taxpayers because:
the new loans represented not a bailout for Greece but a cynical transfer of losses from the books of the private banks to the weak shoulders of the weakest of Greek citizens. (How many of Europe’s taxpayers, who footed these loans, know that more than 90% of the €240 billion borrowed by Greece went to financial institutions, not to the Greek state or its citizens?)
it was obvious that, at a time Greece could not repay its existing loans, the austerity conditions for giving Greece the new loans would crush Greek nominal incomes, making our debt even less sustainable
the ‘bailout’ burden would, sooner or later, weigh down German and other European taxpayers once the weaker Greeks buckled under their mountainous debts (as moneyed Greeks had already shifted their deposits to Frankfurt, London etc.)
misleading peoples and Parliaments by presenting a bank bailout as an act of ‘solidarity to Greece’ would turn Germans against Greeks, Greeks against Germans and, eventually, Europe against itself.
In 2010 Greece owed not one euro to German taxpayers. We had no right to borrow from them, or from other European taxpayers, while our public debt was unsustainable. Period!
That was my ‘controversial’ point in 2010: In 2010, Greece should have borrowed not one euro before entering into debt restructuring procedures and partially defaulting to its private sector creditors.
Well before the May 2010 ‘bailout’, I urged European citizens to tell their governments not to even think of transferring private losses to them.
To no avail, of course. That transfer was effected soon after[2] with the largest taxpayer-backed loan in economic history given to the Greek state on austerity conditions that have caused Greeks to lose a quarter of their income, making it impossible to repay private and public debts, and causing a hideous humanitarian crisis.
That was then, in 2010. What should we do now, in 2015, that Greece remains in crisis and our people, the Greeks and the Germans, have, regrettably but also predictably, descended into a mutual ‘blame game’?
First, we should work towards ending the toxic ‘blame game’ and the moralising finger-pointing which benefit only the enemies of Europe.
Secondly, we need to focus on our joint interest: On how to grow and to reform Greece rapidly, so that the Greek state can best repay debts it should never have taken on while looking after its citizens as a modern European state ought to do.
In practical terms, the 20th February Eurogroup agreement offers an excellent opportunity to move forward. Let us implement it immediately, as our leaders have urged in yesterday’s informal Brussels meeting.
Looking ahead, and beyond current tensions, our joint task is to re-design Europe so that Germans and Greeks, along with all Europeans, can re-imagine our monetary union as a realm of shared prosperity.
—————————–
[1] Whose showing derailed an otherwise constructive discussion on German television.
[2] First in May 2010 (€110 billion) and then again in the Spring of 2012 (another €130 billion).

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Martin Zeis
globalcrisis/globalchange NEWS
martin.zeis@gmxpro.net

IMF Director Admits: Greek Bailout Was “To Save German & French Banks”

zerohedge, March 05, 2015 — www.zerohedge.com/news/2015-03-04/imf-director-admits-greek-bailout-was-save-german-french-banks

IMF Director Admits: Greek Bailout Was “To Save German & French Banks”

For the first time in public, though practically the entire world assumed it, an official from The IMF has admitted that the various Greek bailouts were not for The Greeks at all …

“They gave money to save German and French banks, not Greece,” Paolo Batista, one of the Executive Directors of International Monetary Fund told Greek private Alpha TV on Tuesday. As KeepTalkingGreece reports, Batista then went on to strongly criticized not only the euro zone and the European Central Bank but also the IMF and the Fund’s managing Director Christine Lagarde for defending Europe much too much…

Oops! “The Greek issues were not the best handled by The IMF… They put too much of a burden on Greece and not enough of a burden on Greece’s creditors”

Video: Newsbeast.gr – Συνέντευξη του Νογκέιρα Μπατίστα, 03.03.2015 – URL:

Batista then urged Greece to directly negotiate with the IMF and favored the restructuring of the Greek debt that is been hold by the European partners.

Source: Keep Talking Greece – URL: http://www.keeptalkinggreece.com/2015/03/04/imfs-director-batista-greek-bailout-was-to-save-german-french-banks-video

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Martin Zeis
globalcrisis/globalchange NEWS
martin.zeis@gmxpro.net

Greece And The Endgame Of The Neocolonial Model Of Exploitation by Charles Hugh Smith – Feb 19, 2015

http://charleshughsmith.blogspot.de/2015/02/greece-and-endgame-of-neocolonial-model.html / via zerohedge, Feb 19, 2015

Greece And The Endgame Of The Neocolonial Model Of Exploitation
by Charles Hugh Smith – Feb 19, 2015

With the bankruptcy of Greece now undeniable, we’ve finally reached the endgame of the Neocolonial-Financialization Model.

We all know how old-fashioned colonialism worked: the imperial power takes physical control of previously independent lands and declares its ownership of the region as a newlygreek-debt minted colony.

What’s the benefit of controlling colonies?

In the traditional colonial model, there are two primary benefits:

1. The imperial power (the core) extracts valuable commodities and low-cost labor from its colony (the periphery)
2. The imperial power sells its own high-margin manufactured goods to the captured-market of its colony.

This buy low, sell high dynamic is the heart of colonialism, which can be understood as one example of the The Core-Periphery Model (June 11, 2013).

The book Sweetness and Power: The Place of Sugar in Modern History is an excellent history of how this model worked for Great Britain.

The tensions this model generated in the colonial elites of America are brought to life in Tobacco Culture: The Mentality of the Great Tidewater Planters on the Eve of Revolution.

This traditional model of colonialism was forcibly dismantled in the 1940s-1960s. Former colonies established their political independence, a process that diminished the wealth and global reach of former colonial powers.

In response, global financial powers sought financial control rather than political control. This is one dynamic of what I call the Neocolonial-Financialization Model (May 24, 2012), which substitutes the economic power of financialization (debt, leverage and speculation) for the raw power of political conquest and control.

The main strategy of financialization is: extend cheap credit to those with limited access to capital. Those with limited access to capital will swallow the bait of cheap credit whole, and willingly agree to penalties, high interest rates, etc.

Then, when the credit expansion reaches levels that cannot be supported, the lenders demand collateral and/or favorable trade and financial concessions.

These tactics have been well-documented in books such as The Shock Doctrine: The Rise of Disaster Capitalism and Confessions of an Economic Hit Man.

But the economic pillaging of former colonies has limits, and as a consequence the global financial powers developed the Neocolonial Model, which turns these same techniques on one’s home region.

Thus Greece and other capital-poor European nations were recognized as the periphery that could be exploited by the core, and the euro was the ideal tool to financialize the economies of nations which could never have generated credit/housing bubbles without the wide-open spigots of cheap credit flooding their economies.

In Neocolonialism, the forces of financialization are used to indenture the local Elites and populace to the financial core: the peripheral “colonials” borrow money to buy the finished goods manufactured in the core economies, enriching the Imperial Elites with A) the profits made selling goods to the debtors B) interest on credit extended to the peripheral colonies to buy the core economies’ goods and “live large”, and C) the transactional skim of financializing peripheral assets such as real estate and State debt.

In essence, the core banks of the EU colonized the peripheral nations via the financializing euro, which enabled a massive expansion of debt and consumption in the periphery. The banks and exporters of the core extracted enormous profits from this expansion of debt and consumption.

Now that the financialization scheme of the euro has run its course, the periphery’s neocolonial standing is starkly revealed: the assets and income of the periphery are flowing to the core as interest on the private and sovereign debts that are owed to the core’s central bank and its money-center private banks.

Note how little of the Greek “bailout” actually went to the citizenry of Greece and how much was interest paid to the financial powers.
This is not just the perfection of neocolonialism but of neofeudalism as well. The peripheral nations of the EU are effectively neocolonial debtors of the core, and the taxpayers of the core nations are now feudal serfs whose labor is devoted to making good on any loans to the periphery that go bad.

Neocolonialism benefits both the core’s financial Aristocracy and national oligarchies/ kleptocracies. This is ably demonstrated in the recent essay Misrule of the Few: How the Oligarchs Ruined Greece.

With the bankruptcy of Greece now undeniable, we’ve finally reached the endgame of the Neocolonial-Financialization Model. There are no more markets to exploit with financialization, and the fact that the mountains of debt are unpayable can no longer be masked.

At this point, the financial Aristocracy has an unsolvable dilemma: writing off defaulted debt also writes off assets and income streams, for every debt is somebody else’s asset and income stream. When all those phantom assets are recognized as worthless, the system implodes.

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Martin Zeis
globalcrisis/globalchange NEWS
martin.zeis@gmxpro.net

Meet The Man Behind The Scenes: The “Pro-Market Socialist” Banker Who Will Shape “Europe’s Financial Future”

zerohedge, Feb 04, 2015 — http://www.zerohedge.com/news/2015-02-04/meet-man-behind-scenes-pro-market-socialist-banker-who-will-shape-europes-financial-

Meet The Man Behind The Scenes: The “Pro-Market Socialist” Banker
Who Will Shape “Europe’s Financial Future”

… The real brains behind the latest Greek attempt at tearing away the hated “oppressive” shackles of debt (which nobody had a problem incurring originally when everything was going smoothly, but that’s a topic for another day) is a banker who sits 3000 kilometers away, on Paris’ Boulevard Hausmann, and who is a self-described “pro-market socialist”, and fan of The Clash.

Meet Lazard’s Matthieu Pigasse, the banker, whose actions in the next few days, as the WSJ puts it (1), will shape “Europe’s financial future.”

The 46-year-old financier is head of the government advisory arm at Lazard , the international investment bank hired in recent days by both Greece and Ukraine to help renegotiate their debts, according to people familiar with the matter.
Mr. Pigasse “has been involved in some of the most important sovereign debt restructurings in the last decade,” said Deborah Zandstra, a sovereign debt partner at lawyers Clifford Chance LLP. “His appointment by the new Greek administration is a positive step.” Both assignments are key to Europe’s political and economic health. …
In Greece, new Prime Minister Alexis Tsipras has promised to slash the country’s heavy debt burden. But other eurozone leaders have declared that any reduction in the face value of Greek debt would be unacceptable and the Greek finance minister is now proposing to swap debt for new growth-linked bonds… .
And while third world familiarity will certainly come in useful, the fees collected are quite first world:
Advising governments is a relatively small part of Lazard’s business, with fees making up just a small fraction of total revenue. But government mandates are particularly prestigious and the work can be lucrative. In March 2012, Greece said it paid Lazard €25 million ($28.5 million) for its advice over the previous two years. The sovereign advisory arm, run out of the Paris office, has increased head count by 50% to 30 over the past three years. …

While Pigasse’s academic background is nothing special, it is notable that one of his co-workers is none other than disgraced former IMF head and one time French presidential hopeful DSK:
Mr. Pigasse graduated from France’s ENA, a prestigious administrative school that has educated many of the country’s top civil servants. In the late 1990s, he worked in the French finance ministry under its then chief, Dominique Strauss-Kahn . He joined Lazard in 2002 and earned a reputation as a strong negotiator after working on a string of large deals, including the $38 billion merger between utilities giants Suez SA and Gaz de France SA .
Curiously, in this specific assignment instead of being aligned monetarily with his client, Pigasse will share ideological ties: you see the banker is a devout socialst.
The financier, who through Lazard declined to comment, is also part-owner of France’s left-leaning Le Monde newspaper and a self-confessed socialist. In an interview with French television that aired last week before Lazard was appointed as an adviser to Greece, Mr. Pigasse said it was “absolutely necessary” that the Greek debt held by public institutions be halved, which would represent a cut of about €100 billion. …

(1) THE WALL STREET JOURNAL, Feb 04, 2015
The Lazard Banker Shaping Greece’s and Ukraine’s Financial Fate
Matthieu Pigasse’s Department has Been Hired to Renegotiate the Countries’ Debt
By DAVID WIGHTON
URL: http://www.wsj.com/articles/the-lazard-banker-shaping-greece-and-ukraines-financial-fate-1423067028

Full text attached (pdf-file, 3p) GREECE-The-Man-Behind-The-Scenes150205

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Martin Zeis
globalcrisis/globalchange News
martin.zeis@gmxpro.net